Petition for Writ of Certiorari — Liberty Mutual Insurance Company, a Corporation v. Sandra Wetzel and Mari Ross, on Behalf of Themselves and all Other's Similarly Situated
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SANDRA WETZEL and MARI ROSS, on behalf
of themselves and all others similarly situated,
Petitioners,
Vv.
LIBERTY MUTUAL INSURANCE COMPANY,
Respondent.
PeTInon For A Warr or CERTIORARI
TO THE Unrrep States Court or APPEALS
FOR THE THinp Cincurr
INDEX
TABLE OF CITATIONS ..........ceccccccccceee
PETITION FOR A WRIT OF CERTIORARI......
COPEINIRING BAAS oo csc c i cece nsnsccnsscsesssece
FUER MED 6 a nGnnhecena eX ccvaveuntenvessen’
QUESTION PRESENTED.................e000-
STATUTORY PROVISION INVOLVED..........
STATEMENT OF THE CASE ................0..
REASONS FOR GRANTING THE WRIT.........
The Court of Appeals Has Decided an
Important Question of Federal Law
Which Has Not Been, But Should Be,
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INDEX TO APPENDIX
Page
Opinion of the United States Court of
SI aeUN Abad dhe dedcnveesceass la
Amended Judgment of the United States
Court of Appeals 2/14/75 ............0.ce eee da
District Court’s Memorandum Order on
Plaintiffs’ Motion to Determine Class
PS aS Les clase takwh de erecuvenecsse 35a
District Court’s Memorandum Order
on Pending Matters 12/6/73 .............-.206. 38a
Opinion of the District Court 1/9/74 ............. 43a
Order of the District Court 1/9/74 ............... T4a
District Court’s Memorandum and Amended
EE cece ssabis bus hoe bred oneobenes 76a
Table of Citations
TABLE OF CITATIONS
Cases
Air Line Stewards & Stewardesses Association
v. American Airlines, Inc., 9 FEP Cases 101
(N.D. Ill., November 18, 1974)................
Alexander v. Gardner-Denver Co., 415 U.S.
Se CE Grae cece aN ea Ad hh Gk Ghia hee on
Bartmess v. Drewrys U.S.A., Inc., 444 F.2d
1186 (7th Cir. 1971), cert. denied, 404 U.S.
We MTD eaehbe shah Vaated sh cies Rd cbs becnss
Boudreaux v. Baton Rouge Marine Contracting Co.,
437 F.2d 1011 (5th Cir. 1971) .................
Hamm v. City of Rock Hill, 379 U.S. 306 (1964) ....
Macklin v. Spector Freight Systems, Inc., 478 F.2d
Se EEE sie wpacccacbasadcesaniners
McDonnell Douglas Corp. v. Green, 411 U.S.
ere ea bes Cains sicne sakes bcc es
Strauss v. Douglas Aircraft Co., 404 F.2d 1152
MCCS LK Rr eich oe se s.0e bs 94090600
United States v. Masonry Contractors Association,
497 F.2d 871 (6th Cir. 1974) ..................
STATUTES AND RuLes or Court
Pub. L. No. 92-261, §4(a), 86 Stat. 104 .............
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42 U.S.C. §2000e-5(d) (1970)...................0..
42 U.S.C.A. §2000e-5(e) (1974) ................28..
42 U.S.C. §2000e-6(a) (1970) .................0.0..
42 U.S.C.A. §2000e-6(c) (1974) ...............0008
OTHER SOURCES
Remarks of Senator Humphrey, 110 Cong. Rec.
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Remarks of Senator Javits, 110 Cong. Rec. 14191
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tel
A PRT Fan AD
gn the
Supreme Court of the United States
Ocroser TERM, 1974
No. 74-
SANDRA WETZEL and MARI ROSS, on behalf
of themselves and all others similarly situated,
Petitioners,
Vv.
LIBERTY MUTUAL INSURANCE COMPANY,
Respondent.
PETITION FOR A Writ oF CERTIORARI
TO THE UNireD STATES CourT OF APPEALS
FOR THE THIRD CIRCUIT
Petitioners Sandra Wetzel and Mari Ross pray that a
writ of certiorari issue to review that portion of the judgment
of the United States Court of Appeals entered on January 23,
1975, which vacated the judgment of the United States
District Court for the Western District of Pennsylvania
entered in favor of former employees of Liberty Mutual
Insurance Company who left the employ of Respondent
more than 210 days before the filing of Petitioners’
administrative charge with the Equal Employment Oppor-
tunity Commission.
2 Opinions Below, Jurisdiction
and Question Presented
OPINIONS BELOW
The following opinions are printed in the Appendix to
this Petition:
1. Opinion of the Court of Appeals dated January 23,
1975, as amended, February 25, 1975, reported at 508 F.2d
239 (3rd Cir. 1975) (1a);!
2. Unreported Memorandum Order of the District
Court dated August 16, 1972, holding that Petitioners’ action
was maintainable as a class action, but limiting the class to
present and future employees of the Respondent (35a);
3. Unreported Memorandum Order of the District’
Court dated December 6, 1973, which, inter alia, redefined
the class to include former employees (38a);
4. Opinion and Order of the District Court dated
January 9, 1974, granting Petitioners’ motion for partial
summary judgment on liability (43a, 74a). The opinion is
reported at 372 F. Supp. 1146 (W.D. Pa. 1974);
5. Unreported Memorandum and Amended Order of
the District Court dated March 19, 1974, entering judgment
in accordance with Fed. R. Civ. P. 54(b) (76a).
JURISDICTION
The opinion and judgment of the Court of Appeals were
issued on January 23, 1975. This Petition for Certiorari is
filed within ninety days therefrom. The jurisdiction of this
Court is invoked under 28 U.S.C. §1254(1) (1970).
QUESTION PRESENTED
Is the time provision for filing a charge with the Equal
Employment Opportunity Commission contained in section
“a” references herein are to the designated page number of the
Appendix.
PELE AI OY ICL OE SLI I OS PEC LGS EPA NEE RIE NAR SE NCE MSG AB a SN LE WET BLE My
aioe ST TRL, CPM FETE LS REAL YY TARE APL OE See ONE TUE ME dae DOIN” OED: Lai SUAS? =,
Statutory Provision Involved , : 3
706(d) of the Civil Rights Act of 1964? a jurisdictional bar to
recovery in a private “pattern and practice” class action
where the employer’s discriminatory practices are shown to
have been continuous from the effective date of the Act until
after the filing of a charge?
STATUTORY PROVISION INVOLVED
The statutory provision involved is section 706(d) of the
Civil Rights Act of 1964,5 42 U.S.C. §2000e-5(d) (1970),
which provided:
§2000e-5. Enforcement provisions.
(d) Time for filing charges after occurrence of unlawful
practices or termination of State or local enforcement |
proceedings; filing of charges by Commission with
State or local agency.
A charge under subsection (a) of this section shall
be filed within ninety days after the alleged unlawful
employment practice occurred, except that in the case
of an unlawful employment practice with respect to
which the person aggrieved has followed the procedure
set out in subsection (b) of this section, such charge shall
be filed by the person aggrieved within two hundred
and ten days after the alleged unlawful emp pyment
practice occurred, or within thirty days after receiving |
notice that the State or local agency has terminated the
proceedings under the State or local law, whichever is_,
earlier, and a copy of such charge shall be filed by the
Commission with the State or local agency.
242 U.S.C.§2000e-5(d) (1970), now, as amended, 42 U.S.C.A. §2000e- °
S(e) (1974).
3The subsection was, amended by the Equal Employment Oppor-
tunity Act of 1972, Pub. L. No. 92-261, §4(a), 86 Stat. 104, to extend the
time for iiling charges and to add the requirement that notice of the charge
be served on the employer within ten days after filing. See 42 U.S.C.A.
§2000e-5(e) (1974). The effective date of the amendment was March 24,
1972, after the filing of the Petitioners’ Complaint in the District Court.
area
4 Statement of the Case
STATEMENT OF THE CASE
This action was commenced as a class action under Title
VII of the Civil Rights Act of 1964, 42 U.S.C, §§2000e et seq..,
to obtain injunctive, declaratory and monetary relief.
Petitioners have, successfully challenged Respondent's
_ ‘hiring, promotion and pregnancy related practices as sex
discriminatory. Respondent i is a casualty insurance company
with offices throughout the United States. Both men and
women are employed in the Claims Department in what the
Respondent classifies as a “technical” capacity. Within the
“technical” classification are Claims Adjusters and Claims
Representatives, each of whose basic function is the
application of the necessary technical skills to investigate
and bring about'the proper disposition of claims. While each
_ is anentry level position open to college graduates, the salary
of an Adjuster is considerably higher than that of a
Representative. The opportunities for promotion are
unlimited for the Adjuster; they are severely limited for the
Representative. Prior to the Petitioners’ filing of charges
with the EEOC, the position of Adjuster was staffed
predom inantly by‘malcs; the position of Representative was
staffed predominantly by females.
Respondent’s employment policies relating to preg-
nancy have varied somewhat since the July 2, 1965, effective
date of Title VII. From 1948 until March, 1967, a pregnant
employee was not permitted to work beyond her sixth
month of pregnancy under any circumstances and was
discharged by the Resporident at that time. In March, 1967,
Respondent modified its leave policy slightly so that a
pregnant employee was not discharged until after her eighth
month of pregnancy. This policy of automatic termination
continued until September, 1970, when, as an‘alternative to
discharge, Respondent required its employees to take
uncompensated leaves of absence after the eighth month of
pregnancy and to return to work no later than six months
ORL EO CORRELL AI LO NE ani
WAP scat: OF 4s
Statement of the Case 5
from the commencement of the leave or three months from
the date of delivery, whichever came first. The policy was
modified to its present form in November, 1971, to enable an
employee to work prior to delivery for as long as her
physician verifies her ability to continue. The same
mandatory return dates, which apply only to maternity
leaves and not to other leaves of absence for other temporary
disabilities, remain in force.
Respondent also requires its employees to participate in
an income protection plan as a condition of employment.
The plan, which is funded in part through mandatory
employee contributions, provides employees with income
during periods of disability. Respondent pays no benefits
under the income protection plan for any disability related
to pregnaycy. Leaves or temporary absences due to
pregnancy related disabilities are not covered.
Mrs. Wetzel worked for Respondent as a Claims
Representative from J uly, 1967, until August, 1973. Mrs. Ross
worked for Respondent as a Claims Representative from
early 1970 to September, 1972. On May 14, 1971, Petitioners,
who were employed at Respondent's Pittsburgh office, filed
charges of sex discrimination with the Equal Employment
Opportunity Commission. They had filed a previous charge
with the appropriate state agency. After the EEOC issued
right to sue letters, Petitioners commenced this nationwide
class action on February 28, 1972, alleging that the
Respondent's hiring and promotion policies and its preg-
nancy related policies as to the female technical employees
in its Claims Department violated Title VII.‘
On August 16, 1972, the District Court ordered that the
suit was maintainable as a class action and that the
‘Petitioners alleged further that Respondent's policy of paying higher
salaries to Claims Adjusters than to Claims Representatives is unlawful. -
Since this claim was not susceptible of summary judgment treatment, a
non-jury trial was had. The trial was concluded in January, 1975. Final
judgment has yet to be entered.
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6 Statement of the Case
nationwide class would include present and future female
technical employees in Respondent's Claims Department.
On December 6, 1973, the District Court amended its order
and defined the class as follows:
“The class represented by plaintiffs shall include all
female technical employees who were, are, or will be
employed in the defendant's claims department from
and after July 2, 1965, without limitation to territory in
the entire geographical area where defendant does
business.”
On January 9, 1974, the District Court ruled that the
Respondent’s hiring, promotion and pregnancy related
practices were violative of Title VII. The Court also found
that Respondent’s policies of denying the benefits of its
income protection plan to females with pregnancy related
disabilities and of requiring such employees to return to
work within a time limit applicable to no other disability or
to be fired were the “proper subject of injunctive
relief.”(75a). On February 20, 1974, the District Court,
pursuant to Fed. R. Civ. P. 54(b), directed the entry of final
judgment on the pregnancy related issues. On March 19,
1974, the District Court, again pursuant to Fed. R. Civ. P.
54(b), directed the entry of final judgment on the hiring and
promotion issues.
Respondent took separate appeals from the February
20 and March 19, 1974, orders. In Wetzel v. Liberty Mutual
Insurance Co.,__F .2d (No. 74-1233, 3rd Cir., February
11, 1975), petition for cert. docketed at No. 74-1245,
Respondent asserted that the District Court had erred in
finding its pregnancy related practices unlawful. The Court
of Appeals affirmed the summary judgment, holding that
“Liberty Mutual’s income protection plan and maternity
leave policy are violative of Title VII of the 1964 Civil Rights
Act.” Id., slip opinion at 17.
a: WER
CIEE EF LEIA NTR TELE LE IT TENT TEEN TINT
Statement of the Case 7
In the appeal which resulted in the judgment challenged :
here by Petitioners, Respondent contended that the District :
Court had erred in finding the challenged hiring and
promotion practices violative of Title VII and in resolving
the class action aspects of this case. In Wetzel v. Liberty
Mutual Insurance Co., 508 F.2d 239 (No. 74-1515, 3rd Cir.,
January 23, 1975) (la),° a separate panel of the Court of
Appeals affirmed the District Court’s judgment in all
respects except the one challenged here by Petitioners.
Relevant to this Petition, the Court of Appeals held that:
(1) the claims of employees who left the employ of
Respondent more than 210 days before the filing of
charges with the EEOC by Petitioners were time barred
by the “statute of limitations” contained in section
706(d) of the Civil Rights Act of 1964 (8a); and
(2) since the filing of a charge with the EEOC is a
“jurisdictional” requirement, the Court could consider
the issue on appeal even though Respondent failed to
raise it in the District Court (7a, n. 8).
The Court of Appeals vacated that part of the District
Court’s judgment in favor of the Kespondent’s former
employees whose claims were held to be time barred. @
IASG EYES LT EIN LOL LSI LE TEI TD
REASONS FOR GRANTING THE WRIT
The Court of Appeals Has Decided an Important Question
of Federal Law Which Has Not Been, But Should Be,
Settled By This Court.
This case involves an issue of national importance
concerning the administration of Title VII of the Civil Rights
Act of 1964 in a class action context. On the one hand, the
Court of Appeals held Respondent’s discriminatory hiring
and promotion practices to be continuing violations of Title
‘Liberty Mutual Insurance Company sought and received two stays
of the mandate of the Court of Appeals. It has filed its own Petition For
Writ Of Certiorari with this Court at No. 74-1288.
22
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8 Statement of the Case
VII which would have permitted the filing of a charge with
the EEOC by a present employee at any time (8a).° The
Court of Appeals also held that a plaintiff can maintain a
class action on behalf of employees who had not filed
charges with the EEOC (7a). On the other hand, however,
the Court held that employees who had left the
Respondent’s employ more than 210 days before the
Petitioners filed their charges could no longer file charges
with the EEOC, and that those females therefore must be
excluded from the class for failure to satisfy a “jurisdictional”
prerequisite to suit in the District Court (7-8a).
Petitioners contend, initially, that the former em-
ployees’ inability to comply with the time provision
contained in section 706(d) does not erect a jurisdictional
impediment to suit.‘ This provision is merely part of an
administrative remedy which must be exhausted by one
individual litigant, not the entire class of aggrieved
employees. The purpose of the provision is to ensure that the
purported grievance is not stale and to afford the EEOC the
opportunity to investigate and conciliate. See Boudreaux v.
Baton Rouge Marine Contracting Co., 437 F.2d 1011 (5th
Cir. 1971). Here, Respondent was apprised of the charges
and was afforded ample time to conciliate and change its
practices. And while the Respondent was found to have
modified its hiring and promotion practices subsequent to
the filing of the charges, its other employment practices
remain unaltered.
*This holding is consistent with established law. See, e.g., Macklin v.
Spector Freight Systems, Inc., 478 F.2d 979 (D.C. Cir. 1973); Bartmess v.
Drewrys U.S.A., Inc., 444 F.2d 1186 (7th Cir. 1971), cert. denied, 404 U.S.
939 (1971).
“While Petitioners are aware that this Court has stated twice that the
timely filing of a charge with the EEOC is a “jurisdictional” prerequisite,
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973); Alexander v.
Gardner-Denver Co., 415 U.S. 987 (1974), in neither case was the
statement necessary to this Court’s holding or made in a class action
context.
Statement of the Case )
Since it is unnecessary for more than one employee to
file charges with the EEOC as a prerequisite to a Title VII
class action suit, it was unnecessary for any former employee
of Respondent to attempt to file charges with the EEOC.
Once the administrative process initiated by Petitioners had
ceased, former employees could file suit directly in the
District Court. The legislative history concerning the
administrative procedure is revealing. In addressing the
issue of whether any filing with the EEOC is necessary,
Senator Javits stated:
“The Commission does not hold the key to the
courtroom door. The only thing this title [Title VII}
gives the Commission is time in which to find that there
has been a violation and time in which to seek
conciliation ... .
“But, Mr. President, that is not a condition
precedent to the action of taking a defendant into court.
