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Goodman v. Lukens Steel Co.

November 13, 1985

CHARLES GOODMAN, RAMON L. MIDDLETON, ROMULUS C. JONES, JR., AND LYMAS L. WINFIELD, ON THEIR OWN BEHALF AND ON BEHALF OF OTHERS SIMILARLY SITUATED, AND UNITED POLITICAL ACTION COMMITTEE, AN UNINCORPORATED ASSOCIATION, DOCK MEEKS, DAVID DANTZLER, JOHN HICKS, III, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED
v.
LUKENS STEEL COMPANY, AND INTERNATIONAL STEELWORKERS OF AMERICA (AFL-CIO), AND LOCAL 1165, UNITED STEELWORKERS OF AMERICA (AFL-CIO), AND LOCAL 2295, UNITED STEELWORKERS OF AMERICA (AFL-CIO); UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC, AND ITS LOCAL UNIONS 1165 AND 2295. APPELLANTS IN 84-1478; LUKENS STEEL COMPANY, APPELLANT IN 84-1509



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA (D.C. Civ. No. 73-1328)

Author: Weis

Before: WEIS, GARTH, and STAPLETON, Circuit Judges

Opinion OF THE COURT

WEIS, Circuit Judge.

This appeal is from the grant of injunctive relief and liability findings in a wide-ranging employment discrimination class action. We conclude that: (1) the same period of limitations applies in § 1981 claims as in those under § 1983; (2) class representatives who were not discriminated against in initial work assignments may not represent those who were; (3) on remand, consideration should be given to appointment of an appropriate representative and possible reinstatement of findings; (4) the unions violated Title VII and § 1981 by failing to assert racial bias as grievances; (5) the limitations period for a Title VII charge against a union begins only after its named in an EEOC proceeding and not on the date that a charge id brought against the employer alone in a state proceeding; (6) a finding of discrimination in denying incentive pay was clearly erroneous where the evidence demonstrates the action was taken solely on economic grounds; and (7) other findings of discrimination by the district court were not clearly erroneous. Accordingly, we affirm, and remand in part.

After a lengthy bench trial, the district judge found for plaintiffs on several counts alleging discrimination in employment, and therefore entered a remedial order, reserving assessment of damages for future proceedings. On the other counts, the court concluded that the evidence was in adequate to support the plaintiffs' claims and entered judgment for defendants. Defendants appeal the orders adverse to them.*fn1

In 1973, class action plaintiffs filed this massive suit on behalf of current and past employees of the Lukens Steel Company, alleging violations of 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. Plaintiffs sought both injunctive relief and damages.

Defendant Lukens is an independent steel producing company with its principal facility in Coatesville, Pennsylvania. Since 1966, its work force has ranged between approximately 4200 and 5300 employees; of these the hourly employees numbered between 2600 and 3900. From 1967 to 1978, the percentage of black employees in the hourly work force varied between 21.8 and 24.1. Lukens' hourly employees had been represented by Locals 1165 and 2295 of the United Steelworkers of America, and the unions are listed as defendants together with the company.

The district court observed that work at Lukens requires skills which are unique to its specialized products. With a few limited exceptions, the "majority of the Lukens hourly work force start from scratch, and are trained on the job." Partially as a consequence of the need for highly specific skills, the company has a general policy of promoting from within its workforce. The district court found that to some extent current disparities between white and black employees are a reflection of historical discrimination existing well before the statutory limitations period applicable in this lawsuit.

Plaintiffs developed their case by the combination of statistical and anecdotal evidence. After the compilation of an extensive record, the court found evidence of discriminatory practices by the company in the following categories:

1. Initial job assignments to higher paying craft jobs were skewed in favor of whites. Blacks also were assigned in higher percentages than whites to "pool" positions, which had seniority provisions inferior to those in the "subdivisions."

2. Evidence focusing on transfers to more desirable craft positions demonstrated that whites were favored over blacks by a substantial margin.

