Gerard Cardenas v. State of New Jersey 00-5225 IN THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _______________________________________ No. 00-5225 _______________________________________ GERARD CARDENAS, Plaintiff/Appellant, v. JON MASSEY, JAMES REBO, ROBERT LIPSCHER, JAMES CIANCIA, DEBORAH PORITZ, and STATE OF NEW JERSEY Defendants/Appellees. _____________________________________________________________ On Appeal from the United States District Court for the District of New Jersey _____________________________________________________________ BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE _____________________________________________________________ GWENDOLYN YOUNG REAMS Associate General Counsel PHILIP B. SKLOVER Associate General Counsel EQUAL EMPLOYMENT LORRAINE C. DAVIS OPPORTUNITY COMMISSION Assistant General Counsel Office of General Counsel 1801 L Street, N.W. JENNIFER S. GOLDSTEIN Washington, DC 20507 Attorney (202) 663-4733 TABLE OF CONTENTS TABLE OF AUTHORITIES....................................................ii STATEMENT OF INTEREST...........................................................1 STATEMENT OF THE ISSUE...........................................................1 STATEMENT OF FACTS.....................................................1 ARGUMENT Each Payment of an Allegedly Discriminatory Wage Is A Separate Violation of Title VII That May Be Challenged When the Payments Continue into the Limitations Period......................................................4 CONCLUSION........................................................14 CERTIFICATE OF BAR MEMBERSHIP CERTIFICATE OF SERVICESTATEMENT OF INTEREST The Equal Employment Opportunity Commission is the federal agency charged with the interpretation, administration, and enforcement of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. This appeal raises the question of whether allegedly discriminatory wages may be challenged under Title VII where the payments commenced outside the limitations period but continued into the limitations period. In our view, the district court's decision finding the claim untimely fails to analyze this wage case in accordance with controlling Supreme Court precedent. The court's decision, if allowed to stand, would frustrate enforcement of Title VII by improperly insulating current discriminatory conduct from challenge under the statute. We therefore offer our views to the Court. STATEMENT OF THE ISSUE<1> Whether each payment of an allegedly discriminatory wage is a separate violation of Title VII that may be challenged when the payments continue into the limitations period. STATEMENT OF FACTS Plaintiff Gerard Cardenas was hired by defendant, the State of New Jersey, to work for the Administrative Office of the Courts in its Information Systems Division. App. 29.<2> Cardenas was hired to work as a Project Manager, at a pay grade of 30, beginning in January 1990. Id. Cardenas is Mexican-American, and was the only minority manager in his Division. Cardenas worked for the Administrative Office of the Courts for six years, until March 1996, when he began working in the private sector. Cardenas filed a charge with the Commission on April 6, 1995, alleging that the Administrative Office of the Courts discriminated against him on the basis of race or national origin. App. 37. He subsequently received a right-to-sue notice, and he filed a complaint in district court on August 23, 1996. In his complaint, which named the State of New Jersey and several individuals as defendants, Cardenas alleged that he was initially assigned "a pay grade substantially lower than the three other professionals reporting to Massey [Cardenas' supervisor]." R.1 ¶22. He alleged that his predecessor "held a pay grade substantially higher than the one assigned to plaintiff." R.1 ¶23. Cardenas alleged that as a result of "his lower pay grade, plaintiff received substantially less compensation than the other professionals reporting to Massey." R.1 ¶24. He alleged that the pay disparity was the result of discrimination on the basis of national origin and/or race, in violation of Title VII. R.1 ¶26. Defendants filed a motion for summary judgment which the district court granted in an order dated December 2, 1999.