EEOC v. MCI Telecommunications

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,
Plaintiff-Appellant,
v. No. 98-1195
MCI TELECOMMUNICATIONS,
INCORPORATED,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Leonie M. Brinkema, District Judge.
(CA-96-661-A)
Argued: April 7, 1999
Decided: July 28, 1999
Before ERVIN, LUTTIG, and TRAXLER,
Circuit Judges.
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Affirmed in part and reversed in part by unpublished opinion. Judge
Ervin wrote the opinion, in which Judge Luttig and Judge Traxler
joined.
_________________________________________________________________
COUNSEL
ARGUED: Susan Lisabeth Starr, EQUAL EMPLOYMENT OPPOR-
TUNITY COMMISSION, Washington, D.C., for Appellant. David
Jay Cynamon, SHAW, PITTMAN, POTTS & TROWBRIDGE,
Washington, D.C., for Appellee. ON BRIEF: C. Gregory Stewart,
General Counsel, Philip B. Sklover, Associate General Counsel, Vin-
cent J. Blackwood, Assistant General Counsel, EQUAL EMPLOY-
MENT OPPORTUNITY COMMISSION, Washington, D.C., for
Appellant. Lori Vaughn Ebersohl, SHAW, PITTMAN, POTTS &
TROWBRIDGE, Washington, D.C., for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
ERVIN, Circuit Judge:
Appellant the Equal Employment Opportunity Commission
("EEOC") sued appellee MCI Telecom, Incorporated ("MCIT"), on
behalf of Dolly Cox, a technical writer whom MCIT interviewed but
did not subsequently hire. The EEOC describes Cox as a "dark-
skinned Asian Indian," claiming in its Title VII action that MCIT dis-
criminated against Cox on the basis of her race and her national origin
when the company hired two allegedly less-qualified white men to fill
positions for which Cox had been considered. See 42 U.S.C.A.
§ 2000e-2(a) (West 1994). The district court granted summary judg-
ment for MCIT, ruling that Cox was an independent contractor and
therefore not entitled to Title VII's protection from unlawful discrimi-
nation. The court also awarded attorneys' fees and costs to MCIT.
On appeal the EEOC argues that MCIT created a common-law
employment relationship with the two candidates that the company
selected for the positions in question. Assuming without deciding that
Cox was therefore an applicant for employment under Title VII, we
nonetheless find that the EEOC offers insufficient evidence that
MCIT discriminated against Cox. We affirm solely on this ground.
We reverse the award of attorneys' fees and costs, because the district
court premised this award upon the erroneous conclusion that Fourth
Circuit precedent rendered the EEOC's case frivolous and without
merit.
2
I.
In 1991 MCIT decided to hire additional workers to assist with
projects in the company's Management Information Systems (MIS)
department. Gary Braz, a senior MIS manager at MCIT, asked a sub-
ordinate, Edmond Parkinson, to assist him in screening resumes and
interviewing personnel to staff the new MIS projects. At Braz's
request, Parkinson collected resumes from MCIT-approved vendors.1
One such vendor, The Registry, Inc., provided MCIT with a num-
ber of resumes, including the resume of the complainant in this case,
Dolly Cox. According to her own deposition testimony, Cox submit-
ted her resume to The Registry with the clear intent to operate as an
independent contractor. Cox understood that The Registry would
arrange interviews for her, place her with various corporate clients,
and then remit compensation directly to her. As did the other Registry
employees, Cox specified the hourly rate that she would be paid by
The Registry. The Registry would then negotiate with its corporate
clients for a placement fee that covered contractor compensation,
overhead, and profit.
MCIT solicited resumes from The Registry pursuant to a contract
specifying that all personnel supplied by The Registry were to be con-
sidered employees of The Registry only. MCIT maintains that in
November of 1991 it sought to hire Registry consultants to staff one
particular project: a complex multi-media presentation that the MIS
department was preparing to unveil at a company-wide meeting.
Edmund Parkinson began the hiring process for this project, operating
under the supervision of Gary Braz.
From among the resumes submitted by vendors, Parkinson selected
six candidates for an initial interview. One of these candidates was
Dolly Cox. Cox's resume states that she has eight years of experience,
much of it in script writing, plus a familiarity with Macintosh comput-
ers. Cox's resume also indicates that she has a master's degree in "in-
teractive technologies" and formal training in video disk design.
