James White, Cross-Appellant v. Colgan Electric Co., Inc., Cross-Appellee , 781 F.2d 1214 ( 1986 )

CORNELIA G. KENNEDY, Circuit Judge.

Plaintiff James White brought suit under Title VII, U.S.C. § 2000e et seq. and 42 U.S.C. § 1981, alleging racial employment discrimination. Defendant Colgan Electric Co. (“Colgan”) appeals the District Court’s finding of racial discrimination in the March 2, 1976, layoff of plaintiff James White. Mr. White cross appeals the District Court’s grant of Colgan’s motion for summary judgment on issues addressed and litigated in a previous employment discrimination class action suit, Badgett v. IBEW, 12 Fair Empl.Prac.Cas. 97 (N.D. Ohio 1975), aff'd sub nom. Coggen v. IBEW, 549 F.2d 800, 14 Fair Empl.Prac. Cas. 1047 (6th Cir.1977). Mr. White also appeals the District Court’s holding that he was entitled to only $5,500 in damages and reasonable attorney’s fees for the March 2 layoff because he had failed to mitigate his damages.

Mr. White began working as a trainee at Colgan in 1973, pursuant to a voluntary program in which Colgan attempted to increase the number of minorities in its work force. While Mr. White was not a union member, Colgan was able to hire him under the “48 hour clause,” which allows an employer to hire off the street if the union cannot supply sufficient workers within forty-eight hours of an employer’s request. A complete trainee program never materialized, but Mr. White remained at Colgan nevertheless until March of 1976, transferring from job to job as Colgan’s needs dictated. His job classification never rose above “pre-apprentice.”

In 1975, Mr. White was a named plaintiff in Badgett, supra, a class action suit against various unions and employer associations alleging racially discriminatory patterns and practices in the Toledo electrical trade. The Badgett case was settled with an Affirmative Action Plan and Consent Order in December of that year. Mr. White initially agreed to a settlement, which included relief for him in the form of a position as a first-year apprentice and $10,000 in damages. He then filed objections to the settlement and refused to sign a release, contending among other things that his nearly three years at Colgan entitled him to a higher job ranking and more pay. His objections were overruled by the district court. The district court’s decision was later affirmed by this Court in Coggen, supra.

Two weeks after Mr. White refused for a second time the offer of a first-year apprenticeship, he was laid off in a reduction of work force at Colgan. A total of forty-seven employees, forty-five of them non-minorities, were laid off, pursuant to a legitimate order by the general contractor. The inverse layoff procedure which Colgan followed meant that those with the least seniority were laid off first. Several employees with greater seniority than Mr. White’s were also laid off. Colgan points out, however, that had Mr. White entered the apprenticeship program when offered, he would have been insulated from the March 2 layoff.

Colgan management advised Mr. White to report to the union hall for further employment. According to Colgan’s collective bargaining agreement, it could not hire or rehire employees without a referral from the union, unless the forty-eight hour time period mentioned above had elapsed. At the union hall, Mr. White was told to sign a pad of paper and wait to be called. Testimony credited by the District Court indicates that he did wait, but that he was never called.¹ Virtually all the other employees laid off on March 2 were rehired by Colgan within a short period of time.

The issues presented in this case are therefore 1) whether Mr. White’s claim for individual relief from acts of discrimination alleged and litigated in the Badgett case are res judicata in the current action, 2) whether the District Court properly found that Colgan Electric Co. discriminated against Mr. White in laying him off on March 2, 1976, and not rehiring him, and 3) if so, whether the District Court properly found that Mr. White had failed to mitigate his damages after the layoff.

I

In the instant case, Mr. White seeks relief as an individual for claims of discrimination raised in the Badgett case, contending that although he was a named plaintiff and sought individual relief, the judgment in that case was addressed to him only as a class representative, and not as an individual. The District Court held below that any claims that Mr. White raised regarding the subject matter of Badgett were res judica-ta, even though Mr. White refused the settlement offered him in that case.

