EEOC v. Bd Regents Univ WI ( 2002 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 01-2998
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,
Plaintiff-Appellee,
v.
BOARD OF REGENTS OF THE UNIVERSITY
OF WISCONSIN SYSTEM,
Defendant-Appellant.
Appeal from the United States District Court
for the Western District of Wisconsin.
No. 00-C-564-S--John C. Shabaz, Judge.
Argued February 15, 2002--Decided April 30, 2002
Before ROVNER, DIANE P. WOOD, and EVANS,
Circuit Judges.
EVANS, Circuit Judge. This is a public
enforcement action brought by the United
States Equal Employment Opportunity
Commission (EEOC) under section 7 of the
Age Discrimination in Employment Act
(ADEA), 29 U.S.C. sec. 626. The EEOC
alleged that the Board of Regents of the
University of Wisconsin System (UW)
violated the ADEA when it terminated the
employment, on the basis of age, of four
persons working for the University of
Wisconsin Press. The EEOC prevailed in a
jury trial, bifurcated between liability
and damages. Following the jury
determination that there was a willful
violation of the Age Discrimination Act,
the UW moved for judgment as a matter of
law, as it did following the trial on
damages. Those motions and a motion for a
new trial were denied. The UW appeals
those rulings as well as an award of
costs to the EEOC. In addition, the UW
contends that it enjoys Eleventh
Amendment sovereign immunity which should
have barred this suit from even going to
trial.
The University of Wisconsin Press is a
nonprofit organization associated with
the UW Graduate School and under the
direction of the UW Board of Regents. It
publishes scholarly books, journals, and
periodicals, primarily in the humanities
and the social sciences. The EEOC’s case
is based on claims by four "charging"
parties: Rosalie Robertson, who was 50
years old at the relevant time; Mary
Braun, who was 46; Joan Strasbaugh, age
47; and Charles Evenson, who was 54. The
university personnel who made the
termination decisions were David Bethea,
the interim director of the Press, and
Steve Salemson, the associate director.
Finding evidence of "ageism" in the
terminations, the EEOC filed this action.
We will save until later our discussion
of what that evidence was and move first
to the issue of sovereign immunity.
If this case was to be prosecuted in
federal court, the EEOC had to do it. The
individual charging parties were barred
by the Eleventh Amendment from suing the
state (and therefore the Board of Regents
of the state university system). The
Supreme Court determined in Kimel v.
Florida Bd. of Regents, 528 U.S. 62
(2000), that the ADEA did not abrogate
states’ sovereign immunity to suits
brought by individuals.
It is, however, a well-established
principle that the fact that the states
retain sovereign immunity from private
lawsuits does not mean that they are
protected from suit by the federal
government. As the Court explained in
Alden v. Maine, 527 U.S. 706, 755 (1999),
"[i]n ratifying the Constitution, the
States consented to suits brought by
other States or by the Federal
Government." The Court said that a suit
brought against a state in the name of
the United States "differs in kind from
the suit of an individual." Id. See also
Seminole Tribe of Fla. v. Florida, 517
U.S. 44 (1996). In extending the Kimel
principle to the Americans with Disabili
ties Act (ADA), the Court stated that
even though private suits were barred,
the standards of the ADA can nevertheless
be enforced "by the United States in
actions for money damages . . . ." Board
of Trustees of Univ. of Ala. v. Garrett,
531 U.S. 356, 374 n.9 (2001).
These cases have not ended the debate.
The question arguably left open is
whether all types of suits brought by the
federal government may proceed against a
state or whether the nature of the suit
determines whether the state enjoys
Eleventh Amendment sovereign immunity.
The UW points out that the case before us
is one in which the Commission is merely
seeking redress of individual acts of
discrimination; the Commission is simply
standing in the shoes of the individuals
and is acting in privity with them as
their representative. In other words, it
is just a private suit dressed in fancy
clothes. Therefore, the argument is, even
though the EEOC would have the power to
sue the states to remedy a pattern of
intentional discrimination, the state
retains immunity from this suit. If the
individuals cannot sue, the EEOC should
not be able to either.
