Clara R. King v. South Central Bell Telephone and Telegraph Company and Communication Workers, Afl-Cio

790 F.2d 524, 4 Fed. R. Serv. 3d 1166, 1986 U.S. App. LEXIS 25149, 40 Empl. Prac. Dec. (CCH) 36,137, 40 Fair Empl. Prac. Cas. (BNA) 1355

• Court: Court of Appeals for the Sixth Circuit
• Decided: May 14, 1986
• Docket: 84-5186
• Status: Published

Opinions

DeMASCIO, District Judge.

On October 28, 1983, Clara R. King (King) filed this sex discrimination action in the United States District Court for the Eastern District of Tennessee against South Central Bell Telephone Company (Bell) and her union, the Communication Workers of America, AFL-CIO (CWA). King alleged that Bell violated Title VII, 42 U.S.C. § 2000e et seq., by reinstating her to a lower paying job when she returned to work after a maternity leave in March 1977. She contends that CWA violated Title VII by acquiescing in Bell’s discriminatory practices. Both Bell and CWA moved for summary judgment, contending that King’s action was barred by the settlement of a prior class action entitled Communication Workers of America, AFL-CIO v. South Central Bell Telephone Co., 515 F.Supp. 240 (D.C.La.1981). On January 31, 1984, the district court granted appellees’ motions. King filed this timely appeal requiring us to consider whether the district court erred in holding that her claims were barred by the doctrine of res judicata due to the settlement of the prior class action; in holding that the class action notice was sufficient to advise King of her rights and comported with due process requirements; in holding that the class representatives adequately represented King; and in holding that King’s claims against CWA were similarly barred.

For the reasons set forth below, we affirm.

Initially, we review the salient facts pertaining to the class action and the events leading up to this cause of action. On July 3, 1973, CWA and Harriett Wilhite brought a class action in the Eastern District of Louisiana, alleging that Bell’s policies and practices with respect to maternity benefits discriminated against its female employees. The issue presented in that case was whether the disparity in treatment between male employees on disability leave under Bell’s employee benefit plan and female employees on maternity leave imposed an unreasonable burden in violation of Title VII. On October 21, 1976, the class was certified under Fed.R.Civ.P. 23(b)(2) as consisting of all female non-supervisory employees of Bell who allegedly suffered as a result of the benefit plan during a pregnancy-related absence that occurred, at least in part, after October 13, 1971. On April 1, 1981, the Louisiana district court held that Bell violated Title VII by denying guaranteed reinstatement to former or equal positions to its female employees on maternity leave. On December 9, 1982, a stipulation and a settlement agreement were reached between Bell, the class and CWA, settling all claims against Bell relating to maternity leave of absence policies subject to the class action.

On February 11, 1983, the court entered an order preliminarily approving the settlement, without prejudice to the rights of class members to object to the proposed stipulation and settlement agreement. A final order approving the settlement agreement was entered August 24, 1983.

King’s Claim

King was hired by Bell in August 1959. Prior to the incident giving rise to this litigation, she had been employed with Bell for 17V2 years, the last V-k years as a frame attendant. In 1976, King became pregnant. Rather than a maternity leave, she requested any other type of leave (i.e., vacation or sick leave) in order to be assured of returning to her former position. Under Bell’s benefit plan, employees taking maternity leave were not guaranteed reinstatement to their former jobs. Bell denied King’s request to take a non-maternity leave. On February 4, 1977 she took a maternity leave, giving birth to her child the next day.

On March 1, 1977, King advised Bell that she was ready to return to work. On March 14, 1977, she was returned, not as a frame attendant, but to a different job, resulting in a salary decrease of $45 per week. King claims that CWA denied her request to file a grievance against Bell. This is the basis for her claim that CWA acquiesced in Bell’s discriminatory practices. On June 22, 1977, King filed a charge of sex discrimination with the Equal Employment Opportunity Commission (EEOC) against both appellees. The EEOC investigated and, on April 28,1983, issued a determination finding reasonable cause to believe there was a Title VII violation. On August 2, 1983, the EEOC issued a right-to-sue letter.¹

King’s Notice of the Class Settlement

King first became aware of the class action on March 10, 1983, when she received a packet of documents relating to the proposed class settlement from counsel representing the named plaintiffs. One of the documents, entitled “Important Notice,” read as follows:

IF YOU WERE A NON-SUPERVISORY FEMALE EMPLOYEE OF SOUTH CENTRAL BELL ON MATERNITY LEAVE BETWEEN OCTOBER 13, 1971 AND AUGUST 7, 1977, AND YOU WERE NOT REINSTATED TO YOUR JOB OR WERE DELAYED IN REINSTATEMENT TO YOUR JOB WHEN YOU REQUESTED TO RETURN TO WORK FROM YOUR MATERNITY LEAVE, YOU MAY BE OWED A SETTLEMENT FROM THE COMPANY. BE SURE TO READ THE ATTACHED MATERIALS. FAILURE TO FILE A CLAIM MAY RESULT IN YOUR LOSING YOUR RIGHT TO A SETTLEMENT FROM THE COMPANY.