A complainant has an absolute right to go into court, and
this provision does not affect that right at all.” 110 Cong.
Rec. 14191 (1964).
Senator Humphrey, sharing the same view, added: “The
individual may proceed in his ownright at any time. He may
take his complaint to the Commission, or he may go directly
to court.” 110 Cong. Rec. 14188 (1964). Senator Humphrey's
statement is significant here since this Court has relied on his
interpretations, as the bill’s floor manager in the Senate, in
construing other provisions of the Civil Rights Act of 1964.
See Hamm vt. City of Rock Hill, 379 U.S. 306, 311 (2964).
Under this reasoning, Title VII contains no express statute of
limitations, and thus the applicable statute of limitations is
the most analagous state statute, the benefits of which
Respondent waived by its failure to raise the defense in the
District Court. Strauss v. Douglas Aircraft Co., 404 F.2d
1152, 1155 (2d Cir. 1968); United States v. Masonry
Contractors Association, 497 F.2d 871 (6th Cir. 1974).
Alternatively, Petitioners submit that the time provision
sete
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ROG DSR I, EY AIO LB
10 Statement of the Case
contained in section 706(d) is no more than a statute of
limitations which also can be waived. Air Line Stewards &
Stewardesses Association v. American Airlines, Inc., 9 FEP
Cases 101 (N.D. Ill., November 18, 1974).
Of further significance to the disposition of the issue
raised by this Petition is the fact that Petitioners, acting as
“private attorneys general,” alleged and proved a “pattern
and practice” of sex discrimination by Respondent.
Paragraph 11 of the Complaint alleged, inter alia, that:
“ .. defendant has enacted and effected national
policies and practices of unlawful and systematic
exclusion of and discrimination against women as a
class.”
The trial and appellate courts have held that Respondent
continuously violated Title VII from the effective date of the
Act until subsequent to the Petitioners’ filing with the EEOC.
Clearly, the Attorney General could have brought a “pattern
and practice” suit under section 707(a) of the Civil Rights Act
of 1964, 42 U.S.C. §2000e-6(a) (1970).*° In such a case, the
Attorney General could have recovered back pay on behalf
of the employees excluded from the class by the Court of
Appeals. United States v. Masonry Contractors Association,
497 F.2d 871 (6th Cir. 1974). The same result should obtain
where Petitioners have instituted a private “pattern and
practice” class action, so that the Respondent’s former
employees are not prejudiced by the Attorney General's
failure to act.
‘The Attorney General's function has been transferred to the EEOC.
42 U.S.C.A. $2000e-6(c) (1974).
Conclusion ll
CONCLUSION
For the reasons stated above, Sandra Wetzel and Mari
Ross, on behalf of themselves and all others similarly
situated, pray this Honorable Court to grant this Petition For
A Writ Of Certiorari to review the issue raised herein on the
merits.
Respectfully submitted,
Howarpp A. SPECTER,
LITMAN LITMAN HARRIS & SPECTER, P.A.
1320 Grant Building
Pittsburgh, Pennsylvania, 15219
RosBert F. STONE
FINE, PERLOW & STONE
1528 Frick Building
Pittsburgh, Pennsylvania 15219
Attorneys For Petitioners
PS ACUI ne
Jn the
Supreme Court of the United States
OcroBer TERM, 1974
No. 74-
SANDRA WETZEL and MARI ROSS, on behalf
of themselves and all others similarly situated,
Petitioners,
V.
LIBERTY MUTUAL INSURANCE COMPANY,
Respondent.
APPENDIX TO PETITION FOR A WRIT OF
CERTIORARI TO THE UNITED STATES CourT
OF APPEALS FOR THE THIRD CiRCUIT
NO PMY a eS
Opinion of the Court of Appeals la
United States Court of Appeals
For THE THirp Circuit
No. 74-1515
SANDRA WETZEL and MARI ROSS, on behalf of
themselves and all others similarly situated, Equal
Opportunity Commission as amicus curiae
Vv.
LIBERTY MUTUAL INSURANCE COMPANY,
a corporation,
Appellant
(D.C. Civil Action No. 72-169)
APPEAL FROM THE UNITED STATES District Court
For THE WESTERN DistRICT OF PENNSYLVANIA
Argued October 30, 1974
Before STALEY, ALDISERT and RoseENn, Circuit Judges
—
2a Opinion of the Court of Appeals
OPINION OF THE COURT
(Filed January 23, 1975)
Rosenn, Circuit Judge
This appeal raises significant questions concerning the
management of class actions brought under Title VII of the
Civil Rights Act of 1964, 42 U.S.C. §2000e et seq. (1970), as
amended Equal Employment Opportunity Act of 1972, 42
U.S.C. §2000e et seq. (Supp. II, 1972).
Appellant, Liberty Mutual Insurance Company (Liber-
ty Mutual), is a casualty insurance company with offices
throughout the country. Both men and women are employed
in the claims department of these offices in what the
appellant terms a “technical” capacity. Within its claims
department are adjusters and representatives, each of whose
basic functions is the application of the necessary technical
skills to investigate and bring about the proper disposition of
claims against the company. While each is an entry level
position open to college graduates, the salary of a claims
adjuster is considerably higher than that of a claims
representative. The possibilities for promotion are unlimited
for the claims adjuster; they are severely limited for the
claims representative. Before the filing of charges in this case
by the appellees, Sandra Wetzel and Mari Ross, the position
of claims adjuster was staffed predominantly by males; the
position of claims representatives was staffed predominant-
ly by females.! ;
Wetzel and Ross were employed as claims represen-
tatives in the Pittsburgh office of the company. Bothdesired
the higher paying adjuster’s position but were informed by
the Company that it was not open to women. Dissatisfied
with the Company’s policies, they filed charges of sex
1. The differences in Liberty Mutual’s hiring and promotional
practices as to claims representatives are set out in greater detail, infra at
pp. 28-30.
' Opinion of the Court of Appeals 3a
discrimination with the Pennsylvania Human. Relations
Commission (PHRC) on May 11, and with the Equal
Employment Opportunity ae (EEOC) on May 14,
1971.
The filing of these charges nl led the Company
to reassess its policies concerning these positions. In August,
1971, the Company decided to recruit women to become
claims adjusters and reviewed its roster of claims represen-
tatives to ascertain if any such representatives were
interested in, and qualified for, the position of claims
adjuster. This decision eventually led to the hiring of
approximately 10% of the claims re as claims
adjusters.
After the filing of the charges with PHRC, the Company
offered Wetzel and Ross positions as claims adjusters.
Because of information which they had received from
PHRC concerning back pay, and because of their belief that
the job offer was accompanied by unacceptable conditions,
they rejected the offer. Since PHRC had failed to conciliate
the parties, Wetzel and Ross were issued right to sue letters
by the EEOC. On February 28, 1972, Wetzel and Ross
commenced a class action alleging that the Company’s
hiring and promotion policies and its pregnancy related
policies as to the female technical employees in its claims
department violated Title VII. They further alleged that the
Company’s policy of paying higher salaries to claims
adjusters than to claims representatives violated the Equal
Pay Act of 1963, 29 U.S.C. §206(d) (1970).
In response to Wetzel’s and Ross’ motions, the district
court, on August 16, 1972, ordered that the suit was
maintainable as a class action? under Rule 23(b)(2) and that
the class would include “all present and future female
technical employees in the defendant’s claim department
2. All references to rules are references to the Federal Rules of Civil
Procedure.
-_ Se
4a Opinion of the Court of Appeals
without limitation to territory in the entire geographical area
where defendant does business.” On September 14, 1972, the
court refused to require notices to be sent to the proposed
nationwide ¢lass and declined to maintain the class under
Rule 23(b)(3). In its final order of December 6, 1973, the
court amended the class to include former, as well as present
and future female technical employees, and reaffirmed its
determination to maintain the class under Rule 23(b)(2),
rather than Rule 23(b)(3). The court acknowledged,
~ however, that the class was maintainable under: either
subsection. It also saw “no immediate necessity of the class
action notice required of actions proceeding under Fed. R.
Civ. P. 23(b)(3).” No notice had been sent to any members of
the class as of the date of. this appeal.
On March 26, 1973, Wetzel and Ross moved for wablta
summary judgment.’ Counsel for both sides agreed that the
equal pay claim was not susceptible to summary judgment
treatment because disputed issues of fact existed as to
whether the work performed by claims representatives was
equivalent to that performed by claims adjusters. On
January 9, 1974, the court entered an interlocutory order that
the pregnancy related policies of the Company violate Title
VII, “are continuing violations and are the proper subject of
" injunctive relief.” On February 20, 1974, the district court
rendered final the interlocutory order. A notice of appeal
was filed and was docketed at No. 74-1233. That appeal is
presently before another panel of this court and the issues in
that appeal do not concern us here.
The district court inits interlocutory order of January 9,
1974, also ruled that the hiring and promotion policies of the
Company violated Title VII, but denied injunctive relief‘
3. Only the question of liability was to be decided at that time.
Determination of the relief to be granted was left for further proceedings.
: 4. The opinion of the district court is reported at 372 F. Supp. 1146
(W.D. Pa. 1974).
Opinion of the Court of Appeals 5a
“{b]ecause the evidentiary materials show that at certain
times subsequent to the filing of the administrative charge or
the within Complaint the Defendant has ceased or
discontinued the discriminatory practice[s].”"> In an un-
successful attempt to avoid piecemeal appeals, the court, on
March 19, 1974, rendered final this part of the interlocutory
order. In this appeal, Liberty Mutual has asked us to review
the district court’s management of the class action and its
granting of summary judgment against the challenged hiring
and promotion policies.
I
® A. Jurisdiction
Preliminarily, we note that, despite Wetzel’s and Ross’
contentions, we have jurisdiction to review the class action
aspects of this case. The district court, pursuant to Rule
54(b), rendered final the partial summary judgment as to the
Company’s hiring and promotion policies on March 19, 1974.
The determination of the class became final for the purposes
of 28 U.S.C. § 1291 at that time. The notice of appeal, filed
April 15, 1974, was timely as to all aspects of that judgment.
including the determination of the affected class.
B. Scope of Review
Before examining Liberty Mutual's contentions, we
must first decide the appropriate scope of review of the
district court’s actions. The extent of the scope of review is of
the utmost importance for, in some instances, it effectively
determines whether the actions of the district court wi!’ be
sustained. Lengthy deliberations on the subject are not
necessary, however, because the question is settled in this
circuit by the recent case of Katz v. Carte Blanche Corp., 496
F.2d 747 (3d Cir.) (en banc), cert. denied, 43 U.S.L.W. 3197
(October 15, 1974), in which Judge Gibbons wrote:
5. Id. at 1163. —
us
5 RLS RAN a RRR BL ORE SOAS
VERE SRG TAPE ELAR AS Fe Oe
6a Opinion of the Court of Appeals
[The scope of review] will depend to some extent upon
which facet of the multi-faceted determination is
challenged on appeal. The district court must determine
if the four prerequisites for a class action listed in rule
23(a) have been met. These are mandatory re-
quirements, and our review decides whether the
mandates have been met. The district court must also
determine whether the class action is maintainable
under rule 23(b)(1) or (2) so that it may proceed without
notice to or identification of the class members. Our
review will determine whether the court properly
classified the type of class action in reaching its decision
as to class action treatment.
Id. at 756 (citations omitted). Inasmuch as the district court
appropriately applied the criteria of Rule 23(a), the scope of
our review is whether the trial court did abuse its broad
discretion.®
II
The mandatory requirements of Rule 23(a)* must first
be met to maintain a class action. Liberty Mutual has made
6. The scope of review is summarized by Professor Moore:
In determining whether an action brought as a class action is to be
so maintained the trial court should carefully apply the criteria, set
forth in Rule 23. . . , to the facts in the case; and if it fails to do so its
determination is subject to reversal by the appe!!ate court when the
issue is properly before the latter court. On the other hand, where the
trial court does apply the Rule's criteria to the facts of the case, the
trial court has [a] broad discretion in determining whether the action
may be maintained as a class action and its determination should be
given great respect by a reviewing court.
3B J. Moore, Federal Practice 4 23.50 at 1104-05 (2d ed. 1974), quoted with
approval in Katz v. Carte Blanche Corp., 496 F.2d at 757.
7. Rule 23(a) provides:
(a) Prerequisites to a Class Action. One or more members of a
class may sue or be sued as representative parties on behalf of all only
if (1) the class is so numerous that joinder of all members is
impracticable, (2) there are questions of law or fact common to the
class, (3) the claims or defenses of the representative parties are
typical of the claims or defenses of the class, and (4) the
representative parties will fairly and adequately protect the interests
of the class.
PLE OE OD
Opinion of the Court of Appeals 7a
numerous attacks on the determination made by the district
court that the requirements of 23(a) had been met. After
careful consideration of its contentions, we need to discuss
only two.
First, Liberty Mutual contends that it was error to
include in the class all female technical employees who had
been employed since July 1, 1965. It contends that
employees whose claims are time barred by the statute of
limitations contained in then section 706(d) of Title VII, 42
U.S.C. § 2000e-5(d) (1970), should be excluded from the
class.”
We agree with Liberty Mutual that such individuals
should have been excluded. At the time charges were filed
with the EEOC, section 706(d) provided that where, as here,
a charging party had instituted proceedings with a state
agency which has jurisdiction over discriminatory employ-
ment practices, a charge must be filed with the EEOC within
210 days of the occurrence of the alleged unfair practice.’
As stated in Macklin v. Spector Freight Systems, Inc.,
478 F.2d 979, 986 (D.C. Cir. 1973):
Since a suit in court depends on an agency notice to
sue letter and since the agency cannot take the case
initially unless the timely filing requirements are met,
the timely filing requirements with respect to EEOC
appears to be a jurisdictional prerequisite to court
action under Title VII.
A plaintiff may bring a class action on behalf of those who
have not filed charges with the EEOC. Bowe v. Colgate-
8. Since the filing of a charge with the EEOC is a jurisdictional
requirement, we may consider the issue here although Liberty Mutual did
not raise it in the district court.
9. The Equal Employment Opportunity Act of 1972, Pub. L. No. 92-
261, $4, 86 Stat. 104 (March 24, 1972), extended the time for filing in such
cases to 300 days and renumbered §706(d) as §706(e). The effective date
of the amendment was March 24, 1972, after the filing of the complaint in
the district court.
8a Opinion of the Court of Appeals
Palmolive Co., 416 F.2d 711, 719-20 (7th Cir. 1969); Oatis v.
Crown Zellerbach Corp., 398 F.2d 496, 499 (5th Cir. 1968).
This tolls the statute of limitations for all members of the
class. American Pipe & Construction Co. v. Utah, 414 U.S.
538 (1974). But Wetzel and Ross cannot represent those who
could not have filed a charge with the EEOC at the time they
filed their charges. CWA v. New York Telephone Co., 8
F.E.P. 509, 513 (S.D. N.Y. 1974); Culbert [sic] v. General
Electric Co., 5 F.E.P. 969, 993 (E.D. Va. 1973);Garneau v.
Raytheon Co., 3 F.E.P. 1315 (D. Mass. 1971).
This conclusion does not mean, however, as Liberty
Mutual contends, that the numerosity requirement of
23(a)(1) has not been met. Wetzel’s and Ross’ charges
alleged the maintenance of discriminatory hiring and
promotion policies up to the time of the filing of their
complaint. Such policies are continuing violations of Title
VII and would allow a filing of a charge ai any time by a
present employee. Macklin v. Spector Freight Systems, Inc.,
supra at 987-88. The only employees barred from the class
are those who left the employ of the Company more than 210
days before the filing of the charges with the EEOC by
Wetzel and Ross. The class will be larger than the
approximately seven hundred female technical employees
presently employed by Liberty Mutual, meeting the
numerosity requirement of 23(a)(1). Of course, in the
determination of the relief to which members of the class
will be entitled, the district court should take into account
the modification of the class required by section 706(d).
The second attack on the district court’s determination
that the conditions of Rule 23(a) have been met is the
contention that Wetzel and Ross were not adequate
representatives of the class as required by Rule 23(a)(4).
Adequate representation depends on two factors: (a)
the plaintiff's attorney must be qualified, experienced, and
generally able to conduct the proposed litigation, and (b) the
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Opinion of the Court of Appeals Ya
plaintiff must not have interests antagonistic to those of the
class. Eisen v. Carlisle & Jacquelin, 391 F.2d 555, 562 ( 2d Cir.
1968).
Liberty Mutual does not dispute the district court's
finding as to the competency of counsel but it does object to
the court’s finding of “no conflict or antagonism betwen
Wetzel’s and Ross’ claims and the claims of the class.”
Liberty Mutual contends that employees, such as Wetzel and
Noss, Who have voluntarily severed their employment prior
to suit cannot adequately represent members of the class
who are presently employed by the company. We note the
existence of a dispute as to whether Wetzel’s and Ross’
termination of employment was, in fact, voluntary, but we
will assume, arguendo, that they voluntarily severed their
employment.
