On Appeal from the United States District Court for the Western District of Pennsylvania (Pittsburgh), D.C. Civil No. 83-2096.
Before: SLOVITER, STAPLETON, Circuit Judges, and LONGOBARDI, District Judge.*fn*
At the conclusion of a full trial, the district court found that Small Tube Products, Inc. violated Title VII of the Civil Rights Act of 1964 by refusing to rehire its former employee Peyton Waddell in retaliation for Waddell's filing a charge of religious discrimination against Small Tube. Small Tube appeals contending that the district court's finding is clearly erroneous and the the court erred in failing to find Waddell's claim barred by laches. Waddell cross-appeals contending that the court erred in fixing the amount of the backpay award.
On August 8, 1973, Waddell, who had worked for Small Tube for ten years, was discharged from his position as a bright anneal furnace operator for insubordination when he left his machine for a twenty-five minute lunch break at noon after being told not to do so. The only other incidents in Waddell's record were one or two warnings nine years before for leaving work without notifying anyone. Waddell, who is a Baptist, believed that he was terminated because of his devout religious beliefs and filed complaints with the Equal Employment Opportunity Commission (EEOC) in March, 1975, and with the Pennsylvania Human Relations Commission (PHRC) in December, 1975.
In the summer of 1976, Waddell heard that there were openings at Small Tube and that former employees were rehired. Waddell telephoned Clyde Flaugh, the former Plant Superintendent, who told him to complete an application. Waddell submitted an application to Small Tube on Thursday, August 12, 1976, was interviewed by Flaugh and Howard Rife, the present Plant Superintendent, was scheduled for a physical examination which he passed, and on August 12 or August 13, was told to report for work at 7:00 a.m. on Monday, August 16, 1976.
On Friday, August 13, 1976, Small Tube received a notice from the PHRC that Waddell's discrimination charge, which had been pending, was dismissed. On Saturday, August 14, 1976, Rife telephoned and told Waddell not to report for work. The parties have stipulated that Edward Oliphant, then President of Small Tube, made the ultimate decision not to rehire Waddell. Oliphant died in June, 1980.
On August 24, 1976, Waddell sent a letter to the PHRC requesting reconsideration of its dismissal of his complaint. In the same letter, he included a charge arising out of the failure to rehire. On October 27, 1976, the PHRC denied Waddell's petition for reconsideration, but in late January, 1977 the PHRC prepared a formal complaint based on the failure to rehire charge which was signed by Waddell on February 12, 1977.*fn1
In accordance with a Worksharing Agreement between the PHRC and the EEOC, the complaint was then referred on March 21, 1977 to the EEOC for filing. The EEOC stated it would assert jurisdiction on the 60th day after the charge was filed with the PHRC, but would not engage in any compliance activities until the PHRC had completed its investigation. The PHRC then dismissed the complaint on the ground that the identical issues had been disposed of when it denied Waddell's petition for reconsideration. Inexplicably, the PHRC letter of April 29, 1977 notifying Waddell of the dismissal of his case incorrectly stated that the ground for the dismissal was the existence of "insufficient facts to show that discrimination had occurred on the basis that [Waddell's] handicap/disability was job-related." App. at 128 (emphasis added). Nonetheless, Waddell does not contend that he misunderstood this dismissal notice.
The PHRC failed to notify the EEOC when it dismissed Waddell's charge, as it was obliged to do under the Worksharing Agreement. In fact, the PHRC did not send the EEOC any such notification until November 30, 1981, more than 4-1/2 years later. In the meantime, Waddell wrote two letters to the EEOC about his case.
The first letter dated April 17, 1977 informed the EEOC that Small Tube continued to "blackball" him with prospective employers. The letter ended with the sentences "I have a family, wife, and 4 children to support. [F]or four years everytime I get a good lead on a job this happens. [T]he mental anguish on my family trying to clothe and feed them is almost unbearable. Thank you. Please keep me informed." App. at 63-64. There was no response.
The second letter dated September 30, 1977, stated in full:
In regard to my case, Peyton R. Waddell vs. Small Tube Products, you promised to pick this case up when Human Relations let it go. [I] would like to know what you're going to do concerning this case. [I] would appreciate hearing from you immediately.
App. at 65. The letter further identified the case by charge number. When the EEOC failed to respond, Waddell did nothing further until the EEOC contacted him in 1982. During the 4-1/2 year period, the EEOC conducted three internal audits that revealed the existence of the outstanding charge, but each time it assumed that PHRC was still proceeding with the case.
When the EEOC finally was notified of the PHRC's closing of the case, it conducted an investigation and determined that there was no reasonable basis to believe Waddell had been subject to religious discrimination but that there was reasonable cause to believe he had not been rehired in retaliation for the charges he brought against Small Tube. In May, 1983, Waddell was first notified of his right to request a right to sue letter and he was sent a notice of right to sue on approximately June 24, 1983. On August 22, 1983, within 90 days of receiving notice of his right to sue, Waddell brought this action claiming that Small Tube had violated Section 704(a) of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-3(a).
Before trial, Small Tube filed a motion for summary judgment contending, inter alia, that laches barred Waddell's action. In the first of three opinions issued in this case, the district court denied the motion.
This case then proceeded to a bench trial. On March 1, 1985, the district court issued its second opinion holding that Waddell had shown that Small Tube had retaliated against him for bringing a religious discrimination charge in violation of Section 704(a) of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-3(a). The district court ordered Small Tube to reinstate Waddell to the position for which he had applied in August, 1976.
The district court then held a proceeding on the issue of damages. In its third opinion, the district court relied on 42 U.S.C. § 2000e-5(g) to award backpay to Waddell, including lost wages, the value of certain fringe benefits, and prejudgment interest. However, the court barred Waddell from recovering backpay for the 4-1/2 years that he took no action, relying on the doctrine of laches.
We will consider first Small Tube's challenge to the district court's judgment on the merits, then its contention that the court erred in failing to find laches, and finally, Waddell's cross-appeal, challenging the district court's reduction of his backpay award.
The Finding of Retaliation
Section 704(a) of the Civil Rights Act of 1964 provides, in pertinent part:
It shall be an unlawful employment practice for an employer to discriminate against any of his employees or applicants for employment . . . because he has opposed any practice made an unlawful employment practice by this subchapter, or because he had made a charge, testified, assisted, or participated in ...