Another document, entitled “Notice of Proposed Class Action Settlement,” describes the class action, advises class members of the proposed settlement and their right to object, and explains the procedure for recovering part of the settlement.²

The plaintiff class is described as being divided into two groups, with a notation that the proposed settlement provides monetary and reinstatement relief only to those employees in category (2):

(1) Those who returned to work at South Central Bell directly from their maternity leaves or who voluntarily terminated their employment with South Central Bell following the expiration of their leaves; and

(2) Those who requested to return from their maternity leaves and were delayed in such reinstatement.

Accompanying the notice was a fill-in-the-blanks claim application, which contained the following note:

UNLESS YOU INTEND TO CLAIM THAT SOUTH CENTRAL BELL DELAYED YOUR RETURNING TO WORK DURING OR AT THE END OF YOUR MATERNITY LEAVE, YOU CAN STOP HERE, AS YOU WILL NOT BE ELIGIBLE FOR ANY MONETARY OR REINSTATEMENT RELIEF.

King’s Response to the Class Action Notice

King filled out the claim application solely with respect to the 8-day delay between her request to return to work and the date on which Bell actually returned her. This claim amounted to approximately $400. King did not attempt to make claim for the wages she lost due to being returned to the lower-paying job. She estimates that this claim, with interest, presently totals over $13,000. Along with the completed claim application, King sent the court the following letter:

I am submitting the attached to be a part of the case no. 73-1771 providing that accepting the class action does not mean that I have given up my rights to claim for the following:

1. First and most important is the loss of 10 days of seniority ... One days [sic] seniority may at some time make the difference between my keeping or losing my job.

2. Losing my Frame Attendant position and having to accept an Assignment Clerks [sic] position in order to maintain my employment (from high on the promotion ladder to near the bottom. A significant salary reduction for 3 years.) .. I do not want to relinquish that right for items 1 and 2 above.

King sent a separate letter to counsel for the class representatives, forwarding them copies of her claim application. That letter reads, in part:

I think you can appreciate my concern for at least two areas that do not appear to have been addressed to the court. I am sure that I am not the only one and would hope that additional litigation wouldn’t be necessary to resolve these additional issues.

Counsel for the class responded to appellant’s letter, however, not in terms of her wage loss claim.³ King did not seek the advice of independent counsel until after entry of the final order approving the stipulation and settlement agreement.

The Final Class Action Settlement

On June 15, 1983, the court entered a consent supplemental memorandum order that allowed for retroactive crediting of seniority for employees, such as King, who could establish that their request to return from a maternity leave of absence was delayed by Bell. On August 24, 1983, the court entered its final order approving the stipulation and settlement agreement. The court noted that:

Of approximately 1,600 claims filed with the Court, fewer than ten filed any objections at all to the settlement, the only objections of substance being contentions that the settlement did not specifically provide that net credited service (seniority) would be granted to claimants for the period between the time they should have been reinstated and the time they actually returned to work.

General Principles of Res Judicata

We now separately examine each ground for appeal and in the order set forth above. King initially contends that the district court erred in dismissing her action on the basis of the res judicata effect of the class action. In the recent decision of Westwood Chemical Co. v. Kulick, 656 F.2d 1224 (6th Cir.1981), this court spoke of the doctrine of res judicata in the following manner:

The purpose of res judicata is to promote the finality of judgments and thereby increase certainty, discourage multiple litigation, and conserve judicial resources. A final judgment on a claim is res judicata and bars relitigation between the same parties or their privies on the same claim. It bars relitigation on every issue actually litigated or which could have been raised with respect to that claim. To constitute a bar, there must be an identity of the facts creating the right of action and of the evidence necessary to sustain each action.

Id. at 1227 (citations omitted).

In the context of class actions, these principles apply with equal and even greater force. For a prior judgment to bar an action on the basis of res judicata, the parties must have been identical in both actions; the prior judgment must have been rendered by a court of competent jurisdiction; there must be a final judgment on the merits and both cases must involve the same cause of action. Kemp v. Birmingham News Co., 608 F.2d 1049 (5th Cir.1979).

