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Wetzel v. Liberty Mutual Insurance Co.

decided: January 23, 1975.



Staley, Aldisert and Rosenn, Circuit Judges.

Author: Rosenn


ROSENN, Circuit Judge

This appeal raises significant questions concerning the management of class actions brought under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (1970), as amended Equal Employment Opportunity Act of 1972, 42 U.S.C. § 2000e et seq. (Supp. II, 1972).

Appellant, Liberty Mutual Insurance Company (Liberty Mutual), is a casualty insurance company with offices throughout the country. Both men and women are employed in the claims department of these offices in what the appellant terms a "technical" capacity. Within its claims department are adjusters and representatives, each of whose basic function is the application of the necessary technical skills to investigate and bring about the proper disposition of claims against the company. While each is an entry level position open to college graduates, the salary of a claims adjuster is considerably higher than that of a claims representative. The possibilities for promotion are unlimited for the claims adjuster; they are severely limited for the claims representative. Before the filing of charges in this case by the appellees, Sandra Wetzel and Mari Ross, the position of claims adjuster was staffed predominantly by males; the position of claims representatives was staffed predominantly by females.*fn1

Wetzel and Ross were employed as claims representatives in the Pittsburgh office of the company. Both desired the higher paying adjuster's position but were informed by the Company that it was not open to women. Dissatisfied with the Company's policies, they filed charges of sex discrimination with the Pennsylvania Human Relations Commission (PHRC) on May 11, and with the Equal Employment Opportunity Commission (EEOC) on May 14, 1971.

The filing of these charges apparently led the Company to reassess its policies concerning these positions. In August, 1971, the Company decided to recruit women to become claims adjusters and reviewed its roster of claims representatives to ascertain if any such representatives were interested in, and qualified for, the position of claims adjuster. This decision eventually led to the hiring of approximately 10% of the claims representatives as claims adjusters.

After the filing of the charges with PHRC, the Company offered Wetzel and Ross positions as claims adjusters. Because of information which they had received from PHRC concerning back pay, and because of their belief that the job offer was accompanied by unacceptable conditions, they rejected the offer. Since PHRC had failed to conciliate the parties, Wetzel and Ross were issued right to sue letters by the EEOC. On February 28, 1972, Wetzel and Ross commenced a class action alleging that the Company's hiring and promotion policies and its pregnancy related policies as to the female technical employees in its claims department violated Title VII. They further alleged that the Company's policy of paying higher salaries to claims adjusters than to claims representatives violated the Equal Pay Act of 1963, 29 U.S.C. § 206(d) (1970).

In response to Wetzel's and Ross' motions, the district court, on August 16, 1972, ordered that the suit was maintainable as a class action*fn2 under Rule 23(b)(2) and that the class would include "all present and future female technical employees in the defendant's claim department without limitation to territory in the entire geographical area where defendant does business." On September 14, 1972, the court refused to require notices to be sent to the proposed nationwide class and declined to maintain the class under Rule 23(b)(3). In its final order of December 6, 1973, the court amended the class to include former, as well as present and future female technical employees, and reaffirmed its determination to maintain the class under Rule 23(b)(2), rather than Rule 23(b)(3). The court acknowledged, however, that the class was maintainable under either subsection. It also saw "no immediate necessity of the class action notice required of actions proceeding under Fed. R. Civ. P. 23(b)(3)." No notice had been sent to any members of the class as of the date of this appeal.

On March 26, 1973, Wetzel and Ross moved for partial summary judgment.*fn3 Counsel for both sides agreed that the equal pay claim was not susceptible to summary judgment treatment because disputed issues of fact existed as to whether the work performed by claims representatives was equivalent to that performed by claims adjusters. On January 9, 1974, the court entered an interlocutory order that the pregnancy related policies of the Company violate Title VII, "are continuing violations and are the proper subject of injunctive relief." On February 20, 1974, the district court rendered final the interlocutory order. A notice of appeal was filed and was docketed at No. 74-1233. That appeal is presently before another panel of this court and the issues in that appeal do not concern us here.

The district court in its interlocutory order of January 9, 1974, also ruled that the hiring and promotion policies of the Company violated Title VII, but denied injunctive relief*fn4 "because the evidentiary materials show that at certain times subsequent to the filing of the administrative charge or the within Complaint the Defendant has ceased or discontinued the discriminatory practice[s]."*fn5 In an unsuccessful attempt to avoid piecemeal appeals, the court, on March 19, 1974, rendered final this part of the interlocutory order. In this appeal, Liberty Mutual has asked us to review the district court's management of the class action and its granting of summary judgment against the challenged hiring and promotion policies.


A. Jurisdiction

Preliminarily, we note that, despite Wetzel's and Ross' contentions, we have jurisdiction to review the class action aspects of this case. The district court, pursuant to Rule 54(b), rendered final the partial summary judgment as to the Company's hiring and promotion policies on March 19, 1974. The determination of the class became final for the purposes of 28 U.S.C. § 1291 at that time. The notice of appeal, filed April 15, 1974, was timely as to all aspects of that judgment, including the determination of the affected class.

B. Scope of Review

Before examining Liberty Mutual's contentions, we must first decide the appropriate scope of review of the district court's actions. The extent of the scope of review is of the utmost importance for, in some instances, it effectively determines whether the actions of the district court will be sustained. Lengthy deliberations on the subject are not necessary, however, because the question is settled in this circuit by the recent case of Katz v. Carte Blanche Corp., 496 F.2d 747 (3d Cir.) (en banc), cert. denied, 419 U.S. 885, 95 S. Ct. 152, 42 L. Ed. 2d 125 (1974), in which Judge Gibbons wrote:

[The scope of review] will depend to some extent upon which facet of the multi-faceted determination is challenged on appeal. The district court must determine if the four prerequisites for a class action listed in rule 23(a) have been met. These are mandatory requirements, and our review decides whether the mandates have been met. The district court must also determine whether the class action is maintainable under rule 23(b)(1) or (2) so that it may proceed without notice to or identification of the class members. Our review will determine whether the court properly classified the type of class action in reaching its decision as to class action treatment.