Whatever wind might originally have been
in the sails of this argument has been
knocked out by EEOC v. Waffle House,
Inc., 122 S. Ct. 754, decided earlier
this year. In Waffle House, the EEOC
brought an enforcement action under the
ADA on behalf of a former Waffle House
employee who signed a binding arbitration
agreement. The issue presented for
decision was "whether an agreement
between an employer and an employee to
arbitrate employment-related disputes
bars the Equal Employment Opportunity
Commission (EEOC) from pursuing victim-
specific judicial relief . . . ." At 758.
The Court of Appeals for the Fourth
Circuit had distinguished between
injunctive and victim-specific relief and
determined that only when the EEOC seeks
broad injunctive relief would the public
interest overcome the goals of the
Federal Arbitration Act. Rejecting this
conclusion, the Supreme Court pointed out
that once an EEOC charge is filed, the
EEOC is in "command of the process" and
has "exclusive jurisdiction over the
claim for 180 days." If the EEOC chooses
to file suit on its own, the employee
retains no independent cause of action,
although he may intervene in the EEOC’s
suit. The EEOC is, in other words, the
"master of its own case" and the statute
"confers on the agency the authority to
evaluate the strength of the public
interest at stake." It is the EEOC’s job
to determine whether public resources
should be used to recover victim-specific
relief. The Court concluded:
[W]e are persuaded that, pursuant to
Title VII and the ADA, whenever the EEOC
chooses from among the many charges filed
each year to bring an enforcement action
in a particular case, the agency may be
seeking to vindicate a public interest,
not simply provide make-whole relief for
the employee, even when it pursues
entirely victim-specific relief.
At 765.
The only response left to the UW would
be to say that sovereign immunity is
different; it is more important than the
FAA or arbitration agreements. That may
be so. But when we read Waffle House
together with the cautionary language of
Garrett, which indicates that despite the
fact that sovereign immunity bars private
suits, the federal employment statutes
can be enforced by the United States, we
find little room in which to maneuver--
even were we inclined to. If ultimately
Waffle House is to be distinguished from
a case such as this one, that distinction
should be drawn not by us, but rather by
the Supreme Court. See Agostini v.
Felton, 521 U.S. 203 (1997).
We will note, though, that granting the
states immunity from suits by individuals
but allowing suits by the EEOC is both a
benefit and a curse for the states. It is
a benefit because the EEOC brings only a
few cases out of the thousands of charges
filed, so the number of cases to defend
against is vastly reduced. It is a curse
because when the EEOC decides to bring a
case, rather than facing an individual
plaintiff, who almost certainly has
limited resources, the state must square
off against the power and majesty of the
federal government. But whatever the
policy arguments on either side of the
issue, Waffle House compels us to find
that sovereign immunity does not bar this
suit, which is brought independently by
an agency of the United States
government.
Finding that the suit was properly
before the court, we proceed to the
merits and the appeal from the denial of
the motions for judgment as a matter of
law and for a new trial. In considering a
motion for judgment as a matter of law, a
court must review all the evidence in the
record; it must "draw all reasonable
inferences in favor of the nonmoving
party, and it may not make credibility
determinations or weigh the evidence."
Reeves v. Sanderson Plumbing Prods.,
Inc., 530 U.S. 133, 150 (2000). Although
the court should review the entire
record, "it must disregard all evidence
favorable to the moving party that the
jury is not required to believe." Id. at
151. Furthermore, as a reviewing court,
we must not substitute our view of the
evidence for that of the jury. Massey v.
Blue Cross-Blue Shield of Ill., 226 F.3d
922 (7th Cir. 2000).
In an age discrimination case, we
evaluate whether there is evidence that
the employer discriminated against the
employees "because of" age. 29 U.S.C.
sec. 623(a)(1). Reeves. Our task, then,
is to examine the record to see whether
there was evidence from which a
reasonable jury could conclude that the
"charging" parties were terminated
"because of" their ages.
A claim of discrimination can be proven
by the direct or indirect methods of
proof. See Troupe v. May Dep’t Stores, 20
F.3d 734 (7th Cir. 1994); Gorence v.