According to the doctrine of res judicata, if the second action is upon the same cause as the former one, the judgment on the merits in the first case is an absolute bar to the subsequent action between the same parties, not only in respect to every matter which is actually offered, but also as to every ground of recovery which might have been presented. Baltimore S.S. Co. v. Phillips, 274 U.S. 316, 47 S.Ct. 600, 71 L.Ed. 1069 (1927). The Affirmative Action Program and Consent Order was a final judgment on the merits in Badgett. Consent orders can constitute a final judgment of class-wide discrimination claims and will result in the application of res judicata to individual claims brought later by class members. Dosier v. Miami Valley Broadcasting Co., 656 F.2d 1295 (9th Cir.1981); Fowler v. Birmingham News Co., 608 F.2d 1055 (5th Cir.1979).

Plaintiff relies on Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867, 104 S.Ct. 2794, 81 L.Ed.2d 718 (1984), for the proposition that a plaintiff unsuccessful in a class action suit may later maintain suit for damages based on his individual claim of discrimination. The holding in Cooper is inapplicable in this case, however. In Cooper, the court in the class action suit had found no discrimination after considering the claims of the named plaintiffs. Certain class members later initiated a suit based on their own claims of discrimination, claims that had not been litigated in the class action suit. The Supreme Court held that those class members were not barred by res judicata from bringing their individual claims before the court.

The special status of named plaintiffs in class action employment discrimination suits is quite clear. In General Telephone v. Falcon, 457 U.S. 147, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982), the Court pointed out that while the Equal Employment Opportunity Commissioner may sue to secure relief for groups of discriminatees without complying with the requirements of Fed.R.Civ.P. 23, “[a]n individual litigant seeking to maintain a class action under Title VII must meet ‘the prerequisites of numerosity, commonality, typicality, and adequacy of representation’ specified in Rule 23(a). [General Telephone Co. of Northwest v. EEOC,] 446 U.S. 318, 330 [100 S.Ct. 1698, 1706, 64 L.Ed.2d 319 (1980)]. These requirements effectively ‘limit the class claims to those fairly encompassed by the named plaintiff’s claims.’ [Id.]" 457 U.S. at 156, 102 S.Ct. at 2369. By necessity, therefore, as Mr. White was a named plaintiff in Badgett, his claims were addressed by the court in that action.

Furthermore, Mr. White filed objections to the final judgment in Badgett. The objections included the following statement: “[t]here is no assurance in the consent order as to the plaintiffs receiving any damages or back pay.” The objections were considered by the District Court and subsequently overruled. This Court affirmed that decision.

For the reasons stated above, the District Court properly granted summary judgment as to the alleged acts of discrimination that were raised in Badgett, based on the doctrine of res judicata.

II

Turning to the question of Colgan’s liability for the claims of discrimination which occurred after the Badgett suit, the Court holds as a preliminary matter that the District Court erred as a matter of law in holding that Colgan violated Title VII by laying Mr. White off and not rehiring him in 1976. The District Court’s decision vis a vis Colgan hinges on an analysis that has been rejected by the Supreme Court in Firefighters Local Union No. 1784 v. Stotts, 467 U.S. 561, 104 S.Ct. 2576, 81 L.Ed.2d 483 (1984).

The District Court found, following McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981), that Mr. White had established a prima facie case of discrimination against Colgan in that Mr. White, a black man, was laid off rather than reassigned to another site, and upon his request for re-employment was directed to the union for referral. Citing Colgan’s “post-lay-off requests for labor and concomitant work force increase, and the supposed committment [sic] to integrate its work force,” the court held that it was more likely than not that Colgan’s actions were based on impermissible eonsidera-tions. Furnco Construction Corp. v. Waters, 438 U.S. 567, 98 S.Ct. 2943, 57 L.Ed.2d 957 (1978).

The court then held that Colgan had not rebutted the prima facie case against it, in that it failed to advance lawful reasons for its actions. Colgan had argued that the inverse layoff procedure and referral system dictated by its collective bargaining agreement required it to take the action it did regarding Mr. White. The District Court held that where goals have been established in a consent decree, “[n]o employment practice or seniority rule, however facially neutral, will excuse stopping or retreating.”