<3> App. 27. The court held that Cardenas' disparate wage claims were untimely. According to the court, Cardenas' Title VII claims, to be timely, must have accrued within 180 days of April 6, 1995 - the date he filed his charge with the Commission. App. 37. The district court rejected Cardenas' argument that he suffered a separate injury each time he received a pay check based upon his initial, allegedly discriminatory pay grade classification. Citing United Air Lines, Inc. v. Evans, 431 U.S. 553, 560 (1977), the district court stated that a "neutral pay scale that merely perpetuates the effects of discrimination that occurred outside the limitations period will not resurrect an otherwise time-barred cause of action." App. 38. The court went on to cite a Third Circuit case (which in turn cited Lorance v. AT&T Technologies, Inc., 490 U.S. 900 (1989)) for the proposition that application of the continuing violation theory requires proof of a discriminatory policy that is applied to the plaintiff and that is "discriminatory on its face." App. 38 (citing Courtney v. LaSalle Univ., 124 F.3d 499, 509 (3d Cir. 1997) (citing Lorance, 490 U.S. 900)). Applying this standard to then facts of this case, the district court concluded that Cardenas' receipt of discriminatory paychecks "was merely the continuing effect . . . of the discriminatory decision to assign him a pay grade of 30, rather than a separate act of discrimination constituting a continuing wrong." App. 40. The court thus concluded that Cardenas' wage claims were untimely. Cardenas filed a motion for reconsideration, highlighting the Third Circuit's decision in Miller v. Beneficial Management Corp., 977 F.2d 834 (3d Cir. 1992), where this Court held that discriminatory wage payments were a continuing violation of the Equal Pay Act. The district court denied plaintiff's motion on February 2, 2000. The district court pointed out that Cardenas never mentioned the Miller case in any prior filings to the court. App. 22. The court refused to consider the import of Miller, despite its potentially persuasive reasoning, because it was a case brought under the Equal Pay Act, not Title VII, and so was not controlling. Id. ARGUMENT EACH PAYMENT OF AN ALLEGEDLY DISCRIMINATORY WAGE IS A SEPARATE VIOLATION OF TITLE VII THAT MAY BE CHALLENGED WHEN THE PAYMENTS CONTINUE INTO THE LIMITATIONS PERIOD The Supreme Court's decision in Bazemore v. Friday, 478 U.S. 385 (1986), speaks directly to the timeliness issue in this wage case, and compels reversal of the district court's decision here. Bazemore involved a challenge by black employees of a state-run program to allegedly discriminatory wages. The program had ended explicit racial segregation in job assignments in 1965, but the effects of the prior segregation led to continued disparities in wages. After Congress made Title VII applicable to States in 1972, the plaintiffs challenged the disparate wages under Title VII. The district court and court of appeals ruled against the plaintiffs, holding that the employer "was under no obligation to eliminate any salary disparity between blacks and whites that had its origin prior to 1972." Id. at 394. The Supreme Court reversed, holding unanimously that the plaintiffs could challenge discriminatory wages under Title VII even though the initial, discriminatory wage classification occurred outside the limitations period. According to the Court, "[e]ach week's paycheck that delivers less to a black [person] than to a similarly situated white [person] is a wrong actionable under Title VII. . . . " Id. at 395 (Brennan, J., concurring in part, joined by all other members of the Court). As in Bazemore, the plaintiff here has alleged that his employer, which made Cardenas' initial pay classification outside the limitations period, has continued to pay him allegedly discriminatory wages into the limitations period.<4> Bazemore accordingly is controlling precedent, and, under Bazemore, the current discriminatory acts of paying Cardenas unequal wages render his claim timely under Title VII. Since Bazemore, the courts of appeals considering wage discrimination cases almost universally have held that paying discriminatory wages is a statutory violation that continues with each paycheck. Most notably, this Court so held in Miller v. Beneficial Management Corp., 977 F.2d 834 (3d Cir. 1992). Specifically, the Miller Court held that sex-based, discriminatory wage payments constitute a continuing violation of the Equal Pay Act because "'[t]o hold otherwise would permit perpetual wage discrimination by an employer whose violation of the Equal Pay Act had already lasted without attack for over two years.'" Id. at 843 (citation omitted).<5> This Court concluded that "the statute of limitations begins to run on the date of the last occurrence of discrimination [i.e. the last receipt of a paycheck], rather than the first." Id. at 844; see also id. at 843 ("Most courts appear to treat pay discrimination claims as continuing violations."). In our view, Miller likewise dictates that Cardenas' wage claims are timely. The district court did not address Miller directly.