Petition for Writ of Certiorari — Lufkin Industries, Inc., v. McClain (No. 08-29)

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@ 08-29 JUL 2- 2008

OFF:C# OF THE CLERK

No. Wittinnn iC. Buiter, Chest

In The

Supreme Court of the Anited States

LUFKIN INDUSTRIES, INC.,

Petitioner,

Vv.

SYLVESTER MCCLAIN, on HIS OWN BEHALF AND ON

BEHALF OF A CLASS OF SIMILARLY SITUATED PERSONS, e¢ al.,

Respondents.

On Petition for Writ of Certiorari to the United

States Court of Appeals for the Fifth Circuit

PETITION FOR WRIT OF CERTIORARI

Douctas E. HAMEL

Counsel of Record

CHRISTOPHER V. BACON

VINSON & ELKINS L.L.P.

1001 FANNIN STREET, SUITE 2500

Housron, TX 77002-6760

(713) 758-2036

Attorneys for Petitioner

July, 2008

Becker Gallagher - Cincinnati, OH - Washington, D.C. - 800 890.5001

I.

II.

i

QUESTIONS PRESENTED FOR REVIEW

Whether § 703(h) of Title VII of the Civil Rights Act

of 1964 permits disparate effect in promotions

undisputedly awarded by seniority and without

intent to discriminate to be used in establishing

unlawful disparate impact under the not-capable-

of-separation-for-analysis method added to

Title VII by the Civil Rights Act of 1991.

Whether the Fifth Circuit’s decision imposing a

liability period for a Title VII class claim beginning

almost three years before the charge that the Court

of Appeals found exhausted the administrative

remedies for the class was filed conflicts with this

Court’s decisions negating liability for acts outside

the Title VII limitations period.

il

PARTIES TO THE PROCEEDING

The parties to the proceeding are listed below.

Petitioner: LUFKIN INDUSTRIES, INC.

Respondents: SYLVESTER MCCLAIN, on his

own behalf and on behalf of a class of similarly

situated persons; BUFORD THOMAS, on his own

behalf and on behalf of a class of similarly situated

persons; PATRICK ROSS, on his own behalf and on

behalf of a class of similarly situated persons; MARY

THOMAS, on her own behalf and on behalf of a class

of similarly situated persons; EDDIE K. MASK, on his

own behalf and on behalf of a class of similarly

situated persons; LEROY GARNER, on his own behalf

and on behalf of a class of similarly situated persons;

SHERRY CALLOWAY SWINT, on her own behalf and

on behalf of a class of similarly situated persons;

WALTER BUTLER, on his own behalf and on behalf of

a class of similarly situated persons; also known as A;

FLORINE THOMPSON, on her own behalf and on

behalf of a class of similarly situated persons;

CLARENCE OWENS, on his own behalf and on behalf

of a class of similarly situated persons; also known as

C; CLIFFORD R. DUIRDEN, on his own behalf and on

behalf of a class of similarly situated persons; EARL

POTTS, on his own behalf and on behalf of a class of

similarly situated persons; ROALD MARK, on his own

behalf and on behaif of a class of similarly situated

persons.

i

RULE 29.6 STATEMENT

Lufkin Industries, Inc. has no parent company and

no publicly held corporation owns 10% or more of

Lufkin Industries stock.

1V

TABLE OF CONTENTS

QUESTIONS PRESENTED FOR REVIEW ...... 1

PARTIES TO THE PROCEEDING ............ il

pub Be. 2 Posy yo |. y a ili

pe Be gee. os |. y | a errr iv

Abed OF AUTESIOREIIES ... «2.2. ese seees vii

CUNEO ne is ce ee ee cee seas 1

STATEMENT OF JURISDICTION ............ 1

STATUTORY PROVISIONS INVOLVED ....... 1

STATEMENT OF THE CASE ................ 2

REASONS FOR GRANTING THE PETITION ... 9

I. SECTION 703(h) OF TITLE VII OF THE CIVIL

RIGHTS ACT OF 1964 DOES NOT PERMIT

DISPARATE EFFECT IN PROMOTIONS

UNDISPUTEDLY AWARDED BY SENIORITY AND

WITHOUT INTENT TO DISCRIMINATE TO BE USED

IN ESTABLISHING UNLAWFUL DISPARATE IMPACT

UNDER THE NOT-CAPABLE-OF-SEPARATION-FOR-

ANALYSIS METHOD ADDED TO TITLE VII BY THE

ee mr ee Fe ne 9

Vv

A. By Permitting Lawful, Seniority-Based

Promotions to Create Unlawful Disparate

Impact, the Fifth Circuit Interferes With the

Collective Bargaining Process and Threatens

the Recognition of Seniority in Awarding

Competitive Benefits. ................. 10

B. In Favoring the Application of the Not-

Capable-of-Separation-For-Analysis Method

of Proof Over Seniority Systems, the Fifth

Circuit Seriously Misapprehends the

oN i) ee er arr 15

C. The Fifth Circuit’s Decision Stands in Direct

Conflict With California Brewers, Which

Protects Seniority Systems Even When They

Are Combined With Non-Seniority Criteria

in Collective Bargaining Agreements. .... 21

II. THE FIFTH CIRCUIT'S DECISION IMPOSING A

LIABILITY PERIOD FOR A TITLE VII CLASS CLAIM

BEGINNING ALMOST THREE YEARS BEFORE THE

CHARGE THAT THE COURT OF APPEALS FOUND

EXHAUSTED THE ADMINISTRATIVE REMEDIES FOR

THE CLASS WAS FILED CONFLICTS WITH THIS

COURT’S DECISIONS NEGATING LIABILITY FOR

ACTS OUTSIDE THE TITLE VII LIMITATIONS

ERR ae ac tam aa ha a Many acne unt fa 24

On ie er, ew ie wl en 25

APPENDIX

Appendix A: February 29, 2008 (revised 3/10/08)

