Amicus Curiae Brief — Walters v. Metropolitan Educational Enterprises, Inc.

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Supreme Court of the Uni

October Term, 1995

DARLENE WALTERS AND EQUAL EMPLOYMENT

OPPORTUNITY COMMISSION,

Petitioners,

METROPOLITAN EDUCATIONAL ENTERPRISES, INC.

AND LEONARD D. BIEBER,

Respondents.

On Writs Of Certiorari To The

United States Court Of Appeals

For The Seventh Circuit

BRIEF OF THE ILLINOIS STATE CHAMBER

OF COMMERCE; CHAMBER OF COMMERCE OF THE

UNITED STATES OF AMERICA; ILLINOIS

MANUFACTURERS’ ASSOCIATION; ILLINOIS

RESTAURANT ASSOCIATION; ILLINOIS RETAIL

MERCHANTS ASSOCIATION; THE MANAGEMENT

ASSOCIATION OF ILLINOIS; AND WISCONSIN

MANUFACTURERS & COMMERCE AS AMICI

CURIAE SUPPORTING RESPONDENTS

Donato J. McNeIr

Counsel of Record

Norma W. ZEITLER

Keck, MAHIN & CATE

77 W. Wacker Dr., Suite 4900

Chicago, Illinois 60601-1693

(312) 634-7700

Mona C. ZEIBERG

National Chamber Litigation

Center, Inc.

1615 H Street, N.W.

Washington, DC 20062

(202) 463-5337

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964 y\

OR CALL COLLECT (402) 342-2831 ux +

TABLE OF CONTENTS

Page

TABLE OF AUTHIORITIES 202. c cc cccccccccccscsuces iii

INTEREST OF THE AMICI CURIAE................ 1

SUMMARY OF ARGUMENT....................... 1

SOS 6 0.03046-06005660005440000 oe 5

I. THE RELEVANT CONGRESSIONAL INTEN-

TION HERE IS THE DESIRE OF CONGRESS

TO AVOID PLACING ON CERTAIN SMALL

BUSINESSES THE BURDEN OF ELIMINAT-

ING INVIDIOUS DISCRIMINATION FROM

THE AMERICAN WORKPLACE WHILE

ALLOWING THE STATES TO IMPOSE SUCH

A BURDEN (AS MOST HAVE).............. 5

A. The Purposes Behind Limiting Coverage

To Exclude Small Businesses ............ 5

B. “Liberal Construction” Of The Language

In Question Would Undermine The Con-

Pre rit 7

C. The States Can (And Most Do) Fill Any

ee ere 11

D. Petitioners’ Statistical Analysis Of The

1990s Workplace Sheds No Light On Con-

SOROS O TURN BR Te +5000 scescenceseens 15

E. There Is No Reason To Believe Small Busi-

nesses Will Manipulate Scheduling To

FE COSTED 0.0.0 0k Sint enrencicvececces 17

F. The Seventh Circuit’s Counting Method

Generally Will Be Simple To Apply...... 18

il. THE DAILY PAYROLL METHOD AVOIDS

RENDERING THE PHRASE “FOR EACH

WORKING DAY” SUPERFLUOUS........... 20

TABLE OF CONTENTS - Continued

Page

Ii. THE LEGISLATIVE HISTORY IS SILENT ON

THE QUESTION BEFORE THE COURT...... 24

IV. THE EEOC’S OPINION AS TO THE LIMITS

OF ITS OWN AUTHORITY IS ENTITLED TO

EES 6 ess ccne ee vcccccscccccccece 28

INS CaN wanna ck dveesccceskcccescece 30

TABLE OF AUTHORITIES

Page

Cases

Bureau of Alcohol, Tobacco and Firearms v. Federal

Labor Relations Authority, 464 U.S. 89 - ae 29

Calderon v. Witvoet, 999 F.2d 1101 (7th Cir. 1993) .._.. 8

Chevron U.S.A. Inc. v. Natural Resources Defense

Council, Inc., 467 U.S 837 tetsiaiwecistees 29

Consumer Product Safety Commission v. GTE Syl-

vania, Inc., 447 JS. 102 Gs Chdenddeacend cant 26

EEOC v. Commercial Office Products Co., 486 U.S.

TF PEC CU e peneveseiencceséctecscecs.... 13, 15, 28

EEOC v. Metropolitan Educational Enterprises, Inc.,

60 F.3d 1225 (7th Cir. 1995)........ 17, 29

Flores v. Rios, 36 F.3d 507 (6th Cir. 1994)............. 8

Gomez v. Toledo, 446 U.S. 365 (1980) ......00000000.... 7

Goudeau v. Dental Health Services, Inc., 901 F Supp.

1139 (M.D. La. 1995) .......0000000 0 18

Gustafson v. Alloyd Co., 115 S. Ct. 1061 (1995).... 3, 21, 22

Harmon v. Brucker, 355 U.S. 579 (1958) .............. 29

Irwin v. Department of Veterans Affairs, 498 U.S. 89

a) 7

Lane v. Pena, 64 U.S.L.W. 4541 (U.S. June 18, 1996). ..3, 21

LeBlanc v. Great American Insurance Co., 6 F.3d 836

(1st Cir. 1993), cert. denied, 1145S. Ct. 1398 (1994).... 16

Lowe v. ].B. Hunt Transport, Inc., 963 F.2d 173 (8th

Cir, 1992) 2... cccceececee ee... 16

TABLE OF AUTHORITIES —- Continued

McDonald v. Santa Fe Trail Transportation Co., 427

eee GP GED ocdnncescncanecccesencssnentcsesecs 15

Missouri v. Andrews, 787 F.2d 270 (8th Cir. 1986),

aff'd sub nom. ETSI Pipeline Project v. Missouri,

Se Wee GaP CP ebcedectdiscescccccenccccesccss 29

Mohasco Corp. v. Silver, 447 U.S. 807 (1980).......... 13

Montclair v. Ramsdell, 107 U.S. 147 (1882)............ 21

Oscar Mayer Co. v. Evans, 441 U.S. 750 (1979)..... 13, 26

Patterson v. McLean Credit Union, 491 U.S. 164

GORD ceccvesncndedccectededseachsecesseeseseeseces 26

Price Waterhouse v. Hopkins, 490 U.S. 228 (1989)...... 26

Proud v. Stone, 945 F.2d 796 (4th Cir. 1991).......... 16

Public Employees Retirement System of Ohio v. Betts,

Cee GS Ce SU heeecéncnddddantbssenedsassecs 5, 26

Rand v. CF Industries, Inc., 42 F.3d 1139 (7th Cir.

GeOEe eevecensnedacesscepnedinenedeseéedennsscoces 16

Richardson v. Bedford Place Housing Phase I Associ-

ates, 855 F. Supp. 366 (N.D. Ga. 1994)........ 8, 9, 25

Sims v. Trus Joist MacMillan, 22 F.3d 1059 (11th Cir.

BODE s cdcvcccconcecvccvccescuesesceedesnseoccncces 15

Social Security Board v. Nierotko, 327 U.S. 358 (1946) .... 29

Teamsters v. United States, 431 U.S. 324 (1977)........ 26

United Siates v. Clark, 445 U.S. 23 (1980) ............ 26

United States v. Menasche, 348 U.S. 528 (1955)...... 3, 21

United States v. Nordic Village, Inc., 503 U.S. 30

Di kinhenadssbesddnddadaananananadauaenne 3, 21

United States v. Southwestern Cable Co., 392 U.S. 157

EE ard ald er ticleic dad abc aie aa oe ae 26

Zimmerman v. North American Signal Co., 704 F.2d

See Ge Geek Ge cndccensscecceses 17, 21, 23, 26, 29

TABLE OF AUTHORITIES - Continued

Page

STATUTES AND REGULATIONS:

Federal:

Age Discrimination in Employment Act, 29 U.S.C.

Pe Oe Ue ME i dik.ceskcaénhdntdccccesceceeacece 11

29 U.S.C. § 630(b) (1994).... 00. 11

Americans with Disabilities Act, 42 U.S.C. § 12101

OF GR) SOND sock nsehtocdonccnssiccnenéencedceccex 11

42 U.S.C. § 12111(5)(A) (1994).......000.000....... 11

Civil Rights Act of 1964, tit. VII, 42 U.S.C. § 2000e

SF Sa GED acedsddecnneéendsntuievanncacenucsnas 1

42 U.S.C. § 2000e(b) (1994)..........0.0......... 1, 20

42 U.S.C. § 2000e-2(m) (1994) ..................... 26

42 U.S.C. § 2000e-S(c) (1994) ...................... 13

42 U.S.C. § 2000e-5(e) (1994)...................... 29

42 U.S.C. § 2000e-5(e)(1) (1994) .......0 0... 15

Civil Rights Act of 1991, Pub. L. No. 102-166, 105

Stat. 1071 (1991) (codified as amended at 42

U.S.C. § 1981 and 42 U.S.C. § 2000e-2(m)) ........ 26

Family and Medical Leave Act, 29 U.S.C. § 2601 et

FP GA Sebdercencuschenceecundeséediddckekeekin 4

29 U.S.C. § 2611/2)(A)(i) (1994) .... 2... 28

29 U.S.C. § 2611(2)(A)(ii) (1994).... 2... 28

29 U.S.C. § 2611(4)(A)(i) (1994)... 20 28

Unemployment Compensation Act, 26 U.S.C.

