Equal Employment Opportunity Commission v. Horizon/CMS Healthcare Corporation 98-2328 IN THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT No. 98-2328 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. HORIZON/CMS HEALTHCARE CORPORATION, Defendant-Appellee. On Appeal from the United States District Court for the District of New Mexico Magistrate Judge Richard L. Puglisi RESPONSE OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION TO THE DEFENDANT-APPELLEE HORIZON/CMS HEALTHCARE CORPORATION'S PETITION FOR REHEARING EN BANC C. GREGORY STEWART General Counsel PHILIP B. SKLOVER Associate General Counsel LORRAINE C. DAVIS Assistant General Counsel ROBERT J. GREGORY Senior Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 1801 L Street, N.W. Washington, D.C. 20507 (202) 663-4059 INTRODUCTION This case involves a claim of pregnancy discrimination under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. ("Title VII"). The Commission seeks relief for four charging parties, Darla Phillips, Denise Ortega, Alathea Chenoweth, and Elizabeth Johnston, and a group of similarly-situated pregnant employees (or former employees) of Horizon/CMS Healthcare Corporation ("Horizon"). The Commission alleges that Horizon denied these women the opportunity to work light duty when they became temporarily unable to perform heavy lifting due to pregnancy, even though light duty was made available to other non-pregnant workers. The Commission appealed from an order of the district court granting summary judgment in Horizon's favor. In an opinion dated July 31, 2000, a unanimous panel of this Court reversed the district court's grant of summary judgment. See EEOC v. Horizon/CMS Healthcare Corp., 220 F.3d 1184 (10th Cir. 2000). The panel based its decision on two fact-specific rulings. First, the panel ruled that the Commission's evidence was sufficient to make out a prima facie case of discrimination. Second, the panel ruled that the Commission's evidence was sufficient to raise a genuine issue of material fact on the issue of pretext. The panel did not hold that Horizon's modified- or light-duty policy was invalid as a matter of law. Nor did the panel hold that an employer may never adopt a policy that limits the class of employees eligible for light-duty work to those employees whose injury or condition is work-related. The panel merely held that, under the specific facts of this case, the Commission's evidence, "considered in the aggregate and construed in the light most favorable to the Commission" (id. at 1200), was sufficient to support a finding that Horizon was using its modified- or light-duty policy as a pretext for discriminating against pregnant employees. Despite the obviously fact-specific nature of the panel's holding, Horizon seeks en banc review. Horizon makes two arguments. First, Horizon argues that "[t]he panel decision conflicts with other decisions of this Court and consideration by the full Court is therefore necessary to secure and maintain uniformity of the Court's decisions." Horizon Pet. at 1. Second, Horizon argues that "[t]his case presents a question of exceptional importance because it involves an issue on which the panel decision conflicts with the authoritative decisions of two other United States Courts of Appeal that have addressed the issue." Id. Neither argument has merit. ARGUMENT THE PANEL DECISION IS NOT IN CONFLICT WITH OTHER DECISIONS OF THIS COURT. Horizon's first argument is that the panel decision conflicts with this Court's decisions in York v. American Tel. & Tel. Co., 95 F.3d 948 (10th Cir. 1996) and Ellis v. United Airlines, Inc., 73 F.3d 999 (10th Cir. 1996). Horizon claims that "[t]he common issue addressed in these three decisions [York, Ellis, and the panel decision] is whether a plaintiff's failure to meet an objective job qualification defeats the plaintiff's prima facie case under the evidentiary test established by McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)." Horizon. Pet. at 2. In Horizon's view, the panel in this case deviated from York and Ellis by "remov[ing] the right of employers to establish objective job qualification requirements that a plaintiff must meet in order to satisfy the second prong of a prima facie case under McDonnell Douglas." Id. at 4. York involved a claim of sex discrimination by a plaintiff who was denied a job because she did not meet the experience requirement imposed by the employer, i.e., that the applicant have two years of "practical experience." 95 F.3d at 952-53. The plaintiff's Title VII claim was tried to a jury, which found in favor of the employer. The plaintiff appealed, arguing that the trial judge erroneously instructed the jury that the plaintiff was required to prove, as part of her prima facie case, that she was "'qualified for the position [in question].'" Id. at 954. The plaintiff insisted that the jury should have been instructed that the plaintiff was merely required to show "that she possessed the minimal qualifications that the jury deemed necessary for safe and effective job performance." Id. This Court held that the trial judge did not abuse its discretion in rejecting the plaintiff's requested instruction. This Court reasoned that the plaintiff's requested instruction "misconstrues the first stage of the McDonnell Douglas test" by "direct[ing] the jury to determine the appropriate qualifications for the job." Id. Ellis involved the claims of two plaintiffs whose applications were rejected because they "failed to meet [the employer's] weight requirements for new flight attendant hires." 