Goodman v. Lukens Steel Co. , 107 S. Ct. 2617 ( 1987 )

Justice White

delivered the opinion of the Court.

In 1973, individual employees¹ of Lukens Steel Company (Lukens) brought this suit on behalf of themselves and others, asserting racial discrimination claims under Title VII of the Civil Rights Act of 1964, 78 Stat. 253, as amended, 42 U. S. C. §2000e et seq.,² and 42 U. S. C. § 1981³ against their employer and their collective-bargaining agents, the United Steelworkers of America and two of its local unions (Unions).⁴ After a bench trial, the District Court specified the periods for which Title VII claims could be litigated; it also reaffirmed a pretrial order that the Pennsylvania 6-year statute of limitations governing claims on contracts, replevin, and trespass⁵ applied to the §1981 claims and that claims with respect to the period after July 14, 1967, were accordingly not barred. On the merits, the District Court found that Lukens had discriminated in certain respects, but that in others plaintiffs had not made out a case.⁶ The District Court concluded that the Unions were also guilty of discriminatory practices, specifically in failing to challenge discriminatory discharges of probationary employees, failing and refusing to assert instances of racial discrimination as grievances, and in tolerating and tacitly encouraging racial harassment. 580 F. Supp. 1114 (ED Pa. 1984). The District Court entered separate injunctive orders against Lukens and the Unions, reserving damages issues for further proceedings. Lukens and the Unions appealed, challenging the District Court’s liability conclusions as well as its decision that the Pennsylvania 6-year statute of limitations, rather than the 2-year statute applicable to personal injuries, would measure the period of liability under § 1981.

The Court of Appeals, differing with the District Court, held that the 2-year statute of limitations controlled but affirmed the liability judgment against the Unions. 777 F. 2d 113 (CA3 1985).⁷ The employees’ petition for certiorari in No. 85-1626 challenged the Court of Appeals’ choice of the § 1981 limitations period. The Unions’ petition in No. 85-2010 claimed error in finding them liable under Title VII and §1981. We granted both petitions, 479 U. S. 982 (1986). We address in Part I the limitations issue in No. 85-1626 and the Unions’ liability in Part II.

I

Because § 1981, like §§ 1982 and 1983, does not contain a statute of limitations, federal courts should select the most appropriate or analogous state statute of limitations. Wilson v. Garcia, 471 U. S. 261, 266-268 (1985); Runyon v. McCrary, 427 U. S. 160, 180-182 (1976); Johnson v. Railway Express Agency, Inc., 421 U. S. 454, 462 (1975). In Wilson, the reach of which is at issue in this case, there were three holdings: for the purpose of characterizing a claim asserted under § 1983, federal law, rather than state law, is controlling; a single state statute of limitations should be selected to govern all § 1983 suits; and because claims under § 1983 are in essence claims for personal injury, the state statute applicable to such claims should be borrowed. Petitioners in No. 85-1626 (hereafter petitioners), agree with the Court of Appeals that the first two Wilson holdings apply in § 1981 cases, but insist that the third does not. Their submission is that § 1981 deals primarily with economic rights, more specifically the execution and enforcement of contracts, and that the appropriate limitations period to borrow is the one applicable to suits for interference with contractual rights, which in Pennsylvania was six years.

The Court of Appeals properly rejected this submission. Section 1981 has a much broader focus than contractual rights. The section speaks not only of personal rights to contract, but personal rights to sue, to testify, and to equal rights under all laws for the security of persons and property; and all persons are to be subject to like punishments, taxes, and burdens of every kind. Section 1981 of the present Code was § 1977 of the Revised Statutes of 1874. Its heading was and is “Equal rights under the law” and is contained in a chapter entitled “Civil Rights.” Insofar as it deals with contracts, it declares the personal right to make and enforce contracts, a right, as the section has been construed, that may not be interfered with on racial grounds. The provision asserts, in effect, that competence and capacity to contract shall not depend upon race. It is thus part of a federal law barring racial discrimination, which, as the Court of Appeals said, is a fundamental injury to the individual rights of a person. Wilson’s characterization of §1983 claims is thus equally appropriate here, particularly since §1983 would reach state action that encroaches on the rights protected by § 1981. That § 1981 has far-reaching economic consequences does not change this conclusion, since such impact flows from guaranteeing the personal right to engage in economically significant activity free from racially discriminatory interference. The Court of Appeals was correct in selecting the Pennsylvania 2-year limitations period governing personal injury actions.