We believe that a former employee, who is not entitled
to reinstatement, may still be an adequate representative of a
class of past and present employees alleging discriminatory
employment practices.'° Whether a party adequately
represents a class depends on all the circumstances of the
particular case. 3B J. Moore, Federal Practice, 4 23.07[1] (2d
ed. 1974) (hereinafter cited as Moore). That a person is no
longer employed with a company and is not entitled to
reinstatement is but one of the circumstances to be
10. A former employee has standing to bring such a suit. Hackett v.
McGuire Bros., Inc., 445 F.2d 442 (3d Cir. 1971).
We are aware that, in a similar situation, the Sixth Circuit has reached
the opposite conclusion. Heard v. Mueller Co., 464 F.2d 190 (6th Cir.
1972). However, in Heard the former employee attempted to represent a
class of present and prospective employees only. Here the class includes
past employees as well. Further, the court in Heard decided that the
company’s employment practices were not discriminatory before
deciding the class action issue. Here, of course, no such determination was
made. Finally, the only support for the holding in Heard was Huff v. N. D.
Cass Co., 468 F.2d 172 (5th Cir. 1972), which was subsequently reversed in
Huff v. N. D. Cass Co., 485 F.2d 710 (5th Cir. 1973) (en banc).
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10a Opinion of the Court of Appeals
considered in the determination of whether Rule 23(a)(4)
has been met. In fact, as the court observed in Mack v.
General Electric Co., 329 F. Supp. 72, 76 (E.D. Pa. 1971),
with respect to plaintiffs who were former employees of the
company, “being familiar with [the company’s] employ-
ment practices and being free from any possible coercive
influences of [the company’s] management, [the plaintiffs]
are better situated than either job applicants or present
employees to present an intelligent and strongly adverse
case against [the company’s] alleged discriminatory prac-
tices.” Moreover, were the position advanced by Liberty
Mutual adopted, employers would be encouraged to
discharge those employees suspected as most likely to
initiate a Title VII suit in the expectation that such employees
would thereby be rendered incapable of bringing the suit as
a class action. Reed v. Arlington Hotel Co., 476 F.2d 721 (8th
Cir.), cert. denied, 414 U.S. 854 (1973).
In the present case, the district court specifically found
that the requirements of Rule 23(a)(4) have been met. The
interests of Wetzel and Ross in combatting the sexually
discriminatory policies of the Company surely are coexten-
sive with all female technical employees, whether formerly
or presently employed. We do not perceive any interests of
the former employees antagonistic to those of the present
employees. The relief to be granted by the district court,"'!
whether it takes the form of back pay, mandatory hiring of
female claims adjusters, or increased promotional oppor-
tunities for women will benefit all members of the class.!?
11. We intimate no opinion as to what relief, if any, is appropriate.
12. We believe that Air Line Stewards & Stewardesses Ass'n Local 550
v. American Airlines, Inc., 490 F.2d 636 (7th Cir. 1973), cert. denied,
US, (1974), upon which Liberty Mutual relies, is distinguishable
because there the relief to former stewardesses (reinstatement with no loss
of seniority) would have been antagonistic to the interests of stewardesses
presently employed with less seniority. Here, the only group whose
Opinion of the Court of Appeals Ila
We see no other factors revealing that the plaintiffs were not
adequate representatives of the class. The district court did
not abuse its discretion in holding that Wetzel and Ross
adequately represented the class.
Ill
A. Characteristics of (b)(2) and (b)(3) actions
In addition to meeting the mandatory requirements of
Rule 23(a), the class must be maintainable under either
subsection 23(b)(1), (b)(2), or (b)(3). In the usual class
action, the determination of whether the action should
proceed as a 23(b)(2) or as a 23(b)(3) action offers little
difficulty. In the present case, however, the order of the
district court finding injunctive relief unnecessary as to
Liberty Mutual’s hiring and promotional practices in its
12. (Continued)
interests are hostile to those of the class are the male claims adjusters, and
they, of course, are not members of ‘he class.
13. Rule 23(b) provides:
(b) Class Actions Maintainable. An action may be maintained as
a class action if the prerequisites of subdivision (a) are satisfied, and in
addition:
(2) the party opposing the class has acted or refused to act on
grounds generally applicable to the class, thereby making ap-
propriate final injunctive relief or corresponding declaratory relief
with respect to the class as a whole; or
(3) the court finds that the questions of law or fact common to the
members of the class predominate over any questions affecting only
individual members, and that a class action is superior to other
available methods for the fair and efficient adjudication of the
controversy. The matters pertinent to the findings include: (A) the
interest of the members of the class in individually controlling the
prosecution or defense of separate actions; (B) the extent and nature
of any litigation concerning the controversy already commenced by
or against members of the class; (C) the desirability or undesirability
of concentrating the litigation of the claims in the particular forum:
(D) the difficulties likely to be encountered in the management of a
class action.
:
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12a Opinion of the Court vf Appeals
claims department, because the Company's practices as to
these issues have ceased, presents complications. Whether
(b)(2) or not (b)(2) is indeed the question.
In the instant case, the district court found that the class
could be maintained under either 23(b)(2) or 23(b)(3), but
exercising its discretion decided to maintain the class under
23(b)(2). Liberty Mutual vigorously contends that the class
could only be maintained under (b)(3), and that the
procedural prerequisites for maintaining a (b)(3) suit have
not been met. We find no error in the district court's
determination that the class was properly mafntainable
under (b)(2).
In reviewing Liberty Mutual's contentions, it is
necessary to understand the basic nature of (b)(2) and (b)(3)
suits and the res judicata effects of judgments upon
members of the respective classes.
A (b)(2) suit is permitted when the opposing party has
acted or refused to act on grounds generally applicable to
the class. Advisory Committee's Note to Proposed
Amendments to Rule 23, 39 F.R.D. 69, 102 (1966)
{hereinafter cited as Advisory Committee]. By its very
nature, a (b)(2) class must be cohesive as to those claims tried
in the class action. Note, Managing the Large Class Action:
Eisen v. Carlisle & Jacquelin, 87 Harv. L. Rev. 426, 441
(1973). The rule recognizes that the res judicata effect of a
judgment may only be tested in a subsequent action.
Advisory Committee, supra at 106, citing Restatement of
Judgments § 86, comment (h), § 116 (1942). Because of the
cohesive nature of the class, Rule 23(c)(3)'* contemplates
14. Rule 23(c)(3) provides:
(3) The judgment in an action maintained as a class action under
subdivision (b)(1) or (b)(2), whether or not favorable to the class,
shall include and describe those whom the court finds to be members
of the class. The judgment in an action maintained as a Class action
under subdivision (b)(3), whether or not favorable to the class, shall
include and specify or describe those to whom the notice provided in
subdivision (c)(2) was directed, and who have not requested
exclusion, and whom the court finds to be members of the class.
Opinion of the Court of Appeals 13a
that all members of the class will be bound. Advisory
Committee, supra at 106; C. Wright, Federal Courts § 72, at
314 (2d ed. 1970) [hereinafter cited as Wright]. Any resultant
unfairness to the members of the class was thought to be
outweighed by the purposes behind class actions:
eliminating the possibility of repetitious litigation and
providing small claimants with a means of obtaining redress
for claims too small to justify individual litigation.'°
Rule 23(b)(3) permits a class action where the questions
of law or fact common to the class predominate over
questions only affecting individual members and the “class
action is superior to other available methods for the fair and
efficient adjudication of the controversy.” While not a true
successor to the “spurious” class action which existed prior to
the 1966 amendments, Wright, supra at 312, the (b)(3) class
action developed therefrom. In the spurious class action,
members of the class would be bound by the judgment only
if they intervened in the action. Moore, supra at 702. Various
courts of appeals permitted intervention after a judgment
favorable to the class. Many commentators objected that
such one-way intervention resulted in binding the members
of the class only when the class had won. To eliminate the
unfairness of this one-way intervention, the Advisory
Committee concluded that class members should be
brought in prior to the determination of a defendant's
liability, thus making the estoppel mutual. See Katz v. Carte
Blanche Corp., supra at 759; Advisory Committee, supra at
105.
Binding all members of a (b)(3) class, however, was not
thought by the Advisory Committee to be as fair as binding
all members of a (b)(2) class. By the very nature of a
heterogeneous (b)(3) class, there would be many instances
where a particular individual would not want to be included
15. See Katz v. Carte Blanche Corp., supra at 759; Wright, supra at
306.
i4a Opinion of the Court of Appeals
as a member of the class.'* To respect these individual
interests, rule 23(c)(2)'" was written to afford an opportunity
to every potential member to opt out of the class. See Katz v.
Carte Blanche Corp., supra at 759; Advisory Committee,
supra at 104-05. For the opt out procedure to be effective,
23(c)(2) also provides for notice to be sent to all potential
members prior to the final determination of the class. Eisen
v. Carlisle & Jacquelin, 417 U.S. 156 (1974).
With the potential unfairness to members of the (b)(3)
class eliminated by the opt out procedure, 23(c)(3)
contemplates that all members of the (b)(3), as well as
members of the (b)(2) class, will be bound by the res
judicata effect of the judgment. Wright, supra at 314.
B. Appropriateness of (b)(2) for this action
Liberty Mutual contends that this suit could not have
been maintained as a class action under (b)(2) because such
class actions are limited to only those suits in which final
injunctive relief is found to be appropriate. In support of this
16. An excellent example is the situation found in Katz v. Carte
Blanche Corp., supra, in which it was alleged that Carte Blanche violated
the Truth in Lending Act in its disclosure of finance charges. Assume,
contrary to the decision, that a (b)(3) class was allowed to be maintained.
Carte Blanche might counterclaim against the members of the class for
amounts owing from use of the credit card. A delinquent account debtor
may well decide that a judgment for amounts owing will outweigh any
benefits he might obtain from a favorable judgment resulting from the
Truth in Lending Act violation. j
17. Rule 23(c)(2) provides:
(2) In any class action maintained under subdivision (b)(3), the
court shall direct to the members of the class the best notice
practicable under the circumstances, including individual notice to all
members who can be identified through reasonable effort. The notice
shall advise each member that (A) the court will exclude him from the
class if he so requests by a specified date; (B) the judgment, whether
favorable or not, will include all members who do not request
exclusion; and (C) any member who does not request exclusion may,
if he desires, enter an appearance through his counsel.
“Sey
AP PORE LA OAT Be
Opinion of the Court of Appeals 15a
position, Liberty Mutual relies on the language of (b)(2),'°
the comments of the drafters of the rule,'’ and the case of Air
Line Stewards & Stewardesses Association, Local 550 v.
American Airlines, Inc., supra.”®
The district court, after discovery and extensive
briefing, considered whether the action here was properly
maintained under (b)(2) three separate times. In its last
memorandum order of December 6, 1973, the court
indicated that maintenance under (b)(2) was proper because
Liberty Mutual had “ ‘acted or refused to act on grounds
generally applicable to the class’ and the representative
plaintiffs seek among other remedies, ‘final injunctive relief
or corresponding declaratory relief.” In his opinion of
January 9, 1974, Judge Weber noted:
Because the evidentiary materials show that at certain
times . . . subsequent to the filing of the administrative
charge or the within Complaint the Defendant has
ceased or discontinued the discriminatory practices,
injunctive relief is not appropriate as to those practices.
372 F. Supp. at 1163.
The precise issue before us then is whether a district
court, having determined that a Title VII suit brought in
good faith for injunctive relief may be maintained under
18. See note 13 supra.
19. “[Subdivision (b)(2)] does not extend to cases in which the
appropriate final relief relates exclusively or predominantly to money
damages.” Advisory Committee, supra, at 102. See Moore, supra, at 654.
20. Airline stewardesses had brought suit seeking injunctive relief
against the airlines’ policy of permanently discharging pregnant
stewardesses. After the institution of the suit, the airlines eliminated the
practice. The court noted:
When the airlines ended their discharge policy, the actions became
virtually moot as far as the currently employed stewardesses were
concerned, and purely prospective relief against the practice became
of little moment. The (b)(3) character of actions, while always
present as to the discharged stewardesses, became even more
obvious.
490 F.2d at 643. For a further discussion of the case, see note 30 infra.
l6a Opinion of the Court of Appeals
(b)(2), is required to redetermine that the suit be maintained
under (b)(3) and comply with its procedural requirements
once it concludes on a motion for summary judgment that
changed conditions make injunctive relief no longer
appropriate. We decline to so hold.
First, a Title VII suit against discriminatory hiring and
promotion policies is necessarily a suit to end discrimination
because of a common class characteristic, in this case sex.
Bowe v. Colgate-Palmolive Co., 416 F.2d 711, 719 (7th Cir.
1969); Oatis v. Crown Zellerbach Corp., 398 F.2d 496, 499
(5th Cir. 1968). The conduct of the employer is actionable
“on grounds generally applicable to the class,” and the relief
sought is “relief with respect to the class as a whole.” The
class, all sharing a common characteristic subjected to
discrimination, is cohesive as to the claims alleged in the
complaint. Thus, a Title VII action is particularly fit for
(b)(2) treatment, and the drafters of Rule 23 specifically
contemplated that suits against discriminatory hiring and
promotion policies would be appropriately maintained
under (b)(2). Advisory Committee, supra at 102. Since a
Title VII suit is essentially equitable in nature,”! it cannot be
characterized as one seeking exclusively or predominantly
money damages. Franks v. Bowman Transp. Co., 495 F.2d
398 (5th Cir. 1974).
The basic nature of a Title VII suit is not altered merely
because the employer’s change of discriminatory policy
prior to the motion for summary judgment has obviated the
need for injunctive relief. The conduct of the employer is
still answerable “on grounds generally applicable to the
class,” and the relief sought is still “relief with respect to the
class as a whole.” The cohesive characteristics of the class are
21. “Thus, the action and the relief authorized are essentially
equitable in nature. This is true not only of traditional injunctive relief
which may be granted, but also of the back pay award.” Franks v.
Bowman Transp. Co., 495 F.2d 398, 406 (5th Cir.), cert. denied, 43
U.S.L.W. 3328 (December 10, 1974).
e
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ROT A BOLAND NA of OO
WARY IN NAD
Opinion of the Court of Appeals \7a
‘the vital core of a (b)(2) action. Functionally, these
characteristics of the class are still intact in the suit. Nothing
has changed to require the procedural protections of (b)(3)
to determine the presence or absence of liability. The class is
still appropriately maintained under (b)(2).
Second, the language of (b)(2) does not support the
‘contention that (b)(2) actions are limited to final injunctive
relief or declaratory judgments only. Rather, the language
describes the type of conduct by the party opposing the class
which is subject to equitable relief by class action under
(b)(2). As recently stated in Pettway v. American Cast Iron
Pipe Co., 494 F.2d 211, 257 (5th Cir. 1974):
: All that need be determined is that conduct of the
party opposing the class is such as makes such equitable
relief appropriate. This is no limitation on the power of
the court to grant other relief to the established class,
‘especially where it is required by Title VII. . . .
Liberty Mutual's policies at the time these charges were
made were such that final injunctive relief was appropriate.
This satisfies the language of the rule. The nature of these
policies, and the nature of the class opposing these policies,
does not change’ merely because subsequent action by
Liberty Mutual eliminates the need for final injunctive relief.
Moreover, although the court found that injunctive
relief was unnecessary, it did determine the presence of
liability on the part of Liberty Mutual. The court did not
preclude the possibility of directing affirmative action,” in
22. The district court in its first class action order dated August 16,
1972, stated: ;
[W]e find that the defendant has acted or refused to act on grounds
generally applicable to the class, thereby making appropriate final
_ declaratory or injunctive relief with respect to the class as a whole.
Claims of sexual discrimination are particularly appropriate for such
determination.
23. 372 F. Supp. at 1163. We do not suggest what relief, if any, may be
appropriate. ;
WES ———
4 e
~ 18a Opinion of the Court of Appeals
addition to back pay, to remedy conditions caused by the
offensive discriminatory practices. Such affirmative action
ultimately would, in effect, constitute final injunctive or
declaratory relief. “No one has suggested that this [relief]
violates the dictates of subdivision (b)(2).” Pettway v.
American Cast Iron Pipe Co., supra at 257. .
Courts have held that a (b)(2) class is appropriate in a
Title VH suit where both fina? injunctive and monetary retief
are granted. Franks v. Bowman Transp. Co., supra at 422;
Pettway v. American Cast Iron Pipe Co., supra at 257;
Johnson v. Goodyear Tire & Rubber Co., 491 F.2d 1364,
1375 (5th Cir. 1974); Robinson v. Lorillard Corp., 444 F.2d
791, 801-02 (4th Cir. 1971), petition for cert. dismissed, 404
U.S. 1006 (1972); Bowe v. Colgate-Palmolive Co., supra at
720. Maintenance of a class action under (b)(2) in a Title VII
, action has also been held to be appropriate when the actions
of the defendant after the complaint had been filed had
obviated the need for final injunctive relief. Arkansas
Education Ass'n v. Board of Education, 446 F.2d 763 (8th
Cir. 1971).
