Sidley Austin LLP v. EEOC ( 2006 )

In the
United States Court of Appeals
For the Seventh Circuit
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No. 06-8002
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,
Plaintiff-Appellee,
v.
SIDLEY AUSTIN LLP,
Defendant-Appellant.
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Application for Leave to Appeal
from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 05 C 0208—James B. Zagel, Judge.
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SUBMITTED FEBRUARY 7, 2006—DECIDED FEBRUARY 17, 2006
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Before POSNER, EASTERBROOK, and WOOD, Circuit Judges.
POSNER, Circuit Judge. In 1999, Sidley & Austin (as it
then was) demoted 32 of its equity partners to “counsel” or
“senior counsel.” The EEOC began an investigation to
determine whether the demotions might have violated
the Age Discrimination in Employment Act. After we
upheld the district court’s rebuff of Sidley’s effort to de-
rail the investigation, EEOC v. Sidley Austin Brown & Wood,
315 F.3d 696 (7th Cir. 2002), the Commission filed an ADEA
suit against Sidley. Sidley asks us to entertain, as recom-
2 No. 06-8002
mended by the district judge, an interlocutory appeal
from the judge’s denial of Sidley’s motion for partial sum-
mary judgment. The appeal would require us to decide
whether the judge was correct to rule that the EEOC may
obtain monetary relief on behalf of individuals who, having
failed to file timely administrative charges under the ADEA,
are barred from bringing their own suits. The question
satisfies the criteria in 28 U.S.C. § 1292(b) for an interlocu-
tory appeal and since it has been fully briefed we can
proceed to answer it.
The identical question received the opposite answer in
EEOC v. North Gibson School Corp., 266 F.3d 607 (7th Cir.
2001), but that decision is no longer good law. It was
scuttled by the Supreme Court in EEOC v. Waffle House, Inc.,
534 U.S. 279 (2002), which held that the EEOC’s claim for
monetary relief for a victim of an alleged violation of the
Americans with Disabilities Act was not barred by the fact
that the victim had agreed to arbitrate any disputes arising
out of his employment. The reason there was no bar was not
that the arbitration clause was unenforceable but that the
Commission was not bound by it because its enforcement
authority is not derivative of the legal rights of individuals
even when it is seeking to make them whole. Similarly, the
Commission is not bound by the failure of the Sidley ex-
partners to exhaust their remedies; the Commission had no
duty to exhaust.
Sidley seeks to distinguish Waffle House from the pres-
ent case on the basis of the following sentence in the Court’s
opinion: “It is true, as respondent and its amici have argued,
that Baker’s conduct [Baker was the victim of the alleged
violation of the ADA] may have the effect of limiting the
relief that the EEOC may obtain in court.” 534 U.S. at 296.
But the remainder of the paragraph makes clear that the
No. 06-8002 3
Court was talking about something quite different from a
procedural forfeiture. “If, for example, [Baker] had failed to
mitigate his damages, or had accepted a monetary settle-
ment, any recovery by the EEOC would be limited accord-
ingly. As we have noted, it ‘goes without saying that the
courts can and should preclude double recovery by an
individual.’ ” Id. at 296-97 (citations omitted). Similarly, had
Baker sued and lost, the employer might have been able to
interpose the judgment as a bar to the EEOC’s obtaining
money for Baker, by virtue of the doctrine of collateral
estoppel. EEOC v. U.S. Steel Corp., 921 F.2d 489 (3d Cir.
1990). Even though (this is the doctrinal heart of Waffle
House) the EEOC is not in privity with the victims for whom
it seeks relief, it does not follow that they must be permitted
to take two bites from the same apple.
For all we know, some of the ex-partners may have
received settlements from Sidley and others may have failed
to mitigate their damages. Suppose all have received
settlements that have fully compensated them for the
alleged violations of the age discrimination law. Then the
EEOC could obtain no monetary relief on their behalf. But
this was not the basis for Sidley’s motion for partial sum-
mary judgment. The basis was a ground that Waffle House
rejects, as we and other courts have already recognized in
related contexts. EEOC v. Caterpillar, Inc., 409 F.3d 831, 833
(7th Cir. 2005); EEOC v. Board of Regents, 288 F.3d 296, 300
(7th Cir. 2002); EEOC v. Pemco Aeroplex, Inc., 383 F.3d 1280,
1292-94 (11th Cir. 2004), and cases cited there.
AFFIRMED.
4 No. 06-8002
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—2-17-06