In Kemp, the Fifth Circuit held that a consent judgment entered in a class action barred, by res judicata, a member of that class from pursuing his own claim. Plaintiff Kemp brought a Title YII race discrimination action against his former employer. The district court granted defendant summary judgment on res judicata grounds because plaintiff was a class member in a prior class action against the employer based on race discrimination. Despite plaintiffs argument that his claim was not identical to those that were the subject of the class action, the Fifth Circuit affirmed, holding:

The main purpose of a class action is to dispose of the claims of numerous parties in one proceeding. If the defendants in class action lawsuits for employment discrimination could not rely on the binding effect of consent decrees they would have no incentive to settle such cases.

Id. at 1053.

The court discussed the degree of scrutiny a district court should employ in deciding whether a prior class action has a res judicata effect:

In applying the doctrine of res judicata, it is also important to keep in mind that res judicata is a principle of peace. Under its influence an end is put to controversies. Parties and their privies are made to abide definitive and final judgments and litigations are concluded. The rule of res judicata does not go on whether the judgment relied on was a right or a wrong decision. It rests on the finality of judgments in the interest of the end of litigation and it requires that the fact or issue adjudicated remain adjudicated.

Id. at 1052.

It is against this background that we examine King’s contention that her action should not have been barred on res judicata grounds. King admits she was a member of the prior class action against Bell. Therefore, with respect to her present claim against Bell, there is an exact identity of parties. The prior judgment was entered by the District Court for the Eastern District of Louisiana, a court of competent jurisdiction. The prior judgment was clearly a final one in that it adjudicated all claims or potential claims of Bell employees relating to discrimination based on its maternity leave policies. Finally, both the prior class action and this cause of action deal with a delay in reinstatement to a former job after a maternity leave.

We initially conclude, therefore, that unless there is merit to one of King’s other assignments of error, the district court properly concluded that this claim is barred on res judicata grounds by the class settlement.

Adequacy of Notice

King argues that the notice she received did not inform her that her claim for lost wages was included in the class action and, therefore, was constitutionally deficient.

In resolving this issue, we are guided by the Fifth Circuit decision of Johnson v. General Motors Corp., 598 F.2d 432 (5th Cir.1979). In Johnson, the issue was whether res judicata barred the maintenance of a race discrimination action by an absent member of a previous class action challenging the same discriminatory practices. The class representatives sought solely injunctive relief and, in accordance with Fed.R.Civ.P. 23(b)(2), no notice was provided to absent class members. The district court held that plaintiff’s claims were fully barred and that no notice was necessary to bind absent class members. On appeal, the Fifth Circuit held that the portion of plaintiff’s cause of action, which sought monetary relief, was not barred by the class action. It is not difficult to understand why the court reached this result, since plaintiff received no notice whatsoever of the pendency or resolution of the class action. Further, in reaching this result, the court discussed the degree of notice required in order for principles of res judicata to attach:

Where [individual monetary claims are at stake, the balance swings in favor of the provisions of some form of notice. It will not always be necessary for the notice in such cases to be equivalent to that required in (b)(3) actions. In some cases it may be proper to delay notice until a more advanced stage of the litigation; for example, until after class-wide liability is proven. Before an absent class member may be forever barred from pursuing an individual damage claim, however, due process requires that he receive some form of notice that the class action is pending and that his damage claims may be adjudicated as part of it.

Id. at 438 (citations omitted).

We conclude that the notice of the proposed class action settlement was sufficient to put King on notice of the pendency of that action. The notice also sufficiently apprised King that her claims arising out of Bell’s maternity leave policies were properly adjudicated in that action. King received personal notice through the mail and was afforded an opportunity to make a claim, file objections or do both. King chose to do both, filling out the claim application and sending objections in letter form to the court.

The district court properly resolved the adequacy of notice holding that:

Although the notification of the proposed settlement received by plaintiff may have been subject to some misinterpretation, a review of the entire record makes clear that the class action adjudicated all claims presented in this case.

******

Although plaintiff was uncertain of the full scope of the class action, she filed an objection to the settlement in the event that the class action did fully cover her claim. This objection was considered and apparently rejected by the Louisiana Court.

The “Important Notice” unambiguously states that “if you were ... delayed in reinstatement to your job when you requested to return to work from your maternity leave, you may be owed a settlement from the company.” King’s claim that Bell failed to reinstate her to her former job as frame attendant clearly falls within this language. Moreover, the notices and proposed settlement agreement are replete with warnings that failure to file a claim may result in the loss of a right of action. Even if it can be argued that the notice was somewhat ambiguous, King could not opt out because the action did not include that privilege. The most she could do was object to the decree and she did.