Additionally, only with the benefit of hindsight do we
now know that injunctive relief against the Company's
hiring and promotion practices was not necessary in this
case. At the (c)(1) hearing, the district court specifically
found that the conduct of Liberty Mutual made appropriate
final injunctive relief.2‘ Requiring the court to reconsider
_ and possibly redetermine the class at the time of the
summary judgment application and redirect the course of
the litigation with notice and other procedural requirements
would inevitably complicate a type of litigation which by its
nature is complex at its best. For this court to compel a
redetermination of the class at that point probably’ would
require the district court to consider the merits of the case,
and ultimately would lead to a practice of holding a
2A. See note 22 supra.
!
al ce a ee ti
iP A i DAD pee CE
RRA on PORT ERY 1 etd OO Cm PEE.
Opinion of the Court of Appeals 19a
preliminary hearing on the merits at the time of the initial
(c)(1) class determination. This, of course, the Supreme
Court has made clear the district court may not do:
We find nothing in either the language or history of
Rule 23 that gives a court any authority to conduct a
preliminary inquiry into the merits of a suit in order to
determine whether it may be maintained as a class
action. Indeed, such a procedure contravenes the Rule
.... [It] is directly contrary to the command of
subdivision (c)(1) that the court determine whether a
suit denominated a class action may be maintained as
such “as soon as practicable after the commencement of
[the] action... .”
Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78 (1974). It is
at the (c)(1) hearing that the class must be shown to possess
the characteristics required by (b)(2). Of course, the district
court may amend its determination at a later date. See
23(c)(1). But we decline to hold that a court must reconsider
its determination when, at the decision for summary
judgment, it finds injunctive relief to be inappropriate.
Finally, we have reviewed the (b) (2) issue on this appeal
as if the action in the district court involved only the hiring
and promotion policies of Liberty Mutual. Wetzel and Ross,
however, also attacked in the district court Liberty Mutual's
pregnancy related policies, and its policy of paying higher
salaries to claims adjusters than to claims representatives.
Due to the piecemeal nature of the appeals from the district
court, the only substantive issue before us involves the hiring
and promotion policies, but in the absence of the argument
by Liberty Mutual that different classes should have been
created for different issues,° we must consider the propriety
25. Rule 23(c)(4)(A) permits an action to be brought or maintained as
a class action as to particular issues only. See note 25 infra. From our
review of the record, it does not appear that Liberty Mutual had requested
the district court to maintain the class under (b)(3) as to its hiring and
promotion policies while maintaining the class under (b)(2) for the other
issues. In this court Liberty Mutual has only attacked the maintenance of
the class as a whole.
PRESALE PLT ALI EG IB LAPS
20a Opinion of the Court of Appeals
of the class determination in the light of all the substantive
issues raised in the district court. Liberty Mutual has
changed, as a result of the charges brought by Wetzel and
Ross, neither its pregnancy related policies, nor its higher
salary policy to claims adjusters. In the event these policies
are found to be violative of Title VII, final injunctive relief
will be necessary as redress. The (b)(2) nature of the class,
while visible as to the promotion and hiring issues, becomes
translucent when viewed in the light of the multifaceted
attack upon Liberty Mutual's policies.
Liberty Mutual also contends that if the requirements of
both (b)(2) and (b)(3) are met, the court should certify the
class under (b)(3) to provide the procedural protections,
namely notice and opting out, which (b)(3) affords
members of the class. Virtually every class action meeting
the requirements of 23(b)(2) will also meet the less severe
requirements of 23(b)(3). Van Gemert v. Boeing Company,
259 F. Supp. 125, 130 (S.D. N.Y. 1966). If the actions are
classified under (b)(3), members of the class could elect to
opt out and thereby not be bound by the judgment. This
would permit the institution of separate litigation and would
defeat the fundamental objective of (b)(2), to bind the
members of the class with one conclusive adjudication. Van
Gemert v. Boeing Company, supra at 130-31. As discussed
above,”6 the procedural protections of (b)(3), opting out and
notice, are necessary because of the heterogeneity of the
(b)(3) class. They are unnecessary for the homogeneous
(b)(2) class.
The recent Supreme Court decision in Eisen v. Carlisle
& Jacquelin, 417 U.S. 156 (1974), does not support the
Company’s contention. Eisen does not extend the (b)(3)
notice requirement to (b)(2) actions, nor to actions
maintainable under either (b)(2) or (b)(3). We therefore
agree with the Van Gemert principle that an action
26. See pp. 13-15 supra.
ia aie LPL DAIL IIE SELIG IT VAPOR VEEN OR SLIME A ORLY RAE
Opinion of the Court of Appeals Qla
maintainable under both (b)(2) and (b)(3) should be treated
under (b)(2) to enjoy its superior res judicata effect and to
eliminate the procedural complications of (b)(3) which
serve no useful purpose under (b)(2). This principle has been
widely adopted in the federal courts. See Moore, supra
4123.31[3] and cases cited therein.
C. Inclusion of former and future employees
¥
&
¥
F
,
Liberty Mutual asserts that the inclusion of former
employees in the (b)(2) class was an abuse of discretion
because such employees, even at the time of the filing of the
complaint, could only have been interested in monetary
relief. It again relies on Air Line Stewards & Stewardesses
Association Local 550 v. American Airlines, Inc., supra.”
A short answer to this contention is that former
employees may well be interested in the eradication of the
Company’s discriminatory policies and their effect.
Employees who had despaired of becoming claims
adjusters, or of receiving promotions to positions higher than
those of claims representative supervisor, may well desire to
renew their employment with Liberty Mutual if the
discriminatory practices are terminated.
Moreover, even if the former employees were in-
terested in only monetary relief, Rule 23(c)(4)(B)* permits,
but does not require, the district court to divide the class into
appropriate subclasses. Such subdivision is required where
the class includes . . . subclasses with divergent interests,
or where certain representatives adequately represent
only one group and other representatives represent
another group.
27. See note 20 supra.
28. Rule 23(c)(4) provides:
(4) When appropriate (A) an action may be brought or
maintained as a class action with respect to particular issues, or (B) a
class may be divided into subclasses and each subclass treated as a
class, and the provisions of this rule shall then be construed and
applied accordingly.
oud P we on yong ~a9TRS . a9 MOP EET AL Dw 1 4 “s PE LY ID ALIN Ao ME — |
DAO APE ME ITS
22a Opinion of the Court of Appeals
Moore, supra, 4 23.65 at 1251, and cases cited therein. Here,
as we have observed, the interests of the former and present
employees in this class action are congruent: the elimination
of, and relief from, Liberty Mutual's discriminatory policies.
We do not perceive any interests of the two groups which are
mutually antagonistic. We also believe that the former
employees can adequately represent the interests of the
present employees.’ The district court did not abuse its
discretion by failing to create subclasses.”
Liberty Mutual additionally contends that inclusion of
future employees in the class is improper because injunctive
relief has been found to be unnecessary by the district court.
As noted above,*! the district court may well conclude that
affirmative relief is necessary to completely dissipate the
effects of the Company’s discriminatory policies. If it so
finds, the inclusion of future employees in the class may be
useful. However, if the court should find that such
affirmative relief is unnecessary, inclusion of future
employees would appear to be improper.
29. See p. 9 to p. 11, supra.
3. The congruence of interests and absence of antagonism between
the two groups distinguish this case from Air Line Stewards &
Stewardesses Association Local 550 v. American Airlines, Inc., supra, both
as to this issue of subclasses and the issue of whether the class was properly
maintained under (b)(2). See pp. 15-20. In Air Line Stewards, American
Airlines and TWA had permanently discharged stewardesses who became
pregnant. The Association, certified bargaining representative for airline
cabin attendants, brought suit to enjoin the practice, and after the
companies terminated the practices, negotiated a settlement. Objecting
stewardesses appealed approval of the settlement by the district court.
The appellate court noted that the Association, which was composed of
active airline attendants, could not adequately represent the former
attendants because the two groups had conflicting interests. The former
stewardesses would desire reinstatement with no loss of seniority, leap-
frogging them over less senior active stewardesses. Seniority had an
important effect on promotions, trip assignments, and other aspects of
employment. The court, desirous of allowing the former stewardesses to
opt out of the settlement, held that a (b)(3) subclass should have been
created. Here, we perceive no need for former employees to opt out.
31. See p. 18 supra.
Opinion of the Court of Appeals 23a
IV
Liberty Mutual contends that if the action is main-
tainable under (b)(2), we should hold that notice should
have been given prior to determination of liability to all
members of the class, either under our supervisory powers
over the circuit district courts or under the requirements of
due process.”
Suits brought by private employees are the cutting edge
of the Title VII sword which Congress has fashioned to fight
a major enemy to continuing progress, strength, and
solidarity in our nation, discrimination in employment.
What is required by Congress is the removal of artificial,
arbitrary, and unnecessary barriers to employment
when the barriers operate invidiously to discriminate on
the basis of racial or other impermissible classification.
Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971). Class
actions, which allow attorneys to receive fees commensurate
with time and effort expended on what often are complex
and difficult litigations, are powerful stimuli to enforce Title
VI. The imposition of notice and the ensuing costs often
discourage such suits. See Eisen v. Carlisle & Jacquelin, 417
U.S. 156, 179 (1974). Therefore, we are reluctant to impose
notice requirements under our supervisory power for Title
VII (b)(2) actions unless Rule 23 so requires or unfairness
will result to the parties.
Rule 23 definitely does not require mandatory notice for
(b)(2) actions. By its terms, the mandatory notice re-
32. There is a serious question whether Liberty Mutual, during a
colloquy with Judge Aldisert, abandoned its due process contention at
oral argument. We consider the contention, found in the written brief,
because the colloquy is not altogether clear and because of the Company's
reliance on Eisen v. Carlisle & Jacquelin, 391 F.2d 555 (2d Cir. 1968).
Eisen’s requirement of notice in (b)(2) actions was predicated on due
process not, as Liberty Mutual contended at oral argument, on the
supervisory power of the court.
33. Rule 23(c)(2) in pertinent part provides:
Ya Opinion of the Court of Appeals
quirement of (c)(2) applies only to actions maintained under
(b)(3).
Whether the court should require notice to be given
to members of the class to make a determination, [of
whether a class should be maintained under (b)(2)] or of
the order embodying it, is left to the court's discretion
under subdivision (d)(2).
Advisory Committee, supra at 104. We will not presume to
exercise supervisory powers, as urged upon us by counsel for
Liberty Mutual, to mandate notice which the Federal Rules
of Civil Procedure, promulgated by the Supreme Court
under authority from Congress, 28 U.S.C. $2072, specifically
do not require.
Moreover in Eisen v. Carlisle & Jacquelin, 417 U.S. 156
(1974), the Supreme Court held that there should be strict
adherence to the notice requirements of Rule 23(c)(2). In the
light of Eisen, deviation from the literal requirements of the
rule would be incongruous and, at the same time, would also
fly in the face of its spirit. As discussed supra,** mandatory
notice is required in (b)(3) actions for the effective operation
of the “opt out” provision, which is essential to protect the
interests of individuals in the heterogeneous group. The “opt
out” procedure, however, is not necessary for the protection
of interests of individuals in the homogeneous (b)(2) class. In
the instant case, determination of liability on the part of
Liberty Mutual to each member of the class depends on
whether it discriminated on the basis of sex. This question is
common to the claims of all members of the class. “In the
degree that there is cohesiveness or unity in the class . . . the
33. (Continued)
In any class action maintained under subdivision (b)(3), the court
shall direct to the members of the class the best notice practicable
under the circumstances, including individual notice to all members
who can be identified through reasonable effort. . . .
3A. See pp. 14-15 supra.
Opinion of the Court of Appeals 25a
need for notice to the class will tend toward a minimum.”
Advisory Committee, supra, at 106. In this proceeding, the
fundament for claims of each member of the class rests
squarely on the same issue and the need for individual notice
is superfluous.
The due process argument presents a more difficult
question. Liberty Mutual primarily relies on dictum in Eisen
v. Carlisle & Jacquelin, 391 F.2d 555, 564-65 (2d Cir. 1968)
that
notice is required as a matter of due process in all
representative actions and 23(c) (2) merely requires a
particular form of notice in 23(b) (3) actions. Mullane v.
Central Hanover Bank & Trust Co., 339 U.S. 306 (1950).
Several courts of appeals and district courts have followed
this dictum.*> Wetzel and Ross counter with the following
dictum of this circuit in Katz v. Carte Blanche Corp., 496
F.2d 747, supra at 756:
The district court must also determine whether the class
action is maintainable under rule 23(b) (1) or (2) so that
it may proceed without notice to or identification of the
class members.
We believe that this battle of the dicta lends scant assistance
to either party.°6 We believe it preferable to analyze the
35. Schrader v. Selective Serv. Sys. Local Bd. No. 76, 470 F.2d 73 (7th
Cir.), cert. denied, 409 U.S. 1085 (1972); McCarthy v. Director of Selective
Serv. Sys., 322 F. Supp. 1032 (E.D. Wis. 1970), aff'd per curiam on other
grounds, 460 F.2d 1089 (7th Cir. 1972); Zeilstra v. Tarr, 466 F.2d 111 (6th
Cir. 1972); Pasquier v. Tarr, 318 F. Supp. 1350 (E.D. La. 1970), aff'd per
curiam on other grounds, 444 F.2d 116 (5th Cir. 1971); Newman v. Avco
Corp., 43 U.S.L.W. 2135 (M.D. Tenn. Sep. 6, 1974).
36. With the exception of Newman v. Avco Corp., supra, the cases in
the preceding footnote are suspect in their precedential value on the notice
issue because of their confused procedural history.
In Gregory v. Hershey, 311 F. Supp. 1 (E.D. Mich. 1969), the district
court rendered a declaratory judgment that the class before it was entitled
to fatherhood deferments from Selective Service. The Gregory court had
not provided members of the class with notice. Plaintiffs in the cases upon
:
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OCD 6B PRY HI Na
26a Opinion of the Court of Appeals
problem in light of the policies underlying the constitutional
requirement of due process.
The due process problem surfaces because the class
action judgment binds all members of a (b) (2) class. The
Second Circuit in requiring notice relied solely on Mullane v.
Central Hanover [sic] & Trust Co., 339 U.S. 306 (1950),
which concerned the judicial settlement of accounts by the
trustee of a trust fund created under state banking law. The
Court held that the State could not assert jurisdiction over
the trust beneficiaries unless notice were mailed to all
whose names and addresses were known, and notice by
36. (Continued)
which Liberty Mutual relies claimed to be members of the class in
Gregory.
Schrader v. Selective Serv. Sys. Local Bd. No. 76, 329 F. Supp. 966
(W.D. Wis. 1971), held the judgment binding despite the lack of notice.
Pasquier v. Tarr, 318 F. Supp. 1350 (E.D. La. 1970), and McCarthy. v.
Director of Selective Serv. Sys., 322 F. Supp. 1032 (E.D. Wis. 1970),
rejected plaintiff's res judicata claims by relying on the dicta in Eisen.
Following the decisions in the preceding paragraph, Gregory was
reversed. The reversal of Gregory on the ground that the court had lacked
subject matter jurisdiction, 436 F.2d 513 (6th Cir.), cert. denied, 403 US.
922 (1971), sent these cases back to court and produced several new ones.
Pasquier and McCarthy were affirmed on appeal but on the ground that
Gregory was void for lack of subject matter jurisdiction. See McCarthy v.
Director of Selective Serv. Sys., 460 F.2d 1089 (7th Cir. 1972); Pasquier v.
Tarr, 444 F.2d 116 (Sth Cir. 1971). Schrader was reversed because “the
absolute failure to give any indicia of notice to absent members
render[ed] the purported class in Gregory futile.” Schrader v. Selective
Serv. Sys. Local Bd. No. 76, 470 F.2d 73, 75 (7th Cir.) cert. denied, 409 US.
1085 (1972). Zeilstra v. Tarr, 466 F.2d 111 (6th Cir. 1972), reversed another
district court decision holding Gregory binding on the grounds that
Gregory had been void, for lack of both notice and subject matter
See Note, Collateral Attack on the Binding Effect of Class Action
Judgments, 87 Harv. L. Rev. 596-97 (1974), upon which the foregoing
analysis is predicated.
We are inclined to believe that the courts in the above cases reached
for the notice requirement as an answer to the complex res judicata effect
of the class action rather than carefully considering whether due process
actually requires notice to absent members of the class.
Opinion of the Court of Appeals Tia
publication given to those beneficiaries who were unknown
or contingent. Mullane, however, denied that individual
notice was required in every action.
The Supreme Court plainly stated that it had not
committed itself to any formula in achieving a balance
between the interests of the State and the interests of the
individual parties in the litigation or in “determining when
constructive notice may be utilized or what test it must meet.
Personal notice has not in all circumstances been regarded as
indispensable to the process due to residents, and it has more
often been held unnecessary as to nonresidents.” Id. at 314.
Because the Court linked the requirement of notice to the
particular circumstances of each case, it is important to note
that the situation in Mullane is significantly different from
the situation in a (b) (2) class action. First, Mullane dealt with
the established interests of individuals in specific property, a
common trust fund. Second, the interests of all the
beneficiaries in that fund were not identical; some were
entitled to interest income, while others were concerned
with capital growth. These interests were represented by
different guardians, but the personal interests of the
guardians functionally differed from the interests of the
beneficiaries. Therefore, a significant possibility existed that
they did not adequately represent the beneficiaries in the
action.” Third, the beneficiaries had a resident fi luciary asa
caretaker of their interest in the trust “[b]ut it is their
caretaker who in the accounting becomes their adversary.”
