Nos. 06 -5430(L) & 08-4308 (xap) _____________________________________________ IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ____________________________________________ EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellee-Cross-Appellant, v. EVERDRY MARKETING AND MANAGEMENT, INC., and EVERDRY MANAGEMENT SERVICES, INC., Defendants-Appellants-Cross-Appellees. ______________________________________________________ On Appeal from the United States District Court for the Western District of New York _____________________________________________________ REPLY BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS CROSS-APPELLANT __________________________________________________________ JAMES L. LEE EQUAL EMPLOYMENT Deputy General Counsel OPPORTUNITY COMMISSION 131 M Street, N.E., Fifth Floor VINCENT J. BLACKWOOD Washington, D.C. 20507 Acting Associate General Counsel 202/663-4727 (office) SUSAN L.P. STARR 202/663-7090 (fax) Attorney TABLE OF CONTENTS TABLE OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE TABLE OF AUTHORITIES FEDERAL CASES Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975). . . . . . . . . . . . 5, 11 EEOC v. Joint Apprenticeship Committee of Joint Ind. Bd, 186 F.3d 110 (2nd Cir. 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Galloway v. General Motors Serv. Parts Operations, 78 F.3d 1164 (7th Cir. 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 McLeod v. General Electric Co., 366 F.2d 847 (2nd Cir. 1966). . . . . . . . . 4 Pietras v. Bd of Fire Com'rs of Farmingville Fire Dist., 180 F.3d 468 (2d Cir. 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Strom v. Goldman, Sachs & Co., 202 F.3d 138 (2d Cir. 1999). . . . . . . . . 8 United States v. Gregory, 871 F.2d 1239 (4th Cir. 1989). . . . . . . . . . . . 5 United States v. W.R. Grant, Co., 345 U.S. 629 (1953). . . . . . . . . . . . 5 FEDERAL STATUTES 42 U.S.C. § 2000e-5(g). . . . . . . . . . . . . . . . . . . . . . . . . . .passim Fed. R. App. P. 32(a)(7)(B). . . . . . . . . . . . . . . . . . . . . . . . . . 12 IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT _________________________________ Nos. 06-5430 & 08-4308 ________________________________ EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellee-Cross-Appellant, v. EVERDRY MARKETING AND MANAGEMENT, INC., and EVERDRY MANAGEMENT SERVICES, INC., Defendants-Appellants-Cross-Appellees. ______________________________________________________ On Appeal from the United States District Court for the Western District of New York _____________________________________________________ REPLY BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS CROSS-APPELLANT __________________________________________________________ ARGUMENT 1. A jury found that Everdry Marketing and Management (EMM) and Everdry Management Services (EMS) constituted a single integrated enterprise, and that both defendants were jointly and severally liable as an integrated enterprise for violating Title VII by subjecting thirteen female employees to a hostile work environment based on sex. The jury awarded backpay as well as compensatory and punitive damages to the victims. The district court denied defendants' post-verdict motions for judgment as a matter of law and entered a judgment holding both defendants liable for the backpay and damages; however the court denied EEOC's motion to enjoin the defendants from engaging in future Title VII violations. The defendants have appealed from the denial of their motions for judgment as a matter of law and the EEOC has cross-appealed from the denial of injunctive relief. In our opening brief on cross-appeal, we argued that the district court abused its discretion when it failed to enjoin EMM from future Title VII violations. We noted that the district court stated that, based on the evidence at trial, it could "confidently" conclude that injunctive relief against EMS was appropriate, if EMS still existed. SPA 348. We also noted that EMM's liability is premised on the finding that EMM and EMS should be treated as one entity, yet the district court based its conclusion that an injunction is not warranted on the fact that EMS no longer operates the Rochester facility at which the harassment occurred and there was no evidence of harassment at EMM's facility in Ohio.