We also agree with the Court of Appeals that the 2-year statute, adopted in compliance with Wilson, should be applied in this case. The usual rule is that federal cases should be decided in accordance with the law existing at the time of decision. Gulf Offshore Co. v. Mobil Oil Corp., 453 U. S. 473, 486, n. 16 (1981); Thorpe v. Housing Authority of Durham, 393 U. S. 268, 281 (1969); United States v. Schooner Peggy, 1 Cranch 103, 109 (1801). But Chevron Oil Co. v. Huson, 404 U. S. 97 (1971), advises that nonretroactivity is appropriate in certain defined circumstances. There the Court held that a decision specifying the applicable state statute of limitations in another context should not be applied retroactively because the decision overruled clear Circuit precedent on which the complaining party was entitled to rely, because the new limitations period had been occasioned by a change in the substantive law the purpose of which would not be served by retroactivity, and because retroactive application would be inequitable. Petitioners argue that the same considerations are present here. We disagree.

It is true, as petitioners point out, that the Court of Appeals decision in this case overruled prior Third Circuit cases, Meyers v. Pennypack Woods Home Ownership Assn., 559 F. 2d 894 (1977); Davis v. United States Steel Supply, Div. of United States Steel Corp., 581 F. 2d 335, 338, 341, n. 8 (1978), each of which had refused to apply the Pennsylvania 2-year personal injury statute of limitations to the § 1981 claims involved in those cases. But until Meyers was decided in 1977, there had been no authoritative specification of which statute of limitations applied to an employee’s § 1981 claims, and hence no clear precedent on which petitioners could have relied when they filed their complaint in this case in 1973. In a later case, Al-Khazraji v. St. Francis College, 784 F. 2d 505, 512-514 (1986), the Court of Appeals refused to apply retroactively the same 2-year statute in an employment discrimination §1981 case because the case was filed when clear Circuit precedent specified a longer statute. Distinguishing its decision there from the case now before us, the Court of Appeals said: “In 1973, when the complaint was filed in the Goodman case, there was no established precedent in the Third Circuit to indicate the appropriate limitations period for Section 1981 claims.” 784 F. 2d, at 512. It was obviously for this reason that the Court of Appeals here said that its decision “should be given the customary retroactive effect.” 777 F. 2d, at 120. The court cited its prior decision in Smith v. Pittsburgh, 764 F. 2d 188 (1985),⁸ a post-Wilson case in which the Court of Appeals applied retroactively the 2-year statute in a § 1983 employment termination case because of the unsettled law in the Third and other Circuits.

As for the remainder of the Chevron factors, applying the 2-year personal injury statute, which is wholly consistent with Wilson v. Garcia and with the general purposes of statutes of repose, will not frustrate any federal law or result in inequity to the workers who are charged with knowledge that it was an unsettled question as to how far back from the date of filing their complaint the damages period would reach. Accordingly, the Court of Appeals properly applied the 2-year statute of limitations to the present case.⁹

HH I — (

This case was tried for 32 days in 1980. One-hundred fifty-seven witnesses testified and over 2,000 exhibits were introduced. On February 13, 1984, the District Court filed its findings and conclusions. In an introductory section discussing the relevant legal principles, the trial judge discussed, among other things, the nature of “disparate treatment” and “disparate impact” cases under Title VII, recognizing that in the former the plaintiff must prove not only disparate treatment, but trace its cause to intentional racial discrimination, an unnecessary element in disparate-impact cases. The District Court also emphasized that proof of discriminatory intent is crucial in §1981 cases and that such intent cannot be made out by showing only facially neutral conduct that burdens one race more than another.