Fifth Circuit Opinion and Judgment ....... la

vil

Appendix B: August 29, 2005 District Court

Amended Final Judgment ............... 37a

Appendix C: April 4, 2008 Fifth Circuit Denial

fe re errr 83a

vill

TABLE OF AUTHORITIES

CASES

American Tobacco Co. v. Patterson,

456 U.S. 63 (1982) .... 10,12, 13, 14, 15, 16, 17

California Brewers Ass’n v. Bryant,

444 U.S. 598 (1980) ......... 10, 12, 21, 22. 23

Franks v. Bowman Transportation Co.,

S96 53. PRT eee 6 test ea 9, 16, 22

Humphrey v. Moore,

SERIE GOOLE ac tk hak ale aed eee 14

International Brotherhood of Teamsters v. United

States,

S35 UD. SRO COT) nc CaS ae ee 9,13

Ledbetter v. Goodyear Tire & Rubber Co.,

Ia? BS. (2. Se ons +5 so ee eee 25

Lorance v. AT&T Technologies, Inc.,

490 US. BOO CA ks ke i ies 10, 16, 22

McClain v. Lufkin Indus., Inc., |

187 FD. 267 Cl... Fem. Te) ow os ce ee 3

Nat'l R.R. Passenger Corp. v. Morgan,

GIG ty.2. 0% CO) co ss ted pee 25

NLRB v. Am. Nat'l Ins. Co ,

345 US. SOB Ce) 2.46 ook ose eee Bi

Vill

NLRB v. Jones & Laughlin Steel Corp.,

NL Ss rr ll

Pullman-Stendard v. Swint,

4 es 10, 16

Smith v. City of Jackson,

CL 21

Trans World Airlines, Inc. v. Hardison,

Goa 0.6. GOCIGT?) .. ww wc eae 10, 12, 14, 16, 17

United Air “ines, Inc. v. Evans,

See we. Ooo (i877) .......... .... 10,25, 26

Wards Cove Packing Co. v. Atoiia,

Re) 20, 21

Watson v. Fort Worth Bank & Trust,

EUS ft ee ee eee eeses 19

STATUTES

5 ra re 1

ee ei nce ee bse eee esau ye 1

ES CS ae 1

GR passim

SEU, © MUO) ow wees passim

42 U.S.C. § 2000e-5(eX 1)... 2... eee ee ee 24

ix

$2 UB.C. § FOGG O-GUING) .. ww ccc ccc cece esens 1

Civil Rights Act of 1991, Pub. L. 102-166, § 105(b)

SE Se aan. SU Soe Cae bbb ee Ew wee 21

OTHER

137 CONG. REC. S. 15276 (daily ed. Oct. 25, 1991),

reprinted in 1991 U.S.C.C.A.N. 767 ........ 20

Basic Patterns in Union Contracts, Bureau of

National Affairs (14" ed. 1995) ............ 12

SE. hy Se CAO. DA CIGE) 6 cc ee cece wnscees 20

H.R. REP. No. 102-40(1) (1991), reprinted in 1991

Sa RA I ne 4 ks oo 8 ee ee 20

]

Lufkin Industries, Inc. (“Lufkin”) respectfully prays

that a writ of certiorari issue to review a final

judgment of the United States Court of Appeals for the

Fifth Circuit.

OPINIONS BELOW

The opinion of the United States Court of Appeals

for the Fifth Circuit is reported at 519 F.3d 264 (5th

Cir. 2008), and is reproduced in the Appendix (“Pet.

App.”) at la. Plaintiffs and Lufkin timely petitioned

for a rehearing. The Court of Appeals Order denying

plaintiffs’ and Lufkin’s petitions is reproduced at Pet.

App. 83a. The district court’s Amended Final

Judgment is reproduced at Pet. App. 37a.

STATEMENT OF JURISDICTION

The district court had jurisdiction undey 28 U.S.C.

§§ 1331 and 1343(a)(4) and 42 U.S.C. § 2000e-5(f)(3).

The Court of Appeals panel issued its Revised Opinion

on March 10, 2008. Plaintiffs and Lufkin each timely

petitioned for rehearing. The panel denied rehearing

on April 4, 2008. This Court has jurisdiction under 28

U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

Section 703(h) of Title VII of the Civil Rights Act of

1964, 42 U.S.C. § 2000e-2(h) (hereinafter § 703(h)):

Notwithstanding any other provision of this

subchapter, it shall not be an _ unlawful

employment practice for an employer to apply

different standards of compensation, or

2

different terms, conditions, or privileges of

employment pursuant to a bona fide seniority or

merit system, or a system which measures

earnings by quantity or quality of production or

to employees who work in different locations,

provided that such differences are not the result

of an intention to discriminate because of race,

color, religion, sex, or national origin ....

Section 105(a) of the Civil Rights Act of 1991, 42

U.S.C. § 2000e-2(k)(1)(B)G):

With respect to demonstrating that a particular

employment practice causes a disparate impact

as described in subparagraph (A)(i), the

complaining party shall demonstrate that each

particular challenged employment practice

causes a disparate impact, except that if the

complaining party can demonstrate to the court

that the elements of a_ respondent’s

decisionmaking process are not capable of

separation for analysis, the decisionmaking

process may be analyzed as one employment

practice.