Id. at 316. Under these circumstances, the possibility that
parties having conflicting interests in specific property could
be bound by an action of which they have no actual notice
and brought by parties who possibly could represent those
interests inadequately does violate due process. This
possibility could not occur in a (b) (2) action.
37. See Comment, Adequate Representation, Notice and the New
Class Action Rule; Effectuating Remedies Provided by the Securities
Laws, 116 U. Pa. L. Rev. 889, 912-13 (1968).
28a Opinion of the Court of Appeals
The very nature of a (b) (2) class is that it is
homogeneous without any conflicting interests between the
members of the class. Since the class is cohesive, its members
would be bound either by the collateral estoppel or the stare
decisis effect of a suit brought by an individual plaintiff.
Thus, as long as the representation is adequate and faithful,
there is no unfairness in giving res judicata effect to a
judgment against all members of the class even if they have
not received notice. Adequacy of representation of the class
is a mandatory requirement for the maintenance of a class
action under Rule 23(a). If the representation proves
inadequate, members of the class would not be bound.
Hansberry v. Lee, 311 U.S. 32, 44-46 (1940). Gonzales v.
Cassidy, 474 F .2d 67 (5th Cir. 1973). Of course, there may be
circumstances when the court, in its discretion, believes that
notice to the absent members of the class is necessary for the
fair conduct of the action. Rule 23(d) (2) anticipates such
situations and permits the court to then require such notice.
In most cases, however, “[n]otice would add little or
nothing.” Moore, supra, at 1152. We decline, therefore, to
hold that due process ineluctably requires notice in all (b) (2)
class actions.
We do not believe that Mullane overruled sub silentio
the case of Hansberry v. Lee, supra, in which the Court was
faced with the question of the res judicata effect to be given
to a state class action. The Court wrote:
It is a principle of general application . . . that one
is not bound by a judgment in personam in a litigation in
which he is not designated as a party or to which he has
not been made a party by service of process.
oO oO o
To these general rules there is a recognized
exception that, to an extent not precisely defined by
judicial opinion, the judgment in a “class” or “represen-
tative” suit, to which some members of the class are
EG IPE LES RO
LAS LEIA DO I EET OSI IR, wee
Opinion of the Court of Appeals 29a
parties, may bind members of the class or those
represented who were not made parties to it.
[T]his Court is justified in saying that there has
been a failure of due process only in those cases where it
cannot be said that the procedure adopted, fairly
insures the protection of the interests of absent parties
who are to be bound by it.
Id. at 40-42.
We believe that if there is truly adequate representation,
the interests of absent parties to a (b) (2) class are protected.
We thus agree with the framers of the rule,” several district
courts that have expressly considered the question,” and
several of the commentators” that notice to absent members ©
of a (b) (2) class is not an absolute requisite of due process. __
For the foregoing reasons, we have concluded that there was |
no denial of due process in this case.
es ARRON AND OUP OY TLE ROE MSTA ITT PME SE IRE NEE fo
38. There is a strong presumption that the rule is valid. See Hanna v.
Plumer, 380 U.S. 460 (1965).
39. Northern Natural Gas Co. v. Grounds, 292 F. Supp. 619, 636 (D.
Kan. 1968) (“the essential requisite of due process as to absent members of
the class is not notice, but the adequacy of representation of their interests
by named parties”); Dolgow v. Anderson, 43 F.R.D. 472 (S.D. N.Y. 1965)
(“adequacy of representation, not form of notice, is the crucial
consideration”). See Woodward v. Rogers, 344 F. Supp. 974, 980 (D. D.C.
1972) aff'd, 486 F.2d 1317 (D.C. Cir. 1973) (“where the adequacy of the
representation of the class interests by the named parties is clear, where no
apparent purpose would be served by notice to this wide ranging
class . . . and where, indeed, judgment is in favor of the class, the essential
requisites of due process have been met without further notice.”)
40. Moore, supra 4 23.55; Note, Constitutional & Statutory Re-
quirements of Notice Under Rule 23(c)(2), 10 B.C. Ind. & Comm. L. Rev.
571 (1969); Comment, Adequate Representation, Notice and the New
Class Action Rule; Effectuating Remedies Provided by the Securities
Laws, 116 U. Pa. L. Rev. 889 (1968).
Pyar | é
ie aa WARES Peet PONIR REL OL BIAS FAL OOD AY IRENE AD TIE A TONG HER Sa yy rune spear gg
PLR ER Tg POD a
3a Opinion of the Court of Appeals
V
Almost anticlimactically, we turn to the question of
whether the district court properly granted Wetzel’s and
Ross’ motion for summary judgment. To fully consider this
questiion, we must review the evidence in some detail.
The Company historically had employed claims
adjustters but the position of claims representatives was not
created until sometime in 1965. Of the 3,129 claims adjusters
hired between July 1, 1965, and March 17, 1972, only two
were women; they were hired after Wetzel and Ross filed .
their administrative charges. During that same period, 2,329
persoms were hired as claims : 2presentatives of which 2,302,
or 98.84% were women. During each year between 1965-
1969, an average of 1,441 adjusters worked for the
Company; in none of those years were more than two:
adjusters women. In 1970, the number of women female
adjusters increased to 5 or 0.31% of the 1,645 adjusters
employed that year. In 1971, that percentage increased
slightly to 2.82.
It does not appear that women were any less qualified to —
become claims adjusters than men. When the Company
decided to recruit women claims adjusters in 197], it found
that of its then existing claims; representative force of 600
women, approximately 1/3 were considered qualified to
become claims adjusters. Approximately 10% of the claims
representatives were offered and accepted the claims
adjusters’ position.
This statistical evidence is buttressed by additional
documentary evidence. The Company’s_ recruitment
brochure describes the position of claims representative as
“Fit for a Queen.” In contrast, the brochures entitled “A
Management Career in Liberty Mutual’s Claims Depart-
ment,” challenge the applicant with the inquiry, “Are you the
right man?”
/
Opinion of the Court of Appeals _ dla
Liberty Mutual's training manual, copyright 1970, is
replete with reference to pronouns of the female gender.*!
The evidence with respect to the Company's promotion
policy is just as impressive. Promotions available to female
claims representatives were only to positions of supervising
claims representative and claims representative supervisor.
Claims adjusters, however, could be promoted to those
positions and to numerous other positions which could not
be achieved without first being an adjuster.
Between July 1, 1965, and January 18, 1973, the
Company had not employed one woman as a branch office
claims manager but had employed in the same position
between 121 and 142 men annually. During the same period,
no more than 9 or 1.65% of all persons employed on an annual
basis as claims supervisors were women. Not one woman
was promoted to claims supervisor from the ranks of claims
representative between July 1965 until the end of 1969. Of
the 97 persons promoted to claims supervisor in 1970, only
41. Typical are the following general instructions:
This course consists of four text books and a Form Book, plus
supplementary materials, designed to help you train your new Ciaims
Representative. The first two text books covered A, AP & SA
Claims—when your C.R. finishes Books 1 and 2 she will be able to
process an automobile claim from first report to closing. Book 3 will
equip her to handle L & S1. cases. Book 4 will teach her to handle X
and SX cases... . ; :
s ° e
/
‘To get the most out of this training program, you should:
b. Supply the trainee with required materials before she starts to
work through any volume... . :
; ° © ©
e. Ask the trainee to complete the chapter on which she is working
before going to change of pace activity.
Use this program patiently. Let your C.R. take, within suggested
limits, the time she needs to complete the course (emphasis supplied).
RR STMT SE OAT ayy
Pew CREAT 4 ee are,
32a Opinion of the Court of Appeals
one was a woman. Again in 1971, only one woman was
promoted. This statistical ‘evidence is also corroborated by
the Company’s recruiting brochures. The brochures for
claims representatives describes the only advancement
opportunities as supervising claims representative and
claims representative supervisor. The brochure for claims
- adjusters refers to the glowing advancement opportunities
available to the claims adjuster. ;
Rule 56(c) provides that summary judgment shall be
granted when there is no genuine issue of material fact and
when the moving party is entitled to judgment as a matter of
law.*? Rule 56(e) provides that the adverse party must by
affidavit set forth specific facts ——— the existence
of a genuine issue for trial:
We are aware of the admonition that “[i]n the area of
employment, with its complexities and variables, statistics
must be analyzed with careful attention both to supportive
and opposing facts.” Pettway v. American Cast lron Pipe
Co., 494 F.2d 211, 230-31 n. 44 (5th Cir. 1974). But we also
recognize the oft cited rule that “statistics often tell much
and courts listen.” Alabama v. United States, 304 F.2d 583,
586 (5th Cir,) aff'd per curiam, 371 U.S. 37 (1962). In fact,
statistics are particularly appropriate in Title VII class
42. Rule 56(c) provides in pertinent part: _
... The judgment sought shall be rendered forthwith if the
pleadings, depositions, answers to interrogatories, and the admissions
on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact, and that the moving party is
entitled to judgment as a matter of law. .
43. Rule 56(e) peovides, in pertinent part:
aan for summary judgment is made and supported as
i pengeyompre! ang bees fest aoa
sBogetiaal or denials of his pleading, but his response, by affidavits,
or as otherwise provided in this , must set forth specific facts
showing that there is 2 genuine issue for trial. If he does not so
respond, summary judgment, if appropriate, shall be entered against
him. |
_ oe * eae POE LOI LAI IO LES SST TO SE IAG” LIL LOO LIE Cae
Opinion of the Court of Appeals 33a
actions where it is the aggregate effect of acompany’s policy
on the class which is important.“
Under McDonnell Douglas Corp. v. Green, 411 U.S.
792 (1973), once the plaintiff has established a prima facie
case of discrimination, the burden shifts to the empioyer to
provide non-discriminatory reasons to rebut the prima facie
case. The statistics in this case establish the existence of a
prima facie case of sex discrimination. The burden
thereupon shifted to Liberty Mutual to establish that these
statistics were midleading or to establish non-discriminatory
reasons for its policies. Despite its assurances that “good and
sufficient reasons for the existence of these statistics,
together with full explanation, will be offered in due course
at the proper time,” the district court found that Liberty
Mutual's response to plaintiffs’ motion “failed to address this
burden at all, let alone rebut the Plaintiffs’ evidence.” The
time for explanation has come and gone. We believe the
evidence established as a matter of law the existence of
sexual discrimination in violation of Title VIL
The Company also raises eight disputed issues of
material facts which it claims the district court either
declared immaterial or improperly resolved. We have
carefully examined each and find no merit in any of them.
The judgment of the district court as to the maintenance
of the class action will be affirmed. The part of its order
which includes in the class past employees whose claims are
time barred will be vacated. The district court's granting of
summary judgment will be affirmed.
44. Numerous courts have relied on evidence of numerical disparity
among classes of employees to prove discrimination under Title VIL. See.
e.g., Rowe v. General Motors Corp., 457 F.2d 348 (5th Cir. 1972): United
States v. Ironworkers Local 86, 443 F.2d 544 (9th Cir.), cert. denied, 404
U.S. 984 (1971); Parham v. Southwestern Bell Telephone Co., 433 F.2d 421
(8th Cir. 1970); Jones v. Lee Way Motor Freight, Inc., 431 F.2d 245 (10th
Cir. 1970), cert. denied, 401 U.S. 954 (1971). Although all of these cases
were decided after full trial, we see no reason why statistical evidence is
less appropriate at a hearing on a motion for summary judgment.
ition SRT RRT DDR FE Hee Bite EE, O87 Hig hale Nis aR OS RA ae MAR RY LENGE: Site NEL NS taicig OR SIT
aa APIO ONDO EV EPEY = Bt ht
34a Amended Judgment of the Court of Appeals
United States Court of Appeals
For THE THirp Circuit
No. 74-1515
SANDRA WETZEL and MARI ROSS, on behalf of
themselves and all others similarly situated
Equal Opportunity Commission as amicus curiae
VS.
LIBERTY MUTUAL INSURANCE COMPANY,
a corporation,
Appellant
(D.C. Civil Action No. 72-169)
On APPEAL FROM THE UNITED States District Court
FOR THE WESTERN DistTRICT OF PENNSYLVANIA
Present: STALEY, ALDISERT and RosENNn, Circuit Judges
AMENDED JUD@MENT
This cause came on to be heard on the record from the
United States District Court for the Western District of
Pennsylvania and was argued by counsel.
On consideration whereof, it is now here ordered and
adjudged by this Court that that part of the order of the said
District Court entered March 19, 1974 which relates to the
maintenance of the class action be, and the same is hereby
affirmed; that part of the said order which includes in the
class past employees whose claims are time barred be, and
the same is hereby vacated; that part of the order granting
summary judgment be, and the same is hereby affirmed.
Costs taxed against appellant.
ATTEST:
February 14, 1975 Clerk
District @5urt’s Memorandum Order 8/16/72 35a
Whited States District Court
W. D. Pennsylvania
SANDRA WETZEL and MARI ROSS on behalf of
themselves and all others similarly situated,
Plaintiffs,
Vs.
LIBERTY MUTUAL INSURANCE COMPANY,
a corporation,
Defendant.
Civ. A. No. 72-169
MEMORANDUM ORDER ON PLAINTIFFS’
MOTION TO DETERMINE CLASS ACTION
The Court has allowed limited discovery to proceed
before determination of Plaintiffs’ Motion for Class Action.
Thereafter the parties submitted voluminous briefs and the
court heard oral argument thereon.
From the p!eadings, the evidentiary materials produced
on discovery and the briefs of the parties we make the
following determination.
(1) The class is so numerous that joinder of all members
is impracticable.
The plaintiffs allegedly represent all female employees
over the nation in the claims department of defendant's
business, past, present and future, since 1965. Defendant
admits to employing about 700 female claims represen-
ne |
RAR hy eter
36a ~—rDistrict Court’s Memorandum Order 8/16/72
tatives alone in this category, disregarding females in other
categories in this department.
(2) There are questions of law and fact common to the
alleged class.
Plaintiffs aver a company-wide policy of discrimination
directed toward females which eliminates females from
holding certain positions and limits pay, promotions and
benefits. The plaintiffs charge a common claim of dis-
crimination against a class of persons of which they are a
part. The questions of law and fact necessary to determine
plaintiffs’ rights are patently common to the class that they
claim to represent; the existence of company-wide dis-
criminatory employee practices based on sex.
(3) The claims of the representative parties are typical
of the claims of the class.
Plaintiffs’ claims are that they are subject to discrimina-
tion in employment practices because of their sex, and they
allege that all members of their sex in the class of employees
named are subject to the same discriminatory system. There
is no conflict or antagonism between their claims and the
claims of the class.
(4) The representative parties will fairly and adequate-
ly protect the interests of the class.
The essential element in this determination is the
qualification, experience and ability of the attorneys
representing the representative parties, and there is no doubt
in the court’s mind of their ability and energy as illustrated
by the efforts demonstrated in the prosecution of this case to
this date.
In addition to the above elements we find that the
defendant has acted or refused to act on grounds generally
applicable to the class, thereby making appropriate final
declaratory or injunctive relief with respect to the class as a
whole. Claims of sexual discrimination are particularly
appropriate for such determination.
District Court's Memorandum Order 8/16/72 37a
Because the declaratory and injunctive relief demanded
can only be of benefit to those members of the class who are
presently employed, or who may be employed in the future,
we believe that under the present state of the record we must
limit the class to such employees. Because of high turnover
and changes of name and residence through marriage, we
believe that the inclusion of past employees would make the
class unmanageable.
We believe that the class must be company-wide or
nation-wide in scope, covering all employees of the
defendant in that class throughout the nation because of the
allegation of a company-wide policy of sex discrimination.
It is, therefore, Ordered that Plaintiffs’ Motion for
determination of class action be Granted pursuant to the
provisions of Fed. R. of Civ. P. 23(c)(1), and that the class
represented by plaintiffs include all present and future
female technical employees in the defendant's claims
department without limitation to territory in the entire
geographical area where defendant does business.
This Order is made conditional, subject to further Order
of this court, and may be altered, amended or revoked prior
to a determination on the merits.
Pending notification to the class, neither plaintiffs or
their counsel, nor defendant, nor its counsel shall solicit or
otherwise contact the class concerning the pending litigation
independently or in the absence of court approval. This
Order shall not affect the rights of the parties or counsel to
contact members of the class in the ordinary course of
business or discovery.
Upon application of the parties or either party the court
will consider the form and manner of notice which may be
given to the class, or any part of it, as to any matter arising out
of the conduct of this action as a class action.
So Ordered this 16th day of August, 1972.