FS NED Kn enbs Ondddncotcccdunceececcnns 4, 25

TABLE OF AUTHORITIES - Continued

Page

BP es 1 By GD hcdccnctenasddccnesatccncoctes 19

ee en Se OD GOED ccpcccndondnnndscvededésevese 26

Ge as We Ge GUD cnecdnconddccuncsncccntconcsss 7

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SP CRE. © OGRE Ae CRIN cc cc cccnccccccccccces 15

BP CIR. © BOGE. BUee (URGE ec ccc cccccccccccesccss 15

STATES:

Alaska Stat. § 18.80.300 (Supp. Oct. 1995)........... 11

Ariz. Rev. Stat. Ann. § 41-1461 (Supp. 1995)......... 12

Ark. Code Ann. § 16-123-102(5) (Michie Supp.

Sn chekdndcuecqhacdkectesasaneeee thheeeneanceda 11

Cal. Gov't Code § 12926(d) (West Supp. 1996)....... 11

Colo. Rev. Stat. § 24-34-401 (1988)................... 11

Conn. Gen. Stat. Ann. § 46a-51(10) (West 1995)...... 11

Del. Code Ann. tit. 19 § 710(2) (1995)............... 12

DL. CoGe Agm. & UGBEE COGBE). occ ccccccsccccsccess 12

Fla. Stat. Ann. § 760.02(7) (West 1986 and Supp.

as okie daeensdévneachandunananchseueksaccaseee 12

Ga. Code Ann. § 45-19-21 (1990 & Supp. 1996}...... 13

Sees, GOT. GRR. BH Deere CHOU ccc ccccccccccccccsscis 12

ee GD Bh Gre CD vo ccc cscsccncesdicsssecs 12

Vii

TABLE OF AUTHORITIES - Continued

Page

Ill. Comp. Stat. Ann. ch. 775 para. 5/2-101(B)(1)(a)

GU PO he eh sastccencedseccccccencceddeceecenc 12, 13

Ill. Comp. Stat. Ann. ch. 820 para. 105/4a (1993 &

WE OUND 28 sdcencdendisedsndoncascnsiacsnnecess 19

Ill. Comp. Stat. Ann. ch. 820 para. 105/8 (1993)..... 19

Ind. Code Ann. § 22-9-1-3 (West Supp. 1996)........ 12

lowa Code Ann. § 216.2(7) (West 0 OS 12

Kan. Stat. Ann. § 44-1002(b) A i a 12

Ky. Rev. Stat. Ann. § 344.030 (Michie /Bobbs-

oo ERE eer 12

La. Rev. Stat. Ann. § 23:1006(A) (West 1985) ..... 12, 13

Me. Rev. Stat. Ann. tit. 5 § 4553(4) (West Supp.

EE A a ene eee IER CAE Satta ae 12

Md. Ann. Code art. 49B § 15(b) I 12

Mass. Gen. L. Ann. ch. 1518 § 1(5) (West 1996) ..... 12

Mich. Comp. Laws. Ann. § 37.2201(a) (West 1985) .... 12

Minn. Stat. Ann. § 363.01(17) (West Se 12

Miss. Code. Ann. § 25-9-149 (1991).................. 13

Mo. Rev. Stat. § 213.010 (Vernon Supp. 1996)........ 12

Mont. Code Ann. § 49-2-101(8) SEAS Seve pee 12

Neb. Rev. Stat. § 48-1102(2) (1993) .................. 12

Nev. Rev. Stat. Ann. § 613.310 (Michie 1996) ........ 12

N.H. Rev. Stat. § 354-A:2(7) (1995) .................. 12

N.J. Stat. Ann. § 10:5-5(e) (West Supp. 1996)........ 12

Viii

TABLE OF AUTHORITIES - Continued

Page

N.M. Stat. Ann. § 28-1-2(B) (Michie Supp. 1995)..... 12

N.Y. Exec. Law § 15-292(5) (Consol. 1995)........... 12

N.C. Gen. Stat. § 143-422.2 (1993)... 0.66... cece eee eee 13

N.D. Cent. Code § 14-02.4-02(5) (1991 & Supp.

Is vc vccvcvecvencccececcesecccoseceveseuesessse 12

Ohio Rev. Code Ann. § 4112.01(2) (Baldwin 1994) .... 12

Okla. Stat. Ann. tit. 25 § 1301(1) (West Supp. 19946) .... 13

Or. Rev. Stat. § 659.010(6) (Supp. 1994).............. 12

Pa. Cons. Stat. § 954 (Supp. 1996). ...... 6.6... e ee eees 12

P.R. Laws Ann. tit. 29 § 146 (1995). ...........55055. 12

R.I. Gen. Laws § 28-5-6 (1995) ... 6.6... cece eens 12

S.C. Code Ann § 1-13-30(e) (Law. Co-op 1986) ...... 13

S.D. Codified Laws Ann. § 20-13-1(7) (1995)......... 12

Tenn. Code Ann. § 4-21-102(4) (Supp. 1995)......... 12

Tex. Lab. Code Ann. § 21-002(8)(A) (West 1996)..... 13

Utah Code Ann. § 34-35-2(7) (1994) ..... 6.6... cee ee. 13

Vt. Stat. Ann. tit. 21 § 494(1) (1987).............005. 12

V.I. Code Ann. tit. 24 § 421(2) (1993).............65. 12

Va. Code Ann. § 2.1-715 (Michie 1995).............. 12

Wash. Rev. Code Ann. § 49.60.040 (West Supp.

Is <cnckeneseenseeseessconeeseecseevetsouudcans 12

W. Va. Code § 5-11-3(d) (Supp. 1996) ............05: 12

Wis. Stat. Ann. § 111.32(6} (West 1988).............. 12

TABLE OF AUTHORITIES - Continued

Page

Wyo. Stat. § 27-9-102(b) (June 1991)..............55. 12

Se Ay: MD Ge 06060005 hebececsseccevesesenseces 13

OTHER AUTHORITIES:

CONGRESSIONAL MATERIALS:

110 Cong. Rec. (1964)

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4. PPPTTTITITINITITII TIL 6

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BD. FROG ccccvesuccevesseveveccscsvessceneevesessvces 6

BD. FEUD vccccccescsscescsecssscevevvceveesseeseeges 6

DD. TRIG TF oo nc cccrccccvcccescverccvvevesseencsees 25

De GERD. cccccccscccccvscscescesevesscovcencevess 6, 15

Dr, TERG s evcvvsccccccccscnensccescoccveneevessoesees 6

Dr. GETE . nccveveccccccncvcccecccescevesesereseeseses 6

DP. THRD sv wvcvcccccncncncsccecccescceseescesceseees 15

, BOTTB ssc cscccnsviccseccesccsenvscseccscsseces 6, 14

D. BBGTTD. wc wvcccvccccscvecvevcccvesesevesveveeveees 6

D. DEFOR. wc ccrvccccccccecccssccsvsvessvevessenveees 6

BD. BEFOOEB. occ ccccccccvsccscsccscvecevscesenccees 6

TABLE OF AUTHORITIES - Continued

Page

i. TGs sccvenconccccsesenesscecesencesednncens 6, 10

WD, GND: cv ccccsccpesecsccseecscoucsodsecsecnes 6

Dh GRE scceccneccssecvccsesiscesececes 14, 15, 25, 26

, TMs onc cccnsccncsecsescesccssassesdcaccnn 25

MB PPTYTITITITITITITILITULIT Tere ee 6

A, TR ea cc ccnsepecccincenesesncedesndsncowasies 6, 9

Dy, EPC h en wdieenenneoncheananadevesece 6, 10, 14, 15

i, FO cach acesoncacepessesacceccnendesnenuscasdes 6

Dh, FP han cnnsvenstanensanendecnenwenseoseudanas 6

i, FR ahh Ogee deRde Kes edeceens rid nesesevaceecien 6

118 Cong. Rec. (1972)

De GE cccccccccccecsocccscecsoccoccsncoceescunne 7, 27

Dh, TEER vccncaccvcenccsoccesecscesceveeseavesens 7, 27

Dh TPs co eee ccendescecvcseressceseaseuereseeasa 7, 27

TGs owe ecsoweccenceseesdeccesesseeseenes 7, 27

OE, Fr ok ce ceteceeeueess ewtaxcascencsscceni 7, 27

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DE, BDO sc cee cccceseccctestecesseccctoeesensenss 7

DR. BOOT a ccc cvccccenccsccscccceccescceseneeesens 27

Dy FPN 6400604 hbbn css cd neseeeseexeéunnssesanneed 7

TABLE OF AUTHORITIES - Continued

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i CRE vA ore ene nines e6eesbsineiucéveeccecaassdai 7, 27

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135 Cong. Rec. (1989)

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i SC bars nscbechekccssubensuadusinrcdecensene 27

i, GN 0.8 ON 6 nS eci bas erisscarsrcdssicineesss 28

H.R. 7152, 88th Cong., Ist Sess. (1963) .............. 24

MISCELLANEOUS:

Bureau of the Census, Dep’t of Comm., County

Business Patterns 1993 (1995)............0 0000 cues 11

EEOC Fiscal Year 1994 Annual Report ......... 8, 9, 10

Rev. Rul. 55-19, 1955-1 C.B. 496 (1955) .............. 25

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INTEREST OF THE AMICI CURIAE!