STATEMENT OF THE CASE

Plaintiffs are former and current black employees

working at Lufkin’s production operations and

corporate office in Angelina County, Texas. Originally

asserting an across-the-board class action, plaintiffs

alleged class-wide unlawful race discrimination under

both disparate treatment and disparate impact

theories of liability.

3

The district court (Cobb, J.) dismissed plaintiffs’

disparate treatment claims, but certified plaintiffs’

disparate impact claims for the following class:

All Black persons employed for any period of

time by defendant Lufkin Industries on or after

March 6, 1994, to date, whose compensation,

remuneration, benefits, job assignments,

promotional opportunities, career advancement

and other terms and conditions of employment

have been, may have been, or may become,

adversely affected by defendant Lufkin

Industries’ past or present systems of

administering hiring, wages, salaries, job

assignments, training, evaluations, promotions,

demotions, terminations, layoffs, recalls, and

rehires.

McClain v. Lufkin Indus., Inc., 187 F.R.D. 267, 277-78

(E.D. Tex. 1999).

During the class period certified by the district

court, Lufkin maintained four production divisions in

Angelina County: Foundry, which produced metal

castings; Trailer, which produced trailer truck bodies;

Oilfield, which manufactured and repaired oil

pumping units; and Power Transmission, which

machined high tolerance heavy industrial gearing.

Hourly employees in Lufkin’s production divisions

have been represented for more than fifty years by the

AFL-CIO which delegates its collective bargaining

responsibilities for Foundry to the Glass, Molder,

Pottery, Plastics and Allied Workers Union, Local

No. 429 (“GMP”); for the Oilfield machine shop and

Power Transmission to the International Association

4

of Machinists and Aerospace Workers, Local No. 1999

(“IAM”); and for the Oilfield fabrication shop and

Trailer to the International Brotherhood of

Boilermakers, Iron Ship Builders, Blacksmiths,

Forgers and Helpers, Local No. 587 (“Boilermakers”).

Lufkin and the unions have a single collective

bargaining agreement for hourly employees in

Angelina County.

The collective bargaining agreement recognizes

plant and departmental seniority, with department

seniority defined as the length of continuous service in

the following departments computed from the date on

which an employee went to work in said department:

foundry department, pattern shop department, trailer

division, fabrication department, machine shop

department, and gear repair department. During the

class period, the collective bargaining agreement

provided:

Departmental seniority within the bargaining

unit shall govern in promotions or demotions

within a department, and in reduction of forces

within the several departments; and, when

forces are increased, employees who have been

laid off in a particular department, shall be

recalled in the inverse order of their layoffs;

provided, said employees’ shall have

departmental seniority status in accordance

with the provision of this Article 22; and

provided, also, that in the case of promotions,

demotions, transfers, layoffs and recalling to

work of employees laid off, all as above set out,

their departmental seniority shall govern if

their ability to perform the work is

5

approximately equal. “Ability” as the term is

used in the phrase “ability to perform” shall be

understood to include the employee’s capacity to

perform the work, to which they are assigned,

with efficiency equal to that of other employees

under consideration, and with the same, or

equivalent, tools or equipment, which at the

time, are customarily available to such

employees for their performance of such work.

The determination of an employee’s ability to

perform the work is a function of management;

however, in the event an employee is

dissatisfied with the company’s determination

of their ability to perform the work, such

dissatisfaction may be made the subject of a

grievance. Any employee transferred from one

department to another department shall have

their seniority frozen in their former

department; and shall begin accumulating

seniority in the department to which they are

transferred.

Most hourly jc»s are posted and as the Fifth Circuit

noted, “{u]nder ine [collective bargaining agreement},

the company must post bid sheets for each new hourly

opening. Seniority is the main criterion for

promotion.” Pet. App. at 14a. Lufkin’s promotion

process for posted hourly jobs is_ generally

summarized:

e Any employee may apply for the job (that is,

sign the bid sheet);

e To be eligible, the employee must be seeking a

promotion (that is, a higher rated job) and not

6

be disqualified because of plant rule violations

or, in the foundry department, because they are

in the attendance control program;

¢ For most hourly promotions, the process ends

here with the senior bidder seeking a promotion

being promoted; or, if the senior bidder declines,

the next senior eligible bidder is promoted; and

¢ For some jobs, the employee must also establish

job-related ability (that is, pass a paper and

pencil test or skill demonstration) and the

senior bidder passing the test or skill

demonstration is promoted.

The district court found that in hourly jobs,

“[sleniority is the main criterion, but ability is also a

necessary qualification.” Pet. App. at 43a. The district

court further determined:

Although seniority is the paramount

qualification listed in the CBA, Lufkin has

established several other rules which affect

promotions. For some positions, Lufkin

requires an “objective” test that generally

involves a demonstration of basic math, literacy,

and competence with the relevant machinery.

Some of the criteria are objectively verifiable,

such as math skills or reading ability. Other

criteria are left to the satisfaction of individual

managers.

To ensure that competent workers occupy all

positions, the company has also inserted an

“ability” clause in the CBA that allows Lufkin to

7

fill positions on the basis of ability and

regardless of seniority. The ability clause

appears to trump all other considerations.

Id. at 48a-44a.

Two claims went to trial: discrimination against

blacks in assignment of newly hired employees; and

racially discriminatory promotion practices that rested

on largely subjective decision-making criteria carried

out by a largely white supervisory core. Pet. App. at

4a. Plaintiffs’ disparate impact promotion analysis,

which concluded there was a statistically significant

shortfall in black promotions, included numerous

promotions that contributed to the statistical shortfall

in black promotions, even though these jobs were

indisputably awarded to the most senior candidate.