/s/ GeraLp J. WEBER
Gerald J. Weber
United States District Judge
oe |
38a __— District Court's Memorandum Order 12/6/73
Wnited States District Court
* ° (Caption—72-169) ° °
MEMORANDUM ORDER ON PENDING MATTERS
Pursuant to a conference of counsel held on December 3,
1973 it appears to this court that certain determinations are
now necessary for the orderly advancement of the above
entitled litigation. Accordingly, the following pending
matters will be considered herein:
(1) whether the class action shall proceed under Fed. R.
Civ. P. 23(b)(2) or under Fed. R. Civ. P. 23(b)(3);
(2) what redefinition of the plaintiff class is now
appropriate;
(3) whether, at what time and in what form, notice
should be addressed to class members;
(4) plaintiffs’ Motion for an Order Compelling Dis-
covery filed December 3, 1973; and
(5) plaintiffs’ Motion for Reconsideration filed
December 3, 1973.
1.
This class action is at least arguably proper for
treatment under either Rule 23(b)(2) or 23(b)(3). Rule
23(b)(2) is applicable because the defendant “has acted or
refused to act on grounds generally applicable to the class”
and the representative plaintiffs seek, among other
remedies, “final injunctive relief or corresponding
declaratory relief.” Subdivision (b)(3) may also be
applicable because of the presence of common questions of
law and fact and because, in the judgment of this court, a
class action is superior to any other available method for
resolving the instant dispute with fairness and efficiency.
PE OOO I EOI LE OE 5 LO LLL EY OLERG LI NEE ALL TE OLE. TIES INTE
District Court's Memorandum Order 12/6/73 39a
It may be argued that the primary purpose of this action
is not the securing of injunctive or declaratory relief but is the
recovery of money damages and, therefore, 23(b)(2)
treatment is inappropriate. Wright and Miller, addressing
this question, suggest avoiding such disputes and, so long as
the prerequisites of Rule 23(a) have been met, allowing the
action to proceed under subdivision (b)(2). 7A Wright and
Miller, Federal Practice and Procedure § 1775, p. 23 [1972
ed.}. In accord with this and the weight of other authority, it
is hereby ORDERED that the class action, although proper
for treatment under either subdivision (b)(2) or (b)(3), shall
proceed under Rule 23(b)(2). See Johnson v. City of Baton
Rouge, Louisiana, 50 F. R. D. 295, 300 [1970]; Zachary v.
Chase Manhattan Bank, 52 F. R. D. 532, 534 [1971]; Mungin
v. Florida East Coast Railway Co., 318 F. Supp. 720, 730-731
[1970], affd. 441 F. 2d 728 [5th Cir. 1971]; 3B Moore's
Federal Practice § 23.31[3], pp. 23-526, 527.
2.
The plaintiff class was first defined in this Court's
Memorandum Order of August 16, 1972. It was there held
that declaratory and injunctive relief could be of benefit
only to present or future employees. Under the then existing
state of the record it was thought that inclusion of past
employees would render the class unmanageable. The
problems considered included the turnover rate in defen-
dant’s female employees and changes of names and
addresses through marriage. The court limited the class to all
present and future female technical employees in defen-
dant’s claims department.
Plaintiffs’ counsel now allege and defendant's counsel
does not dispute that the entire class is not likely to include
more than 2,500 persons even if past employees are
included. After discovering that the defendant maintains
records of the names and the last known address of its
We KE WROTE someeentcng
40a _ District Court's Memorandum Order 12/6/73
former employees, plaintiffs have moved for a redefinition
of the class to add those past employees who can be located
and identified by first class mail at the plaintiffs’ expense.
The court’s concern with the manageability of the class
action is allayed by counsel representation of a maximum
class membership figure. Therefore, it is hereby ORDERED
that the Memorandum Order of August 16, 1973 is
AMENDED to add to the plaintiff class all former female
technical employees of defendant who, on or after July 2,
1965, were employed in the defendant's claims department.
Because no method of distribution or form of notice to the
class has yet been approved it is not now necessary to adopt
plaintiffs’ suggested limitation that class members be
located and identified.
It is ORDERED that the Memorandum Order of
August 16, 1972 permitting plaintiffs, pursuant to Fed. R.
Civ. P. 23 (c)(1) to proceed with this action as a class action
be AMENDED as follows with respect to the class therein
defined:
The class represented by plaintiffs shall include all
female technical employees who were, are, or will be
employed in the defendant’s claims department from and
after July 2, 1965, without limitation to territory in the entire
geographical area where defendant does business.
In all other respect the Memorandum Order of August
16, 1972 remains in full force and effect.
3.
Having determined that the action shall proceed as a
class action under Fed. R. Civ. P. 23(b)(2), we see no
immediate necessity of the class action notice required of
actions proceeding under Fed. R. Civ. P. 23(b)(3), nor of the
application of the provision which authorizes notice to a
class member of his right to request exclusion from the class
by a specified date.
IO MIT SAMEERA ig PT OIE “ “= -e ar) wo on =
LLL T IOI CP OE
District Court's Memorandum Order 12/6/73 4la
However, Fed. R. Civ. P. 23(d)(2) allows, if required
for the protection of members of the class or otherwise for
the fair conduct of the litigation, that notice be given in such
manner as the court may direct to some or all of the members
of the class of any step in the action.
The court, therefore, invites the application of counsel
for approval of a form and method of distribution of such
notice as may be advisable at any stage of this action. Prior to
such application counsel shall meet and confer with a view to
reaching agreement as to the desirability, form and manner
of distribution of such notice, and shall report to the court in
such application the areas of agreement as well as any area of
disagreement.
4.
Plaintiffs have moved to compel the production for
examination of certain notes made by deposition witness
Robert A. Penney contemporaneously with Mr. Penney’s
interviews with the named-plaintiffs representative parties.
In accordance with the oral instructions of the court of the
conference of counsel on December 3, 1973 it is ORDERED
that defendant shall respond to Plaintiffs’ Motion showing
the cause, if any, why such production should not be
ordered. _
Defendant shall file said Response on or before
December 17, 1973.
\
5.
Plaintiffs have also moved for reconsideration of our
Order of November 27, 1972 which restricted Plaintiffs’
discovery. On consideration of the Motion, the represen-
tations made therein, and the oral arguments made at the
conference of December 3, 1973, it is ORDERED that:
Defendant shall produce for inspection and copying by
Plaintiffs’ counsel all statements taken by Defendant from
any member of the class defined herein and reduced to
\
Ft RE ROTO el
—
42a District Court's Memorandum Order 12/6/73
writing concerning the recruitment, hiring, employment, job
description, compensation, maternity leave and health
insurance benefits of employees from and after July 2, 1965.
Defendant shall also produce for inspection by Plaintiffs’
counsel the persounel file of any employee or former
employee from whom such a statement was secured. The
term “statement” as used herein shall include a written
statement prepared or signed by said employee and any
memorandum or summary of a statement made or interview
conducted which was summarized or reported in writing by
any other person.
Otherwise, the restrictions of the Order of November
27, 1972 remain in effect. The court reserves for later
determination when the need becomes apparent, Plaintiffs’
request for production of the last known names and
addresses of former female technical employees in Defen-
dant’s claims department.
So Ordered this 6th day of December, 1973.
/s/ GerALp J. WEBER
Gerald J. Weber
United States District Judge
ce:
All counsel
Or AAA PAP OEE.
Opinion of the District Court 1/9/74 43a
IN THE
Wnited States District Court
° ° (Caption—72-169) ° °
Jan. 9, 1974
OPINION
Wesen, District Judge
The two named Plaintiffs on behalf of themselves and
all other female technical employees employed in Defen-
dant Liberty Mutual Insurance Company’s Claims Depart-
ment (the Company) have filed a Complaint charging that
the Company discriminated against women in hiring, job
classification, promotions, and in the compensation and job
benefits they received for the jobs they were allowed to
hold.
The Representative Plaintiffs are Sandra Wetzel, a
woman, who was hired by Defendant Company as a
“Claims Representative” in July 1967, and Mari Ross, who
was hired by Defendant Company as a “Claims Represen-
tative” in September 1967. Both allege that they suffered
discrimination by reason of their sex because of the hiring,
job classification, pay differential, and employment benefit
policies of Defendant Company and that these policies were
applied to all female technical employees in the Defendant's
Claims Department throughout the nation where Defendant
Company did business.
The court determined that the action should proceed as
a class action covering all female technical employees in the
Defendant's Claims Department in the entire geographical
area where the Company did business. The class as now
defined includes all such employees who were hired or
working for the Company in its Claims Department since
July 2, 1965, the effective date of Title VII of 42 U.S.C.
§2000e et seq., the Equal Employment Opportunity Act of
1972.
hoe
yee
RONG EE CEG Gre OTE OF
44a Opinion of the District Court 1/9/74
Extensive discovery has been employed and the
Plaintiffs now file a motion for partial summary judgment on
certain of the issues raised. I: is agreed between the parties
thatt one of the issues, designated the “equal pay” issue, is not
susceptible of summary judgment at this time because there
are disputed issues of fact with respect to whether or not the
work performed by women in the job classification of
“Claims Representative” was equal to the work performed
by men in the job classification of “Claims Adjuster” for
which they were paid a substantially higher salary.
However, the Plaintiffs at this time allege that there is no
genuine issue as to any material fact with respect to the job
classification under which men and women were originally
hired as technical employees in the Claims Department,
with regard to the promotional policy within the Claims
Department, and with regard to the pregnancy and
maternity leave policies of the Company including the
disability income protection plan of the Company as applied
to women on maternity leave.
The key point of discrimination set forth in the
pleadings, evidentiary material and briefs of the plaintiffs,
and the amicus curiae brief of the United States Equal
Employment Opportunity Commission is the hiring policy
of the Company, since original assignment in effect
determines the employee’s future chances of promotion
within the Company. Because the Company in its Claims
Department promotes from its own ranks, the opportunity
for advancement depends upon the entry level position to
which an employee is assigned upon first being employed by
the Company’s claim division. Promotion to the higher rank
of Claims Supervisor was limited to persons holding the
position of Claims Adjuster and throughout most of the
period under consideration through 1970 was limited to male
employees because all Claims Adjusters were male. On the
other hand the entry level classification in the Company's
Opinion gd the District Court 1/9/74 45a
Claims Department of “Claims Representative” was
exclusively limited to women throughout most of the period
under consideration here. There was no avenue of promo-
tion to Claims Supervisor and higher supervisory positions
from those personnel classified as “Claims Representatives”
on entry into the Company in its Claims Division.
There were two higher supervisory positions in the
“Claims Representative” category, that of “Supervising
Claims Representative” and “Claims Representative Super-
visor”, but no promotion beyond the second rank. Although
the line of responsibility from “Claims Representative
Supervisor” runs to “Claims Supervisor” there is no similar
line of promotion because all “Claims Supervisors” are
drawn from the ranks of “Claims Adjuster”.
/
/
ORC Abe PEM Matatie OLE APA OF Le oP
‘
46a Opinion of the District Court 1/9/74
The lines of euhaaieien: and promotion are illustrated
as follows:
CLAIMS DEPARTMENT - . TECHNICAL EMPLOYEES
Lines of Responsibility and Epemaation
"Division Claims Manager
| PI) ae
EES? eR
Branch Office Claims Manager |
Branch Office Assistant Claims Manager
/
‘
'
‘
Claims Supervisor
i a
.
Claims Representative Supervisor
Claims Representative (CR)
lines of responsibility
lines of promotion _...._._..__-
‘The same educational requirements were in 1965 and
thereafter until 1970 with respect to the hiring of “Claims
Adjusters” and “Claims Representatives”, a college degree.
No prior experience in the insurance business was required
and in fact the Company did not hire persons who had
worked’ for other insurance companies in its entry level
positions in the Claims Department.
- Although the Defendant Company had employed
_ “Claims Adjusters” for a long period of time the position of
“Claims Representative” was created in mid-1965. The
position was created when the Company had decided to
‘
Opinion of the District Court 1/9/74 47a
handle more of its claims work from inside its offices. A
recruiting brochure for this position was prepared and
circulated through college placement offices and employ-
ment agencies. The qualification for the “Claims Represen-
tative” position included a college degree. The recruiting
brochure is entirely female oriented. Its title page bears the
capiton and picture identifying the position as a job fit for a
queen. It shows women in its illustrations of persons
performing their duties in this capacity. Between July 1, 1965
and the end of 1966, 401 persons were hired for the positions
of “Claims Representative”, not one of which was male.
Between July 1, 1965 and March 17, 1972, 2,329 persons were
hired as “Claims Representatives” of which 2,302 or 98.547
were women. The first male “Claims Representative” was
hired in 1969, four in 1970, and twenty in 1971. During the
period from 1965 until the end of 1970, the Company hired
over 2,000 “Claims Adjusters”, not one of which was female.
The recruiting brochure used by the Company during
this period describing the position and duties of “Claims
Adjusters” was entirely male oriented, its illustrations
showing men performing the duties of the position, and
bearing the legend in large type, “Are you the right man?”,
and reciting the avenues of advancement from Claims
Adjuster through Branch Office Claims Manager, Division
Claims Manager, Manager Home Office Examiners’
Division, and so on up the ladder. The Company promoted
to advanced positions in its Claims Department solely from
those persons who had served it in the capacity of “Claims
Adjuster”.
The two Representative Plaintiffs were hired in the
position of “Claims Representative” and they have deposed
that in answer to their inquiries they were informed that the
position of “Claims Adjuster”, the beginning of the
promotional ladder in the Claims Department, was not
available for women. It has been admitted by represen-
48a Opinion of the District Court 1/9/74
tatives of the Defendant that the two named Representative
Plaintiffs were qualified for the position of “Claims
Adjuster” at the time of the original hiring.
It would serve little purpose to recite in detail the great
mass of statistical evidence which the Plaintiffs have
produced in support of their contention that the two initial
entry positions were segregated between male and female
applicants, that the educational requirement for both
positions was the same, that no prior insurance experience
was required for either position, that the functions per-
formed in these positions were very similar, that the pay
differential between the positions was substantial, being
approximately $2,500 per year greater for the Claims
Adjuster, that prior to 1971 no opportunity was given to
women “Claims Representatives” to qualify for the position
of “Claims Adjuster”, and that all promotions to higher
positions in the Claims Department were made from the
ranks of the exclusively male “Claims Adjuster” classifica-
tion.
In addition to the statistical evidence which is un-
rebutted here the Plaintiffs have produced additional
supporting evidence of the Company’s employment policies
with respect to women in the Claims Division. Much of this
3 evidence is in the form of oral testimony and affidavits
7 which may be subject to a question of credibility but a good
deal of the supporting evidence is documentary and
supports the Plaintiffs’ contention of a recognized pattern of
3 treating the male and female employees in the Claims
Department differently in respect to recruitment, hiring
classifications, promotional opportunities, and salary.
We are not speaking of salary or compensation with
respect to the question of whether equal pay was given for
the same work but in connection with the entry level salary
paid for the two classifications and the salary differential
between “Claims Representatives” of considerable ex-
| en PERSIA Mra CRT IRAN SONS
SSO A
De® as EF OPE OI ELI GIT EPP BLE AOD ORY I BEE ELE E OF OOO.
Opinion of the District Court 1/9/74 49a
patsy ti aks |
perience and the starting salary which they could receive
when openings were finally made available to “Claims
Representatives” to become “Claims Adjusters”.
Two sections of Fed. R. Civ. P. 56 are applicable to our
consideration of Plaintiffs’ motion for summary judgment.
Fed. R. Civ. P. 56(c) provides in part:
“The judgment sought shall be rendered forthwith if the
pleadings, depositions, answers to interrogatories, and
[the] admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any
material fact, and that the moving party is entitled to
judgment as a matter of law.”
and Fed. R. Civ. P. 56(e) which provides in part:
“When a motion for summary judgment is made and
supported as provided in this rule, an adverse party may
not rest upon the mere allegations or denials of his
pleading, but his response, by affidavits, or as otherwise
provided in this rule, must set forth specific facts
showing that there is a genuine issue for trial. If he does
not so respond, summary judgment, if appropriate,
shall be entered against him.”
The Plaintiffs have relied chiefly on statistical evidence
in support of their contention of discriminatory employment
policies and in many cases the courts have accepted such
evidence in determination of whether Title VII has been
violated. Parham v. Southwestern Bell Telephone Co., 433
F.2d 421 [8th Cir. 1970]; Witherspoon v. Mercury Freight
Lines, Inc., 457 F. 2d 496 [5th Cir. 1972]; Bing v. Roadway
Express, Inc., 444 F. 2d 687 [5th Cir. 1971]; Rowe v. General
Motors Corp., 457 F. 2d 348 [5th Cir. 1972]. In accordance
with these decisions and under the doctrine of McDonnell
Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817, 36 L.
Ed. 2d 668 [1973], once the plaintiff has established a prima
facie case by setting forth statistics of this kind the burden is
on the employer to sufficiently explain the disparity in +
hiring; conclusory statements that the employer never
te
ETRE
SOa Opinion of the District Court 1/9/74
discriminated in hiring is insufficient to satisfy this burden.
As stated in McDonnell, supra, “The burden then must shift
to the employer to articulate some legitimate, non-
discriminatory reason for the respondent's rejection.” (p.