<6> App. 22 ("The Miller court's reasoning may or may not be persuasive when applied to the facts of this case...."). The district court held simply that it was not "controlling" because Miller arose under the Equal Pay Act, rather than under Title VII. In this context, such a statutory distinction is immaterial. For purposes of determining timeliness under the two statutes, there is no difference between the statutes that would make Miller any less persuasive in this Title VII case. Several courts have held the timeliness precedent applicable to both statutes. See, e.g., Nealon v. Stone, 958 F.2d 584, 592 (4th Cir. 1992) ("This continuing violation principle that applies under Bazemore to race discrimination violations of Title VII applies also to sex discrimination allegations under the Equal Pay Act."). In any event, even if the distinction between the statutes is significant, Bazemore, as a Title VII case, is controlling precedent here, and the continuing vitality of the Supreme Court's holding has been recognized by the courts of appeals. See, e.g., Anderson v. Zubieta, 180 F.3d 329, 335-37 (D.C. Cir. 1999) (discriminatory salary and benefits are "continuing violations of Title VII, actionable upon receipt of each paycheck") (citing Bazemore); Pollis v. New Sch. for Soc. Research, 132 F.3d 115, (2d Cir. 1997) ("a claim of discriminatory pay [under Equal Pay Act] is fundamentally unlike other claims of ongoing discriminatory treatment because it involves a series of discrete, individual wrongs rather than a single and indivisible course of wrongful action") (citing Bazemore); Brinkley-Obu v. Hughes Training, Inc., 36 F.3d 336, 345-48 (4th Cir. 1994) ("in a compensation discrimination case, the issuance of each diminished paycheck constitutes a discriminatory act"); Nealon v. Stone, 958 F.2d 584, 591-92 (4th Cir. 1992) (Equal Pay Act plaintiff "suffers current discrimination each time she is paid less than her male counterpart") (citing Bazemore); Wagner v. Nutrasweet Co., 95 F.3d 527, 534 (7th Cir. 1996) (under Bazemore, "discrimination claims based on repeated acts, such as the receipt of a weekly or monthly salary check," timely where disparate compensation continued into limitations period)<7>; Ashley v. Boyle's Famous Corned Beef Co., 66 F.3d 164, 167-68 (8th Cir. 1995) (en banc) (plaintiff's Title VII pay claim was timely because she received allegedly discriminatory paychecks within 300 days of her administrative charge, even though her initial discriminatory job assignment was outside the limitations period) (citing Bazemore); Beavers v. American Cast Iron Pipe Co., 975 F.2d 792 (11th Cir. 1992) (relying on Bazemore to hold plaintiff alleged continuing violation under Title VII); see also Gibbs v. Pierce County Law Enforcement Support Ag'y, 785 F.2d 1396 (9th Cir. 1986) (rejecting argument that discriminatory wage payments are "merely the present effect of a past act" and holding instead that "each payment of discriminatory wages constituted a 'continuing violation'" of Title VII) (pre-Bazemore).<8> The Eighth Circuit's en banc decision in Ashley, 66 F.3d 164, illustrates the distinction between one-time acts of discrimination, which cannot be challenged after passage of the limitations period, and current acts of discrimination, which may be challenged. The plaintiff in Ashley challenged both her initial assignment to a non-union job preparing specialty products at a corned beef plant, and her rate of pay in that job as sex-based discrimination. The Eighth Circuit held that Ashley's challenge to her initial job assignment was time-barred, even though "some of the effects of that initial assignment [did] not occur until later." Id. at 167 (citing Delaware State Coll. v. Ricks, 449 U.S. 250, 258 (1980)). On the other hand, the court held, Ashley's claim "that gender discrimination tainted her rate of pay" was not time-barred. Ashley, 66 F.3d at 167. The fact that similar discriminatory acts could have been challenged earlier does not alter the critical question for timeliness purposes: is there a present violation? Id. at 168 (citing United Air Lines, Inc. v. Evans, 431 U.S. 553, 558 (1977)). Invoking Bazemore, the court concluded that "Ashley's Title VII pay claim is timely because she received allegedly discriminatory paychecks within 300 days prior to the filing of her administrative charge." Id. at 168. Cardenas received allegedly discriminatory paychecks within 300 days prior to the filing of his administrative charge, and so his claim should have been deemed timely. The district court in this case held to the contrary, however. In so holding, the district court did not consider the more recent acts of alleged wage discrimination that continued into the limitations period, as Bazemore and its progeny instruct. Instead the court focused solely on the time when the Administrative Office of the Courts began its allegedly discriminatory treatment of Cardenas and, citing United Air Lines, Inc. v. Evans, 431 U.S. 553, 560 (1977), concluded that ensuing payments of wages could not be challenged where the initial