Penson v. Terminal Transport Co.

634 F.2d 989, 26 Fair Empl. Prac. Cas. (BNA) 828, 30 Fed. R. Serv. 2d 1233, 1981 U.S. App. LEXIS 20754, 25 Empl. Prac. Dec. (CCH) 31,521
CourtCourt of Appeals for the Fifth Circuit
DecidedJanuary 23, 1981
DocketNo. 79-2483
StatusPublished
Cited by52 cases

This text of 634 F.2d 989 (Penson v. Terminal Transport Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Penson v. Terminal Transport Co., 634 F.2d 989, 26 Fair Empl. Prac. Cas. (BNA) 828, 30 Fed. R. Serv. 2d 1233, 1981 U.S. App. LEXIS 20754, 25 Empl. Prac. Dec. (CCH) 31,521 (5th Cir. 1981).

Opinion

RONEY, Circuit Judge:

Plaintiff sued his former employer and his union alleging he was discharged because of his race. The district court granted the employer’s motion for summary judgment on the ground the suit was barred by a prior consent decree entered in a class action against the employer. We reverse, holding the present action is not barred because the notice of the consent decree received by plaintiff did not inform him of his right to “opt out” of the class and pursue his individual suit. In so holding, we seek to clarify the law in this Circuit concerning the opt-out rights, and the corresponding notice requirements, of absent members of a class certified under Rule 23(b)(2) of the Federal Rules of Civil Procedure.

The district court also denied Penson’s motion for “specific relief” under the terms of the consent decree on the ground that Penson had not filed his claim within the time period prescribed by notice of the decree. Holding the court did not err in denying the out-of-time motion, we affirm.

FACTS

In 1974, defendant Terminal Transport Company discharged plaintiff Eugene Pen-son, a black employee of its Atlanta, Georgia, terminal, ostensibly because of his poor attendance record. After failing to obtain relief through the grievance procedure established by the collective bargaining agreement between Terminal and the codefendant union, Local 728 of the International Brotherhood of Teamsters, Penson filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC). The EEOC issued Penson a right-to-sue letter in May, 1978. In July 1978, he instituted this action against Terminal and Local 728 under 42 U.S.C.A. § 1981, and Title VII, 42 U.S.C.A. § 2000e et seq., alleging employment discrimination. Penson sought reinstatement, back pay, and injunctive relief. Penson had thus properly complied with procedural and time requirements to litigate his claim after it was considered by the EEOC.

Since 1972, however, two broader actions had been pending against Terminal, both charging that it engaged in racially discriminatory employment practices. Private individuals had filed a class action, Allen v. Terminal Transport Co., No. 16687 (N.D.Ga., filed June 2, 1972), which addressed only Terminal’s employment practices at its facilities in Georgia, including the one in Atlanta at which Penson was employed. The other action, United States v. Terminal Transport Co., No. 16761 (N.D.Ga., filed June 21, 1972), instituted by the Justice Department, challenged Terminal’s employment practices at all of its facilities throughout the United States. The two actions were later consolidated.

In 1975, Terminal entered into a consent decree in partial resolution of these two actions. The consent decree was approved by the district court on August 4, 1975, after Penson’s termination but while his claim was pending with the EEOC.

The consent decree described the class of affected persons in the consolidated action to include “all Black employees of Terminal Transport, present and past, ... insofar as [992]*992they were affected by any act of racial discrimination occurring since July 2, 1965, to the date of entry of this Decree.” While not determining the merits of the employment discrimination claims asserted against Terminal, the consent decree established uniform qualifications for employment, minority recruitment goals, hiring procedures and goals, and procedures by which those persons found by a special magistrate to have been the victims of past discriminatory practices could receive relief in the form of preferential hiring and back pay. The decree required Terminal to give notice of the settlement to all members of the affected class described in the decree and notice of their right to request exclusion from the class or modification of the decree.

In January, 1976, the district court certified the class in Allen under Rule 23(b)(2) of the Federal Rules of Civil Procedure. In April, 1976, Terminal mailed notice of the consent decree to each identified class member. Penson admits receiving this notice. Attached to a copy of the consent decree, the notice informed the class members that the decree was binding upon the rights of any black person who was employed at a Terminal facility in Georgia between July 2, 1965, and August 4, 1975. The notice required any class member who wished to object to the terms of the consent decree to file an objection with the clerk of court by June 17, 1976. It provided that a class member, to be considered for relief under the decree, had to present a written claim to the clerk by May 17, 1976. Penson admits that he neither objected to the terms of the consent decree nor filed a claim for relief within the time limit prescribed by the notice.

At least one other notice was mailed by Terminal. The second notice, mailed in January, 1977, concerned preferential employment rights. Penson claims he never received this second notice. His claim was accepted as true by the district court for purposes of its disposition of this case.

In November, 1978, shortly before hearings were to begin before a special magistrate to determine the particular relief to be accorded persons who had filed claims under the consent decree, Penson filed a motion in his private action seeking “specific relief” under the terms of the decree. Terminal countered with a motion for summary judgment. The district court denied Penson’s motion for specific relief under the class action decree because he had failed to file his claim within the prescribed time period. The court also granted Terminal’s motion for summary judgment on the ground that Penson’s individual suit was precluded by the consent decree in Allen, since Penson was a member of the class represented in that action but had failed to respond to the notice of the decree. Penson appeals both rulings.

Two distinct questions are raised in this case. The first is whether the present suit filed by Penson is barred by the prior consent decree that was entered in Allen. The second question is whether Penson may seek relief under the consent decree even though he failed to object to its terms or file a claim under it within the time period prescribed by the notice that he admittedly received.

I. Whether the Present Suit is Barred by the Prior Consent Decree

A judgment or court-approved settlement entered in a properly certified class action generally will bind an absent class member. See, e. g., Fowler v. Birmingham News Co., 608 F.2d 1055 (5th Cir. 1979); Grigsby v. North Mississippi Medical Center, 586 F.2d 457 (5th Cir. 1978). In Fowler, a case similar to the present action, this Court held that an employee’s suit alleging various types of employment discrimination was barred by a prior consent decree entered in a class action which put forth similar claims, where the employee had been a member of the class. The Court noted that the consent decree was “a full and final adjudication of all claims that were or might have been brought” on behalf of the individual employee. 608 F.2d at 1058.

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Bluebook (online)
634 F.2d 989, 26 Fair Empl. Prac. Cas. (BNA) 828, 30 Fed. R. Serv. 2d 1233, 1981 U.S. App. LEXIS 20754, 25 Empl. Prac. Dec. (CCH) 31,521, Counsel Stack Legal Research, https://law.counselstack.com/opinion/penson-v-terminal-transport-co-ca5-1981.