Eagle Food Centers, Inc., 242 F.3d 759
(7th Cir. 2001). The indirect method is
the familiar framework set out in
McDonnell Douglas Corp. v. Green, 411
U.S. 792 (1973), a paradigm designed to
give plaintiffs a fair chance to prove
discrimination when direct evidence of it
is not available. But McDonnell Douglas
has become a two-edged sword. We noted
that irony in Gorence, where the
plaintiffs argued that rather than
helping them, McDonnell Douglas put too
great a burden on them. Additionally, as
this case shows, once a trial is
completed, defendants may attempt to use
the McDonnell Douglas framework as a
shield. Here, the UW argues that the EEOC
failed to establish a prima facie case
because to do so, it had to show that the
charging parties were replaced with
persons at least 10 years younger. The
EEOC says that the prima facie case is
irrelevant at this stage of the
proceedings.
Both sides have something to support
their positions. We have said that
on post-trial review, whether Plaintiff’s
case is based on direct or indirect
evidence, the McDonnell Douglas framework
drops out of the analysis and we need
only consider whether the record supports
the resolution as to the ultimate
question of intentional discrimination.
Hasham v. California State Bd. of
Equalization, 200 F.3d 1035, 1044 (7th
Cir. 2000). Or:
After trial, the issue becomes whether
the jury’s verdict is against the weight
of the evidence, with the focus being on
whether there was sufficient evidence on
the ultimate question of discrimination.
Dadian v. Village of Wilmette, 269 F.3d
831, 837 (7th Cir. 2001) (citations
omitted). Yet in Reeves, which involved a
post-verdict motion, the Court spent a
good deal of time evaluating whether the
evidence met the McDonnell Douglas
criteria. But the Court also said, "The
ultimate question in every employment
discrimination case involving a claim of
disparate treatment is whether the
plaintiff was the victim of intentional
discrimination." Reeves, at 153. As far
back as 1983, in U.S. Postal Service Bd.
of Govs. v. Aikens, 460 U.S. 711, 714,
the Court found it "surprising" to have
the parties arguing about the prima facie
case after the case had been fully tried
on the merits. These statements are not
necessarily irreconcilable. There would
seem to be no impediment to discussing a
case based on indirect proof in terms of
McDonnell Douglas. After all, that is
what Reeves does. But ultimately the fact
remains that what we are looking for is
proof of intentional discrimination based
on an examination of all the evidence in
the record viewed in the light favorable
to the nonmoving party. As we said in
Massey, after trial we "need not tarry on
the to’s and fro’s . . . ." of McDonnell
Douglas. At 925.
Despite that, we will look briefly at
UW’s argument that the EEOC failed to
make out a prima facie case because not
all of the charging parties were replaced
by persons at least 10 years younger. The
argument grows out of O’Connor v.
Consolidated Coin Caterers Corp., 517
U.S. 308 (1996), which says that to make
out a prima facie case of age
discrimination, the claimant must be
replaced by someone "substantially
younger." Our decisions have
defined"substantially younger" as 10
years younger. See Kariotis v. Navistar
Int’l Transp. Corp., 131 F.3d 672 (7th
Cir. 1997). The requirement applies to
the indirect McDonnell Douglas framework
and the prima facie case. But even in
thesummary judgment context in a
McDonnell Douglas case, we have noted
that the 10-year line is not indelible.
In Hartley v. Wisconsin Bell, Inc., 124
F.3d 887, 893 (7th Cir. 1997), we said:
Yet the line we draw is not so bright as
to exclude cases where the gap is smaller
but evidence nevertheless reveals the
employer’s decision to be motivated by
the plaintiff’s age.
What is true on summary judgment is all
the more true following a trial.
Furthermore, here some of the persons
hired were 10 years younger than the
plaintiffs. We will turn to the other
evidence.
Soon after Bethea became interim
director, he came to the conclusion, as
early as February 1999, that the Press
was in financial trouble. Concluding that
costs had to be cut, he decided it was
necessary to terminate some employees.
Working with Salemson, he set out to make
a list of persons who would be let go.