act of discrimination fell outside the limitations period. App. 38. The court's holding, particularly its characterization of the continuing wage payments as "neutral" rather than as current discriminatory acts, is legally erroneous. The district court erred in relying on the Supreme Court's decision in United Air Lines, Inc. v. Evans, 431 U.S. 553 (1977), in this wage discrimination case. Indeed, the Bazemore Court specifically distinguished wage cases from cases like Evans, where a female flight attendant was forced to resign because of a no-marriage policy for women and then brought suit four years later, when she was rehired and given seniority only from her rehire date. The Bazemore Court stated that because the employer in Evans "was not engaged in discriminatory practices at the time the [plaintiff] . . . brought suit, there simply was no violation of Title VII." Bazemore, 478 U.S. at 396 n.6. By contrast, where an employer has continued to pay disparate salaries, the focus is on "the present salary structure." Id. That such disparate salaries can be challenged is, according to the Bazemore Court, "too obvious to warrant extended discussion." Id. at 395.<9> Cardenas' claim - a challenge to allegedly discriminatory wages - falls squarely within the Bazemore line of cases, and so is timely. Finally, the district court's opinion suggests that the continuing violation theory<10> requires proof of a discriminatory policy that is applied to the plaintiff and that is "discriminatory on its face." App. 38. There is no such requirement of a facially discriminatory policy in a wage case, as illustrated by the fact that neither Bazemore nor Miller involved facially discriminatory policies. The district court cited the Supreme Court's decision in Lorance, which involved a challenge to a seniority system, not to discriminatory wages. See Beavers v. American Cast Iron Pipe Co., 975 F.2d 792, 799-800 (11th Cir. 1992) ("the Supreme Court made it exceedingly clear . . . that its holding in Lorance was limited to seniority systems"). In Lorance, the Court held that facially neutral seniority systems must be challenged within 300 days of adoption. The Court's holding was based in part on the notion that it would be difficult to ascertain the motivation behind adoption of a system if it were challenged years later. However, Congress responded to Lorance by adding § 703(2)(e), 42 U.S.C. § 2000e-5(e)(2), in the Civil Rights Act of 1991 specifically to permit challenges to seniority systems as long as they continue to be applied. In enacting that provision, Congress expressed its concern that Lorance had caused employees to lose their right to challenge a seniority system. See H.R. Rep. No. 102-40(I), 102nd Cong., 1st Sess., reprinted in 1991 U.S.C.C.A.N. 549, 599. Section 703(e)(2) therefore represents Congress' judgment that it is not unfair to require an employer to defend a seniority system, whether facially discriminatory or facially neutral, as long as it continues to injure individuals protected by Title VII. Lorance thus was overridden by Congress. The district court also cited to language from this Court's decision in Courtney noting that a plaintiff must prove the existence of a discriminatory policy. But the factual backdrop of Courtney was a challenge to a discriminatory policy. See Courtney, 124 F.3d at 505 (discussing precedent addressing situation "where the challenge is to a continuing discriminatory policy"). Courtney does not stand for the proposition that showing the existence of an explicitly discriminatory policy is necessary in every continuing violation case. In sum, both Bazemore and Miller contemplate that an individual may challenge allegedly discriminatory wage payments as long as one such payment falls within the limitations period. Cardenas has met that requirement, and his discrimination claim accordingly should be considered on the merits. CONCLUSION For the foregoing reasons, we urge this Court to reverse the judgment of the district court and remand the case for further proceedings. GWENDOLYN YOUNG REAMS Associate General Counsel PHILIP B. SKLOVER Associate General Counsel LORRAINE C. DAVIS Assistant General Counsel __________________________ JENNIFER S. GOLDSTEIN Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, N.W. Washington, DC 20507 (202) 663-4733 CERTIFICATE OF BAR MEMBERSHIP I hereby certify that I am employed by and represent in this case the United States Equal Employment Opportunity Commission, an agency of the federal government. It is my understanding that, as an attorney representing the federal government, I need not become a member of the bar of this Court in order to appear in this matter. CERTIFICATE OF SERVICE I hereby certify that two copies of the foregoing brief were mailed, first class, postage prepaid, on this 20th day of December, 2000, to the following: Frederic J. Gross, Esq. 7 East Kings Highway Mount Ephraim, NJ 08059 George N. Cohen, Deputy Attorney General R.J. Hughes Justice Complex 25 Market Street P.O. Box 112 Trenton, NJ 08625 _____________________________ JENNIFER S. GOLDSTEIN Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, N.W. Washington, DC 20507 (202) 663-4733 December 20, 2001 1 The Commission takes no position on any other issue raised in this appeal. 