Phyllis Chambers v. Parco Foods, Incorporated

935 F.2d 902, 1991 U.S. App. LEXIS 12821, 56 Empl. Prac. Dec. (CCH) 40,856, 56 Fair Empl. Prac. Cas. (BNA) 303, 1991 WL 106134

• Court: Court of Appeals for the Seventh Circuit
• Decided: June 20, 1991
• Docket: 90-1419
• Status: Published

Opinions

MANION, Circuit Judge.

Phyllis Chambers sued Parco Foods, Inc. for violating Title VII through its collectively bargained promotion and transfer policies. The district court granted summary judgment for Parco, holding that Chambers’ claim was time-barred. We affirm.

I.

The facts of this case are not in dispute. Parco makes holiday cookies at its plants in Michigan City, Indiana and Blue Island, Illinois. Both plants have six departments: packing, mixing, maintenance, warehouse, traffic and sanitation. As of November 1, 1988, the packing departments of both plants were primarily female, and the mixing departments were primarily male. At all relevant times, the lowest-paying job in the mixing department paid more than the highest-paying job in the packing department.

As one might imagine for a company that makes holiday cookies, the work is seasonal, requiring the greatest output and the most workers during the Christmas holiday season from October to January. Partly for that reason, Parco and the union in 1979 bargained for a departmental seniority system where employees in one department are not allowed to bid for jobs in another department. The specific provision is contained in Article VII, Section 3(C):

C. Bidding

Section 1. Seniority shall be the determining factor in matters affecting promotions, demotions and transfers within classifications, only if other factors of fitness and ability are equal.

(a) When an employee’s job is eliminated, such employee shall have the right to exercise his seniority within the employee’s department.

Section 2. When a vacancy occurs, or a newly created job, the company will post the job for three (3) days, and will then have one week to fill the new job. Employees within the department desiring to apply for this job will write their names and seniority status on the posted notice. The successful applicant will be chosen by the Employer on the basis of seniority, provided ability and fitness of the senior employee is equal to that of the other applicants.

Parco maintains this system of departmental seniority so that an experienced work force is guaranteed in each department, even during periods of fluctuating production demands and dramatic changes in number of employees. Stability appears to be the key. Without this provision, Par-co would find itself with few experienced workers during both the slow season and the time of heavy production during the holiday season. In the off-season, reductions in force might knock out most of the experienced workers within a department, replacing them with workers from other departments who have greater plant-wide seniority. And during the busy season, Parco would have to train new workers to take the place of those who transferred to another department, and would also have to train the transferred employees to do their new jobs, during a time with heavy production demands.¹

Phyllis Chambers, employed by Parco in the packing department since 1977, was a member of the union negotiating team that in 1979 agreed to Article VII, Section 3(C). While Chambers claims to have believed that section meant only that employer discretion would be eliminated in transferring employees within departments, since its enactment in 1979 Pareo and the union have interpreted the provision as disallowing bids for transfers. The bidding provision has been reenacted verbatim in subsequent collective bargaining agreements signed in 1984 and 1988, and the union has never attempted to negotiate a change in its terms.

On July 6, 1987, while working in the packing department, Chambers bid for a job in the mixing department. She was told she could not bid on jobs outside her department, and her application was not considered. Charles Glenn Tombs, a male employee with about one year’s experience in the mixing department, but with far less plantwide seniority than Chambers, was hired. On July 31, 1987, Chambers filed a complaint with the Michigan City Human Rights Department alleging sex discrimination because Parco refused to let her bid on the position in the mixing department. The Human Rights Department made an initial finding of probable cause, but Chambers withdrew her complaint. On July 29, 1988, the Equal Employment Opportunity Commission (EEOC) issued a Notice of Right to Sue. Chambers sued in federal district court on September 14, 1988. The district court granted summary judgment for Par-co on January 23, 1990, and Chambers timely appealed.

II.

Parco made two arguments in support of its motion for summary judgment. First, Parco argued that Chambers’ claim was untimely. Second, on the merits, Parco claimed that its policy is a bona fide seniority system. While Title VII prohibits sex discrimination in the terms and conditions of employment, Congress has created an exception where employment 'action occurs pursuant to a bona fide seniority system. See Title VII, 42 U.S.C. § 2000e-2(h). Even if Parco’s plan is a seniority system, challenges still can be brought if discriminatory intent or purpose is shown.