Amici curiae are one national federation and several

state associations which include among their membership

more than 240,000 employers.? More than half the

employers represented by amici curiae are businesses

small enough to be affected by the Court’s decision in

this case. In the view of amici, the decision below prop-

erly limits the scope of federal antidiscrimination law by

excluding from coverage businesses too small to bear the

burden of federal enforcement, while allowing state and

local enforcement agencies the opportunity to work with

small businesses to eliminate invidious discrimination

from the workplace.

SUMMARY OF ARGUMENT

Title VII of the Civil Rights Act of 1964 (“Title VII”),

42 U.S.C. § 2000e et seq. (1994), excludes small businesses

from its coverage unless they “[have] fifteen or more

employees for each working day in each of twenty or more

calendar weeks.” 42 U.S.C. § 2000e(b) (1994) (emphasis

added). The congressional proponents and opponents of

Title VII agreed that some limitation was necessary to

address the following concerns: (1) small businesses

would be unable to afford the cost of documenting and

defending the propriety of their employment decisions;

(2) federal regulation would intrude too greatly into the

close relationship between employer and employees in

! The parties have consented to the filing of this brief. Their

letters of consent have been filed with the Clerk of the Court.

2 Attached in the Appendix to this brief are statements of

interest of each of the amici.

the typical small business; and (3) coverage of all

employers, regardless of size, would overburden the

Equal Employment Opportunity Commission (“EEOC”),

which enforces Title VII, with more claims than it could

handle. Congress also recognized that it was limiting

only the power of the federal government to remedy work-

place discrimination — it left the states free (indeed it

encouraged them) to protect employees in small work-

places excluded from Title VII's coverage.

Congress’s concerns for the burden to be placed on

small businesses and for the appropriate apportionment

of federal and state enforcement authority — not the

“remedial” or ‘ humanitarian” purposes behind Title VII's

substantive provisions — provide the context for the

Court’s inquiry here. The mere fact that Title VII is

“remedial legislation” does not compel this Court to

adopt any arguably plausible reading of the statute that

will result in the broadest possible coverage. To the con-

trary, when, as here, the Court is called upon to construe

a statutory provision designed to exclude a certain class of

employers from coverage, principles of “liberal construc-

tion” do not apply. The expansive interpretation of the

operative language urged by petitioners would subject

hundreds of thousands of small businesses to federal

regulation from which they otherwise would be excluded

under the reading given the definition of employer by the

court of appeals. This Court need not adopt a broad

construction of the employer definition to protect

employees of small businesses from invidious discrimina-

tion — most states (as Congress anticipated) already have

done so.

Il.

Petitioners (and two courts of appeal) say an

employee should be counted for each working day in any

calendar week during which the employee appears “on

the payroll” (i.e., is entitled to some pay) for that week.3

Respondents (and two other courts of appeal, including

the court below) say an employee should be counted for

each working day in a given calendar week for which the

employee appears “on the payroll” (i.e., is paid) for that

day.* Only the latter interpretation gives full meaning to

the phrase “for each working day.” If Congress had

intended that petitioners’ method be used, it could have

omitted this phrase and said “who has fifteen or more

employees in each of twenty or more calendar weeks.”

The court of appeals was correct in refusing to read the

statute as if it had been written this way because, as this

Court has held, a statute must be construed in a way that

avoids rendering words or phrases superfluous. See Lane

v. Pena, 64 U.S.L.W. 4541, 4545 (U.S. June 18, 1996);

Gustafson v. Alloyd Co., 115 S. Ct. 1061, 1069 (1995); United

States v. Nordic Village, Inc., 503 U.S. 30, 36 (1992); United

States v. Menasche, 348 U.S. 528, 538-39 (1955).

Ill.

The legislative history of Title VII reveals why Con-

gress sought to limit the statute’s coverage, but it is silent

as to why Congress included the phrase “for each work-

ing day” in the definition of employer. Earlier versions of

* Petitioners refer to this as the “payroll method” of

counting employees, by which they mean the “weekly payroll”

method.

4 Petitioners refer to this as the “day-by-day” method, but

“daily payroll” is a better description.

the bill that became Title VII limited coverage to

employers of twenty-five or more employees, but did not

include any of the statutory language at issue here. That

language was added to the statute because of a concern

that as originally written, the statute could be construed

to cover employers who had twenty-five or more

employees during any week in a given calendar year.

There was a particular concern about seasonal employers,

who would have the requisite number of employees for

only a few weeks per year. That explains why Congress

added language requiring employers to have twenty-five

or more employees “for twenty or more calendar weeks,”

but it sheds no light on why the phrase “for each working

day” also was added to the statute.

Petitioners attempt to divine the statutory meaning

from (1) a 1955 Internal Revenue Service (“IRS”) ruling

interpreting the Unemployment Compensation Act, 26

U.S.C. § 3396(a) (1958), and (2) congressional committee

reports interpreting the Family and Medical Leave Act

(“FMLA”), 29 U.S.C. § 2601 et seq. (1994), which was

passed in 1993. None of these sources sheds any light on

what Congress thought in 1964 about the question before

the Court (if Congress considered the question at all).

While the author of Title VII's definition of employer

based that definition on language taken from the Unem-

ployment Compensation Act, the definition in that act is

quite different from the one at issue here. So there is

nothing to be learned from the IRS’s opinion as to the

meaning of the earlier statute. Nor does one senator's

reference to the origin of the Title VII language imply that

Congress was aware of, let alone relying on, the IRS

ruling.

The Senate and House Reports on the FMLA - issued

some thirty years after passage of Title VII — provide no

guidance as to Congress's intent in 1964. “[T]he inter-

pretation given by one Congress (or a committee or Mem-

ber thereof) to an earlier statute is of little assistance in

discerning the meaning of that statute.” Public Employees

Retirement System of Ohio v. Betts, 492 US. 158, 168 (1989).

IV.

The EEOC’s opinion as to the limits of its own

authority is entitled to no deference here. Federal agen-

cies are presumed to have special expertise as to subjects

within their enforcement power, but they are not

empowered to interpret congressional intent as to the

scope of their own authority. Such questions fall within

the province of the judiciary.

For all the foregoing reasons, the court of appeals

should be affirmed.

ARGUMENT

THE RELEVANT CONGRESSIONAL INTENTION

HERE IS THE DESIRE OF CONGRESS TO AVOID

PLACING ON CERTAIN SMALL BUSINESSES THE

BURDEN OF ELIMINATING INVIDIOUS DISCRIMI-

NATION FROM THE AMERICAN WORKPLACE

WHILE ALLOWING THE STATES TO IMPOSE SUCH

A BURDEN (AS MOST HAVE)

A. The Purposes Behind Limiting Coverage To Exclude

Small Businesses

The statutory language at issue here is language of

limitation and exclusion. When Congress decided to have

the federal government join the fight against invidious

discrimination in the American workplace, it could have

extended the coverage of Title VII to every employer in

all industries affecting commerce. But Congress did not

do so because it recognized that federal coverage would

bring with it burdens that certain small employers should

not have to bear. The broad reading petitioners would

give to Title VII's definition of “employer” would under-

mine that congressional intention by including in Title

VII's coverage many employers Congress sought to

exclude.

While there was considerable debate as to where the

line should be drawn, the proponents and opponents of

Title VII agreed that the potential damage Title VII would

bring to small businesses outweighed the benefits of

eliminating discrimination from such workplaces. The

limitation enacted by Congress was designed to address

the following concerns: (1) small businesses would be

unable to afford the cost of documenting and defending

the propriety of their employment decisions;® (2) federal

regulation would intrude too greatly into the close rela-

tionship between employer and employees in the typical

small business;® and (3) some limitation was necessary to

avoid overburdening the EEOC with more claims than it

could handle.” Congress also recognized that it was limit-

ing only the power of the federal government to remedy

workplace discrimination — it left the states free (indeed it

encouraged them) to protect employees in small work-

places excluded by Title VII.* This Court’s review of the

5 See, e.g., 110 Cong. Rec. 2708, 2711, 9594, 13088, 13092

(1964).