_________________________________________________________________
1 MCIT uses the term "vendors" in reference to the employment agen-
cies that routinely provide the company with technical consultants.
3
Cox's resume does not reflect significant television or film editing
experience.
Edmond Parkinson conducted the initial interviews for the person-
nel needed to staff MCIT's MIS project. Parkinson's approach to the
interviews was somewhat unorthodox: he chose six candidates and
invited each of them to his home. Once the candidates had all arrived,
Parkinson requested that they prepare a videotaped group presentation
that he would in turn submit to Gary Braz.
Parkinson presented the group to Braz with the hope that MCIT
would hire all six candidates as a team. Parkinson indicated to each
of the candidates, including Cox, that he or she would soon receive
an offer from MCIT. Braz insists, however, that at the time of the
interviews he told both Parkinson and the candidates that he did not
have approved funding for six new positions. From the group that
comprised Cox, two women of unknown race, and three white men,
Braz eventually selected the three white men, Adam Baumstark, Ster-
ling Daines, and Frank Mitko, as new hires.2
According to the EEOC, Parkinson implored Braz to hire Cox,
believing that she was more qualified than either Daines or Baum-
stark. Parkinson's affidavit states simply that he"preferred" Cox to
the other candidates. For its part, MCIT asserts that Braz chose
Baumstark for his extensive television experience and his familiarity
with the Macintosh computer, and Daines for his lower billing rate
and general suitability "to do whatever needs to be done." The com-
pany also maintains that Baumstark and Daines were selected for one
specific MIS project and not an open-ended assignment, although the
record suggests otherwise.3
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2 Braz hired Mitko to fill a temporary computer programming position,
and the EEOC does not allege that Mitko's hiring was an act of discrimi-
nation against Cox.
3 Both Daines and Baumstark were required to work no fewer than
forty hours per week, always under the direction and close supervision
of MCIT employees. Although MCIT did not pay benefits or provide tax
withholding for Daines and Baumstark, the two were paid by the hour,
not by the project, and they appeared to use MCIT's premises and com-
puter equipment exclusively. Eventually, Daines was hired as an official
employee, and Baumstark was offered a transfer to MCIT's Colorado
office.
4
Five years after the events at issue, the EEOC filed a complaint in
district court, alleging that MCIT had violated Title VII's prohibition
against discrimination in hiring when the company selected Daines
and Baumstark instead of Cox. MCIT responded with a motion for
summary judgment. The district court granted the motion on the
grounds that Cox's relationship with MCIT was too"inchoate" to
warrant Title VII protection.
The EEOC then moved for reconsideration, arguing that summary
judgment was premature because no discovery had yet occurred in the
case. The district court granted the EEOC's motion without prejudice
to MCIT's right to refile for summary judgment at the conclusion of
discovery. Once the parties had completed discovery, MCIT
requested that the EEOC dismiss the case. When the EEOC refused,
MCIT moved again for summary judgment, arguing that Cox was an
independent contractor, or, in the alternative, that the EEOC had not
presented sufficient evidence of discriminatory conduct. MCIT also
moved the court for a grant of attorneys' fees and costs.
The district court granted both of MCIT's motions, ruling that Cox
was an independent contractor as a matter of law, and awarding attor-
neys' fees and costs to MCIT. The court determined that these fees
and court costs should accrue from a date ten days subsequent to the
publication of the Fourth Circuit's opinion in Cilecek v. Inova Health
Syst. Servs., 115 F.3d 256 (4th Cir. 1997). The district court viewed
Cilecek as dispositive of the issues at bar and concluded that once the
opinion issued, the EEOC should have voluntarily dismissed the Cox
litigation.
This appeal followed.
II.
Title VII's protective reach extends beyond employees to cover job
applicants, but only in the context of a potential employment relation-
ship. See Bender v. Suburban Hosp., Inc., 159 F.3d 186, 189 n.2 (4th
Cir. 1998). The EEOC argues that once a hiring party has created a
common-law employment relationship with its independent contrac-
tors, unsuccessful applicants for those contracting positions may then
invoke Title VII's protection against discrimination in hiring. We
5
decline to reach this issue, and hold instead that viewing the facts in
the light most favorable to Cox, the EEOC has not presented suffi-
cient evidence of discrimination to survive summary judgment on the
merits of its claim.