Id. at 756 (citations omitted). Inasmuch as the district court appropriately applied the criteria of Rule 23(a), the scope of our review is whether the trial court did abuse its broad discretion.*fn6


The mandatory requirements of Rule 23(a)*fn7 must first be met to maintain a class action. Liberty Mutual has made numerous attacks on the determination made by the district court that the requirements of 23(a) had been met. After careful consideration of its contentions, we need to discuss only two.

First, Liberty Mutual contends that it was error to include in the class all female technical employees who had been employed since July 1, 1965. It contends that employees whose claims are time barred by the statute of limitations contained in then section 706(d) of Title VII, 42 U.S.C. § 2000e-5(d) (1970), should be excluded from the class.*fn8

We agree with Liberty Mutual that such individuals should have been excluded. At the time charges were filed with the EEOC, section 706(d) provided that where, as here, a charging party had instituted proceedings with a state agency which has jurisdiction over discriminatory employment practices, a charge must be filed with the EEOC within 210 days of the occurrence of the alleged unfair practice.*fn9

As stated in Macklin v. Spector Freight Systems, Inc., 156 U.S. App. D.C. 69, 478 F.2d 979, 986 (1973):

Since a suit in court depends on an agency notice to sue letter and since the agency cannot take the case initially unless the timely filing requirements are met, the timely filing requirements with respect to EEOC appears to be a jurisdictional prerequisite to court action under Title VII.

A plaintiff may bring a class action on behalf of those who have not filed charges with the EEOC. Bowe v. Colgate-Palmolive Co., 416 F.2d 711, 719-20 (7th Cir. 1969); Oatis v. Crown Zellerbach Corp., 398 F.2d 496, 499 (5th Cir. 1968). This tolls the statute of limitations for all members of the class. American Pipe & Construction Co. v. Utah, 414 U.S. 538, 38 L. Ed. 2d 713, 94 S. Ct. 756 (1974). But Wetzel and Ross cannot represent those who could not have filed a charge with the EEOC at the time they filed their charges. CWA v. New York Telephone Co., 8 Fair Empl. Prac. Cas. (BNA) 509, 513 (S.D. N.Y. 1974); Culbert v. General Electric Co., 5 F.E.P. 969, 993 (E.D. Va. 1973); Garneau v. Raytheon Co., 3 F.E.P. 1315 (D. Mass. 1971).

This conclusion does not mean, however, as Liberty Mutual contends, that the numerosity requirement of 23(a)(1) has not been met. Wetzel's and Ross' charges alleged the maintenance of discriminatory hiring and promotion policies up to the time of the filing of their complaint. Such policies are continuing violations of Title VII and would allow a filing of a charge at any time by a present employee. Macklin v. Spector Freight Systems, Inc., supra at 987-88. The only employees barred from the class are those who left the employ of the Company more than 210 days before the filing of the charges with the EEOC by Wetzel and Ross. The class will be larger than the approximately seven hundred female technical employees presently employed by Liberty Mutual, meeting the numerosity requirement of 23(a)(1). Of course, in the determination of the relief to which members of the class will be entitled, the district court should take into account the modification of the class required by section 706(d).

The second attack on the district court's determination that the conditions of Rule 23(a) have been met is the contention that Wetzel and Ross were not adequate representatives of the class as required by Rule 23(a)(4).

Adequate representation depends on two factors: (a) the plaintiff's attorney must be qualified, experienced, and generally able to conduct the proposed litigation, and (b) the plaintiff must not have interests antagonistic to those of the class. Eisen v. Carlisle & Jacquelin, 391 F.2d 555, 562 (2d Cir. 1968).

Liberty Mutual does not dispute the district court's finding as to the competency of counsel but it does object to the court's finding of "no conflict or antagonism between Wetzel's and Ross' claims and the claims of the class." Liberty Mutual contends that employees, such as Wetzel and Ross, who have voluntarily severed their employment prior to suit cannot adequately represent members of the class who are presently employed by the company. We note the existence of a dispute as to whether Wetzel's and Ross' termination of employment was, in fact, voluntary, but we will assume, arguendo, that they voluntarily severed their employment.

We believe that a former employee, who is not entitled to reinstatement, may still be an adequate representative of a class of past and present employees alleging discriminatory employment practices.*fn10 Whether a party adequately represents a class depends on all the circumstances of the particular case. 3B J. Moore, Federal Practice, para. 23.07[1] (2d ed. 1974) (hereinafter cited as Moore). That a person is no longer employed with a company and is not entitled to reinstatement is but one of the circumstances to be considered in the determination of whether Rule 23(a)(4) has been met. In fact, as the court observed in Mack v. General Electric Co., 329 F. Supp. 72, 76 (E.D. Pa. 1971), with respect to plaintiffs who were former employees of the company, "being familiar with [the company's] employment practices and being free from any possible coercive influence of [the company's] management, [the plaintiffs] are better situated than either job applicants or present employees to present an intelligent and strongly adverse case against [the company's] alleged discriminatory practices." Moreover, were the position advanced by Liberty Mutual adopted, employers would be encouraged to discharge ...

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