7? See, e.g., 110 Cong. Rec. 13085, 13089 (1964).

8 See, e.g., 110 Cong. Rec. 2709-10, 2712, 2714, 7214, 7216,

8193, 11936, 12688, 12708, 12724-25, 13087-90, 14313, 15882

(1964).

statutory language should be focused by these congres-

sional desires to avoid overburdening small businesses

and to apportion appropriately between federal and state

governments the responsibility for remedying workplace

discrimination.’

B. “Liberal Construction” Of The Language In Ques-

tion Would Undermine The Congressional Purpose

Petitioners would have this Court focus on the

“remedial” or “humanitarian” purposes of Title VII's sub-

stantive provisions, rather than on the purposes behind

its limitation on coverage. It is appropriate to adopt a

“liberal construction” of a remedial statute when a nar-

rower view would take away the remedy the statute was

designed to provide. Thus, for example, in Gomez v.

Toledo, 446 U.S. 635 (1980), this Court “construed gener-

ously” pleading requirements under 42 US.C. § 1983

because to do otherwise would deny civil rights plaintiffs

the damages remedy Congress sought to give them. Id. at

639. But the mere fact that Title VII is remedial legislation

does not compel this Court to adopt any arguably plaus-

ible reading of the statute that will result in the broadest

possible coverage. See Irwin v. Department of Veterans

Affairs, 498 U.S. 89, 92-93 (1990).

To the contrary, when, as here, the Court is called

upon to construe a statutory provision designed to

* When Congress reduced the coverage threshold from

twenty-five to the current fifteen employees in 1972, the debate

addressed the same concerns about overburdening smaller

businesses and the EEOC. See, e.g., 118 Cong. Rec. 671, 1513,

1526, 1841-43, 1845-46, 1975-77, 2386-91, 2393, 2409-11, 2490-91,

3132, 3135-36, 3171-72, 4907, 7567 (1972).

exclude a certain class of employers from coverage, princi-

ples of “liberal construction” do not apply and “the lan-

guage can[not] be read for maximum inclusion.”

Richardson v. Bedford Place Housing Phase | Associates, 855

F. Supp. 366, 371 (N.D. Ga. 1994); see Calderon v. Witvoet,

999 F.2d 1101, 1104 (7th Cir. 1993) (expansive interpreta-

tion of exemption from labor standards statute would

“utterly defeat [its] function”); see also Flores v. Rios, 36

F.3d 507, 510 (6th Cir. 1994) (when Congress has chosen to

exclude a class of employers from regulatory scope of

labor standards statute, court must avoid interpretation

which would “eviscerate” exemption).

Contrary to petitioners’ implicit assumption, the

issue here is not whether to allow small businesses to

discriminate, but whether to impose upon them the finan-

cial burden of supporting the federal scheme for eliminat-

ing such discrimination. In most cases of alleged

discrimination filed with the EEOC in which the agency

makes some determination,'® the employer is found not to

have violated the law.'! Defense of meritless charges is a

10 A significant percentage of cases never get that far,

having been closed because of EEOC failure to locate the

charging party; refusal of the charging party to respond,

ccoperate, or accept full relief; withdrawal by the charging

party; lack of EEOC jurisdiction; and other nonsubstantive

reasons. Such administrative closures accounted for approxi-

mately 28.3% of EEOC total resolutions in fiscal year

1993 (20,285 out of 71,716 resolutions) and 36.4% in fiscal year 1994

(26,012 out of 71,563). EEOC Fiscal Year 1994 Annual Report at 11.

'! In fiscal year 1993, “no cause” resolutions accounted for

56% of the EEOC’s total resolutions and significantly

outnumbered EEOC merit resolutions, which represented only

15.7% (40,183 “no cause” compared to 11,248 merit resolutions).

In fiscal year 1994, “no cause” resolutions were 48.1% of total

resolutions and again outnumbered merit resolutions, which

burden the business community appropriately must pay

to support the goal of eradicating invidious discrimina-

tion in the American workplace.'? But it is a burden

which Congress decided small employers should not

have to share. By spreading the cost too broadly, peti-

tioners’ interpretation would undermine Congress's

intent.

An overly broad view of coverage also threatens to

intrude upon the associational interests of small

employers whose freedom of association Congress sought

to preserve. Here again, the issue is not whether these

small businesses should be allowed to discriminate. The

issue is whether employment relationships in such a

small workplace should be subjected to the scrutiny of a

federal agency (and potentially a federal court). Given

the “intimate, personal character”!* of most small busi-

nesses, Congress thought the owner of such a business

should be allowed to hire as employees and appoint as

accounted for 15.5%, by a wide margin (34,451 “no cause”

compared to 11,100 merit resolutions). EEOC Fiscal Year 1994

Annual Report at 11.

12 As one court noted, the burden can be substantial:

Today, many Title VII cases that this court considers

do not survive the pleading stage and result in a

judgment in favor of the defendant. Nonetheless, the

cost of success on a motion to dismiss or motion for

summary judgment runs into the tens of thousands of

dollars. For small economic enterprises, such outlays

threaten financial viability.

Richardson, 855 F. Supp. at 371. One need only look at this case to

see the potentially ruinous cost of having to litigate even one

promotion decision. Metropolitan’s apparent ability to afford

this litigation is the exception rather than the rule among the

businesses to which petitioners would extend coverage.

13 110 Cong. Rec. 13088 (1964) (remarks of Sen. Humphrey).

managers persons with whom he or she was most com-

fortable — even if the owner’s selection methods resulted

in a less diverse workforce than the ideal. If this Court

accepts petitioners’ overinclusive definition of

“employer,” tens of thousands more decisions like these

will be subject to the sort of judicial second-guessing

from which Congress sought to spare smaller busi-

nesses.!4

Petitioners’ statutory construction arguments also

ignore Congress's desire to limit the EEOC’s caseload to

manageable levels and to share enforcement respon-

sibility with the states.'° The EEOC’s backlog of pending

cases already has grown to a level which significantly

impairs its ability to enforce the federal antidiscrimina-

tion statutes.'"© One can imagine the effect of adding

several hundred thousand more employers and several

million more employees!” to the classes covered by Title

14 The EEOC here found no reasonable cause to believe that

respondents discriminated against petitioner Darlene Wal ‘ers

(“Walters”) because of her gender. Yet under the federal

enforcement scheme, she was still entitled to bring this claim to

a federal district court.

1S See, e.g., 110 Cong. Rec. 13085, 13089 (1964).

‘© As of fiscal year 1994, the EEOC’s backlog of cases stood

at 97,000, after a year in which a record-breaking number of

charges were received. EEOC Fiscal Year 1994 Annual Report at

31. The EEOC’s own annual report complains repeatedly about

insufficient staffing in the face of the flood of charges it has

received in recent years. Id. at 3, 12.

This case is a good example of the effect the backlog can have.

The EEOC filed its complaint in the district court three years after

petitioner Walters’s employment was terminated (allegedly in

retaliation for filing a charge with the EEOC).

'7 According to the statistics relied upon by petitioners’

amici, nearly 800,000 employers, employing more than 10

VIL, the Americans with Disabilities Act (“ADA”), 42

U.S.C. § 12101 et seq. (1994), and the Age Discrimination

in Employment Act (“ADEA”), 29 U.S.C. § 621 et seq.

(1994).'8 If this Court affirms the court of appeals, and

Congress is unhappy with that decision, it can change the

statutory definition and (presumably) give the EEOC suf-

ficient resources to handle the resulting increase in its

caseload. But the potentially devastating impact of such

an increase on the EEOC’s already overburdened opera-

tion argues against a broad construction of the statute by

this Court.

C. The States Can (And Most Do) Fill Any Gaps In

Coverage

Petitioners predict that affirmance here will leave

millions of workers without protection from invidious

discrimination. But this Court need not adopt a broad

construction of the employer definition to protect these

employees — most states (as Congress anticipated) already

have done so. Thirty-five states, the District of Columbia,

Puerto Rico and the Virgin Islands have enacted laws

similar to Title VII covering employers with fewer than

fifteen employees.'? Twelve states have a fifteen-

million persons, report that they have ten to nineteen

employees. Bureau of the Census, Dep’t of Comm., County

Business Patterns 1993, fig. 1 (1995).

18 The ADA and ADEA definitions of employer contain

language identical to that the Court will construe in this case.

See 42 U.S.C. § 12111(5)(A) (1994); 29 U.S.C. § 630(b) (1994).