The district court agreed with the preliminary argument that Chambers’ claim was time-barred, and therefore did not reach the merits. The court concluded that Chambers’ claim was untimely under 42 U.S.C. § 2000e-5(e), which allows 180 days to challenge unlawful employment practices relating to seniority systems, or 300 days if administrative proceedings are pursued first. The allegedly discriminatory provision of the collective bargaining agreement went into effect in 1979, so under the 300-day provision Chambers’ 1988 challenge was about eight years late. The court relied on Lorance v. AT & T Technologies, 490 U.S. 900, 109 S.Ct. 2261, 104 L.Ed.2d 961 (1989), in which the Supreme Court held that the statutory limitations period begins to run when the allegedly discriminatory seniority system is adopted. The Court specifically rejected the argument that the statute was triggered each time the system was applied in a discriminatory fashion. 109 S.Ct. at 2269.

Chambers advances two bases for reversal. Chambers first argues that Par-co’s prohibition of inter-departmental bidding is merely a no-transfer rule, rather than a “seniority system,” and that the statute of limitations therefore does not apply. Parco argues that its bidding policy is an integral part of its seniority system. We agree with the district court that Par-co’s no inter-departmental bidding rule is part of its seniority system.

Lorance considered a seniority system legitimate even though seniority was determined by length of time spent in a particular position, instead of length of time with the company. 109 S.Ct. at 2265. The situation in Lorance is analytically no different than at Parco Foods; here, seniority is determined by length of time in one department, instead of length of time with the company. Pareo, and the defendant in Lorance, justify their seniority systems as reasonable attempts to encourage workers to remain in and improve on the jobs they are doing, rather than to transfer within the company and require training for a new job. In this case, Tombs had one year in the mixing department; Chambers had none. To Parco, Tombs was the more qualified applicant with greater relevant seniority. That Chambers does not like the manner in which Parco’s seniority system operates does not mean it is not a seniority system.

The EEOC’s argument as amicus curiae suffers from this same defect. The EEOC does not like the fact that Chambers is treated as an entry-level applicant, the same as an outsider applying for a job in the mixing department. But the EEOC’s concerns are properly the subject of future collective bargaining negotiations; they do not show that Parco’s plan is not a seniority system. As the Supreme Court said in California Brewers Association ¶. Bryant, 444 U.S. 598, 606, 100 S.Ct. 814, 819, 63 L.Ed.2d 55 (1980), the “principal feature of any and every ‘seniority plan’ is that preferential treatment is dispensed on the basis of some measure of time served in employment.” The key words, which the EEOC chooses not to emphasize, are “some measure of time.” Parco’s measure of time is based on experience within a particular department, for which Chambers will receive preferential treatment. Par-co’s measure of time is sufficient to show that its no inter-departmental bidding rule is indeed part of a seniority system.

Chambers’ second argument for escaping the statutory limitations period presents a question of first impression. She argues that each subsequent reenactment of an allegedly discriminatory seniority system re-triggers the limitations period. Therefore, she argues, the reenactment of Article VII in 1988 was a new discriminatory event that made her 1988 lawsuit timely. The district court rejected this reasoning on the basis of Lorance, but we do not believe Lorance provides us such a clear answer.

Several factors support the district court’s analysis. Although Lorance did not involve a collective bargaining agreement that was subsequently reenacted, the Court seemed to focus on the moment when a system changes from nondiscriminatory to discriminatory — a “diminution in employment status” — as the moment triggering the limitations period. In Lorance, the Court described this crucial moment in a manner that discounts the importance of prior or future verbatim reenactments of the same provision:

Under the collective bargaining agreements in effect prior to 1979, each petitioner had earned the right to receive a favorable position in the hierarchy of seniority among testers ..., and respondents eliminated those rights for reasons alleged to be discriminatory. Because this diminution in employment status occurred in 1979 ... the Seventh Circuit was correct to find petitioner’s claims time-barred_

Lorance, 109 S.Ct. at 2265. The Court did not refer to the most recent reenactment of the collective bargaining agreement, but noted that previous “agreements” preserved certain rights for the workers. Then the Court focused on the point when those rights were allegedly diminished by a change in the collective bargaining agreement.

In our case, there was no “diminution in employment status” during subsequent verbatim reenactments of the allegedly discriminatory Article VII; that “diminution” occurred in 1979 when the agreement’s terms were changed from previous agreements. The district court concluded that allowing each subsequent verbatim reenactment of a collective bargaining agreement to start the limitations clock running again would defeat the workers’ valid reliance interests the Supreme Court sought to protect in Lorance: “[Allowing a facially neutral system to be challenged, and entitlements under it to be altered, many years after its adoption would disrupt those valid reliance interests [that the limitations period] was meant to protect,” and upset the “balance between the interests of those protected against discrimination by Title VII and those who work — perhaps for many years — in reliance upon the validity of a facially lawful seniority system.” 109 S.Ct. at 2269.