73 F.3d at 1000. The district court granted summary judgment in favor of the employer, and the plaintiffs appealed. This Court, although expressing "doubt" whether "plaintiffs had established a prima facie case," did not decide the case on that basis. Id. at 1005. This Court, instead, ruled that the district court "properly granted summary judgment for defendant because plaintiffs have not presented any evidence that [the employer's] explanation for its hiring decisions was pretextual." Id. This Court suggested, in dicta, that it might have been proper to dismiss the plaintiffs' claims at the prima facie stage due to the plaintiffs' failure "to establish that they met the objective weight qualification for new flight attendants." Id. n.8. York and Ellis are readily distinguishable from the present case. In both York and Ellis, the qualifications standard invoked by the employer had some connection to job performance. In York, the employer rejected the plaintiff because she did not possess the two years of "practical experience" required for the job, precisely the type of objective qualifications standard that an employer is entitled to adopt as a predictor of future job performance (assuming the standard is applied in an even-handed fashion). In Ellis, the employer rejected the plaintiffs because they did not meet the objective weight requirement under the employer's collective bargaining agreement with the flight attendant union, a requirement that the employer believed was necessary to the safe performance of the job. 73 F.3d at 1001-07. In this case, by contrast, the supposedly "objective qualifications requirement" adopted by Horizon -- that the injury or condition be work-related -- has no relevance to job performance, a point repeatedly made by the panel.<1> The panel framed the issue before it as follows: "whether an employer may defeat a plaintiff's prima facie case by challenging the plaintiff's qualification for the position on the grounds she has failed to meet an objective qualification that is not essential to the performance of the job." 220 F.3d at 1192 (emphasis added). The panel stressed that "[a] plaintiff's failure to meet employer- imposed objective qualifications that have no relation to the performance of the job at issue is irrelevant at the prima facie stage of the McDonnell Douglas inquiry because it does not compel the conclusion that the plaintiff suffers from an 'absolute or relative lack of qualifications.'" Id. at 1193 (emphasis added). The panel held that "objective, employer-imposed qualifications that have no bearing on an applicant's ability to perform the job sought, like subjective qualifications, are more properly considered at the second stage of the McDonnell Douglas analysis and a plaintiff's failure to meet such qualifications cannot be used to defeat the plaintiff's prima facie case." Id. at 1194 (emphasis added). The panel's holding that a plaintiff's prima facie case is not defeated by "objective criteria not related to the performance of the job" (id. at 1193) is in no way inconsistent with the holdings in York and Ellis.<2> The difference between a qualifications standard that has some connection to job performance and one that does not is self-evident. When an objective qualifications standard has a connection to job performance, there is little risk of disparate treatment discrimination, assuming that the standard is consistently applied. Such a consistently-applied objective qualifications standard is more appropriately tested under a disparate impact theory. Where, however, the qualifications standard is not related to job performance, there is a much greater risk that the employer is using the standard as a mask for intentional discrimination (much in the same way that an employer could be using subjective qualifications as a mask for intentional discrimination). In such a case, dismissing the plaintiff's claim on the basis of prima facie qualifications would "[s]hort-circuit[] the analysis at the prima facie stage," frustrating "a plaintiff's ability to establish that the defendant's proffered reasons were pretextual." MacDonald v. Eastern Wyoming Mental Health Ctr., 941 F.2d 1115, 1119 (10th Cir. 1991). This case proves the point. Horizon has a policy of limiting eligibility for light-duty work to those individuals whose injury or condition is work-related. As the panel noted, that policy, on its face, contains a specific reference to pregnancy. Specifically, the policy cites, as an example of an employee not eligible for light-duty work (ostensibly because her condition is not work-related), a "pregnant employee with a 25 lb. lifting restriction." 