19 See Alaska Stat. § 18.80.300 (Supp. Oct. 1995) (one

employee); Ark. Code Ann. § 16-123-102(5) (Michie Supp. 1995)

(nine employees); Cal. Gov’t Code § 12926(d) (West Supp. 1996)

(five employees); Colo. Rev. Stat. § 24-34-401 (1988) (one

employee); Conn. Gen. Stat. Ann. § 46a-51(10) (West 1995) (three

empioyee threshold,”° but three of these have omitted the

phrase “for each working day” from their definitions of

employees); Del. Code Ann. tit. 19 § 710(2) (1995) (four

employees); D.C. Code Ann. § 1-2502 (1981) (one employee);

Haw. Rev. Stat. § 378-1 (1994) (one employee); Idaho Code

§ 67-5902 (1995) (five employees); Ind. Code Ann. § 22-9-1-3

(West Supp. 1996) (six employees); lowa Code Ann. § 216.2(7)

(West 1994) (one employee); Kan. Stat. Ann. § 44-1002(b) (1993)

(four employees); Ky. Rev. Stat. Ann. § 344.030 (Michie / Bobbs-

Merrill Supp. 1994) (eight employees); Me. Rev. Stat. Ann. tit. 5

§ 4553(4) (West Supp. 1995) (one employee); Mass. Gen. L. Ann.

ch. 1518 § 1(5) (West 1996) (six employees); Mich. Comp. Laws

Ann. § 37.2201(a) (West 1985) (one employee); Minn. Stat. Ann.

§ 363.01(17) (West 1991) (one employee); Mo. Rev. Stat. § 213.010

(Vernon Supp. 1996) (six employees); Mont. Code Ann.

§ 49-2-101(8) (1995) (one employee); N.H. Rev. Stat. § 354-A:2(7)

(1995) (six employees); N.J. Stat. Ann. § 10:5-5(e) (West Supp.

1996) (one employee); N.M. Stat. Ann. § 28-1-2(B) (Michie Supp.

1995) (four employees); N.Y. Exec. Law § 15-292(5) (Consol.

1995) (four employees); N.D. Cent. Code § 14-02.4-02(5) (1991 &

Supp. 1995) (one employee); Ohio Rev. Code Ann. § 4112.01(2)

(Baldwin 1994) (four employees); Or. Rev. Stat. § 659.010(6)

(Supp. 1994) (one employee); Pa. Cons. Stat. § 954 (Supp. 1996)

(four employees); P.R. Laws Ann. tit. 29 § 146 (1995) (one

employee); R.I. Gen. Laws § 28-5-6 (1995) (four employees); S.D.

Codified Laws Ann. § 20-13-1(7) (1995) (one employee); Tenn.

Code Ann. § 4-21-102(4) (Supp. 1995) (eight employees); Vt.

Stat. Ann. tit. 21 § 494(1) (1987) (one employee); V.I. Code Ann.

tit. 24 § 421(2) (1993) (one employee); Va. Code Ann. § 2.1-715

(Michie 1995) (one employee); Wash. Rev. Code Ann. § 49.60.040

(West Supp. 1996) (eight employees); W. Va. Code § 5-11-3(d)

(Supp. 1996) (twelve employees); Wis. Stat. Ann. § 111.32(6)

(West 1988) (one employee); Wyo. Stat. § 27-9-102(b) (June 1991)

(two employees).

20 See Ariz. Rev. Stat. Ann. § 41-1461 (Supp. 1995); Fla. Stat.

Ann. § 760.02(7) (West 1986 and Supp. 1995); Ill. Comp. Stat.

Ann. ch. 775 para. 5/2-101(B)(1)(a) (1993); La. Rev. Stat. Ann.

§ 23:1006(A) (West 1985); Md. Ann. Code art. 49B § 15(b) (1994);

Neb. Rev. Stat. § 48-1102(2) (1993); Nev. Rev. Stat. Ann. § 613.310

“employer.”?! Only three states have no statute prohibit-

ing discrimination by private employers based on the

characteristics protected under Title VII.?2

When it enacted Title VII, Congress not only allowed

for concurrent jurisdiction with the states, but it also

required that the states have the initial opportunity to

process a discrimination charge if they chose to do so.

(Michie 1996); N.C. Gen. Stat. § 143-422.2 (1993); Okla. Stat.

Ann. tit. 25 § 1301(1) (West Supp. 1996); S.C. Code Ann.

§ 1-13-30(e) (Law. Co-op 1986); Tex. Lab. Code Ann.

§ 21-002(8)(A) (West 1996); Utah Code Ann. § 34-35-2(7) (1994).

21 See Ill. Comp. Stat. Ann. ch. 775 para. 5/2-101(B)(1)(a)

(1993); La. Rev. Stat. Ann. § 23:1006(A) (West 1985); N.C. Gen.

Stat. § 143-422.2 (1993).

22 The states are Alabama, Georgia, and Mississippi.

Georgia and Mississippi prohibit discrimination by public

employers based on the characteristics protected under Title

VII. See Ga. Code Ann. 45-19-21 (1990 & Supp. 1996); Miss.

Code. Ann. § 25-9-149 (1991). Alabama has prohibited

discrimination by public employers based on race or sex in a

general appropriations act. 191 Ala. Acts 859.

23 Under Title VII, a charge may not be deemed filed with

the EEOC unless and until (1) the complainant files his charge

with an appropriate agency in the state in which the

discrimination allegedly took place and (2) either sixty days

pass or that agency earlier terminates its proceedings. 42 U.S.C.

§ 2000e-5(c) (1994); see EEOC v. Commercial Office Products Co.,

486 U.S. 107, 110-11 (1988); Mohasco Corp. v. Silver, 447 U.S. 807,

817 (1980); see also Oscar Mayer Co. v. Evans, 441 U.S. 750, 756

(1979). “Resort to appropriate state proceedings is mandatory,

not optional” Oscar Mayer, 441 U.S. at 756 n.3. This deferral

requirement “is intended to give state agencies a limited

opportunity to resolve problems of employment discrimination

and thereby to make unnecessary, resort to federal relief by

victims of the discrimination.” Oscar Mayer, 441 U.S. at 755; see

Commercial Office Products, 486 U.S. at 110-11; Mohasco, 447 U.S.

at 821.

Affirmance of the court of appeals may mean that some

employees will have to turn to state and local fair

employment agencies for relief, but that is exactly what

Congress anticipated would happen in a dual enforce-

ment scheme. Proponents of Title VII emphasized that

state enforcement agencies would have “primary, exclu-

sive jurisdiction . . . for a sufficient period of time to let

them work out their own problems at the local level.” 110

Cong. Rec. 13087 (1964) (remarks of Sen. Dirksen). Sena-

tor Humphrey, a principal sponsor of Title VII, pointed

out that the statute “encourage|d] the States and the local

communities to take a greater share of the responsibility

in carrying out the equal protection of the laws and equal

rights within the laws.” 110 Cong. Rec. 11936 (1964). One

representative noted that in states with effective anti-

discrimination laws, “there will be no cause for the Fed-

eral Government to intrude in these areas at all.” 110

Cong. Rec. 2710 (1964) (quoted statement of Rep.

McCulloch). Senator Saltonstall urged his colleagues to

support the Dirksen-Mansfield substitute which became

Title VII because it “provide[d] greater opportunity for

fair employment problems to be settled locally. This is

very important in the 30 States which already have fair

employment laws and which settle their problems locally,

in one way or another.” 110 Cong. Rec. 13089 (1964).

To the extent a narrower interpretation of Title VII

coverage results in greater reliance on state enforcement,

it also serves the congressional purpose of reducing the

regulatory burden on small employers. Since the EEOC

only can investigate and conciliate claims, but not adjudi-

cate them, Title VII enforcement actually occurs in federal

courts, with all the attendant financial burdens of federal

litigation.24 The proponents of Title VII presumed that

deferral to state enforcement would “promote ‘time econ-

omy and the expeditious handling of cases.’ ” Commercial

Office Products, 486 U.S. at 118 (quoting remarks of Sen.

Dirksen at 110 Cong. Rec. 9790 (1964)); see id. at 119 n.4

(“deferral provisions will ‘assure individual complainants

that they will have fair and expeditious consideration of

their grievances’ ”) (quoting remarks of Sen. Dirksen at

110 Cong. Rec. 8193 (1964)); see also 110 Cong. Rec. 13087

(1964) (remarks of Sen. Dirksen); id. at 13089 (remarks of

Sen. Saltonstall).