Id. at 19a. The district court entered judgment for

plaintiffs on each claim.

Plaintiffs conceded that Lufkin’s’ use of

departmental seniority was a bona fide seniority

system. Neither the district court nor the Fifth Circuit

made any finding that Lufkin’s seniority system was

not bona fide or that Lufkin’s seniority system resulted

from an intention to discriminate because of race.

On appeal, the Fifth Circuit reversed and vacated

the district court’s judgment as to the _ initial

assignment claim but affirmed the judgment on the

promotion claim. Id. at 33a. Addressing whether

plaintiffs had exhausted administrative remedies, the

Fifth Circuit found, contrary to the district court’s

finding, that the letter filed by Sylvester McClain in

January 1995 (which the district court accepted as the

8

equivalent of a charge) would not support either of the

class claims. It did, however, find that a later-filed

charge, filed on February 24, 1997 by Buford Thomas,

would support the class promotion § claims.

Nevertheless, the Fifth Circuit accepted promotions

made outside the limitations period set by the Thomas

charge to support the liability findings and directed

the district court on remand to compute back pay on

the shortfall of promotions beginning from March 6,

1994, the date of limitations established by the earlier

McClain charge. Compare id. at 21a with 26a.

Affirming plaintiffs’ promotion claim, the Fifth

Circuit determined that the district court’s finding of

subjective decision making in Lufkin’s promotion

system was not clearly erroneous, id. at 17a, and that

Lufkin’s promotion process was not capable of

separation for analysis under 42 U.S.C. § 2000e-

2(k)(1)(B)Gi). Id. at 19a.

Critical to the first question presented for review

was the Fifth Circuit’s opinion on this latter issue —

Lufkin argues, for example, that the plaintiffs’

expert could have separated the challenged

employment practices from its legitimate

seniority system. The expert included in his

analysis numerous promotions that contributed

to the statistical shortfall in black promotions,

even though these jobs were indisputably

awarded to the most senior candidate. This

argument ignores the district court’s finding

that Lufkin affords management considerable

discretion in deciding whether to follow

seniority in promotions. Plaintiffs could not

9

statistically analyze the actual practice they

challenge—subjective and_ discretionary

application of the seniority provisions—by

excluding promotion based on_ seniority.

Seniority, the court found, was likely to have

been irrelevant to the promotion.

Id.

Neither the district court nor the Fifth Circuit

explicitly addressed § 703(h), which Lufkin argued

insulated seniority-based promotions from the

disparate impact claim. See, e.g., Defendant’s Pre-

Trial Proposed Findings of Fact and Conclusions of

Law (Docket No. 268) at J 206-211; Lufkin

Industries’ Brief of Appellee/Cross-Appellant at 35-36.

REASONS FOR GRANTING THE PETITION

I. SECTION 703(h) OF TITLE VII OF THE CIVIL

RIGHTS ACT OF 1964 DOES NoT PERMIT

DISPARATE EFFECT IN PROMOTIONS

UNDISPUTEDLY AWARDED BY SENIORITY AND

WITHOUT INTENT TO DISCRIMINATE TO BE USED

IN ESTABLISHING UNLAWFUL DISPARATE IMPACT

UNDER THE NOT-CAPABLE-OF-SEPARATION-FOR-

ANALYSIS METHOD ADDED TO TITLE VII BY THE

CIVIL RIGHTS ACT OF 1991.

The tension created when the use of seniority has

a disparate effect in the workplace is of such critical

importance that this Court addressed the proper

application of § 703(h) eight times before passage of

the Civil Rights Act of 1991 — Franks v. Bowman

Transportation Co., 424 U.S. 747 (1976); International

10

Brotherhood of Teamsters v. United States, 431 US.

324 (1977); United Air Lines, Inc. v. Evans, 431 U.S.

553 (1977); Trans World Airlines, Inc. v. Hardison, 432

U.S. 63 (1977); California Brewers Ass'n v. Bryant, 444

U.S. 598 (1980); American Tobacco Co. v. Patterson,

456 U.S. 63 (1982); Pullman-Standard v. Swint, 456

U.S. 273 (1982); and Lorance v. AT&T Technologies,

Inc., 490 U.S. 900 (1989). Supreme Court review is

again required because the Fifth Circuit’s decision

ignores the special treatment Congress provided bona

fide seniority systems by requiring the disparate effect

of undisputed seniority-based promotions be counted

in the “not capable of separation for analysis” method

of disparate impact proof created by the Civil Rights

Act of 1991. As this Court has often decided, without

intent to discriminate, seniority-based promotions

cannot give rise to unlawful disparate impact

notwithstanding that such promotions have a

disparate effect. The Fifth Circuit’s use of the Civil

Rights Act of 1991 to repudiate this principle reverses

the balance Congress carefully struck in favor of

seniority systems, undermines this Court’s opinions

protecting that congressional intent, and threatens to

disrupt collective bargaining on seniority which is a

foundation of our national labor policy.

A. By Permitting Lawful, Seniority-Based

Promotions to Create Unlawful Disparate

Impact, the Fifth Circuit Interferes With

the Collective Bargaining Process and

Threatens the Recognition of Seniority in

Awarding Competitive Benefits.