220 F.3d at 1189 n.2. The fact that the policy draws an explicit link between pregnancy and the eligibility criterion set by Horizon does not, as matter of law, render the policy unlawful. It is suspicious enough, however, to merit some explanation from Horizon, thus necessitating further inquiry at the pretext stage of the analysis. Contrary to Horizon's assertion, the panel decision does not "effectively remove[] the important managerial prerogative of setting and enforcing objective job qualification requirements." Horizon Pet. at 7. First, the panel decision does not implicate cases such as York and Ellis, where the "objective job qualification requirement" has a connection to job performance. Thus, employers in those cases will still be able to argue that the plaintiff's failure to meet the objective requirements for the job defeats the plaintiff's claim at the prima facie stage, assuming that York and Ellis support such a result. Even in cases such as this, where the "qualifications" standard has no connection to job performance and, thus, does not defeat the plaintiff's claim at the prima facie stage, employers are not deprived of the prerogative "of setting and enforcing objective job qualification requirements," assuming that those requirements are not being used as a pretext for discrimination. The panel did not hold that the distinction in Horizon's modified- or light-duty policy -- between work-related and non-work-related injuries or conditions -- is per se unlawful. The panel merely held that, under the specific facts of this case, the Commission presented sufficient evidence to permit a finding that Horizon's "proffered explanation for the distinction is pretextual." 220 F.3d at 1200. The panel decision does nothing more than subject Horizon's policy to the same pretext inquiry to which virtually all employment actions are subjected. See MacDonald, 941 F.2d at 1119-20 (stressing that the plaintiff's burden at the prima facie case is "not onerous" and that most qualification-based arguments are properly resolved at the pretext stage, in assessing the employer's explanation for the adverse employment action). Finally, the above distinctions aside, the panel decision is consistent with York and Ellis for another reason. In York, this Court stated that "there is no reason for the fact finder to supplant the employer's list of qualifications with its own . . . [a]s long as the qualifications offered by the employer are reasonable and have been consistently applied to all applicants for the position." 95 F.3d at 954 (emphasis added); see also Ellis, 73 F.3d at 1005 n.8 (stressing that lack of qualifications would not defeat the plaintiff's case at the prima facie stage if there was evidence that the employer "imposed an objective employment criteria for the purpose of excluding a protected class"). In this case, there is evidence that the "qualifications" standard invoked by Horizon has not been "consistently applied." Specifically, there is evidence that "non-pregnant employees who sustained off-the-job injuries" were given light-duty work not provided to pregnant employees. 220 F.3d at 1195-96 & n.8. This case falls squarely within the York proviso, involving a qualifications standard that has not been "consistently applied" and, thus, does not defeat the plaintiff's case at the prima facie stage. Under any view of the matter, there is no conflict between the panel decision and existing Tenth Circuit precedent. II. THE PANEL DECISION IS NOT IN CONFLICT WITH THE DECISIONS OF OTHER CIRCUIT COURTS. Horizon's second argument in support of rehearing is that the panel decision "conflicts with authoritative decisions of the Fifth and Eleventh Circuits on the same issue." Horizon Pet. at 12 (citing Urbano v. Continental Airlines, Inc., 138 F.3d 204 (5th Cir. 1998); Spivey v. Beverly Enters., Inc., 196 F.3d 1309 (11th Cir. 1999)). Horizon claims that, in these two cases, "summary judgment was granted to the employer because, inter alia, the plaintiffs were unable to establish the second element ('qualified for the position sought') of their prima facie case" for the "simple" reason that "none of the plaintiffs had suffered an occupational injury, and their employers' modified duty policies were limited in application to employees who had sustained occupational injuries." Horizon Pet. at 12-13. Horizon is correct that the courts in these two cases granted summary judgment in favor of the defendant. Horizon is incorrect that the courts did so on the issue of prima facie qualifications raised by Horizon. In Urbano, the district court had held that the plaintiff could not make out a prima facie case because the plaintiff could not "'provide evidence creating a genuine issue as to whether she was qualified for transfer into a light-duty position, i.e., that she sustained a work related injury.'" 