The District Court proceeded to find that the company had violated Title VII in several significant respects, including the discharge of employees during their probationary period, the toleration of racial harassment by employees, initial job assignments, promotions, and decisions on incentive pay. The court also found that in these identical ways the company had also violated § 1981, a finding the court could not have made without concluding that the company had intentionally discriminated on a racial basis in these respects.

Similarly, the Unions were found to have discriminated on racial grounds in violation of both Title VII and § 1981 in certain ways: failing to challenge discriminatory discharges of probationary employees; failure and refusal to assert racial discrimination as a ground for grievances; and toleration and tacit encouragement of racial harassment.

What the conduct of the Unions had been and whether they had treated blacks and whites differently were questions of historical fact that Federal Rule of Civil Procedure 52(a) enjoins appellate courts to accept unless clearly erroneous. So is the issue of whether the Unions intended to discriminate based on race. Anderson v. Bessemer City, 470 U. S. 564, 574 (1985); Pullman-Standard v. Swint, 456 U. S. 273, 287-288 (1982). The Court of Appeals did not set aside any of the District Court’s findings of fact that are relevant to this case. That is the way the case comes to us, and both courts below having agreed on the facts, we are not inclined to examine the record for ourselves absent some extraordinary reason for undertaking this task. Nothing the Unions have submitted indicates that we should do so. “A court of law, such as this Court is, rather than a court for correction of errors in factfinding, cannot undertake to review concurrent findings of fact by two courts below in the absence of a very obvious and exceptional showing of error.” Graver Mfg. Co. v. Linde Co., 336 U. S. 271, 275 (1949). See also United States v. Ceccolini, 435 U. S. 268, 273 (1978). Unless there are one or more errors of law inhering in the judgment below, as the Unions claim there are, we should affirm it.

The Unions contend that the judgment against them rests on the erroneous legal premise that Title VII and § 1981 are violated if a union passively sits by and does not affirmatively oppose the employer’s racially discriminatory employment practices. It is true that the District Court declared that mere union passivity in the face of employer discrimination renders the union liable under Title VII and, if racial animus is properly inferrable, under § 1981 as well.”¹⁰ We need not discuss this rather abstract observation, for the court went on to say that the evidence proves “far more” than mere passivity.¹¹ As found by the court, the facts were that since 1965, the collective-bargaining contract contained an express clause binding both the employer and the Unions not to discriminate on racial grounds; that the employer was discriminating against blacks in discharging probationary employees, which the Unions were aware of but refused to do anything about by way of filing proffered grievances or otherwise; that the Unions had ignored grievances based on instances of harassment which were indisputably racial in nature; and that the Unions had regularly refused to include assertions of racial discrimination in grievances that also asserted other contract violations.¹²

In affirming the District Court’s findings against the Unions, the Court of Appeals also appeared to hold that the Unions had an affirmative duty to combat employer discrimination in the workplace. 777 F. 2d, at 126-127. But it, too, held that the case against the Unions was much stronger than one of mere acquiescence in that the Unions deliberately chose not to assert claims of racial discrimination by the employer. It was the Court of Appeals’ view that these intentional and knowing refusals discriminated against the victims who were entitled to have their grievances heard.