The Fifth Circuit determined that promotions

indisputably awarded to the bidder with greatest

11

departmental seniority must be included in a not-

capable-of-separation-for-analysis disparate impact

claim whenever the employer has discretion to award

promotions based on other criteria even though it

demonstrably did not. This decision has far-reaching

consequences for collective bargaining. Many

collective bargaining agreements that recognize and

apply seniority routinely also condition eligibility for

promotion on other criteria such as minimum

qualifications, educational requirements, or ability

determinations through testing or skill

demonstrations, with such decisions often made at the

discretion of the employer. National labor policy

favors minimal intrusion into the negotiating process,

allowing unions and employers flexibility in reaching

agreement with respect to seniority. See, e.g., NLRB

v. Jones & Laughlin Steel Corp., 301 U.S. 1, 45 (1937)

(“The theory of the [National Labor Relations] Act is

that free opportunity for negotiation with accredited

representatives of employees is likely to promote

industrial peace and may bring about the adjustments

and agreements which the Act in itself does not

attempt to compel.”); NLRB v. Am. Nat'l Ins. Co., 343

U.S. 395, 401-02 (1952) (explaining that the NLRA,

while encouraging the making of voluntary

agreements, does not compel agreement between

unions and employers or regulate the substantive

terms of any agreement reached). The Fifth Circuit’s

opinion, however, will undoubtedly intrude upon the

bargaining process as employers and unions grapple

with a holding that seniority-based promotions can

now create disparate impact liability under § 2000e-

2(k)(1)(B)(i).

12

This Court has previously acknowledged that

seniority is universally recognized in collective

bargaining agreements. Trans World Airlines uv.

Hardison, 432 U.S. at 79. In 1995, in 67% of collective

bargaining agreements nationwide, seniority was

given a role in determining promotions, but was the

sole factor in promotions in only 5% of contracts. Basic

Patterns in Union Contracts, Bureau of National

Affairs, 46 (14 ed. 1995). In 49% of collective

bargaining agreements, seniority was the determining

factor assuming that a job applicant was qualified for

the available job. Jd. From this data, it is clear that

the collective bargaining process throughout the nation

and in most industries fashions agreements in which

seniority is an important factor but not the exclusive

basis on which competitive benefits such as

promotional opportunities are awarded.

Under the Fifth Circuit’s formulation, however,

simply because a collective bargaining agreement

permits the employer discretion in applying factors

other than seniority in the decision-making process,

the collective bargaining agreement’s seniority-based

benefits would no longer be protected from disparate

impact analysis. Section 703(h), meticulously crafted

by Congress, was intended to balance the occasional

conflict between our national policy to eliminate

discrimination in employment and our national policy

favoring minimal supervision over the substantive

terms of collective bargaining. Am. Tobacco ov.

Patterson, 456 U.S. at 76-77; see Cal. Brewers v.

Bryant, 444 U.S. at 608 (“Congress passed the Civil

Rights Act of 1964 against the backdrop of this

nation’s longstanding labor policy of leaving to the

chosen representatives of employers and employees

13

the freedom through collective bargaining to establish

conditions of employment applicable to a particular

business or industrial environment. It does not

behoove a court to second-guess either that process or

its products.”) (citation omitted). It did so by declaring

that in the absence of intent to discriminate Title VII

would allow the existence of a disparate effect arising

from the allocation of competitive benefits by seniority.

See Am. Tobacco v. Patterson, 456 U.S. at 75-77; Intl

Bhd. of Teamsters v. United States, 431 U.S. at 352

(“[T]he unmistakable purpose of § 703(h) was to make

clear that the routine application of a bona fide

seniority system would not be unlawful under

Title VII.”).

By allowing plaintiffs to prove disparate impact

using “numerous promotions that contributed to the

statistical shortfall in black promotions, even though

these jobs were indisputably awarded to the most

senior candidate,” Pet. App. at 19a, the Fifth Circuit

permits conduct made lawful by § 703(h) to contribute

to, and perhaps produce, a disparate impact sufficient

to establish unlawful conduct.’ Using the not-capable-

of-separation-for-analysis model added to Title VII in

the Civil Rights Act of 1991, the Fifth Circuit adopts a

methodology that allows seniority systems to be

attacked solely on disparate impact grounds without

‘In its recital of the evidence, the Court of Appeals further noted

that “Plaintiffs presented additional evidence that approximately

half of all promotions were not awarded to the most senior

bidder.” I[d-at 14a. Of course, the logical inference from such a

finding is that the other half of the promotions were awarded to

the most senior bidder and that plaintiffs could determine when

this occurred.

14

any showing of discriminatory intent. As a result,

back pay compensation is due for promotions

undisputedly awarded to the most senior bidder.

Confronted with such back pay liability, and the

spectre of a prohibitory injunction for such conduct,

Lufkin, as would any other employer, will certainly

change its position on seniority in collective bargaining

either to avoid additional back pay from a continuing

disparate effect or to comply with the ordered

injunctive relief. See Am. Tobacco v. Patterson, 456

U.S. at 70 (“An adequate remedy for adopting a

discriminatory seniority system would very likely

include an injunction against the future application of

the system and back pay awards for those harmed by

its application.”).

The impact of the decision, however, is more

pernicious. The Fifth Circuit’s decision, or new

litigation prompted by the opportunity to create

disparate impact from seniority-based decisions, will

compel employers to re-evaluate their use of seniority

systems to award benefits and thercby impinges on the

freedom to bargain § 703(h) was meant to protect. Cf.