D. Petitioners’ Statistical Analysis Of The 1990s Work-

place Sheds No Light On Congress’s Intent In 1964

Petitioners say the Seventh Circuit’s method of

counting employees will exclude many small businesses

that hire “part-time employees” (by which they mean

employees who work fewer than all the “working days”

in each calendar week). Relying on recent statistics, they

say that minority and female employees make up a dis-

proportionate number of the part-time workforce and

that the Seventh Circuit’s decision will exclude these

individuals from federal antidiscrimination protection.?°

But Congress knew when it limited coverage that some

minority and female employees would be excluded from

federal protection. Petitioners’ analysis shows how large

24 Indeed, a complainant may request the right to sue

tefore the EEOC even has completed its investigation. See 42

U.c.C. § 2000e-5(e)(1) (1994); 29 C.F.R. § 1601.28(a)(1),(2) (1995);

see also Sims v. Trus Joist MacMillan, 22 F.3d 1059, 1061-63 (11th

Cir. 1994).

25 The statute Congress passed, of course, protects equally

employees of all races and both genders. See McDonald v. Santa

Fe Trail Transportation Co., 427 U.S. 273, 278-80 (1976).

the number may be in 1996, but it has nothing to do with

what Congress intended in 1964. The appropriate inquiry

here is what interpretation best serves the congressional

purposes of limiting the burden on small businesses and

on the federal enforcement scheme, not on what classes

of employees Congress intended to protect.?°

Petitioners’ statistics regarding flex-time scheduling

in the 1990s also provide no guidance to congressional

intent in 1964. Besides being irrelevant, petitioners’ statis-

tics overestimate the impact of such scheduling on cover-

age of small businesses. While many employers today do

offer flexible scheduling, this often means that employees

are allowed to leave earlier or come in later, not that they

are working “compressed work weeks.” Some employers

have adjusted their production schedules to allow

employees to complete in four days of longer hours what

they used to do in five days of shorter hours. But there is

no reason to believe that this practice is widespread in

the smaller workplaces at issue in this case.27 Compressed

26 If petitioners are correct when they say smaller

businesses are hiring a disproportionate number of minority

and female employees, then these businesses may be less in

need of federal regulation thar. petitioners believe. An employer

who hires someone with a protected characteristic is less likely

to take adverse action against that person based on the same

characteristic. See Rand v. CF Industries, Inc., 42 F.3d 1139, 1147

(7th Cir. 1994); LeBlanc v. Great American Insurance Co., 6 F.3d

836, 847 (1st Cir. 1993), cert. denied, 114 S. Ct. 1398 (1994); Lowe v.

].B. Hunt Transport, Inc., 963 F.2d 173, 174-75 (8th Cir. 1992);

Proud v. Stone, 945 F.2d 796, 797 (4th Cir. 1991).

27 Indeed, the statistics offered by Amici Women’s Legal

Defense Fund et al. are based in part on a private study of

“major U.S. employers.” Brief of the Women’s Legal Defense

Fund et al. as Amici Curiae, p. 8 n.11. Petitioner Walters

says respondent Metropolitan Educational Enterprises, Inc.

work weeks are much more common in large workplaces,

where employers have enough workers to adopt more

flexible scheduling. With fewer employees to go around,

smaller businesses generally cannot do that. Nor does a

“compressed work week” necessarily result in loss of

coverage under Title VII. An employer with fifteen

employees working ten hours a day for four “working

days” is covered by Title VII just like an employer with

fifteen employees working five days at eight hours.

E. There Is No Reason To Believe Smail Businesses

Will Manipulate Scheduling To Avoid Coverage

Petitioners also speculate that the court of appeals’

decision will cause a parade of cases in which small

businesses manipulate their scheduling to avoid Title VII

coverage. But as the Seventh Circuit noted, “In more than

a decade since this court ruled in Zimmerman, this parade

has had conspicuously few participants.” EEOC v. Metro-

politan Educational Enterprises, Inc., 60 F.3d 1225, 1230 (7th

Cir. 1995). Indeed, none of the reported cases involved

alleged manipulation.

Nor is there any reason to believe that such manipu-

lation occurs in small businesses. First of all, few small

employers are likely even to be aware of the counting

issue raised by this case. Secondly, the owner of a small

business will be much more concerned about having

enough employees around to produce products and serve

customers than with the effect of scheduling on Title VII

coverage. Finally, in most states, the small employer still

will be subject to state antidiscrimination laws no matter

(“Metropolitan”) engaged in flexible scheduling, but Metro-

politan, a company operating nationwide, is not the typical

small business.

how work schedules are manipulated, so there is little

incentive for such manipulation. In fact, petitioners’

counting method may be more likely to have an adverse

effect on the classes of workers about which petitioners

are concerned. If all part-time employees count for the

entire week, regardless of which days they work, smal!

businesses may be less likely to hire the student, retiree,

or homemaker who is able to work only on certain days.

F. The Seventh Circuit’s Counting Method Generally

Will Be Simple To Apply

According to petitioners, their method of counting is

easier than the Seventh Circuit's, as if this somehow

makes a difference. There is no evidence Congress was

looking for simplicity here, and history tells us that Con-

gress is not adverse to making calculations complex. (See,

e.g., substantial portions of the Internal Revenue Code.)

Petitioners also overestimate the complexity of the

method of counting adopted by the Seventh Circuit?* and

underestimate the burdens of the “payroll method.” The

Seventh Circuit’s method of counting requires that one

look at the “payroll” (i.e., who is being paid) for each

working day in each calendar week. The method favored

28 There is no reason to believe that the amount of time

spent by the parties’ lawyers here is typical. If time and payroll

records are kept in an orderly fashion, the task of preparing a

daily headcount should be “an extremely simple task, as

evidenced by the dearth of cases in which this issue is

dispositive.” Goudeau v. Dental Health Services, Inc., 901 F. Supp.

1139, 1144 (M.D. La. 1995). “It is more likely that since only

small employers will contend that they are not covered by Title

VII, the amount of documents which would reflect the

employees at work on any given day - such as time cards and

work schedules — is unlikely to be substantial.” Id.

by petitioners requires that one look at the “payroll” for

the entire calendar week. But most employers pay their

employees on a biweekly or semimonthly basis, and

those employers with weekly pay periods often designate

a workweek different from the calendar week. So under

either method, one must look at some record to determine

an hourly employee's status on each working day of a

given calendar week.

Petitioners say their method requires that one look

only at records required by federal and state law, but that

is equally true of the method approved below. Contrary

to petitioners’ assertion, federal and most state laws

require that employers keep for hourly employees?’ a

record of “hours worked each workday.” 29 C.F.R.

§ 516.2(a)(7) (1995).°%° Employers routinely keep such

records. Rare is the workplace in which hourly workers

do not have either a time clock or a sign-in sheet. Indeed,

without such records, employers would be unable to

fulfill their obligations under the Fair Labor Standards

Act and corresponding state statutes to pay hourly

employees a premium rate for hours worked in excess of

forty per workweek. See 29 U.S.C. § 207 (1994); see also,

e.g., Ill. Comp. Stat. Ann. ch. 820 para. 105/4a (1993 &

Supp. 1996).

An example of a common pay arrangement illustrates

the situation under both counting methods. Assume a

pay period beginning on the first of the month and end-

ing on the fifteenth. Such a pay period in all cases

includes all or part of three calendar weeks. Since the

2% Salaried employees count for all working days in each

calendar week under either method.

% Most states have similar requirements. See, e.g., Ill.

Comp. Stat. Ann. ch. 820 para. 105/8 (1993).

payroll record for the pay period will show only total

hours werked, it will be necessary to examine daily time

records under either method to determine who was on the

payroll for each working day of all three calendar weeks.

So in most instances, the task of determining coverage

under either method will impose a similar burden. There

is no merit to petitioners’ arg ament that their method is

so much simpler that Congress must have had it in mind

when it passed the relevant language.

THE DAILY PAYROLL METHOD AVOIDS RENDER-

ING THE PHRASE “FOR EACH WORKING DAY”

SUPERFLUOUS

An employer is subject to Title VII coverage if (dur-

ing the relevant years) it “has fifteen or more employees

for each working day in each of twenty or more calendar

weeks.” 42 U.S.C. § 2000e(b) (emphasis added). Given

that several court of appeals panels have disagreed as to

the meaning of the italicized language (with each imply-

ing that the language clearly supported its view), it is

difficult to say that the language has a “plain meaning.”

But there is only one meaning that avoids rendering the

phrase “for each working day” superfluous, and that is

the meaning adopted by the Seventh Circuit.

Petitioners say an employee should be counted for

each working day in any calendar week during which the

employee appears “on the payroll” (i.¢., is entitlea to

some pay)?! for that week. The court of appeals held that

% A “payroll” is a “paymaster’s or employer's list of those

entitled to receive compensation at a given time and of the

amounts due to each.” Webster’s Third New International

Dictionary, 1659 (def. 1) (1981). Although it is not entirely clear

an employee should be counted for each working day in a

given calendar week for which the employee appears “on

the payroll” (i.e., is paid) for that day. Only the latter

interpretation gives full meaning to the phrase “for each

working day.” If Congress had intended that petitioners’

method be used, it could have left this phrase out and

said “who has fifteen or more employees in each of

twenty or more calendar weeks.” The court of appeals

was correct in refusing to read the statute as if it had been

written this way because, as it had held some thirteen

years earlier, a court “should not construe a statute in a

way that makes words or phrases meaningless, redun-

dant or superfluous.” Zimmerman v. North American Signal

Co., 704 F.2d 347, 353 (7th Cir. 1983); see Gustafson v.