The Unions submit that the only basis for any liability in this case under Title VII is § 703(c)(3), which provides that a Union may not “cause or attempt to cause an employer to discriminate against an individual in violation of this section,” 78 Stat. 256, 42 U. S. C. § 2000e-2(c)(3), and that nothing the District Court found and the Court of Appeals accepted justifies liability under this prohibition. We need not differ with the Unions on the reach of § 703(c)(3), for § 703(c)(1) makes it an unlawful practice for a Union to “exclude or to expel from its membership, or otherwise to discriminate against, any individual because of his race, color, religion, sex, or national origin.” 78 Stat. 255, 42 U. S. C. §2000-2(c)(l). (Emphasis added.) Both courts below found that the Unions had indeed discriminated on the basis of race by the way in which they represented the workers, and the Court of Appeals expressly held that “[t]he deliberate choice not to process grievances also violated § 703(c)(1) of Title VII.” 777 F. 2d, at 127. The plain language of the statute supports this conclusion.

The Court of Appeals is also faulted for stating that the Unions had violated their duty of fair representation, which the Unions assert has no relevance to this case. But we do not understand the Court of Appeals to have rested its af-firmance on this ground, for as indicated above, it held that the Unions had violated § 703.

The Unions insist that it was error to hold them liable for not including racial discrimination claims in grievances claiming other violations of the contract. The Unions followed this practice, it was urged, because these grievances could be resolved without making racial allegations and because the employer would “get its back up” if racial bias was charged, thereby making it much more difficult to prevail. The trial judge, although initially impressed by this seemingly neutral reason for failing to press race discrimination claims, ultimately found the explanation “unacceptable” because the Unions also ignored grievances which involved racial harassment violating the contract covenant against racial discrimination but which did not also violate another provision. The judge also noted that the Unions had refused to complain about racially based terminations of probationary employees, even though the express undertaking not to discriminate protected this group of employees, as well as others, and even though, as the District Court found, the Unions knew that blacks were being discharged at a disproportionately higher rate than whites. In the judgment of the District Court, the virtual failure by the Unions to file any race-bias grievances until after this lawsuit started, knowing that the employer was practicing what the contract prevented, rendered the Unions’ explanation for their conduct unconvincing.¹⁸

As we understand it, there was no suggestion below that the Unions held any racial animus against or denigrated blacks generally. Rather, it was held that a collective-bargaining agent could not, without violating Title VII and §1981, follow a policy of refusing to file grievable racial discrimination claims however strong they might be and however sure the agent was that the employer was discriminating against blacks. The Unions, in effect, categorized racial grievances as unworthy of pursuit and, while pursuing thousands of other legitimate grievances, ignored racial discrimination claims on behalf of blacks, knowing that the employer was discriminating in violation of the contract. Such conduct, the courts below concluded, intentionally discriminated against blacks seeking a remedy for disparate treatment based on their race and violated both Title VII and § 1981. As the District Court said: “A union which intentionally avoids asserting discrimination claims, either so as not to antagonize the employer and thus improve its chances of success on other issues, or in deference to the perceived desires of its white membership, is liable under both Title [VII] and §1981, regardless of whether, as a subjective matter, its leaders were favorably disposed toward minorities.” 580 F. Supp., at 1160.

The courts below, in our view, properly construed and applied Title VII and § 1981. Those provisions do not permit a union to refuse to file any and all grievances presented by a black person on the ground that the employer looks with disfavor on and resents such grievances. It is no less violative of these laws for a union to pursue a policy of rejecting disparate-treatment grievances presented by blacks solely because the claims assert racial bias and would be very troublesome to process.

In both Nos. 85-1626 and 85-2010, the judgment of the Court of Appeals is affirmed.

It is so ordered.

1 The United Political Action Committee of Chester County was also a plaintiff in the case.

2 The part of Title VII relevant to the suit against the Unions is 42 U. S. C. § 2000e-2(c), which provides:

“(c) Labor organization practices

“It shall be an unlawful employment practice for a labor organization—

“(1) to exclude or to expel from its membership, or otherwise to discriminate against, any individual because of his race, color, religion, sex, or national origin;

“(2) to limit, segregate, or classify its membership or applicants for membership, or to classify or fail or refuse to refer for employment any individual, in any way which would deprive or tend to deprive any individual of employment opportunities, or would limit such employment opportunities or otherwise adversely affect his status as an employee or as an applicant for employment, because of such individual’s race, color, religion, sex, or national origin; or

“(3) to cause or attempt to cause an employer to discriminate against an individual in violation of this section.”