Id. at 71 (rejecting EEOC theory that would discourage

unions and employers from modifying pre-Act seniority

systems as infringing on contractual freedom). The

harm is significant. “Collective bargaining, aimed at

effecting workable and enforceable agreements

between management and labor, lies at the core of our

national labor policy, and seniority provisions are

universally included in these contracts.” Trans World

Airlines v. Hardison, 432 U.S. at 79. Seniority

provisions are of overriding importance in collective

bargaining. Humphrey v. Moore, 375 U.S. 335, 346

(1964). Because seniority issues are both

15

commonplace and critical to collective bargaining, the

Fifth Circuit decision threatens to alter on a broad

scale the balance so carefully crafted by Congress to

alleviate the tension between the two most important

statutory schemes regulating the nation’s workplaces

— the National Labor Relations Act and Title VII of the

Civil Rights Act. See Am. Tobacco v. Patterson, 456

U.S. at 77 (“Section 703(h) represents the balance

Congress struck between the two policies, and it is not

this Court’s function to upset that balance.”).

B. In Favoring the Application of the Not-

Capabie-of-Separation-For-Analysis

Method of Proof Over Seniority Systems,

the Fifth Circuit Seriously Misapprehends

the Breadth of § 703(h).

The Fifth Circuit erred in two fundamental ways.

First, it did not address § 703(h)’s plain command that

it shall not be an unlawful employment practice for an

employer to apply different terms or conditions of

employment pursuant to a bona fide seniority system.

Section 703(h) provides:

Notwithstanding any other provision of this

subchapter, it shall not be an unlawful

employment practice for an employer to apply

different standards of compensation, or

different terms, conditions, or privileges of

employment pursuant to a bona fide seniority or

merit system, or a system which measures

earnings by quantity or quality of production or

to employees who work in different locations,

provided that such differences are not the result

16

of an intention to discriminate because of race,

color, religion, sex, or national origin, ....

42 U.S.C. § 2000e-2(h).

Section.. 703(h) delineates which employment

practices are illegal and thereby prohibited and which

are not. Franks v. Bowman Transp., 424 U.S. at 758.

A disparate effect among black and white employees

that results from a seniority system is not an unlawful

employment practice unless it is the product of an

intent to discriminate. Pullman-Standard v. Swint,

456 U.S. at 289; see also Lorance v. AT&T Techs., 490

U.S. at 908 (proof of discriminatory intent is a

necessary element of Title VII actions challenging

seniority systems); Am. Tobacco v. Patterson, 456 U.S.

at 65 (“Under 703(h), the fact that a seniority system

has a discriminatory impact is not alone sufficient to

invalidate the system; actual intent to discriminate

must be proved.”). Simply put, it was the intent of

Congress that promotion by seniority is lawful,

notwithstanding any disparate effect. In counting the

discriminatory effect arising from seniority-based

promotions to establish statistically significant

disparate impact, the Fifth Circuit improperly used

the effects of conduct that Congress specifically and

carefully pronounced to be lawful to establish unlawful

discriminatory impact. In so doing, it rendered lawful

conduct unlawful and punished Lufkin for decisions

expressly declared lawful by § 703(h). See Trans

World Airlines v. Hardison, 432 U.S. at 82.

The damage thus done is most easily illustrated in

the Fifth Circuit’s remand on class-wide back pay. On

remand, the Fifth Circuit directed, “the district court

17

will be dealing solely with damages attributable to

approximately 127 lost promotions in hourly pay

grades,” and shall “compute the total additional wages

attributable each year to each promotion and divide

the value among the class members.” Pet. App. at

26a. Notwithstanding that the Fifth Circuit found

that a certain number of those 127 lost promotions

were indisputably awarded to the senior bidder, it has

directed that Lufkin pay back pay attributable to such

promotions. The imposition of a back pay award to

promotions made by seniority is contrary to § 703(h).

See Trans World Airlines v. Hardison, 432 U.S. at 82

(“The Court of Appeals’ conclusion that TWA was not

limited by the terms of its seniority system was in

substance nothing more than a ruling that operation

of the seniority system was itself an unlawful

employment practice even though no discriminatory

purpose had been shown. That ruling is plainly

inconsistent with the dictates of § 703(h), both on its

face and as interpreted in the recent decisions of this

Court.”). Moreover, although the Fifth Circuit

recognized that 11 will be “especially difficult to craft

an adequate remedial order that will eliminate

discrimination without hobbling Lufkin’s legitimate

promotion policies,” Pet. App. at 3la, presumably the

district court will be required to enter injunctive relief

to cure the disparate impact found including that

arising from those promotions that were awarded

based on seniority. See Am. Tobacco v. Patterson, 456

US. at 70.

The Fifth Circuit’s error was to combine promotion

decisions in which Lufkin did not exercise its

subjective judgment or discretion (with promotion

proceeding strictly by seniority) with decisions in

18

which Lufkin exercised subjective judgment and

discretion and promoted individuals notwithstanding

their seniority. Permitting plaintiffs to challenge the

subjective and discretionary application of the

seniority provisions by statistically analyzing all

promotions, including those based on seniority, does by

indirection what § 703(h) forbids. Under the vast

majority of collective-bargaining agreements, to

deprive seniority-based promotions of § 703(h)

protection because the employer may have relied — but

did not — on subjective and discretionary criteria treats

the employer as if § 703(h) were not in the statute.

The Court of Appeals’ ruling thus eviscerates the

protection Congress afforded seniority systems. By

counting the shortfall in expected black promotions

where the actual! basis for decision was departmental

seniority, the Fifth Circuit permits a finding of

unlawful disparate impact to flow directly from, and be

significantly produced by, the lawful disparate effect of

seniority. To justify this result by stating that the

employer could have exercised its discretion to select

based on some other subjective criteria cannot

overcome the special treatment afforded seniority

systems by Title VII.