Alloyd Co., 115 S. Ct. 1061, 1069 (1995) (“[T]he Court will

avoid a reading which renders some words altogether

redundant”); United States v. Nordic Village, Inc., 503 U.S.

30, 36 (1992) (“[A] statute must, if possible, be construed

in such fashion that every word has some operative

effect”); United States v. Menasche, 348 U.S. 528, 538-39

(1955) (“It is our duty ‘to give effect, if possible, to every

clause and word of a statute.’”) (quoting Montclair v.

Ramsdell, 107 U.S. 147, 152 (1882)); see also Lane v. Pena, 64

U.S.L.W. 4541, 4545 (U.S. June 18, 1996) (refusing to adopt

construction which would render statutory language

“entirely superfluous”).

Petitioners focus on the word “has,” contending that

it implies coverage whenever the employee has a con-

tinuing employment relationship with the employer

from the decisions of the First and Fifth Circuits or from

petitioners’ briefs, the “payroll method” they support

presumably would not include in any given calendar week an

employee off for the entire calendar week on an unpaid leave of

absence.

throughout a given calendar week. But that reading does

not explain why the phrase “for each working day” is

included in the statute. “[A] word is known by the com-

pany it keeps.” Gustafson, 115 S. Ct. at 1069. If Congress

was focusing on the existence of an employment relation-

ship during a given week, it would not have followed the

word “has” with the phrase “for each working day.”

Petitioners’ reliance on the continuing nature of an

employment relationship in other contexts or under other

statutes ignores the purpose of the statutory language

here — to measure the size of employers and exclude

those too small to bear the burden of federal coverage. A

part-time employee may have an “employment relation-

ship” on each day of a given calendar week for purposes

of determining seniority or health insurance coverage,

but that does not mean the employee counts under a

statutory measure of coverage which focuses on “each

working day.”

Petitioners concede that an employee who enters or

departs employment in midweek does not count for that

week under their method.*? They say this gives meaning

to the phrase “for each working day,” which it does - the

same meaning respondents give the phrase (i.e., that an

employee does not count for a given day unless he or she

is entitled to pay for the day). There is nothing in the text

of the statute or its legislative history to support peti-

tioners’ restrictive view of the purpose of the operative

language. According to petitioners, a part-time employee

who works on Monday and Tuesday but then quits does

32 Under the Seventh Circuit’s method, the employee would

count for each day on which he or she works, thus increasing the

likelihood of coverage that week, especially if the employee is

replaced immediately.

not count for the balance of the week. According to

respondents, an employee who works on Monday and

Tuesday and is not scheduled for the rest of the week

does not count for the balance of the week. Given that

Congress's intent was to measure the size of the

employer's business (not the size of its total workforce),

there is no principled reason to conclude that Congress

intended one result in the former case and a different

result in the latter.

A test which focuses on employment relationships

also is overinclusive. If every part-time employee counts

for the entire week, Title VII will be extended to hun-

dreds of thousands of small businesses of the type Con-

gress meant to exclude. The number of employees it takes

to accomplish the employer's daily business on its work-

ing days is a truer measure of the employer’s size (the

question the statutory language was designed to answer)

than is the total number of employees on the weekly

payroll. A business which needs twelve employees to

accomplish its goals on each working day is a twelve-

employee business, even if it staffs its workforce with ten

full-time and five part-time employees.

Petitioners suggest various scenarios in which the

Seventh Circuit’s counting method produces results they

consider “absurd” or “bizarre.” But either method under

consideration here can have odd results. As the Seventh

Circuit pointed out in Zimmerman, under petitioners’

method, an hourly worker who works two hours each

Monday would be counted as an employee for every day

of the week. 704 F.2d at 354. Such overinclusiveness

would defeat Congress's goal of limiting statutory cover-

age to those employers able to afford the burden of

enforcement. If the Seventh Circuit’s method excludes

some employers who would have been included had

Congress written a different test, then it is up to Congress

to amend the statute or the states to provide protection

(as most have). The answer cannot be to force a construc-

tion of the statute which includes too many employers

simply to insure coverage of a few that would otherwise

be excluded, especially when that construction does not

give full meaning to the statutory language.

THE LEGISLATIVE HISTORY IS SILENT ON THE

QUESTION BEFORE THE COURT

While the legislative history of Title VII reveals why

Congress sought to limit the statute’s coverage, it is silent

as to why Congress included the phrase “for each work-

ing day” in the definition of employer. Petitioners nev-

ertheless attempt to divine the statutory meaning from (1)

a 1955 Internal Revenue Service (“IRS”) ruling interpret-

ing a statute with language different from that at issue

here, and (2) congressional committee reports interpret-

ing a statute passed in 1993. None of these sources sheds

any light on what Congress thought in 1964 about the

question before the Court (if Congress considered the

question at all).

Earlier versions of the bill that became Title VII lim-

ited coverage to employers of twenty-five or more

employees, but did not include any of the statutory lan-

guage at issue here. See H.R. 7152, 88th Cong., Ist Sess.

(1963). That language was added to the statute because of

a concern that, as originally written, the statute could be

construed to cover employers who had twenty-five or

more employees during any week in a given calendar

year. See, e.g., 110 Cong. Rec. 6450 (1964). There was a

particular concern about seasonal employers, who would

have the requisite number of employees for only a few

weeks per year. See, e.g., id. at 2711, 6450, 7216-17,

13087-88. That explains why the Senate added language

requiring employers to have twenty-five or more

employees “for twenty or more calendar weeks.” Id. at

13087-88. But it sheds no light on why the phrase “for

each working day” also was added to the statute.

During debate, Senator Dirksen explained that the

new version of the definition was based on language in

the Unemployment Compensation Act. 110 Cong. Rec.

13087 (1964). But the language of the two statutes differed

significantly. The Unemployment Compensation Act

stated:

[T]he term “employer” does not include any

person unless on each of some twenty days during

the taxable year, eacn day being in a different calen-

dar week, the total number of individuals who

are employed by him in employment for some por-

tion of the day (whether or not at the same

moment of time) was four or more.

26 U.S.C. § 3306(a) (1958) (emphasis added). Given this

language, it is not surprising the IRS had ruled that part-

time employees counted for each week of their employ-

ment, even if they dic not work on certain days of the

week. Rev. Rul. 55-19, 1955-1 C.B. 496, 497 (1955). The

Act’s definition required only that an employee be

“employed .. . in employment” twenty days, each day

being in a different calendar week. 26 U.S.C. § 3306(a)

(1958) (emphasis added). That test is quite different from

Title VII's requirement that an employer have the requi-

site number of employees “for each working day” during

twenty or more calendar weeks.* So the IRS ruling inter-

preting different language sheds no light on the meaning

33 See Richardson v. Bedford Place Housing Phase | Associates,

855 F. Supp. 366, 369 (N.D. Ga. 1994) (“Had Congress intended

of the phrase “for each working day” in Title VII. Nor

does Senator Dirksen’s reference to the origin of the lan-

guage imply that Congress was aware of, let alone relying

on, the IRS ruling. See 110 Cong. Rec. 13087 (1964).

Petitioners also cite favorable comments about the

“payroll method” made in the Senate and House Reports

on the FMLA some thirty years after passage of the

language in question here. As this Court has said, “{T]he

interpretation given by one Congress (or a committee or

Member thereof) to an earlier statute is of little assistance

in discerning the meaning of that statute.” Public

Employees Retirement System of Ohio v. Betts, 492 U.S. 158,

168 (1989). “ ‘It is the intent of the Congress that

enacted [the statute]. . . that controls.’ ” Oscar Mayer, 441

U.S. at 758 (quoting Teamsters v. United States, 431 U.S.

324, 354 n.39 (1977)). Despite the fact that Zimmerman was

decided some thirteen years ago, Congress has done

nothing to amend Title VII to reflect disapproval of Zim-

merman’s holding. When Congress disapproved of this

Court’s holdings in Price Waterhouse v. Hopkins, 490 U.S.

228 (1989), and Patterson v. McLean Credit Union, 491 U.S.

164 (1989), it took little time overruling those decisions in

the Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat.

1071 (1991) (codified as amended at 42 U.S.C. § 1981 and

42 U.S.C. § 2000e-2(m)). That is the only way Congress

can change the law —- it cannot do so by suggesting a

to base the definition of employer on the Unemployment

Compensation Act, it would have used far more similar

language.”)

