November 20, 2012

6TH CIRCUIT OVERTURNS RULING IN EEOC V. CINTAS

by Art Gutman Ph.D., Professor, Florida Institute of Technology

We reported in an Alert on August 20, 2011 that District Court Judge Sean F. Cox ordered the EEOC to pay 2.6 million dollars for attorneys’ fees and costs in the case of EEOC v. Cintas [2011 U.S. Dist. LEXIS 86228] (it’s actually Serrano v. Cintas with the EEOC as Intervener). The case began when 13 female plaintiffs sued Cintas for sex discrimination and, in December 2005, the EEOC intervened and filed a pattern or practice suit under Section 706 of Title VII. Judge Cox had previously issued a summary judgment favoring Cintas on September 3, 2010 dismissing with prejudice the EEOC claims for failure to exhaust administrative remedies [2010 U.S. Dist. LEXIS 91755]. At the same time, he rejected the individual claims of the 13 women based on merits. In his more recent ruling on August 4, 2011, Judge Cox ordered the EEOC to pay attorneys’ fees and costs is based on its failure to investigate the 13 individual claims, as well as its failure to “engage in any conciliation measures”, a requirement of Section 706.

The key issue in these rulings is that the EEOC sued via Section 706 as opposed to Section 707 of Title VII. As written in the Title VII statute, Section 706 cases may be filed by the EEOC for equitable (e.g., back pay) and legal relief (e.g. compensatory and punitive damages), but the case must be tried under the McDonnell Douglas v. Green (1973) [422 U.S. 792] burden-shifting framework for individual claims of disparate treatment. The EEOC also has the option of using Section 707, which permits the classwide type of burden shifting as in International Brotherhood v. Teamsters (1977) [431 U.S. 324]. Furthermore, Section 707 permits equitable (e.g., back pay) and injunctive relief, but not legal relief (e.g., compensatory and punitive damages) Thus, Judge Cox ruled the EEOC was not entitled to use the Teamsters framework because it did not file under Section 707.

The major difference between the two frameworks is that in McDonnell-Douglas, the prima facie claim and the employer defense are relatively easy for both sides. The plaintiff presents presumptive evidence (e.g., class membership, qualification, and an adverse selection action) to which the defendant need only state (without having to prove) a legitimate reason for the adverse action. The plaintiff must then prove that the reason offered is pretext for discrimination. In Teamsters, the prima facie case is more burdensome (evidence that “unlawful discrimination has been a regular procedure or policy followed by the employer”) forcing a stiffer burden for the defendant to prove the adverse actions were for lawful reasons.

Fast forward to the present. In a split ruling, a 2-1 majority of the 6th Circuit ruled that the EEOC can pursue its pattern or practice claim under the Teamsters framework [2012 U.S. App. LEXIS 23132]. At the same time, the majority overturned the summary judgment against the individual plaintiffs because it was based on the McDonnell Douglas framework and vacated the 2.6 million dollar award to Cintas. The dissenting judge (Julia Smith Gibbons) agreed it is not necessary to cite the theory in order to file a pattern or practice claim. She also agreed on vacating the 2.6 million dollar award. However, she disagreed on whether it was even necessary to discuss Sections 706 versus 707 and, more importantly, would have ruled that the EEOC is not entitled to make a pattern or practice claim because it had never signaled its intentions to do so when it intervened.

This is the kind of issue that has the potential for a Supreme Court review … we’ll see. I think there are key issues to be resolved in individual versus pattern or practice disparate treatment claims, and this case would be a viable one for such resolution.

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DCI Consulting is a risk management human resources consulting firm strategically located in Washington, D.C.

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