Second, the Fifth Circuit’s decision does not

recognize the primacy of § 703(h) over the more

recently enacted § 2000e-2(k)(1)(B)(i). Section 703(h)

begins, “Notwithstanding any other provision of this

subchapter,” an admonition that requires the

subordination of the not-capable-of-separation-for-

analysis method of disparate impact proof to the

application of seniority systems. The Fifth Circuit’s

decision which mandates the inclusion of seniority-

19

based promotions in establishing disparate impac..

under the not-capable-of-separation-for-analysis

methodology effectively makes the subordination

clause meaningless. Because Lufkin did, in fact, apply

its seniority system in making certain promotions, the

subordination clause precludes using those seniority-

based promotions to create unlawful conduct.

The Fifth Circuit's failure to respect the

subordination clause in its application of the not-

capable-of-separation-for-analysis provision is

particularly troubling in light of its recognition that

evidence indisputably established that numerous

promotions were based on seniority. Under the guise

of the district court’s determination that Lufkin could

exercise subjectivity and discretion in promotions,

although it did not in fact do so in approximately 50%

of the promotions, the Court of Appeals has

transformed § 2000e-2(k)(1)(B)(i) into an examination

of the cumulative effect of Lufkin’s application of

various criteria in the promotion process, rather than

limiting its application to functionally-integrated

practices that cannot, as an evidentiary matter, be

separated so as to permit independent analysis of each

factor. This was not what Congress intended in

enacting Section 105(a) of the Civil Rights Act of 1991,

42 U.S.C. § 2000e-2(k).

Supreme Court precedent pre-dating the 1991

Amendments requires that plaintiffs identify the

specific employment practice that they challenge and

establish that practice as responsible for statistical

disparities. Watson v. Fort Worth Bank & Trust, 487

U.S. 977, 994 (1988) (O’Connor, J. plurality opinion)

(“[E]specially in cases where an employer combines

20

subjective criteria with the use of more rigid

standardized rules or tests, the plaintiff is in our view

responsible for isolating and identifying the specific

employment practices that are allegedly responsible

for any observed statistical disparities.”); Wards Cove

Packing Co. v. Atonio, 490 U.S. 642, 656-57 (1989)

(precluding disparate impact liability based on

showing of racial imbalance “at the bottom line” and

requiring plaintiff to demonstrate that the application

of a specific employment practice has created the

disparate impact under attack). An earlier version of

the 1991 amendment, H.R. 1, provided for disparate

impact resulting from the cumulative effect of a group

ef employment practices, departing from _ the

requirement of identifying and isolating the particular

responsible practice. H.R. 1, 102d Cong. § 4 (1991)

(providing an unlawful employment practice is

established where a complaining party demonstrates

that a “group of employment practices” results in a

disparate impact); see also H.R. REP. NO. 102-40(1) at

30-31, 41-42 (1991), reprinted in 1991 U.S.C.C.A.N.

549, 568-69, 579-80. This bill was not enacted and the

particular provision for a cumulative effect disparate

impact was not passed. Rather, § 2000e-2(k)(1)(B)(i)

permits a much narrower departure from the

requirement for isolating the responsible practice,

where “the elements of a respondent’s decisionmaking

process are not capable of separation for analysis.”

The official legislative history makes clear that this

analysis was intended to apply to “particular,

functionally-integrated practices which are

components of the same criterion, standard, method of

administration, or test, such as [] height and weight

requirements... .” Interpretive Memorandum, 137

CONG. REC. S. 15276 (daily ed. Oct. 25, 1991),

21

reprinted in 1991 U.S.C.C.A.N. 767; see Civil Rights

Act of 1991, Pub. L. 102-166, § 105(b) (1991). This

Court’s standard, then, survived in large part the

enactment of § 2000e-2(k)(1)(B)G). See Smith v. City

of Jackson, 544 U.S. 228, 241 (2005) (relying on Wards

Cove to fault petitioners for failure to identify the

specific practice being challenged as responsible for a

disparate impact under the Age Discrimination in

Employment Act). Thus, the Fifth Circuit’s decision

allowing plaintiffs to test the cumulative effect of a

group of practices (including a seniority system),

separable through evidence, on the basis that the

employer has discretion to select which practice it will

use in any particular decision making is not a proper

application of the not-capable-of-separation-for-

analysis review.

C. The Fifth Circuit’s Decision Stands in

Direct Conflict With California Brewers,

Which Protects Seniority Systems Even

When They Are Combined With Non-

Seniority Criteria in Collective Bargaining

Agreements.

These errors are not avoided by the fact that

Lufkin’s promotion process includes other criteria

which Lufkin can use to make promotion decisions. A

seniority system does not lose its status as such simply

because an employer or, more _ specifically, the

collective bargaining agreement, permits decision

making based on seniority and non-seniority criteria.

In California Brewers Ass’n v. Bryant, supra, this

Court discussed the meaning of a “seniority system”

under § 703(h). A “seniority system,” the Court

defined, is “a scheme that, alone or in tandem with

22

non-seniority criteria, allots to employees ever

improving employment rights and benefits as their

relative lengths of pertinent employment increase.”

Cai. Brewers Ass’n v. Bryant, 444 U.S. at 605-06; see

also Lorance v. AT&T Techs., 490 U.S. at 905

(“Seniority is a contractual right ... and a competitive

seniority system establishes a ‘hierarchy [of such

rights] . . . according to which . . . various employment

benefits are distributed”) (quoting Franks v. Bowman

Transp. Co., 424 U.S. 747, 768 (1976)).