However, in Stotts, supra, the Supreme Court held that where a consent decree is silent as to an existing seniority system, the decree cannot be construed to conflict with the seniority system. The Court stated, “[h]ad there been any intention to depart from the seniority plan in the event of layoffs or demotions, it is much more reasonable to believe that there would have been an express provision to that effect.” 104 S.Ct. at 2586. The court below was in error, therefore, in holding that “no ... seniority rule” could constitute a valid reason for laying off Mr. White in view of the Consent Order.²

We hold therefore that Colgan’s explanation for laying off Mr. White, conformity with the inverse layoff procedure dictated by the collective bargaining agreement, was a legitimate reason for its action. Any other finding would be clearly erroneous on this record. Nothing in the agreement or the Consent Order would allow Colgan to depart from the inverse layoff procedure in White’s ease.³

As for Colgan’s failure to rehire Mr. White, the Consent Order itself mandated that Colgan follow the referral system set up by the union. As the union is not a party to this appeal, its liability as to the functioning of the referral system is not before us. However, it is clear from the Consent Order that Colgan’s only responsibility regarding the referral system was to use it. All relevant mandates in the order are addressed to Local 8.

If Colgan had had knowledge that the referral system employed by the union was in fact operating in a discriminatory fashion to prevent Mr. White’s rehiring, Colgan would have been under a duty at least to inquire at Local 8 as to Mr. White’s availability for work. The record lacks evidence, however, that Colgan knew that the union referral system was discriminating against Mr. White, or that it even knew that Mr. White had actually reported to the union hall for a referral. The only reference in the record is Mr. White’s statement that he thought that he had gone back to Colgan a couple of months after his layoff. There is no evidence that he informed Col-gan that he had gone to the union for a referral and had been unable to obtain one.

On this record, there is insufficient evidence for a factfinder to conclude that Mr. White successfully proved that Colgan’s '.proffered explanation as to its laying off and not rehiring Mr. White was pretextual. Any such finding by the District Court would therefore be clearly erroneous.

In light of the foregoing analysis, we hold that Colgan successfully rebutted Mr. White’s prima facie case against his employer and that Mr. White did not prove that Colgan’s proffered explanation was pretextual, the third stage of proof in a Title VII case. Mr. White did not meet his ultimate burden of persuasion that “a discriminatory reason more likely motivated the employer” or that “the employer’s proffered explanation is unworthy of credence,” Burdine, supra, 450 U.S. at 256, 101 S.Ct. at 1095. Accordingly, the District Court’s finding of liability on the part of Colgan is reversed. We therefore need not address the question of mitigation of damages.

The judgment of the District Court in favor of the plaintiff is reversed. The summary judgment in favor of Colgan is affirmed.

1 . After the District Court’s finding of liability on the part of the union, the union settled with and obtained a release from Mr. White. Neither party has appealed on the issue of the union’s liability.

2 . The dissent contends that we advance the "notion that Title VII absolutely forbids voluntary action by an employer to the detriment of the seniority rights of non-minority workers." This contention is wholly without basis on the facts of this case. Colgan, the employer, did. not voluntarily undertake to retain Mr. White to the detriment of other, more senior, employees. Colgan laid off Mr. White in accordance with the provisions of its collective bargaining agreement. The District Court in essence precluded Colgan from doing so, by imposing liability, just as the district court in Stotts had precluded the employer from doing so by injunction.

3 . The dissent states that the record indicates that Colgan could have avoided laying off Mr. White without violating the labor contract. The dissent bases its conclusion on the testimony of witness Phillip Couture, Local 8’s business manager at the time of the trial. Testifying about the collective bargaining agreement, Couture said, “If you have a special skill or if you’re a minority or if you're a supervisor, something like that, you can avoid the inverse layoff procedure.” Tr. 420-21. The contract does indeed include provisions for those with special skills and supervisors, but is silent as to minorities. At another point in his testimony, Couture states that minorities are generally exempt from layoff on federally subsidized jobs. Tr. 416. There was no allegation that this job, the Davis-Besse nuclear power plant, was federally subsidized.