2 "App. *" refers to the page in the Appellant's Appendix. "R.* refers to the record entry number in the district court docket sheet. 3 The district court denied summary judgment with respect to claims against Cardenas' supervisor under 42 U.S.C. § 1981 and state law. Those claims were subsequently settled, after which Cardenas filed his notice of appeal. 4 Cardenas had 300 days to file a Title VII charge with the Commission, and not 180 days, as the district court incorrectly stated. See Miller v. Beneficial Mgmt. Corp., 977 F.2d 834, 842 (3d Cir. 1992); Bihler v. Singer, 710 F.2d 96, 97 (3d Cir. 1983). 5 Miller did not refer to Bazemore, a Title VII case, but instead cited Equal Pay Act case law holding that pay discrimination claims generally are continuing violations. 6 The parties did not bring Miller to the court's attention until after it issued its initial decision. To our knowledge, the parties also never cited Bazemore to the district court, nor have they cited it to this Court. 7 The district court cited to a different Seventh Circuit case, Dasgupta v. University of Wisconsin Board of Regents, 121 F.3d 1138 (7th Cir. 1997). App. 38. That court recognized Bazemore and Wagner as controlling precedents on wage claims, but rejected the plaintiff's timeliness assertion because he filed suit eight years after the end of the first, 13-year period of alleged discrimination. Dasgupta, 121 F.3d at 1140. Cf. Chambers v. American Trans Air, Inc., 17 F.3d 998, 1003 (7th Cir. 1994) (pay discrimination claims "are typically continuing violations, because each pay check at a discriminatory rate is seen as the basis for a separate claim."). 8 The Fifth Circuit, in a case arising under the Fair Labor Standards Act, held a pay claim time-barred where suit was filed too long after the initial reduction in the plaintiffs' pay rate. See Hendrix v. City of Yazoo City, 911 F.2d 1102 (5th Cir. 1990). Hendrix does not cite to or attempt to distinguish Bazemore, which is directly applicable to wage cases. Instead the Hendrix court relied on Lorance, which involved a challenge to a facially neutral seniority system, and the Hendrix court held that challenges to facially neutral systems must date from the original discriminatory act. Subsequent to the Hendrix decision, in the Civil Rights Act of 1991, Congress overrode Lorance's distinction between a facially neutral seniority system and a facially discriminatory seniority system. See 42 U.S.C. § 2000e-5(e)(2). In any event, the Hendrix decision was incorrect for it failed to heed the Supreme Court's directive that discriminatory wages are to be treated as discrete discriminatory acts, regardless of how seniority systems are treated. Finally, we note that Hendrix appears to recognize that, at least under Title VII, "discriminatory amounts paid in each paycheck constitute a renewed violation of the statute." Id. at 1103. 9 While at least one court has stated that the distinction between the facts of Bazemore (paychecks) and Evans (seniority) is "subtle at best," that court acknowledged that the distinction "is a line the Supreme Court has drawn, and it is our obligation to apply it. . . ." Ameritech Benefit Plan Comm. v. Communications Workers of Am., 220 F.3d 814, 823 (7th Cir. 2000). In our view, the line the Supreme Court has drawn is consistent with the purposes of the limitations period. An employer that has terminated an employee is "entitled to treat that past act as lawful" once the charge-filing period for the discharge has expired. United Air Lines, Inc. v. Evans, 431 U.S. 553, 558 (1977). An employer that continues to pay a current employee a discriminatory wage is, as the Supreme Court recognized in Bazemore, in a different posture and cannot use the limitations period to insulate itself from challenge to current discriminatory practices simply because the onset of those practices began outside of the limitations period. 10 To clarify, the continuing violation theory enables a plaintiff to challenge acts occurring outside the limitations period, as long as those acts are related to at least one act of discrimination occurring within the limitations period. Cardenas has alleged numerous wage payments occurring within the limitations period, and the continuing violation theory enables him to challenge in addition those payments predating the limitations period.