3. Incentive pay was denied to workers in the predominantly black crews in the Pit Subdivision, although it was given to other specialized crews composed mainly of whites.

4. Lukens discriminated against black workers by discharging a higher percentage of black employees during their probationary period.

5. The company discriminated against blacks in denying them promotion to salaried positions in management.

6. Lukens tolerated harassment of black employees by whites and failed to take appropriate steps to curb such behavior, thereby encouraging workers to believe such conduct would go unpunished.

The district court also determined that the unions were guilty of discriminatory practices in:

1. Failing to challenge discriminatory discharges of probationary employees.

2. Failing and refusing to assert instances of racial discrimination as grievances.

3. Tolerating and tacitly encouraging racial harassment.

The Court further found that plaintiffs had failed to present adequate proof of discrimination in the following areas:

1. The seniority system.

2. Manning of the new Strand-cast facility (with the exception of class representative Ramon L. Middleton).

3. Shift assignments, including Sundays and holiday work, as well as overtime pay.

4. Discipline (excluding discrimination in discharge of probationary employees).

5. Awards for employee suggestions for improvement in plant operation.

6. Processing grievances by the unions insofar as the complaints centered on the number of grievances which the locals presented initially and pursued through arbitration. In addition, the lower rate of successful outcomes for black employees' grievances did not show racial discrimination.

The court also directed individual relief for class representatives Goodman, Winfield, Jones, Middleton, and Dantzler, but denied the individual claims of Dock L. Meeks, and John R. Hicks III.

The court issued orders against the company and the unions enjoining racial discrimination in the specific areas in which violations of Title VII and § 1981 had been found and directing certain remedial measures. Notice to class members was ordered, and a tentative trial date was set for the individual claims.

Both the company and the unions have appealed the various findings against them, challenging both legal and factual determinations made by the district court. Plaintiffs have not appealed the rulings on which they or the class were unsuccessful.

I.

THE STATUTE OF LIMITATIONS FOR SECTION 1981 CLAIMS

Because there is no specified federal statute of limitations applicable to § 1981 cases, the district court was required to use the state limitations period most analogous to the civil rights cause of action. Johnson v. Railway Express Agency, 421 U.S. 454, 44 L. Ed. 2d 295, 95 S. Ct. 1716 (1975). In a Memorandum Opinion issued on June 16, 1975, the district court concluded that the appropriate period was the six years set forth in Pa. Stat. Ann. tit. 12, § 31, rather than the two year period "for injury wrongfully done to the person" as set out in Pa. Stat. Ann. tit. 12, § 34.

In this determination, the district judge anticipated our decision some two years later in Meyers v. Pennypack Woods Home Ownership Ass'n. 559 F.2d 894 (3d Cir. 1977), where we applied the six year general statute of limitations in a housing discrimination case brought under sections 1981 and 1982. See also Davis v. United States Steel Supply, 581 F.2d 335 (3d Cir. 1978) (six year statute of limitations applicable to § 1981 employment discrimination claim).

Although the district judge was correct in forecasting that we would adopt a six year limitation period in an employment case, his prescience, like ours, was limited. Neither he, nor this court, foresaw the Supreme Court's ruling that all § 1983 cases -- that provided by the states for personal injury. Wilson v. Garcia, 471 U.S. 261, 105 S. Ct. 1938, 85 L. Ed. 2d 254, 53 U.S.L.W. 4481, (1985). That ruling requires us to reexamine our earlier decisions on the appropriate statute of limitations in Civil Right cases.

In Polite v. Diehl, 507 F.2d 119 (3d Cir. 1974) (in banc), we discarded the notion of applying a single limitations period to all § 1983 cases and chose instead to look to the relief sought and the particular injury alleged. A claim alleging bodily injury was governed by the two year Pennsylvania statute but one which was more akin to a contract action came under the six year limitation. Hence, under Polite v. Diehl differing statutes of limitations would be applied to a variety of claims in one suit.