802, 93 S. Ct. p. 1824). We are of the opinion that the
Defendant's response to the Plaintiffs’ motion for summary
judgment fails to address this burden at all, let alone rebut
the Plaintiffs’ evidence.
The response of the Defendant raises eight issues of
defense, as follows:
1
Neither of the named Representative Plaintiffs is
currently in the employ of the Defendant. This is not a
contested issue of fact. The Plaintiffs admit that both the
representative party Plaintiffs have left the employ of
Defendant and the question of whether or not their
termination from employment was voluntary or forced by
discriminatory employment practices of the Defendant is
not an issue before us at this time. This is a matter of law
concerning standing and it has been held that a former
employee may bring an action to enforce rights under this
statute claimed to have been infringed. In Hackett v.
McGuire Bros., Inc., 445 F.2d 442 [3d Cir. 1971] this
contention was rejected;
“The national public policy reflected ...in Title
VII. . . may not be frustrated by the development of
overly technical judicial doctrines of standing or
election of remedies. If the plaintiff is sufficiently
aggrieved so that he claims enough injury in fact to
present a genuine case or controversy in the Article III
sense, then he should have standing to sue in his own
right and as a class representative.” (pp. 446, 447).
The Circuit Court continued:
“A person claiming to be aggrieved may never have
been an employee of the defendant. Indeed the Act
SE LAZO OOO ~~
¢ Pg EN REELS BS
— ee ve . reer Se
fi
Opinion of the District Court 1/9/74 5la
forbids discrimination not only by employers, 42 U.S.C.
§2000e-2(a)(2), but also by potential employers, 42
U.S.C. §2000e-2(a)(1), by labor organizations, 42
U.S.C. §2000e-2(c), and by employment agencies, 42
U.S.C. §2000e-2(b). An aggrieved person obviously is
any person aggrieved by any of the forbidden practtices.
(pp. 445-446).
An interesting commentary on the argument asserted to this
court was made in Reed v. Arlington Hotel Co., Inc., 476 F.
2d 721 [8th Cir. 1973}:
“ ..if this kind of an individual [a discharged
employee, not seeking reinstatement] would! be
prevented from bringing class actions as the rules
permit, there would be a windfall for the employer, and
when any such matter was coming up, all they would
have to do is discharge the employee . . .” (p. 72:3).
2.
The Defendant argues that the representative jparty
Plaintiffs were offered “Claims Adjuster” status and has filed
evidence to this effect. This is not denied by Plaintiff's but
they contend that the terms of the offer were unaccepitable
and were made after the charges of discrimination were
filed in this case with the United States Equal Employiment
Opportunity Commission in 1971. We find this to be a
disputed issue of fact which may be relevant to the question
of damages of the representative party ‘Plaintiffs, but
irrelevant to the question of violation of the stafute which is
before us. Under all circumstances, it is shown by the
evidence that the offer of “Claims Adjuster” status was made
long after the effective date of the statute in question, after
both representative Plaintiffs had been employed im the
positions of “Claims Representatives” for several years, and
after the filing of the Complaints before the EEOC in this
matter.
=
&
>
&
&
:
z
52a Opinion of the District Court 1/9/74
3.
Defendant claims that there is a dispute as to the content
of conversations between representatives of the Company
and a representative of the Pennsylvania Human Relations
Commission. This alleged conversation bears on the
Company’s motive and intent in offering “Claims Adjuster”
status to the named-Plaintiffs at the time that it did. We find
this completely immaterial to the issue before us at this time
because the offer of Claims Adjuster status was not made
until the alleged discriminatory practices in violation of Title
VII of the Act had continued for several years and the issue
had been raised by a Complaint to the Equal Employment
Opportunity Commission by the named Plaintiffs.
4.
The Defendant contends that there is a disputed issue of
fact on the question of whether or not the qualifications and
entrance requirements for the position of “Claims Adjuster”
are substantiall:, different from those of “Claims Represen-
tative”. Although with respect to the duties and respon-
sibilities of each position which we have previously
designated as the “equal pay” issue, not before the Court on
this Summary Judgment motion, nevertheless we are
concerned at this time with whether or not qualified female
applicants were excluded from the position of “Claims
Adjuster” and its subsequent promotional ladder. The
statistical evidence shows that of more than 2,000 persons
hired for the porition of “Claims Adjuster” up through 1970,
not one was female. The Defendant's own representatives
have admitted that the representative Plaintiffs in this case
were qualified for the position of “Claims Adjuster” at the
time of original hiring. Therefore, we find that the
Defendant has not met the burden of showing why no
female personnel were hired for the “Claims Adjuster”
position during the period following the effective date of
Opinion of the District Court 1/9/74 53a
Title VII until sometime after August 1971 and subsequent to
the filing of complaints in the within matter. Plaintiff's
contention is further supported by evidence that no female
employees occupied the supervisory position of “Claims
Supervisor” in the Company which were filled from the
ranks of the “Claim Adjusters” until at least 1970. If the jobs
were substantially dissimilar as the Defendant claims, the
differential in starting salary may be justified but the total
exclusion of women from entry into the higher paid “Claims
Adjuster” position would remain as a discriminatory
practice, and the promotional policy of the company in
drawing all of its supervisory personnel from the ranks of the
exclusively male “Claims Adjusters” continued and
emphasized the discriminatory effect of the policy.
Therefore, we find that the Defendant's argument of a
difference in the qualifications or duties of the two positions
is. immaterial to the Plantiffs’ charge that women were
discriminated against in the selection of persons to fill the
“Claim Adjuster” position. The company has offered no
evidence of any bonafide occupational qualification to
justify the complete exclusion of women for this position for
over a period of five years, particularly in view of its later
determination that some women “Claims Representatives”
were qualified for and were offered these positions.
5.
The Defendant argues that it is not clearly established
by the evidence that a large number of Defendant's female
employees were desirous of and qualified for better
positions. We cannot see the materiality of this argument to
the question presently before us. The undisputed evidence
establishes that after charges were filed in this case, the
Defendant did interview its “Claims Representatives” and
that 10% of them were offered and accepted positions as
“Claims Adjusters”. It was further established by testimony
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of a Company representative that the Company considered
one-third of its women “Claims Representatives” to be
qualified for the position of “Claims Adjuster”. We fail to see
how these facts alter the statistical evidence that of the more
than 2,000 “Claims Adjusters” hired between 1965 and 1970
none were women, that all of the “Claims Representatives”
hired during this period were women, that no woman in the
job classification of “Claims Representative” was ever
promoted to the supervisory position of “Claims Supervisor”
during this period; that the Company deliberately engaged
in the recruitment of women for the “Claims Represen-
tative” position and represented the “Claims Adjuster”
position to be solely a position for male applicants.
6.
The Defendant objects to using the import of the
recruiting brochures which were offered in evidence by
Plaintiffs and has shown that they have since been
superseded by new recruiting literature that is not sex
oriented. However, in this matter as in several other matters
offered in defense in this case the evidence shows that the
Company policy changed after having been continued for a
period of approximately five years from the effective date
of Title VII and after the threat of the instant litigation
became imminent. While the change in Company pdlicy
may affect the question of the amount of damages for which
it may be laible, we cannot see what effect it has on the
liability of Defendant for its policy from and after July 2,
1965.
7
The Defendant disputes the Plaintiffs’ statement that
Defendant discouraged acceptances for the offer given to
female “Claims Representatives” for re-classification to the
position of “Claims Adjuster”. We do not find this to be a
dispute on a material issue of fact. Whether or not the
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Opinion of the District Court 1/9/74 55a
company discouraged its female “Claims Representatives”
from accepting the offered position of “Claims Adjuster”,
after that occupational classification was opened to women
is immaterial to the issue or whether or not the Company
practiced discrimination in its employment policies from
and after July 2, 1965.
For the purposes of this motion we may assume that the
Company did not discourage its female employees from
accepting offers to transfer to the classification of “Claims
Adjuster.”
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The Defendant disputes the inferences which the
Plaintiffs draw from the facts that no women were
promoted to the positions of Branch Office Claims Manager
and above. Whether or not there is a dispute from these
inferences the undisputed fact remains that no women in the
Defendant's organization were promoted to or held these
positions, and the Defendant has failed to come forward
with any evidence to explain or refute the disparity in
promotional practices.
Il.
A second issue presented by Plaintiffs’ motion for
summary judgment may be broadly categorized as the
maternity leave issue. This in turn is divided into two sub-
issues which we label as
‘
(a) the maternity leave conditions of employment and
(b) the income protection plan as applied to maternity
leave.
(a) Maternity leave policy.
Until March 1967, the Company policy was to terminate
the employment of a pregnant employee at the end of her
sixth month of pregnancy. Thereafter, until September 1970
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56a Opinion of the District Court 1/9/74
the policy was to terminate an employee after the eighth
month of pregnancy. An employee so terminated could be
re-employed, at the sole discretion of the Company, if she
re-applied for employment after the birth of her child and if
there was a position, available.
In September 1970, Company policy was changed to
require pregnant employees either to terminate employ-
ment or to take a leave of absence at the end of the eighth
month and to return to work either within six months of the
date of termination of employment or three months from
date of delivery, whichever comes first.
In November 1971, Company policy was again changed
to permit an employee to work for as long as her physician
certifies here ability to work prior to commencing a
maternity leave of absence.
(b) Income Protection Policy.
The Company provides as a fringe benefit of employ-
ment an Income Protection Plan which provides for the
payment of income during periods of disability. This plan is
funded by insurance benefits. The only long term disability
for which no benefits are provided is pregnancy. Further-
more, the Defendant's health insurance plan provides
coverage for children of employees who are working for the
Company at the time of the birth of the child, and this
excludes from coverage the child of an employee who is
absent on a maternity leave of absence at the time of the
birth of the child._
There is no disputed issue of fact as to the provisions of
the maternity leave policies and the fringe benefit coverage
of Defendant Company. The question presented to us is
solely a matter of law as the application of Title VII to these
undisputed facts.
A threshold question raised by Defendant is that the
Plaintiffs have not fulfilled the statutory requirement of
exhaustion of the administrative remedy, 42 U.S.C. § 2000e-
Opinion of the District Court 1/9/74 57a
5(e) because the charges filed by these Plaintiffs with the
EEOC never mentioned this aspect of the complaint. The
policy of the statute is to give the EEOC an opportunity to
investigate and conciliate charges of discrimination.
The strongest case urged by Defendant Company is
Tedford v. Airco Reduction Co., 4 F.E.P. Cases 406 [5th Cir.
1972], where the Court of Appeals reversed the dismissal by
the District Court of a claim for discriminatory hiring
practices because of mootness. The Appeals Court held that
the subsequent hiring of plaintiff did not extinguish
plaintiff's claim for back wages. However, the Court of
Appeals did sustain the dismissal of claims of a dis-
criminatory seniority system and discriminatory job
assignments because,
“the only factual allegation in Tedford’s EEOC
complaint was that Airco had refused to hire him as a
truck driver because of his race.”
oO J o J oO
“But giving this factual allegation the most generous
construction possible, we still are unable to conclude
that the investigation could properly have extended to
Airco’s seniority system, the driver lists, and the like. A
charge filed before the EEOC is not a plenary charter
for a Commission investigation of every aspect of a
company’s employment practices. The conclusion is
unavoidable that the EEOC has never been called upon
to investigate these practices, and accordingly that
litigation of their validity in federal court is premature.”
4 F.E.P. Cases, p. 409.
However, this was the same Circuit Court that decided
Sanchez v. Standard Brands, 431 F. 2d 455 (5th Cir. 1970},
and the Tedford court gave due regard to the Sanchez
doctrine.
However, the courts have not restricted a plaintiff's suit
under 42 U.S.C. § 2000e-5(e) to the specific issues raised
before the EEOC, nor to the specific findings of the EEOC.
mg RE ee eee ieee Bhets) hu
58a Opinion of the District Court 1/9/74
“Respondent satisfied the jurisdictional prerequisites to
a federal action (i) by filing timely charges of
employment discrimination with the Commission and
(ii) by receiving and acting upon the Commission's
statutory notice of the right to sue, 42 U.S.C. § § 2000e-
5(a) and 2000e-5(e). The Act does not restrict a
complainant's right to sue to those charges as to which
the Commission has made findings of reasonable cause,
and we will not engraft on the statute a requirement
which may inhibit the review of claims of employment
discrimination in the federal courts... . . and the courts
of appeal have held that, in view of the large volume of
complaints before the Commission and the nonadver-
sary character of many of its proceedings ‘court actions
under Title VII are de novo proceedings and...a
Commission “no reasonable cause” finding does not bar
a lawsuit in the case.’ Robinson v. Lorillard Corp., 444 F.
2d 791; 800 [C.A. 4, 1971]; Beverly v. Lone Star Lead
Construction Corp., 437 F. 2d 1136 [C.A. 5, 1971];
Flowers v. Local 6, Laborers International Union of
North America, 431 F. 2d 205 [C.A. 7, 1971]; Fekete v.
United States Steel Corp., 424 F. 2d 331 [C.A. 3, 1970].”
McDonnell Douglas Corp. v. Green, 411 U.S. 792, 798-
799, 93S. Ct. 1817, 1822, 1823, 36 L. Ed. 2d 668 [1973].
In Sanchez v. Standard Brands, Inc., cit. supra, it was
explained that in filing a charge with the EEOC an aggrieved
person is supplied with a simple one-page charge form in
which a row of boxes is provided to check the category of
discrimination. We have as Exhibits in the present case the
Notice of Charge which the EEOC gave to Defendant
Company for each case which indicates “Basis of
Discrimination—Sex”, and Nature of Charge—Promotion—
Terms and Conditions.” The Sanchez court found that no
charging party should be barred from the assertion of a
charge because of the technicality of his description.
“Surely the only procedural requirement which should
confront a Title VII complainant is the requirement that
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Opinion of the District Court 1/9/74 59a
he state, within the ninety-day period, facts sufficient to
trigger a Commission investigation. 431 F. 2d p. 462.
Sanchez continues:
“At least one district court in this circuit has addressed
itself to the question, however, and in our judgment it
responded to the question by giving the correct answer.
In King v. Georgia Power Co., N.D. Ga. 1968, 295 F.
Supp. 943, Judge Smith held that the allegations in a
judicial complaint filed pursuant to Title VII ‘may
encompass any kind of discrimination like or related to
allegations contained in the charge and growing out of
such allegation during the pendency of the case before
the Commission.’ 295 F. Supp. at 947. In other words,
the ‘scope’ of the judicial complaint is limited to the.
‘scope’ of the EEOC investigation which can reasonably
be expected to grow out of the charge of discrimina-
tion.” 431 F. 2d p. 466.
It appeared from oral argument that Defendant,
although it had received the “Notice of Charge of
Employment Discrimination”, had not seen copies of the
original charges filed by Plaintiffs with the Commission
before the argument. It appeared that they had never been
requested. They were supplied to the court and counsel the
day following the argument on this motion. The charge of
Plaintiff Mari Ross states, inter alia, “During interview for
position as claims representative was subjected to questions
regarding marital situation and birth control.” Furthermore,
the Plaintiffs were required to pursue their charges through
an appropriate state agency, the Pennsylvania Humgn
Relations Commission, which on July 1, 1971, sent to
Defendant a Complaint which recited, inter alia:
“The complainants further allege that female
applicants, as a condition of hire, are subjected to
inquiries about anticipated marriage and family size,
while men are not similarly evaluated as a condition of
hire.”
(Aune, Deposition, Exhibition 1).
60a Opinion of the District Court 1/9/74
The court believes that the, Representative Plaintiffs
have properly employed the administrative procedures of
Title VII which are a prerequisite to suit in the district court,
they have properly raised the issue of sex discrimination in
the “terms and conditions” of employment, that they
specifically raised allegations of discrimination in respect to
marital status and family planning sufficient to satisfy the
administrative investigation requirement for raising the
. specific question of sex discrimination in maternity leave
and pregnancy disability income policies in the present
lawsuit.
As a point of departure in considering the merits of
Plaintiffs’ charges of sex discrimination with respect to
Defendant's maternity leave and pregnancy disability
income protection policies it might appear to the lay mind
that we are treading on the brink of a precipice of absurdity.
Perhaps the admonition of Professor Thomas Reed Powell
to his law students is apt; “If you can think if something
which is inextricably related to some other thing and not
think of the other thing, you have a legal mind.”
We are dealing witha statute enacted by the Congress
of the United States which says:
“It shall be unlawful employment practices for an
employer—
(1) to fail or refuse to hire or to discharge any
individual, or otherwise to discriminate against any
individual with respect to his compensation, terms,
conditions, or privileges of employment, because of
such individual's . . . sex; or
(2) to limit, segregate or classify his employees in any
way which would deprive or tend to deprive any
individual of employment opportunities or otherwise
adversely affect his status as an employee, because of
such individual's . . . sex.” 42 U.S.C. § 2000e—2(a).
The defendant argues that its policies with regard to
maternity leave and income protection for disability
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Opinion of the District Court 1/9/74 6la
excluding pregnancy are not sex discriminatory because
pregnancy is “sui generis” and thus subject to special
treatment.