<1> We argued that in reaching this conclusion, the court overlooked the finding that EMM, as part of a single enterprise with EMS, is responsible for the harassment at EMS. Therefore, assuming this Court affirms the jury's finding of integrated enterprise, the district court's explanation for denying injunctive relief fails. EMM's response to the Commission's arguments similarly ignores the jury's finding that EMM and EMS were part of a single integrated enterprise and, as such, each is liable for the acts of the other. EMM fails to defend the court's denial of the injunction in that context. Rather, it acts as if the sexual harassment at the Rochester facility were committed by an unrelated company. This Court needs to consider EEOC's appeal from the denial of injunctive relief against EMM only if it affirms the jury's finding that EMM is liable because it formed a single enterprise with EMS. Because EMM's argument in response to the cross-appeal ignores that finding, it provides no support for the district court's denial of injunctive relief. 2. EMM argues that because Title VII provides that a court "may" order injunctive relief, injunctive relief for a Title VII violation is "'an extraordinary remedy.'" EMM Resp. at 32 (quoting McLeod v. General Electric Co., 366 F.2d 847, 849 (2nd Cir. 1966)). Section 706(g)(1) provides that where intentional discrimination is found, "the court may enjoin the respondent from engaging in such unlawful employment practice, and order such affirmative action as appropriate . . . ." 42 U.S.C. § 2000e-5(g). The Supreme Court has made clear that this provision, while discretionary, is "not left to a court's 'inclination,'" but rather requires a "principled application of standards consistent with" Title VII's purpose of eradicating "a historic evil of national proportions." Albemarle Paper Co. v. Moody, 422 U.S. 405, 416-17 (1975) (internal citations omitted). Accordingly, the Court added, to realize Title VII's "make whole" purpose, "the (district) court has not merely the power but the duty to render a decree which will so far as possible eliminate the discriminatory effects of the past as well as bar like discrimination in the future." Id. at 418 (internal citations omitted). As we noted in our opening brief, in applying this principle, this Court has made clear that, once a Title VII violation has been proven, the defendant has the burden to prove that there is no likelihood of future harm. If the defendant fails to meet this burden, an injunction is mandatory. EEOC v. Joint Apprenticeship Comm. of Joint Ind. Bd, 186 F.3d 110, 116 (2nd Cir. 1999) (citing with approval, United States v. Gregory, 871 F.2d 1239, 1246 (4th Cir. 1989) ("when a plaintiff establishes a defendant's liability under Title VII, there is no discretion to deny injunctive relief completely")). In response, EMM ignores this Court's precedent and argues instead that, notwithstanding the finding that EMM violated Title VII, an injunction may not be issued unless the EEOC affirmatively proves that it will likely engage in future discriminatory acts. EMM Resp. at 33. For support, EMM relies on a 1953 anti-trust case decided before the Civil Rights Act was enacted. United States v. W.R. Grant, Co., 345 U.S. 629, 633 (1953). However, this case provides no support for EMM's argument. In Grant, the Court considered whether an injunction was appropriate where no legal violation had been established and where it was undisputed that the defendants stopped engaging in the challenged activity. Id. at 632-33 n.5. The Court held that, in those circumstances, an injunction is warranted only if the plaintiff affirmatively proves its necessity. In this case, by contrast, the jury found that EMM violated Title VII by subjecting thirteen women to a hostile work environment over the course of four years. Further, unlike Grant where the defendants established that they no longer had the ability to violate the relevant statute, there is nothing in the record to suggest that EMM is not capable of committing similar violations of Title VII in the future. In fact, the district court in this case "confidently . . . infer[red] the likelihood of future violations" from the record. SPA 348. We argued that the district court went wrong by placing too much weight on the defendant's assertion that EMS no longer operates the Rochester facility and may have ceased operations. While this might mean that future violations are unlikely at that facility or through EMS, there is nothing to suggest that EMM will not continue to take over and manage failing franchises. Merely because it may do this directly or through another related entity if EMS has ceased to operate does not lessen the likelihood that EMM will commit similar Title VII violations in the future unless it is enjoined. EMM points to no evidence proving that it is not possible for sexual