Although the court discussed only the § 1983 claims, it noted that plaintiff did formulate causes of action under § 1981. 507 F.2d at 121, n.2. In any event the Polite rational of looking to the facts in each case and then searching for the most analogous state statute was followed in § 1981 causes, as well as those brought under § 1983. See Davis v. United States Steel, 581 F.2d at 338, 341 n.8; Meyers v. Pennypack Words Home Ownership Ass'n., 559 F.2d at 903 n.27.

We later determined that the six year statute of limitations applied in § 1983 claims of (1) sex discrimination in employment, Knoll v. Springfield Township School Dist., 699 F.2d 137 (3d Cir. 1983), vacated and remanded 471 U.S. 288, 471 U.S. 288, 85 L. Ed. 2d 275, 105 S. Ct. 2065, 53 U.S.L.W. 4488 (1985), on remand 763 F.2d 584 (3d Cir. 1985); (2) termination of employment with due process, Perri v. Aytch, 724 F.2d 362 (3d Cir. 1983); (3) discharge from employment in violation of the First Amendment, Fitzgerald v. Larson, 741 F.2d 32 (3d Cir. 1984); and (4) termination of employment contract for exercise of First Amendment rights, Skehan v. Trustees of Bloomsburg State College, 590 F.2d 470 (3d Cir. 1978).

Wilson v. Garcia completely undermined the rational we employed in Polite as we were quick to recognize. Smith v. City of Pittsburgh, 764 F.2d 188 (3d Cir. 1985), reviewed our earlier decisions in light of Wilson and applied Pennsylvania's two year statute of limitations for personal injuries to a § 1983 claim of employment termination without due process. In view of the previous unsettled law in this and other circuits, in Smith we also determined that Wilson v. Garcia should be applied retroactively.

Had the case at hand been brought under § 1983 rather than § 1981, the statute of limitations question would be answered by Wilson. This case, however, involves discrimination in private employment to which § 1983 does not apply, and therefore the issue is whether the same statute of limitations used under § 1983 should also apply to § 1981.

The Wilson v. Garcia analysis begins with a reference to 42 U.S.C. § 1988, which determines the "rules of decision applicable to Civil Rights claims." Because no federal statute of limitations has been provided for such claims, § 1988 approves the use of state law to provide the appropriate rule. The reference to state law, however, occurs only after analysis of the claim using federal standards. In characterizing § 1983 claims for statute of limitations purposes, the court must consider the elements of the cause of action and Congress' purpose in providing it. Wilson, 53 U.S.L.W. at 4483.

In deciding the issue presented here, we find it most significant that § 1988 applies not only to § 1983 but to § 1981 and the other reconstruction Civil Rights Acts as well. Section 1988 by its terms applies to "the jurisdiction in civil and criminal matters conferred on the district courts by the provisions of the Title, and of Title 'Civil Rights,' and of Title 'Crimes,' for the protection of all persons in the united States in their civil rights."

In this context, we do not consider relevant that § 1981 was originally enacted in 1866, reenacted in 1970, and later included in the 1874 codification, while § 1983 was the subject of separate legislation 1871. See Runyon v. McCrary, 427 U.S. 160, 168 n.8, 49 L. Ed. 2d 415, 96 S. Ct. 2586 (1976); Mahone v. Waddle, 564 F.2d 1018, 1030-31 (3d Cir. 1977). Both sections are to be analyzed under the broad provision of § 1988, which is "a directive to select, in each state, the one most appropriate statute of limitations." Wilson, 53 U.S.L. W. at 4485. In this choice, we should be guided by "federal interests in uniformity, certainty, and the minimization of unnecessary litigation" over the limitations period as well as by the nature of the federal Civil Rights remedy, and the prevention of potential state discrimination against.