138 F.3d at 206. The Fifth Circuit took note of the district court ruling on this point but did not affirm on that basis. Instead, the court affirmed on the ground that the defendant treated the plaintiff "in exactly the same manner as it would have treated any other worker who was injured off the job," there being "no probative evidence that [the defendant's] distinction between occupational and off-the-job injuries was a pretext for discrimination against pregnant women." Id. at 206-08. The Fifth Circuit, in Urbano, rejected the plaintiff's argument that a distinction between work-related and non-work-related injuries or conditions, in a modified duty policy, constitutes pregnancy discrimination as a matter of law. Id. at 205-08. The court did not hold that the plaintiff's claim was properly dismissed on the issue of prima facie qualifications. In Spivey, the Eleventh Circuit rejected the plaintiff's claim of pregnancy discrimination on two grounds, unrelated to prima facie qualifications. First, the court rejected the plaintiff's argument that Title VII mandated that employers "give preferential treatment to pregnant employees" by extending to such employees the "accommodation of modified duty." 196 F.3d at 1312. Second, the court ruled that the plaintiff "failed to establish that she suffered from a differential application of work rules." Id. at 1313. Although acknowledging that "pregnant employees must be treated the same as every other employee with a non-occupational injury," the court found that the plaintiff's evidence was insufficient to support a finding that the plaintiff was treated less favorably than "non-pregnant employees who were not injured on the job." Id. Plainly, the decisions in Urbano and Spivey do not rest on the prima facie issue of qualifications. They rest, instead, on the plaintiffs' failure of proof on the pretext issue. In both cases, the plaintiffs advanced the broad legal argument that any distinction between non-work-related conditions and work-related conditions, in a modified duty policy, is per se unlawful. In this case, the Commission waived off any such argument. See 220 F.3d at 1191. Instead, the Commission constructed a fact-specific argument, rooted in a substantial body of pretext evidence (the very evidence that was found lacking in Urbano and Spivey). The panel carefully surveyed the Commission's evidence. See id. at 1197-1200. The panel determined that the Commission's evidence, "considered in the aggregate," was sufficient to raise a question of fact on the pretext issue. Id. at 1200. There is no conflict between the panel's fact-specific holding in this case and the holdings in Urbano and Spivey. Although placing its own spin on the Urbano and Spivey decisions, Horizon conveniently ignores two other circuit court decisions that undermine its position. In Ensley-Gaines v. Runyon, 100 F.3d 1220, 1222 (6th Cir. 1996), the plaintiff claimed that the employer's policy of limiting eligibility for certain limited duty jobs to workers "injured on the job" constituted unlawful pregnancy discrimination. The Sixth Circuit held that "the district court erred in granting summary judgment to the Defendant by concluding that Plaintiff failed to establish a prima facie case of discrimination based on her pregnancy." Id. at 1226. The court specifically found that the plaintiff established the qualifications element of the prima facie case, stressing that she was similarly-situated to other eligible non-pregnant employees in her ability to work. Id. Similarly, in Adams v. Nolan, 962 F.2d 791, 792-94 (8th Cir. 1992), the Eighth Circuit held that, in a case of pregnancy discrimination involving the denial of light-duty work, the qualifications element of the prima facie case is satisfied by proof that the plaintiff is capable of performing the light-duty work at issue. The Commission made precisely that showing in this case. See 220 F.3d at 1194 (Commission presented sufficient evidence to support a finding "that the Charging Parties were fully able to perform the modified-duty jobs each sought"). The panel decision is not the outlier decision that Horizon would have this Court believe. The decision is firmly grounded in existing precedent, both inside and outside this Circuit. Rehearing is not justified. CONCLUSION Horizon's petition for rehearing en banc should be denied. Respectfully Submitted, C. GREGORY STEWART General Counsel PHILIP B. SKLOVER Associate General Counsel LORRAINE C. DAVIS Assistant General Counsel ROBERT J. GREGORY Senior Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 1801 L Street, N.W. Washington, D.C. 20507 September 28, 2000 (202) 663-4059 CERTIFICATE OF SERVICE I, Robert J. Gregory, hereby certify that on this 28th day of September, 2000, two copies of the attached response were sent by overnight mail, postage prepaid, to the following counsel of record: Dean Westman KASTNER WESTMAN & WILKINS, LLC 3480 West Market Street, Suite 300 Akron, OH 44333 Robert J. Gregory 1 Arguably, the requirement of a work-related injury or condition, in this context, is not a "job qualification" standard at all but an eligibility criterion for a modified- or light-duty benefit made available to Horizon's existing employees. It is unclear whether this case even implicates the principle, invoked in refusal-to-hire cases, that an employer has "'wide discretion in setting job standards and requirements and in deciding whether applicants meet those standards.'" York, 95 F.3d at 954. 2 Indeed, it is not even clear that there are "holdings" in York and Ellis, apropos to the issue raised by Horizon. The language in Ellis, invoked by Horizon, is clearly dicta. York, while addressing the qualifications issue, did so in the context of a challenge to a jury instruction. The York court held that the district court did not abuse its discretion in refusing to give the qualifications instruction proposed by the plaintiff. The court did not hold that the plaintiff was unable to satisfy the qualifications element of the prima facie case.