3 Section 1981 reads as follows:

“All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.”

4 United Steelworkers of America is the certified bargaining agent. The two locals act on its behalf.

5 Pa. Stat. Ann., Tit. 12, §31 (Purdon 1931), repealed by Judiciary Act of 1976, Act No. 142, 1976 Pa. Laws 586. Under the 1976 Act, the new statute of limitations does not apply to claims arising prior to June 27, 1978.

6 The judgment against Lukens is not at issue in the cases brought here.

7 Judge Garth dissented on the question of which statute of limitations to apply to the workers’ § 1981 claim. 777 P. 2d, at 130. He acknowledged that all § 1981 claims should be treated the same; but in his view, § 1981 claims involved injury to economic rights and the personal injury characterization adopted by the Court in Wilson was ill suited for claims arising under § 1981.

8 In the Smith case, the Third Circuit applied our three-part test in Chevron, in concluding that Wilson should be applied to the case then before it. The court remarked: “We have held that where application of the law had been erratic and inconsistent, without clear precedent on which plaintiff could reasonably rely in waiting to file suit, a subsequent Supreme Court decision on the applicable limitations period cannot be said to have overruled clear past precedent on which the litigants may have relied.” 764 F. 2d, at 194-195. The court went on to note that at the time plaintiffs in that case filed suit, the Third Circuit had not ruled definitively on which limitations period applied to the particular § 1983 claim at issue there.

9 The Court of Appeals recognized that giving retroactive effect to its statute of limitations holding would require reexamination of some of the liability determinations by the District Court in light of the shorter limitations period.

10 The first part of this statement must have been addressed to disparate impact, for discriminatory motive is required in disparate-treatment Title VII eases as it is in § 1981 claims. See Teamsters v. United States, 431 U. S. 324, 335-336, n. 15 (1977); General Building Contractors Assn., Inc. v. Pennsylvania, 458 U. S. 375, 391 (1982). Because the District Court eventually found that in each respect the Unions violated both Title VII and § 1981 in exactly the same way, liability did not rest on a claim under Title VII that did not rest on intentional discrimination.

11 The District Court commented that there was substantial evidence, related to events occurring prior to the statute of limitations period, which “casts serious doubt on the unions’ total commitment to racial equality.” 580 F. Supp. 1114, 1157 (ED Pa. 1984). The District Court noted that it was the company, not the Unions, which pressed for a nondiscrimination clause in the collective-bargaining agreement. The District Court found that the Unions never took any action over the segregated locker facilities at Lukens and did not complain over other discriminatory practices by the company. The District Court found that when one employee approached the president of one of the local unions to complain about the segregated locker facilities in 1962, the president dissuaded him from complaining to the appropriate state agency. The District Court, however, found “inconclusive” the evidence offered in support of the employees’ claim that the Unions’ discriminated against blacks in their overall handling of grievances under the collective-bargaining agreement.

12 The District Court also found that although the Unions had objected to the company’s use of certain tests, they had never done so on racial grounds, even though they “were certainly chargeable with knowledge that many of the tests” had a racially disparate impact. Id., at 1159.

18 The District Court also rejected the Unions’ argument that much of the workers’ case involved discrimination by the company in making initial job assignments, and that it had no control over those assignments. The court found that once hired, new employees were entitled to the protection of the collective-bargaining agreement, including the protection afforded by the nondiscrimination clause:

“To require blacks to continue to work in lower paying and less desirable jobs, in units disparately black, is to discriminate against them in violation of the collective bargaining agreement (and, of course, also in violation of Title VII). It is very clear, on the record in this ease, that the defendant unions never sought to avail themselves of this rather obvious mechanism for protecting the interests of their members.” 580 F. Supp., at 1160.