The list was prepared in March and
included all of the charging parties, who
were the oldest employees at the Press--
other than the two decision-makers
themselves. An oversight committee
approved the list and it was submitted to
Ann Marie Lamboley, a senior
administrative program specialist, who
was the self-described "campus layoff
expert." She instructed Bethea and
Salemson to provide a written
justification of the selection of the
four people. As instructed and, notably,
after the decisions had already been
made, they prepared a document entitled
"A Justification for the UW Press’s
Layoff Proposal." Bethea and Salemson
then met with each of the charging
parties on May 9, 1999, to inform them of
their termination; each was told that the
termination was "not in any way related
to performance or personality issues."
Each one was also given a copy of this
document.
The unavoidable fact is that the four
oldest employees were the only ones
terminated, and the terminations occurred
under circumstances from which one could,
in fact, draw an inference that they were
chosen because of their ages. These
workers were terminated and the
responsibilities were taken over either
by other employees or by replacements
brought in from the outside, which
supports an inference of discrimination.
Robertson was terminated from the
acquisitions department, and 2 weeks
later the Press hired Sheila McMahon, who
was in her mid-twenties, to work in
acquisitions. Strasbaugh was 47 when she
was terminated as assistant marketing
manager. Her duties were assumed by a
woman in her twenties or thirties, whose
contract was renewed and extended shortly
after Strasbaugh’s termination. Evenson
was 54 years old when he was terminated
from his position as a senior marketing
specialist, while 23-year-old Rebecca
Gimenez was retained. Other people in
their twenties and thirties were brought
into the acquisitions and marketing
departments as well.
The UW tries to distinguish between the
charging parties and those retained or
hired, saying they were not similarly
situated to one another. But the
"Justification" itself compares the
charging parties and the other
individuals working at the Press. For
instance, the document discusses the
relative skills of Evenson and Gimenez,
both of whom worked in marketing. It also
compares Robertson and the person
retained in acquisitions.
Although the "Justification" was said to
be an assessment of the skills and
experience of the various people working
at the Press, neither Bethea nor Salemson
spoke with the charging parties about
their skills. The two men did not solicit
the opinions of managers regarding who
should be let go. There were no formal
employee evaluations. Documents they did
look at included out-of-date resumes
which had been on file at the Press, and
these were not looked at until April,
after the termination decisions had
already been made.
The "Justification" can be read to show
that they held the charging parties to a
higher standard than the younger workers.
It claims that Evenson would have to take
courses to get "up to speed" on "Webpage
programming or the electronic transfer of
data and images." In the document there
is no indication whether Gimenez, the
preferred younger employee, herself had
taken such courses. The facts show she
had not. Gimenez also received credit in
the "Justification" for things she had
not done. It says she created the
Webpage, but, in fact, it had been
created before she began working at the
Press.
A reasonable jury could believe that the
"Justification" uses code words which
reflect an age bias. It refers to Evenson
as having skills suited to the "pre-
electronic" era and that he would have to
be brought "up to speed" on "new trends
of advertising via electronic means."
The UW also justifies the termination
decisions by saying that the job titles
of the newly hired younger people were
different from those of the charging
parties. Some of the people were hired as
"limited term employees." We do not think
that hiring individuals under less
desirable terms can necessarily overcome
the inference that the persons being
replaced were replaced because of their
ages.
There was also an interesting concept
taking hold at the Press. Both Bethea and
Salemson acknowledged during cross-
examination that the Press was seeking a
"new vision." Salemson conceded that the
younger individuals brought into the
Press were part of the new vision. Bethea
wanted to hire replacements who would fit
the new vision if he could jump the
"legal hurdle" of the ADEA. He thought
that in the past the Press had not "had
the vision to be agile enough" and that
the terminations of the charging parties
would "improve that agility." It is
certainly an interesting metaphor, from
which the jury could reasonably draw an
inference that in Bethea’s mind youth and
agility go hand-in-hand.