harassment to continue. The closest EMM gets to such an argument is when it infers that, because the evidence in this case only covers the period of 1998- 2002, harassment must have stopped after 2002. EMM Resp. at 34. EMM provides no evidence in support of its inferential leap. 4. We also noted in our opening brief that, in addition to the fact that EMM is responsible for the violations that occurred at the EMS facility by virtue of the integrated enterprise finding, there is also evidence that at least two managers engaged in sexual harassment at the Rochester facility while they were on EMM's employee list. There was testimony that EMM officials David Bowers and Tim Rose, while working as EMS's general managers, sexually harassed subordinates throughout their respective tenures in Rochester and laughed along as others harassed the telemarketers. See EEOC Br. at 23-27 (detailing instances of Bowers' and Rose's harassment). In addition, as the jury expressly found with respect to each of the victims, EMM failed to "exercise[] reasonable care to prevent and correct promptly any harassing behaviour based upon sex or gender . . . ." EEOC-SPA 83-127. As we stated in our opening brief, there is ample evidence that EMM officials failed badly in their statutory obligation to respond to complaints of harassment at EMS. We noted: that EMS's handbook directed EMS employees to lodge sexual harassment complaints with EMM management personnel in Ohio (EEOC br. at 13, 30); that three women complained to three different EMM supervisors who did nothing to stop the harassment (id. at 25-28); that EMM officials warned an employee that if she continued to complain about sexual harassment, she would lose her job (id. at 28); and that an EMM official warned a pregnant employee who was being grabbed, fondled and verbally harassed to stay silent and not resist because it was her job to "keep them happy" (id. at 28-29). EMM ignores this evidence which demonstrates that its responsibility for the Title VII violations was not solely derivative but rather was also based on EMM's direct actions and inaction. 5. EMM also argues that injunctive relief is not warranted in this case because the EEOC did not establish that EMM engaged in "a systematic pattern or practice of discrimination." EMM Resp. at 35. Insofar as EMM means to imply that injunctive relief is only appropriate where a "pattern or practice" of discrimination is expressly found, there is no legal support for this proposition. This Court and other courts have frequently approved injunctive relief in Title VII cases where there was no finding of a pattern or practice. See, e.g., Strom v. Goldman, Sachs & Co. 202 F.3d 138, 146 (2d Cir. 1999) (equitable relief includes injunctive relief under section 706); Pietras v. Bd of Fire Com'rs of Farmingville Fire Dist., 180 F.3d 468, 470 (2d Cir. 1999) (injunction requiring defendant to develop a new hiring test properly awarded under § 706). See also, Galloway v. General Motors Serv. Parts Operations, 78 F.3d 1164, 1167 (7th Cir. 1996) (individual can properly seek injunctive relief under § 706 to preclude "a continuation of the unlawful conduct"). Whether injunctive relief is appropriate and, if so, the scope of that relief turns on the facts of the particular case, not on statutory provision under which it is brought. Here, the court found EMM liable for "pervasive[] and egregious[]" sexual harassment spanning a four-year period (spa 348), a fact pattern strikingly similar to that which EMM uses to describe a pattern or practice of discrimination. See EMM Resp. at 35 (to demonstrate a pattern or practice, the plaintiff must prove "multiple incidents," "systematic disparate treatment," "more than isolated, accidental or sporadic discriminatory acts"). Thus, injunctive relief is appropriate in this case based on the facts underlying EMM's liability, regardless of the label attached to the violation. 