The Court made clear that the combination of

seniority with non-seniority criteria does not deprive

seniority-based promotions of § 703(h) protection,

though the non-seniority criteria would not necessarily

share such pretection:

A collective-bargaining agreement could, for

instance, provide that transfers and promotions

are to be determined by a mix of seniority and

other factors, such as aptitude tests and height

requirements. That the “seniority” aspects of

such a scheme of transfer and promotion might

be covered by § 703(h) does not mean that the

aptitude tests or the height requirements would

also be covered.

Cal. Brewers Ass’n v. Bryant, 444 U.S. at 606 n.13.

This Court also recognized that criteria having no

relationship to seniority are not extended the

protections of § 703(h) simply because of their “nexus”

to seniority provisions:

Significant freedom must be afforded employers

and unions to create differing seniority systems.

23

But that freedom must not be allowed to sweep

within the ambit of § 703(h) employment rules

that depart fundamentally from commonly

accepted notions concerning the acceptable

contours of a seniority system, simply because

those rules are dubbed “seniority” provisions or

have some nexus to an arrangement that

concededly operates on the basis of seniority.

Id. at 608.

The reverse must be equally true — that seniority

provisions do not lose their protection because of their

use in combination with other factors. Thus, Lufkin’s

practice of promoting to some positions based on

seniority pursuant to the collective bargaining

agreement is a seniority system warranting protection

under § 703(h). It does not lose its character as such

simply because the company was authorized to use

either seniority or some other non-seniority factors to

make promotion decisions. Likewise, the seniority

system did not lose its protection because, at the

threshold, the company faced a subjective choice as to

whether to rely on seniority or some other factor — the

alleged practice challenged here. California Brewers

does not permit such a result.

24

II. THE FIFTH CIRCUIT’S DECISION IMPOSING A

LIABILITY PERIOD FOR A TITLE VII CLASS CLAIM

BEGINNING ALMOST THREE YEARS BEFORE THE

CHARGE THAT THE COURT OF APPEALS FOUND

EXHAUSTED THE ADMINISTRATIVE REMEDIES FOR

THE CLASS WAS FILED CONFLICTS WITH THIS

COURT’S DECISIONS NEGATING LIABILITY FOR

ACTS OUTSIDE THE TITLE VII LIMITATIONS

PERIOD.

The Court should also review the Fifth Circuit’s

clear misapplication of Title VII and established

Supreme Court precedent in allowing liability to be

determined and back pay awarded on promotion

decisions not challenged in a timely charge. The

liability period, according to the district court, was

governed by Plaintiff McClain’s January 29, 1995

letter (which the district court accepted as a charge),

as opposed to Buford Thomas’s February 24, 1997

charge. The Fifth Circuit, however, determined that

McClain’s letter failed to exhaust the class’s

administrative remedies. The Fifth Circuit held that

only Thomas’s later-filed charge could support the

class promotion claims. Nevertheless, the Court of

Appeals used the time-barred promotions (occurring

more than 300 days before Thomas’s charge) to

support the liability finding and directed the district

court on remand to include in the back pay calculation

promotions that were not subject to a timely charge.

The Fifth Circuit summarily rejected Lufkin’s request

on rehearing to clarify that Thomas’s charge

establishes the liability period for promotion which

begins on April 2, 1997, 300 days prior to the filing of

Thomas’s charge, and not on March 6, 1994, 300 days

prior to McClain’s letter. 42 U.S.C. § 2000e-5(e)(1).

25

A discriminatory act which is not made the basis

for a timely charge is the legal equivalent of a

discriminatory act which occurred before the statute

was passed. United Air Lines, Inc. v. Evans, 431 U.S.

553, 558 (1977); Ledbetter v. Goodyear Tire & Rubber

Co., 127 S. Ct. 2162, 2170 (2007). Failure to promote

is a discrete discriminatory act not actionable if time

barred, even if related to acts in timely filed charges.

See Nati R.R. Passenger Corp. v. Morgan, 536 U.S.

101, 113-14 (2002). In not applying the well-

established precedent of the Court as to acts not made

the basis for a timely charge, the Fifth Circuit places

itself in direct conflict with this Court.

CONCLUSION

Congress has determined that promotion by

seniority is not unlawful unless there is intent to

discriminate. To permit seniority-based promotions to

establish unlawful conduct by disparate impact, or

contribute to it, violates § 703(h)’s plain language and

its primacy over the not-capable-of-separation-for-

analysis method of disparate impact proof articulated

in § 2000e-2(k)(1)(B)G), and is contrary to numerous

decisions of this Court. The petition should be granted

to consider the first question presented to avoid

compromising the process of collective bargaining as

the nation’s unions and employers grapple with the

far-reaching consequences of no longer being protected

from a finding of unlawful conduct emanating from the

possible disparate effect of seniority systems.

The petition should be granted to consider the

second question to correct the Fifth Circuit’s plain

error in not recognizing and applying well-established

26

precedent of this Court establishing that a

discriminatory act which is not made the basis of a

timely charge is an unfortunate event in history which

has no present legal consequences. See United Air

Lines v. Evans, 431 U.S. at 558.

Respectfully submitted,

DOUGLAS E. HAMEL

Counsel of Record

CHRISTOPHER V. BACON

VINSON & ELKINS L.L.P.

1001 FANNIN STREET, SUITE 2500

HOUSTON, TX 77002-6760

713-758-2036