In concluding that the state statutes for personal injury were the most appropriate for use in § 1983 cases, the Supreme Court believed that the enacting Congress viewed civil rights actions as analogous to state tort claims. In this connection, one might argue, as does the dissent, that since § 1981 on "its face relates primarily to racial discrimination in the making and enforcement of contracts," Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 459, 44 L. Ed. 2d 295, 95 S. Ct. 1716 (1975), the state statute of limitations applying to suits for breach of contract is the most appropriate one See Wilson v. Sharon Steel Corp., 549 F.2d 276, 280 (3d Cir. 1977).

We are not persuaded by the argument because it does not recognize the broad sweep of § 1981, see Mahone v. Waddle, nor is it consistent with the fundamental reasons underlying Wilson v. Garcia. There, the Court emphasized § 1983's derivation from the Fourteenth Amendment, which recognizes the "equal status of every person;" that all persons shall be accorded the full privileges of citizen ship; and that no person should be deprived of life, liberty or property "without due process." Wilson, 53 U.S.L.W. at 4485. As the Court said, "[a] violation of that command is an injury to the individual rights of the person." Id.

Those concepts apply equally to actions under § 1981. Present day § 1981's predecessor was founded on the Thirteenth Amendment that allows "neither slavery nor involuntary servitude" to exist any longer. It is difficult to imagine a more fundamental injury to the individual rights of the person than the evil that comes within the scope of that amendment. Also of significance is that in Runyon v. McCrary, the Supreme Court accepted the use of a state's personal injury statute of limitations in a § 1981 case 427 U.S. at 180-82.

Moreover, in its reenactment of § 1981 in 1870, Congress looked to constitutional authority embodied in the Fourteenth, as well as the Thirteenth Amendment. Croker v. Boeing Company, 662 F.2d 975, 987 (3d Cir. 1981) (in banc); see also General Building Contracts Ass'n., Inc. v. Pennsylvania, 458 U.S. 375, 73 L. Ed. 2d 835, 102 S. Ct. 3141 (1982). Consequently, much of the body of law developed under the Fourteenth Amendment is helpful in the interpretation of § 1981.

A substantial overlap exists in the types of claims brought under sections 1981 and 1983. A plaintiff may press an allegation of intentional racial discrimination under either section when state action is present. A § 1983 case of intentional racial discrimination in employment filed in Pennsylvania against a state agency is governed by the two year personal injury statute. See Knoll v. Springfield Township School Dist., 763 F.2d 584 (3d Cir. 1985). Application of Pennsylvania's six year statute of limitations where the same claim is brought under § 1981 would lead to a bizarre result.

Our first opinion in Knoll, 699 F.2d 137, 144, expressed our doubt that Congress would have intended a differing limitations period depending on whether the defendant was a state official sued under § 1983 or a private individual in a § 1981 action. The same conclusion is appropriate where the identical claim may be brought under either of these Reconstruction Civil Rights Acts. See Jackson v. City of Bloomfield. 731 F.2d 652 (10th Cir. 1984). Therefore, because employment discrimination cases under § 1983, regardless of their affinity to contractual actions, are now governed by the personal injury statute of limitations, and because the same considerations which lead to that judgment are also present in § 1981 cases, we conclude that the same limitations period applies.*fn2

In taking this position, we are agreement with Supreme Court in Wilson that the personal injury limitation period is unlikely to be fixed in such a way as to discriminate against federal Civil Rights claims. In addition, the factors characterized as "practical considerations" by Justice O'Connor's dissent in Wilson -- which include the desirability of uniformity, certainty, and minimization of litigation prior to reaching the merits -- are best served by applying the same statute limitations to all of the Reconstruction Civil Rights cases.*fn3

As we noted earlier, the reasoning employed the Supreme Court in Wilson is inconsistent with the Polite approach as used in Davis and Pennypack Woods. This court has consistently held that one panel may not overrule an earlier panel's decision. See Third Circuit Internal Operating Procedure VIII C. However, we have recognized that this principle must yield when a panel opinion is in conflict with an intervening Supreme Court precedent. "Where, however, a holding of this Court is overruled or rejected by the Supreme Court, IOP 8c does not require in banc consideration to align this court's jurisprudence with Supreme Court teaching." Rubin v. Buckman, 727 F.2d 71, 74 (3d Cir. 1984) (Garth, J. concurring). See also West v. Keve, 721 F.2d 91, 93 (3d Cir. 1983); Geraghty v. United States Parole Commission, 719 F.2d 1199, 1209 (3d Cir. 1983). The rational used in Davis cannot co-exist with Wilson, and accordingly does not bind us here.