6. EMM further argues that an injunction is not necessary because there is no danger of future sexual harassment. In support, EMM seems to argue that because this suit was filed in 2001 and discovery was cut off in 2002, the necessary conclusion is that no sexual harassment occurred after 2002. EMM Resp. at 33-34. EMM fails to provide a single record cite which even suggests that harassment stopped after 2002. Id. at 34. On the contrary, the record makes clear why injunctive relief is particularly important here. Stephanie DiStasio filed her sexual harassment charge with the EEOC in 1999. During the time that the EEOC was investigating that charge, taking statements from EMM and EMS, an array of management officials, including EMM's Rose and Bowers, continued to sexually harass these women and EMM continued to ignore their complaints. Even after the EEOC filed suit in 2001, the sexual harassment continued throughout 2001 and 2002, apparently undeterred by the lawsuit. EMM complains that the EEOC seeks an injunction "to punish, not deter," challenging the injunction as "ethically unwarranted" and "a vindictive attempt to force EMM to show contrition." Id. at 36-37. EMM's professed outrage at the proposed injunction is unavailing given the seriousness of the harassment for which EMM has been found liable. Thirteen women, some as young as sixteen years old, were sexually harassed daily. Their supervisors verbally harassed them and physically assaulted them. The youngest ones were traumatized so severely that, even years later, they testified to the lasting effects on their lives. Company officials responded to the women who complained by threatening them with loss of their jobs, mocking them, laughing at them, telling them to be quiet because it was their job to keep the salesmen "happy." This conduct continued unabated for years. The harassment was not slowed when DiStasio filed an EEOC charge in 1999, when EEOC actively investigated the sexual harassment, or even when the EEOC filed this lawsuit. Injunctive relief is necessary to cause EMM "to self- examine and to self-evaluate [its] employment practices and to endeavour to eliminate, so far as possible, the last vestiges of an unfortunate and ignominious page in this country's history." Albemarle, 422 U.S. at 418 (discussing relief for racial discrimination) (internal citation omitted). EMM also complains that the injunction sought by the EEOC is "incredibly broad and oppressive." EMM Resp. at 37. We disagree with this characterization of the requested relief particularly given the egregious nature of the violations found in this case. However, as we noted in our opening brief, the specific terms of an injunction should be determined by the district court in the first instance. EEOC Br. at 55. If this Court agrees with EEOC that the district court abused its discretion by denying injunctive relief, the case should be remanded to that court for it to fashion appropriate relief. Any complaints EMM may have about the scope or content of EEOC's proposed injunction can be addressed be the district court at that time. CONCLUSION For the foregoing reasons and for the reasons stated in our opening brief, the EEOC respectfully requests this Court to reverse the district court's denial of injunctive relief and remand that portion of the case for further proceedings. Respectfully submitted, JAMES L. LEE Deputy General Counsel VINCENT J. BLACKWOOD Acting Associate General Counsel __________________ SUSAN L.P. STARR Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M Street. NE, 5th Fl. Washington, D.C. 20507 (202) 663-4727 susan.starr@eeoc.gov CERTIFICATE OF SERVICE I, Susan L.P. Starr, certify that I filed this brief with the Court by sending, via Federal Express, ten copies of the brief and via an e-mail attachment to electronic mailboxes designated according to case type, agency cases, a PDF version of the brief. I also certify that I served two copies of this brief, via first class mail, and a PDF version of the brief, via the same electronic filing as sent to this Court, on this 27th day of March, 2009 to the following counsel of record: Harold Schwartz, Esq. Kenneth B. Baker, Esq. JAVITCH, BLOCK & RATHBONE, LLP 1100 Superior Avenue, 19th Fl Cleveland, OH 44114 Sanford R. Shapiro, Esq. BOYLAN, BROWN, CODE, VIGDOR & WILSON, LLP 2400 Chase Square Rochester, NY 14604 _________________________ SUSAN L.P. STARR Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M Street, NE, 5th Floor Washington, DC 20507 (202) 663-4727 susan.starr@EEOC.gov CERTIFICATE OF COMPLIANCE This brief complies with the type-volume limitation of Local Rule 28.1(e)(2)(C) because it contains 2,233 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B), and because it has been prepared in a proportionally spaced typeface using Microsoft Word 2003 with 14 point Times New Roman. ______________________ SUSAN L.P. STARR Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, NW, Room 7044 Washington, DC 20507 (202) 663-4727 susan.starr@EEOC.gov *********************************************************************** <> <1> The district court denied injunctive relief against both EMM and EMS. We do not challenge on appeal the denial of injunctive relief against EMS.