King understood the notice to the extent that she took advantage of the opportunity to file objections, in the form of a letter to the court. Proof that the trial court considered King’s letter is the fact that the proposed settlement agreement was revised to include the seniority claim that King, along with other class members, brought to the court’s attention by way of objections.

We, therefore, conclude that the notice King received regarding the proposed class action settlement was not constitutionally deficient. It certainly advised her of her rights and comported with due process requirements.

Adequacy of Class Representation

In disposing of King's contention that the class representative did not adequately protect her interests, the district court concluded that:

This Court must assume that the Louisiana Court considered the dollar amounts of the settlement as well as all objections to the settlement before approving the settlement. As in most settlements the plaintiff accepts less than she believes her claim is worth. The fact that plaintiff received less in settlement than she would have received had the case gone to trial does not mean that she was inadequately represented.

Nathan v. Rowan, 651 F.2d 1223 (6th Cir.1981) was an appeal of a shareholder’s derivative action dismissed by the district court on res judicata grounds on the basis of a prior shareholder’s derivative action against the same corporation and directors. This court followed Hansberry v. Lee, 311 U.S. 32, 61 S.Ct. 115, 85 L.Ed. 22 (1940) holding that due process and full faith and credit mandate that absent class members are not bound by a judgment in a class action unless the class representative provided adequate and full representation.

The adequacy of representation is a factual finding for the court before whom the class action is pending. 651 F.2d at 1227-28. See also Grigsby v. North Mississippi Medical Center, Inc., 586 F.2d 457 (5th Cir.1978), wherein the court discussed the adequacy of class representation on direct appeal of a class action. The record before us contains no findings by the Louisiana court with respect to the adequacy of representation. King has framed this issue in terms of the letters she sent to counsel, which went unanswered. The district court properly concluded that King’s letters contained objections, rather than inquiries and, therefore, counsel’s obligation was to present them to the court rather than respond to King and attempt to secure coverage for her claim in the settlement agreement. Although representation in this case may be somewhat wanting, the fact that the court received and was aware of King’s objections compensates for this fact. Moreover, by September 2, 1983, King had retained her own counsel and there was ample time to challenge the class action settlement by appeal. She chose to attack the settlement collaterally and should not now complain of any inadequacy in representation.

Claims Against the Union

King’s claim against CWA is facially different than the claims presented in the class action. King contends that CWA failed to file a grievance over Bell’s failure to reinstate her to her former job and that CWA generally acquiesced in Bell’s discriminatory policies regarding maternity leaves. She further contends that her first opportunity to sue CWA for a Title VII violation came after receiving the EEOC’s right-to-sue-letter.

There is no dispute that CWA was a named plaintiff in the class action, although the Louisiana court would only allow it to represent the class for seeking injunctive, and not monetary, relief. CWA was signatory to the settlement agreement. CWA argues that King’s claims against it arise out of the same set of circumstances giving rise to the class action and, therefore, are properly barred. We agree that general policy principles of res judicata dictate that all claims relating to Bell’s maternity leave policies and practices, including any claim that may be directed against CWA, were resolved by the class action settlement.

Accordingly, the district court’s grant of summary judgment in favor of appellees is AFFIRMED.

1 . King contends that her receipt of the EEOC’s right-to-sue letter was her first opportunity to maintain a Title VII claim against CWA.

2 . The notice provided, in pertinent part:

The purpose of this Notice is to describe a class action lawsuit, to advise you of the Proposed Settlement of that class action, to inform you of your right to object to the Proposed Settlement, and to explain the procedure for recovery under the Proposed Settlement. Based upon South Central Bell’s records, it appears that you are a class member. YOU ARE THEREFORE URGED TO READ THIS NOTICE CAREFULLY.

3 . The response was dated May 9, 1983 and read as follows:

I have received your letter of April 28, 1983, regarding the above-referenced case. I do not know whether in addition to your letter of objection, you have filled out and filed the Claim Application that you received in the mail. If the Court should decide to accept the proposed settlement on behalf of the entire class, then we will need to know the amount of damages you would be entitled to.

If you have not done so already, please file the Claim Application form directly with the Clerk of the Court. This can be done up until May 31, 1983, the new deadline established by the Court. I have enclosed a copy of the form in case you no longer have your copy.

While this letter did not directly address whether King’s specific claim is included in the proposed settlement, it urged her to file her claim. King made a conscious choice to limit her claim to the eight days between the date of her request to return to work and the date Bell actually reinstated her.