In addition to finding discrimination,
the jury also found that the
discrimination was willful. Under the
ADEA, an employer’s violation of the
statute is willful if the "employer knew
or showed reckless disregard for the
matter of whether its conduct was
prohibited by the ADEA." Hazen Paper Co.
v. Biggins, 507 U.S. 604, 614 (1993). A
plaintiff does not need to show that the
employer’s conduct was "outrageous," nor
does he need to provide direct evidence
of the employer’s motives. Mathis v.
Phillips Chevrolet, Inc., 269 F.3d 771
(7th Cir. 2001). An employer who truly
violates the ADEA without knowing it and
whose ignorance is not reckless is
protected from a finding of recklessness.
Wichmann v. Board of Trustees of Southern
Ill. Univ., 180 F.3d at 804 (1999). As
one might imagine, given the length of
time the ADEA has been with us, a finding
of nonreckless ignorance is rare.
The evidence was sufficient to allow the
jury to infer that Bethea knowingly
sought to circumvent the ADEA. We have
already referred to his desire for
agility and his attempt to jump legal
hurdles. He conceded that the hurdles in
cluded the ADEA. There is also evidence
that the UW seemed recklessly to
disregard whether its conduct was
prohibited. Bethea, for instance, knew
the ADEA was a hurdle, but neither he nor
Salemson had been given any employment
law training and neither man seemed to
know the age at which the protections of
the Act arose. In addition, even though
the charging parties were the oldest
people at the Press, Lamboley, the campus
layoff expert, did not look at the
terminations to see if age discrimination
might have been involved. Neither did
Associate Dean Mareda Weiss, who also did
not know that the floor age of protection
under the ADEA was 40. Nor did Dean
Virginia Hinshaw, who also reviewed the
proposed terminations. We have previously
said that "leaving managers with hiring
authority in ignorance of the basic
features of the discrimination laws is an
’extraordinary mistake’" from which a
jury can infer reckless indifference.
Mathis, at 778.
The UW also contends that it should be
granted a new trial, both on liability
and damages. We review the denial of a
motion for a new trial for a clear abuse
of discretion. Hasham, at 1035. We see no
reason to discuss further the liability
phase of this trial other than to say
that the denial of a new trial on
liability was not an abuse of discretion.
As to damages, the UW contends that the
damage awards are clearly excessive,
particularly because the charging parties
failed to mitigate their damages. All
four of the charging parties eventually
found employment, but the primary basis
of the argument is that the charging
parties did not apply for openings at the
Press. But they had explanations for
their failure to apply to the very
organization which just terminated them.
For one thing, after just being
terminated for alleged deficiencies in
their performance and skills, they had no
reason to believe they would be hired if
they did apply. Also, Braun testified
that in addition to not being "overly
sanguine" about being rehired by the
organization which terminated her, she
had moved to Oregon to accept another
job. And, in fact, two of the charging
parties did apply for jobs at UW, jobs
they did not get. There is no evidence
that any of the charging parties had been
offered a job they did not accept.
A remark in the closing argument of
counsel for the EEOC is also cited as a
reason for a new trial. Counsel said, "We
wouldn’t be here unless the law had been
violated." The remark was objected to;
the objection was sustained and the jury
instructed to disregard it. The statement
was brief and was not repeated.
Particularly, given that the UW bears the
burden on this issue, Sheehan v. Donlen
Corp., 173 F.3d 1039 (7th Cir. 1999), and
that a motion for a new trial is, as we
have said, reviewed for an abuse of
discretion, we are far from inclined to
reverse the decision of the district
court on this point.
Finally, the UW contends that the travel
and deposition costs of the charging
parties and Dr. Sovan Tun, who was an
expert witness, are not allowable and the
court abused its discretion when it
awarded these costs, which amounted to
$5,516.99. It is true, as the UW argues,
that the general rule in this circuit is
that a court may not tax witness fees for
party witnesses. The trouble is that the
charging parties are not actual parties
to the lawsuit. In fact, of course, the
only reason the lawsuit can be tried is
that the EEOC, not the individuals, is
the plaintiff. Similarly, Dr. Tun, while
he is a Commission employee, does not
have a role in this lawsuit sufficient to
make him a party.
The judgment of the district court is
AFFIRMED.