We believe that the court may take judicial notice of
certain well kuown facts and statistics to illustrate the
problem. We have taken our statistics from the United States
Census figures as published in the 1974 edition of the World
Almanac. In 1970, according to the census figures, there
were 105,000,000 women and 100,000,000 men in the United
States. In 1972 there were 31,000,000 women and 51,000,000
men, sixteen years of age and upwards, employed in the
United States. Women between the ages of fourteen through
forty-four amounted to 43.5% of the total female population
or 45,675,000 women, which we equate with the childbear-
ing age. There is a necessary overlapping of the 31,000,000
women in the work force sixteen years of age and older, and
the 45,000,00 women in the childbearing ages of fourteen to
forty-four. There were 3,191,000 live births in the United
States in the year ending June W, 1973 which produces a
birth rate of about fifteen per 1,000 of total population, but a
fertility rate of sixty-nine births per 1,000 women fifteen to
forty-four years of age. We recognize that more precise
statistics are available but we are not concerned with
ninutiae and only recite these figures to illustrate the scope
of the problem. Pregnancy is a natural condition, it is an
expectable condition, it is a statistically foreseeable condi-
tion, and ultimately it is a necessary condition. It is a
condition limited to women, not by statutory law or custom,
but by biological law. If three-eighths of our employee
working force consists of women, and their age group
necessarily overlaps in large measure the childbearing age
group, pregnancy is certain to occur in a statistically
expectable number of employees. We have no doubt that a
large insurance company is well aware of the precise
statistics. We further note from this case that the defendant's
recruiting policies for female technical employees in its
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62a Opinion of the District Court 1/9/74
claims department was aimed at young women finishing
their college education, and that its promotional policy was
to advance personnel within its own ranks and not draw
upon outside sources. This policy would only increase the
incidence of young women of childbearing age among the
female employees of a growing business organization such
as Defendant, which hired over 2,000 new female claims
representatives in a five year period.
Because pregnancy is a natural, expectable, and
societally necessary condition, which is certain to occur in a
statistically predictable number of women in the labor force,
we see no merit in Defendant's argument that it may be
excluded from equality of treatment in conditions and
benefits of employment because it is a voluntary condition.
Whether voluntary or not, it occurs with certainty and
regularity. The distinction drawn between one hiring policy
for men and another for women—each having pre-school
age children—was rejected by the Supreme Court in Phillips
v. Martin Marietta Corp., 400 U.S. 542, 544, 90S. Ct. 496, 27
L. Ed. 2d 613 [1971] where there was no showing that the
condition in question is a bonafide occupational qualifica-
tion necessary to the operation of that particular business or
enterprise.
The United States Equal Employment Opportunity
Commission which is ‘the administrative body created by
Title VII to adminsiter the Act, has issued the following
Guidelines with respect to the question at issue:
§ 1604.10 Employment policies relating to pregnancy
and childbirth.
(a) A written or unwritten employment policy or
practice which excludes from employment applicants
or employees because of pregnancy is in prima facie
violation of Title VII.
(b) Disabilities caused or contributed to by pregnancy,
miscarriage, abortion, childbirth, and recovery,
Opinion of the District Court 1/9/74 63a
therefrom are, for all job-related purposes, temporary
disabilities and should be treated as such under any
health or temporary disability insurance or sick leave
plan available in connection with employment. Written
and unwritten’ employment. policies and practices
involving matters such as the commencement and
duration of leave, the availability of eXtensions, and
accrual of seniority and other benefits or temporary
disability insurance or sick leave plan, formal or
informal, shall be applied to disability due to pregnancy
or childbirth on the same terms and conditions as thes
are applied to other temporary disabilities.
(c) Where the termination of an employee who is
temporarily disabled is caused by an employment
policy under which insufficient or no leave is available,
such a termination violates the Act if it has a disparate
impact on employees of one sex and is not justified by
business necessity.
29 C.F.R. Labor, Chapter XIV, Part 1604, As Amended
(As of March 31, 1972).
§ 1604.9 Fringe Benefits.
(a) “Fringe benefits,” as used herein, includes medical,
hospital, accident, life insurance and_ retirement
benefits; profit-sharing and bonus plans; leave; and
other terms, conditions, and privileges of employment.
(b) It shall be an unlawful employment practice for an
employer to discriminate between men and women
with regard to fringe benefits.
29 C.F.R. idem.
We give full recognition to the principle urged upon us
that the EEOC Guidelines, 29 C.F.R. §1604.10, effective
April 5, 1972, do not have the force of law in the sense that the
“regulations” or “substantive rules” of an administrative
body authorized by statute to promulgate regulations to
implement existing law have a binding effect. We also
recognize that the Guidelines are interpretive statements of
64a
Opinion of the District Court 1/9/74
what the administrative officer thinks the regulations mean.
Gibson Wine Co. Inc. v. Snyder, 90 U.S. App. D.C. 135, 194
F. 2d 329 [1951]. We are not compelled to follow them, but
some deference is due. Espinoza v. Farah Manufacturing
Co.,
462 F. 2d 1331, 1335 [6th Cir. 1972].
Our own Court of Appeals states it more strongly:
“Such an administrative interpretation is entitled to
great deference. Griggs v. Duke Power Co., 401 U.S.
424, 433-434, 91 S. Ct. 849, 28 L. Ed. 2d 158 [1971]; Udall
v. Tallman, 380 U.S. 1, 85 S. Ct. 792, 13 L. Ed. 2d 616
[1965]. That the guideline was not promulgated until
after this suit was initiated is of no moment. Rights
which came into being when the Act was passed are not
abrogated by administrative interpretation. Bartmess v.
Drewrys U.S.A., Inc., 444 F. 2d 1186 [C.A. 7], cert
denied, 404 U.S. 939, 92 S. Ct. 274, 30 L. Ed. 2d 252
{1971].”
“A reading of the statute convinces us that the
commission's interpretation furthers the legislative
purpose of the Act and is consistent with the plain
meaning of the language employed.
‘Congress intended to strike at the entire spectrum of
disparate treatment of men and women resulting from
sex stereotypes.’ Sprogis v. United Air Lines, 444 F. 2d
1194, 1198 [C.A. 7], cert denied, 404 U.S. 991, 92S. Ct.
536, 30 L. Ed. 2d 543 [1971].” Rosen v. Public Service
Electric and Gas Co., 477 F. 2d 90 [3rd Cir. 1973], at pp.
94-95.
The only current provision of the Defendant's maternity
leave policy under attack is the provision that the employee
who is granted a leave of absence for maternity must return
to w
men
‘ork on a date certain or be terminated from employ-
t. Plaintiffs’ Complaint is zeroed in on the target that this
limitation on leave of absence for temporary disability is
only
men
applied to maternity cases. There is no such require-
t for any other disability.
Opinion of the District Court 1/9/74 65a
Because state and local governments were exempted
under Title VI until 1972, there are few Title VII cases
involving pregnancy that give us guidelines, but the question
has arisen frequently under cases presenting claims of denial
of equal protection or denial of civil rights under color of
state authority. We believe that Title VII standards are more
compelling on a private employer in view of the express
statutory mandate upon employers and the absence of the
question of a “rational basis” for classification by which a
state statute is measured. Dandridge v. Williams, 397 U.S.
471, 90S. Ct. 1153, 25 L. Ed. 2d 491 [1970]. While a fixed state
policy of classification may survive an equal protection
attack it may still be violative of Title VII. See Schattman v.
Texas Employment Commission, 459 F. 2d 32 [5th Cir.
1972], and Newmon v. Delta Airlines, Inc., 475 F. 2d 768 [5th
Cir. 1973].
A district court in the Fifth Circuit has recognized that:
“Schattman, ...turned upon a divided Appellate
Court's interpretation of the federal statute as it then
read on the question of its exclusion from coverage of
state employers and employees.” Vick v. Texas
Employment Commission, 6 EPD 5990 [S. D. Tex. Aug.
30, 1973].
However, the Vick case found this impediment to jurisdic-
tion removed by the 1972 Amendment to Title VII, and
proceeded to find that the state’s denial of unemployment
benefits on the grounds that the last trimester of pregnancy
rendered a woman unavailable for work, violated the
provisions of Title VII.
“While the expectancy of life confined and incident to
female pregnancy involves many delicacies of personal,
institutional and societal interest, Roe v. Wade, 410 U.S.
113 [93 S. Ct. 705, 35 L. Ed. 2d 147] 41 L. W. 4231
(January 22, 1973), such a natural and necessary female
condition cannot be a basis for categorical discrimina-
tion in light of Phillips and its plain interpretation of
Title VII of the Act.” Vick, cit supra, 5 EPD p. 5992.
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66a Opinion of the District Court 1/9/74
Nevertheless, we can take some guidelines from the Equal
Protection Clause cases dealing with pregnancy.
Judge Brown in his dissent in Phillips v. Martin Marietta
Corp., 416 F. 2d 1257 [5th Cir. 1969], vacated per curiam 400
U.S. 542, 91 S. Ct. 496, 27 L. Ed. 2d 613 [1972] noted with
respect to that case, where women with pre-school age
children were denied employment, but not men:
“The distinguishing factor seems to be motherhood
versus fatherhood. The question then arises: Is this sex-
related? To the simple query the answer is just as
simple: Nobody—and this includes Judges, Solomonic
or life tenured— has yet seen a male mother. A mother,
to oversimplify the simplest biology, must then be a
woman”. 416 F. 2d p. 1259.
To the argument that pregnancy is a voluntary status,
the court in Buckley v. Coyle Public School System, 476 F.
2d 92 [10th Cir. 1973] says:
“The fact, if it be a fact, that pregnancy is a voluntary
status really has nothing to do with the question. The
point is that the regulation penalizes the feminine school
teacher for being a woman and, therefore, it must be
condemned on that ground.” 476 F. 2d at p. 95.
The Court of Appeals reversed the District Court's dismissal
and remanded the case to the District Court for determina-
tion of a compelling state interest to justify the regulation.
In Green v. Waterford Board of Education, 473 F. 2d
629 [2nd Cir. 1973], the Court of Appeals reversed a District
Court's dismissal of a complaint alleging that an inflexible
maternity leave policy denied equal protection. Even
though the District Court had found a rational basis for the
school board’s action, the Court of Appeals found that the
state’s interests were not sufficiently promoted by rule to
justify the arbitrary and inflexible regulation applied to
pregnancy as distinguished from other disabilities.
“The heart of plantiff’s case is that disqualifying a
physically capable woman from working because of a
Opinion of the District Court 1/9/74 67a
condition related solely to her sex is unconstitutionally
discriminatory. Plaintiff admits the obvious, that men
do not become pregnant, but points out that men, being
human, are also subject to crises of the body, some of
which, like childbirth, give ample warning: A cataract
operation or a prostatectomy, for example, may be
planned months ahead. Because male teachers are not
forced by defendant Board to take premature leave
because of a known forthcoming medical problem,
female teachers should not be treated differently. Thus
stated, the argument is persuasive, even compelling.
One realizes with a shock what so many women now
proclaim: Old accepted rules and customs often
discriminate against women in ways that have long been
taken for granted or have gone unnoticed.” (p. 634).
See also the following Equal Protection clause cases
involving maternity leave: LaFleur v. Cleveland Board of
Education, 465 F. 2d 1184 [6th Cir. 1972], cert. granted 411
U.S. 947, 93S. Ct. 1921, 36 L. Ed. 2d 408, but Cf. Cohen v.
Chesterfield County School Board, 474 F. 2d 395 [4th Cir.
1973], cert. granted, 411 U.S. 947, 93 S. Ct. 1925, 36 L. Ed. 2d
408.
Defendant has interposed a defense of good faith
reliance upon an administrative interpretation, particularly
in its defense on the income protection exclusion policy here.
This may be a matter to consider when the questions of
affirmative relief or back pay are determined but we cannot
see its application to the immediate question of the inflexible
maternity leave standard. During the period prior to the
Guidelines published in March 1972, there were no
guidelines or opinions issued by the EEOC. 42 U.S.C. §
2000e-12(b) (Sec. 713(b) of the Act) provides that “no person
shall be subject to any liability or punishment for an unlawful
employment practice if he pleads and proves that the act or
commission complained of was in good faith, in conformity
with and in reliance upon any written interpretation or
opinion of the Commission.”
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68a Opinion of the District Court 1/9/74
We do not believe that the various opinion letters
referred to in the brief of amicus curiae United States
Chamber of Commerce, with respect to the inclusion of
maternity benefits in an insurance plan meet the re-
quirements of Sec. 713; there is no evidence that defendant
relied upon them, they were not addressed to the defendant,
and do not otherwise conform to the requirements of a
written opinion under which the defense of reliance may be
asserted. Local 189 United Papermakers and Paperworkers,
etc. v. United States, 416 F. 2d 980 [5th Cir. 1969]; Sprogis v.
United Air Lines, Inc., 444 F. 2d 1194 [7th Cir. 1971].
The maternity leave policy of the company which since
1970 has granted a leave of absence for six months from the
last date of work before delivery, or for three months from
date of delivery, whichever comes first has no relation to the
fitness of any individual female to perform the functions of
her job.
The defendant has not alleged, nor has it offered any
evidentiary material to establish that there is a disputed issue
of fact dependent upon a bona fide occupational qualifica-
tion. Such a bona fide occupational qualification is a defense
to a charge of discrimination where sex is a bona fide
occupational qualification reasonably necessary to the
normal operation of that particular business or enterprise.
This has been narrowly construed by the courts. In Weeks v.
Southern Bell Telephone and Telegraph Company, 408 F.
2d 228 [5th Cir. 1969] the Court held this must give the
employer “a factual basis for believing that all or substantial-
ly all women would be unable to perform safely and
efficiently the duties of the job involved.” In Rosenfeld v.
Southern Pacific Co., 444 F. 2d 1219 [9th Cir. 1971] the court
held the exclusion of women justified only when “the sexual
characteristics of the employee are curcial to the successful
performance of the job, as they would be for the position of a
wet-nurse.” Under Rosenfeld, if one woman can do the job
Opinion of the District Court 1/9/74 69a
the employer cannot impose a blanket rule denying all
women the opportunity.
Under the company policy any female who cannot
return to her job within three months of delivery of her child
is automatically terminated. No other disability is cause for
such automatic termination. “For a woman, however, the
effects of pregnancy and pregnancy-related illness are
debilitating in much the same way as the physical and mental
conditions that are included within the scope of the disability
insurance program.” Aiello v. Hansen, 359 F. Supp. 792
[N.D. Cal. 1973].
We conclude, as a matter of law, that the maternity
leave policy in effect in Defendant Company at the present
time and since September 1970 in the respect in which it
requires a female to return to work within three months of
the date of delivery of her child, or six months from the
beginning of her maternity leave, whichever date is earlier,
or face termination of employment, is violative of Sec. 703,
of Title VII of the Civil Rights Act of 1964, as amended, in
that such policy discriminates against female employees on
the basis of sex.
Because only this present policy is still in existence,
injunctive relief as to this practice is appropriate at this time.
We further find that all prior company policies in effect
since July 2, 1965, which compelled pregnant female
employees to leave employment at a fixed period of
pregnancy before delivery were likewise violative of the
Act, and the company policy in effect since July 2, 1965
which denied reemployment because of pregnancy and
maternity were violative of the Act. Because these practices
have ended there is no need for injunctive relief, and the
question of the intentional nature of the violation and the
appropriate relief will be considered in a subsequent stage of
these proceedings.
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70a Opinion of the District Court 1/9/74
Some additional considerations must be weighed with
respect to plaintiffs’ claim that the Income Protection Plan of
Defendant company is discriminatory to female employees.
The Company provides its employees with a contributory
insurance plan for continuation of income for a “long term
illness”, i.e. an illness requiring treatment by a doctor of eight
or more calendar days which causes absence from work.
Such “benefits are not payable for disability due to
occupational injury or to sickness covered under Workmen’s
Compensation Insurance; for disability due to pregnancy;
for a disability in excess of 104 weeks; or for a disability
during which you were not treated by a physician licensed to
practice medicine.”
Pregnancy is the only disability, not within the other
exceptions, not covered by the Income Protection Plan.
Pregnancy is a condition limited to women. Conditions
limited to men, such as prostate troubles; are not excluded,
nor is any exclusion provided for a nuinber of ilinesses whose
incidence among males is greatly predominant (i.e. gout 19
to 1; the Merck Manual, 10th ed. 1961).
The brief of the United States Chamber of Commerce
as amicus curiae cites cost of the program if pregnancy were
included, as a justification for exclusion.
We must emphasize the distinction made by the
Guidelines, § 1604.10(b) that it is “disabilities caused or
contributed by pregnancy, miscarriage, abortion, child-
birth, and recovery therefrom” which for job-related
purposes are to be treated as temporary disabilities. They do
not cover leave for child rearing, but only for job disability.
No evidence has been presented to us by Defendant as to the
average duration of pregnancy disability. Again, we have a
difficult time in freeing ourselves from stereotype thinking.
We note that the Defendant’s policy for maternity leave
prior to delivery has accommodated itself from a fixed
number of months prior to delivery to the recognition that an
employee may work prior to delivery as long as she is able to
Opinion
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