We hold,therefore, that the personal injury statute of limitations of the forum state supplies the most analogous statute of limitations for actions brought under § 1981. For the reasons set forth in Smith v. City of Pittsburgh, we also conclude that our decision should be given the customary retroactive effect. See Fitzgerald v. Larson, 769 F.2d 160 (3d Cir. 1985).

Our holding affects some but not all of the findings made by the district court. Plaintiffs contend that the two year statute of limitations would not changed the district court's decree because it was based on violations Title VII as well as § 1981.*fn4 However, because the court did not consider the facts separately under § 1981 and Title VII, we conclude this lack of discrete analysis requires a partial remand.

As noted in Croker v. Boeing, 662 F.2d 975 (3d Cir. 1981), § 1981 liability is not co-extensive with that under Title VII, and the remedies provide under the two statutes are "separate, distinct, and independent." See Johnson v. Railway Express Agency. In the absence of a specific finding fixing liability under each statute, we are unable to say whether application of the two year statute of limitations would result in difference in the court's decree on two of its liability determinations. It is conceivable, for example, that events within the six year statute of limitations used for the § 1981 claims might have been considered by the court in finding liability under Title VII beyond its limitations period.

In finding discrimination in transfers to salaried positions, the district court relied heavily on the low percentage of blacks promoted to foreman jobs in the years 1969 and 1970 -- between three and four years before the suit was filed. The court found that the evidence "overwhelmingly establishes that Lukens discriminated in the selection of foremen until at least 1971." 580 F. Supp. at 1145. For the years 1971 through 1978, however, approximately 26% of the foreman promotions were given to blacks -- no substantially different from their 29% representation in the work force during those years.

The record contains other anecdotal and statistical evidence on this point which should be evaluated by the district judge in the first instance. We are mindful that a finding of class-wide violation is supported only when the evidence shows that discrimination was the company's standard operating procedure, rather than something which occurred only in a few isolated incidents. See International Bhd. of Teamsters v. United States, 431 U.S. 324, 52 L. Ed. 2d 396, 97 S. Ct. 1843 (1977). In such a situation, the trial judge's appraisal is particularly important.

Similarly, the district court's finding that the company tolerated racial harassment within the work force must be reevaluated on remand . The court stated that it had considered more than 100 incidents or practices, many of which "predated the limitation period" and about 35 of which "occurred within the limitations period or shortly before -- e.g. 'in the late 1960s' or 'between 1965 and 1970'." 580 F. Supp. at 1147. The court recognized the critical inquiry as "assessing the conditions which prevailed during the limitations period." Id.

Some of the instances described in detail by the district judge occurred before 1971 and some thereafter. We are unable to determine from the record what effect the application of the two year statute of limitations for the § 1981 claims would have on the district court's conclusion with respect to the harassment charge. Consequently, it too will require reexamination by the trial court.

We have surveyed the findings on the other issues and conclude that the would not be affected by the two year limitations period. Naturally, in the portion of the case remaining to be tried for assessment of individual damages, the two year statute would apply.

II.

CLASS CERTIFICATION AND CLASS REPRESENTATIVES

A.

A second major issue presented in this case is that of class representation. In this area, too, subsequent decisional law requires review of the district court's ruling in a somewhat different light than that which prevailed at the time the court acted.

In a Memorandum of June 16, 1975, the district court certified a class of "all black persons employed by the defendant Lukens Steel Company at any time on or after June 14, 1967." This class includes persons whose employment was within the six year statute of limitations for § 1981 applied by ...


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