However, the Lorance Court generally refers to a seniority system’s point of “adoption” as the point at which the statute of limitations begins to run. 109 S.Ct. at 2269. In rejecting the plaintiffs’ argument that the statute should be triggered when the effect of the decision to adopt the seniority provision was felt, the Court explained that “[bjecause the claimed invalidity of the facially nondiscriminatory and neutrally applied ... seniority system is wholly dependent on the alleged illegality of signing the underlying agreement, it is the date of that signing which governs the limitation period.” 109 S.Ct. at 2268 (emphasis added). The Court pointed out that in a facially neutral system “the discriminatory act occurs only at the time of adoption,” 109 S.Ct. at 2269 n. 5 (emphasis in original).

So, under Lorance, the time of adoption is the discriminatory act, and the discriminatory act triggers the statute of limitations. Can maintaining an allegedly discriminatory provision be considered a discriminatory act? We believe that it can, provided that the plaintiff can point to evidence of a discriminatory act or discriminatory intent in the provision’s reenactment. Established caselaw interpreting § 703(h) of Title VII, 42 U.S.C. § 2000e-2(h), indicates that maintenance of an allegedly discriminatory seniority system can be considered a discriminatory act. In Pullman-Standard v. Swint, 456 U.S. 273, 281, 102 S.Ct. 1781, 1786, 72 L.Ed.2d 66 (1982) (citations omitted), the Supreme Court inquired whether a seniority system “was negotiated and has been maintained free from any illegal purpose,” and observed that the district court had “carefully considered the detailed record of negotiating sessions and contracts which span a period of some thirty-five years.” The court made this inquiry even though the relevant seniority provision had remained unchanged over the years through many renegotiations. The implication is that if the parties have discriminatory reasons for reenacting seniority provisions, even when they do not change the system, the reenactment can be considered discriminatory for purposes of § 703(h). See also Teamsters v. United States, 431 U.S. 324, 355-56, 97 S.Ct. 1843, 1864-65, 52 L.Ed.2d 396 (1977); Wattleton v. Intl. Brotherhood of Boiler Makers, 686 F.2d 586, 590, 592 (7th Cir.1982).

Thus, if a plaintiff can point to evidence of discriminatory motive in the renegotiation or “maintenance” of a seniority system, then that date provides the time at which the statute of limitations begins to run, for it is at that point that the “discriminatory act” took place.

All of this is no help to Chambers, however. The record in our case is uncontro-verted that not only was Article VII reenacted verbatim, but the provision was never even a matter of discussion between Parco and the union.² The union never sought to renegotiate the terms of the allegedly discriminatory provision, so there is nothing Chambers can possibly point to that would show Parco’s discriminatory intent. Without an act or statement in the renegotiation process that would be probative of discriminatory intent, the renegotiation date cannot be the starting point for the statute of limitations.³ Therefore, the judgment of the district court dismissing Chambers’ claim as untimely is

Affirmed.

1 . As the district court noted, "From the union's position, the system fostered employees’ opportunities to be promoted and rewarded for their work record within their department, notwithstanding bids from more senior employees in other departments. From Parco Foods’ standpoint, the system furthered continuity of the work force by encouraging employees to departmentalize their skills and work up the ladder within one section of the plant." Memorandum and Order, Jan. 23, 1990, at 3, 1990 WL 71511.

2 . Pursuant to General Rule 11 of the Northern District of Indiana, Parco filed in conjunction with its motion for summary judgment a "Statement of Material Facts As To Which There Is No Genuine Issue.” Paragraph 22 stated: “At no time since 1979 has the Union requested a change in the no inter-departmental transfer rule. The collective bargaining agreement was renegotiated and a new collective bargaining agreement was signed on April 1, 1988, without any request by the Union to change the no inter-departmental transfer rule.” Chambers has never attempted to contest this statement, either in her own statement of material facts to the district court, or in her briefs on appeal. Under General Rule 11, the district court was required to "assume that the facts as claimed by the moving party are admitted to exist without controversy....”.

3 . The dissent sidesteps the precedential force of Lorance by suggesting a different resolution is mandated by simple rules of contract. The dissent fails to point out that, even under its approach, Chambers’ claim here is barred. Chambers’ 1987 job bid and subsequent complaint to the Michigan City Human Rights Commission were untimely attacks on the April 1984 agreement then in effect. Her September 1988 lawsuit was not only untimely but also moot because it was a continuing challenge to the 1984 agreement which had been replaced by a new agreement enacted in April of 1988. And her lawsuit could not be construed as an attack on the April 1988 agreement because, first, she never bid on a job under that agreement, and second, she never went before the Human Rights Commission or the EEOC with a discrimination claim based on the April 1988 reenactment. If we are to apply a "simple contract rule that a new agreement gives rise to new cause of action" the old cause of action Chambers still pursues is moot.