% See Consumer Product Safety Commission v. GTE Sylvania,

Inc., 447 U.S. 102, 117-18 (1980); United States v. Clark, 445 U.S.

23, 33 (1980); United States v. Southwestern Cable Co., 392 U.S. 157,

170 (1968).

different interpretation in comments made about a statute

thirty years after it was passed.

If this Court were inclined to review subsequent leg-

islative history, it would find that Congress continued to

express concern over the burdens of federal enforcement

on small businesses when it amended Title VII to lower

the employee threshold in 1972.%5 At that time, the legis-

lative history also reflects a continuing concern about the

appropriate apportionment of federal and state respon-

sibility in this area and about the effect of expanded

coverage on the EEOC’s workload.

In 1989, when it passed the ADA, Congress still was

concerned about the burden placed on small businesses

by federal regulation. See, e.g., 135 Cong. Rec. $10737-50

(1989). That concern was reflected in questions about the

ADA’s definition of “employer” (the same definition at

issue here):

Mr. BOSCHWITZ. . . . We need to get an idea of

what [the ADA’s] impact will be on small busi-

ness... .

Let me first, ask when you talk about employ-

ment, does the 15 or less [sic] employees mean

full time or part time employees?

Mr. KENNEDY. . . . I believe it is full time

employees, those who work more than 22 hours

a week.

135 Cong. Rec. $10750 (1989). While Senator Kennedy’s

reference to “22 hours” was wrong, his understanding

that only certain “full time employees” counted shows

that Congress had not accepted the “payroll method” as

35 See 118 Cong. Rec. 671, 1526, 1841-43, 1845-46, 1975-77,

2387-91, 3132, 3135, 3171-72, 4907 (1972).

(1972).

the proper interpretation of the language at issue here.

See 135 Cong. Rec. $10752-53 (1989) (remarks of Sen.

Harkin) (employees who work fewer than 20 hours do

not count).

Petitioners also urge this Court to adopt the “payroll

method” so that enforcement of Title VII will be consis-

tent with that of the FMLA. But Congress apparently had

no such concern. When it enacted the FMLA, it set the

employee threshold much higher (fifty),*” and it excluded

many part-time employees* and all employees for the

first twelve months of their employment,** exclusions not

made in Title VII, the ADA, or the ADEA.

IV.

THE EEOC’S OPINION AS TO THE LIMITS OF ITS

OWN AUTHORITY IS ENTITLED TO NO DEFERENCE

Relying on an EEOC “Policy Statement” issued in

1990 and an EEOC general counsel _opinion issued in

1966, petitioners urge this Court to defer to the EEOC’s

judgment as to the proper counting method here. Federal

agencies are presumed to have special expertise as to

subjects within their enforcement power, and deference to

that expertise often is warranted. But federal agencies are

not empowered to interpret congressional intent as to the

scope of their own authority.

The cases upon which petitioners rely do not support

deference here. For example, in EEOC v. Commercial Office

Products Co., 486 U.S. 107 (1988), this Court was deferring to

37 29 U.S.C. § 2611(4)(A)(i) (1994).

38 In order to be eligible for FMLA leave,an employee must

have worked 1,250 hours in the twelve months prior to the date

on which leave commences. 29 U.S.C. § 2611(2)(A)(ii) (1994).

39 29 U.S.C. § 2611(2)(A)(i) (1994).

the EEOC’s judgment as to when state proceedings on a

charge of discrimination have been “terminated” under

Title VII's deferral provision (42 U.S.C. § 2000e-5(e)

(1994)). Id. at 114-16. In Chevron U.S.A. Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837 (1984), the

Court was examining the Environmental Protection

Agency’s interpretation of substantive provisions of the

Clean Air Act. These were matters within the particular

expertise of these agencies, and deference to that exper-

tise was appropriate. But questions about the scope of an

agency’s authority fall within the province of the judici-

ary. See Missouri v. Andrews, 787 F.2d 270, 286 (8th Cir.

1986) (citing Harmon v. Brucker, 355 U.S. 579, 582 (1958);

Social Security Board v. Nierotko, 327 U.S. 358, 368 (1946)),

aff'd sub nom. ETSI Pipeline Project v. Missouri, 484 U.S. 495

(1987). As the Eighth Circuit said in Andrews:

The Chevron rule requires deference only where

an agency reasonably construes the applicable

statute on a matter which is within its jurisdic-

tion to decide. The limits of an administrative

agency’s statutory authority remains [sic] an

issue suitable for judicial resolution.

Andrews, 787 F.2d at 286. “[T]he deference owed to an

expert tribunal cannot be allowed to slip into a judicial

inertia which results in the unauthorized assumption by

an agency of major policy decisions properly made by

Congress.” Bureau of Alcohol, Tobacco and Firearms v. Fed-

eral Labor Relations Authority, 464 U.S. 89, 97 (1983). As the

court of appeals said, it would be particularly inappropri-

ate to give any deference to the 1990 guideline, which

was issued long after Zimmerman had rejected the EEOC’s

view. Metropolitan, 60 F.3d at 1230.

CONCLUSION

The judgment of the court of appeals should be

affirmed.

Respectfully submitted,

Donatp J. McNei

Counsel of Record

Norma W. ZEITLeR

Keck, Manin & Cate

77 West Wacker Drive

Suite 4900

Chicago, Illinois 60601-1693

Mona C. ZEIBERG

National Chamber Litigation

Center, Inc.

1615 H Street, N.W.

Washington, D.C. 20062

Counsel for Amici Curtae

August 1996

APPENDIX

The Illinois State Chamber of Commerce (the “Illinois

Chamber”) includes among its members more than 4,000

employers, who employ more than one million workers

throughout the State of Illinois, and several hundred

other organizations such as local chambers of commerce

and trade and professional associations. Nearly one-third

of the Illinois Chamber’s employer members are small

businesses that will be affected by the Court's decision in

this case. The issue raised in this case is of great impor-

tance to the Illinois Chamber’s smaller business members

because of the disproportionate burden in time and costs

such businesses would have to bear should the scope of

Title VII be extended beyond the limit set by the Seventh

Circuit.

The Chamber of Commerce of the United States of

America (the “Chamber”) is a federation consisting of

approximately 215,000 companies and several thousand

other organizations such as state and local chambers of

commerce and trade and professional associations. A sig-

nificant aspect of the Chamber’s activities involves regu-

lar representation of the interests of its member-

employers before the courts, the United States Congress,

the Executive Branch and independent regulatory agen-

cies of the federal government. Over half of the Cham-

ber’s 215,000 members will be affected by the Court's

decision in this case.

The Illinois Manufacturers’ Association (“IMA”) is

the oldest and largest statewide manufacturing associa-

tion in the United States. IMA provides information and

advocacy on behalf of member companies in such areas

as industrial relations, federal and state regulation, insur-

ance, public affairs, and environmental, judicial and eco-

nomic issues as they relate to the Illinois business climate.

IMA’s 5,000 members employ more than 80% of the total

Illinois manufacturing workforce. A significant percent-

age of IMA’s member companies employ fewer than

twenty-five persons and thus are small enough to be

affected by the outcome here.

The Illinois Restaurant Association (the “Associa-

tion”) represents 2,500 employers at more than 7,000

establishments across the State of Illinois. The Associa-

tion’s mission is to promote and strengthen the restaurant

industry; champion industry concerns and interests; pro-

vide leadership and education; and be of service to the

community. Approximately 25% of the Association's

members operate small establishments which will be

affected by the Court’s decision in this case.

The Illinois Retail Merchants Association (“IRMA”) is

an Illinois not-for-profit trade association which is recog-

nized as the spokesman for Illinois retailing. Within its

membership are retailers in all merchandise lines located

throughout Illinois. Direct inembership includes approxi-

mately 10,000 food and non-food retailers ranging in size

from small “Mom and Pop” businesses to national chains.

Subscribing memberships held by local chambers of com-

merce, retail committees, and shopping center organiza-

tions raise IRMA’s membership to over 25,000 Illinois

retailers which account for approximately 85% of all retail

sales in Illinois.

The Management Association of Illinois (the “Asso-

ciation”) provides human resources, training, organiza-

tional development and employment law lobbying

services to Illinois employers. Established in 1898, the

Association is dedicated to delivering innovative busi-

ness solutions leading to growth and financial stability

for its over 1,000 members.

Wisconsin Manufacturers & Commerce (“WMC”) is

Wisconsin's largest business association, representing

approximately 3,600 member firms which employ 500,000

employees throughout the State of Wisconsin. WMC is

dedicated to fostering and advancing policies which pro-

mote the public interest in business development and a

healthy business climate. The Wisconsin Fair Employ-

ment Act covers all employers, regardless of size, and

thus protects all Wisconsin employees against unlawful

discrimination. Thus, WMC believes there is no need to

impose the additional burden of federal enforcement on

the substantial number of small businesses represented

by WMC.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.