Specifically, the EEOC has failed to rebut Braz's stated rationale
for hiring Daines and Baumstarck instead of Cox. See McDonnell
Douglas Corp. v. Green, 411 U.S. 792, 807 (1973) (once the Title VII
defendant articulates a legitimate, non-discriminatory reason for its
decision, the plaintiff must prove that this reason is a pretext for ille-
gal discrimination). If MCIT offers a plausible explanation for its hir-
ing decision, the EEOC must demonstrate that this articulated
justification is both false and a pretext for illegal discrimination. See
Jiminez v. Mary Washington College, 57 F.3d 369, 378 (4th Cir.
1995). Moreover, to establish pretext where relative job qualifications
are at issue, the EEOC must prove, not only that Cox was qualified
for the position, but that her qualifications were superior to those of
the candidates actually hired. See Evans v. Technologies Applications
& Serv. Co., 80 F.3d 954, 960 (4th Cir. 1996). See also Gairola v.
Commonwealth of Va. Department of General Svcs., 753 F.2d 1281,
1287 (4th Cir. 1985).
To support its claims of falsity and pretext the EEOC relies upon
Braz's allegedly inconsistent statements concerning MCIT's hiring
criteria for the contractor positions. Braz told an Arlington County
Human Rights Commission investigator that he sought the most qual-
ified candidates; later, Braz testified that he hired Baumstark for his
broad range of television production and editing experience and
Daines for his junior status and low billing rate. 4 Although Braz may
have emphasized differing criteria in each of these two explanations,
we do not find that this inconsistency rises to the level of mendacity.
Braz's statements, standing alone, are not persuasive evidence of dis-
criminatory pretext, and the EEOC offers nothing else.
MCIT has maintained that budget restrictions affected Braz's hir-
ing decision, causing him to prioritize Baumstark's broad experience
_________________________________________________________________
4 Daines testified that he received $25.00 per hour from his employer
for the MCIT project. This amount is less than half of the $60.00 hourly
minimum rate that Cox requested from The Registry.
6
and Daines' relative economy over Cox's narrower technical skills.
To rebut this seemingly legitimate and non-discriminatory rationale,
the EEOC would need to show that Cox, whose expertise is primarily
in technical writing, was either more broadly experienced than Baum-
stark, or more cost-effective than Daines. This the EEOC has failed
to do, and so we affirm the grant of summary judgment for MCIT.
III.
A district court may award attorneys' fees and costs to a defendant
only when the plaintiff has brought a case that is frivolous or without
factual or legal foundation. See Christiansburg Garment Co. v.
EEOC, 434 U.S. 412, 421 (1978). In the instant case, the district court
awarded attorneys' fees and costs after concluding that under our
Cilecek holding, Cox was unquestionably an independent contractor
and not an employee. Because the EEOC declined to abandon the Cox
litigation in response to the publication of Cilecek, the court granted
MCIT all costs and fees accruing from a date ten days after the
release of that decision.5
Cilicek holds that among the factors relevant to determining
whether a physician is an employee of a hospital, the degree to which
the hospital controls when and how the physician provides services
is particularly significant. 115 F.3d at 260 ("[a]t root, the distinction
... between an employee and an independent contractor rests on the
degree of control exercised by the hiring party."). We restated this
holding in Bender v. Suburban Hospital, when we again instructed
lower courts to resolve the question of a physician's employment sta-
tus by applying traditional principles of agency law, while recogniz-
ing "the critical question is the ``degree of control.'" 159 F.3d at 190
(citing Cilecek, 115 F.3d at 260).
Cilecek did address additional factors, other than control, that may
serve as indicia of an employment relationship. These factors include
the intent of the parties, the withholding of taxes, and the provision
of employee benefits. 115 F.3d at 261. As we were careful to note,
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5 The district court concluded that after ten days had elapsed from pub-
lication of the opinion, the EEOC could fairly be charged with knowl-
edge of Cilicek's holding.
7
however, the relative weighting of these factors must be industry-
specific. See id. at 260 ("the degree of distinction between [an
employer and the hiring party in an independent contractor relation-
ship] is related to the work itself and the industry in which it is per-
formed."). Our analyses in Cilecek and Bender were tailored to the
special circumstances of the medical profession, where ultimate con-
trol of patient care must, of necessity, rest with the treating physician.
See Cilecek, 115 F.3d at 260 (concluding, "it is less productive to
debate the control over the discharge of professional services in the
medical context than it might be in other service relationships.").
When deciding whether a physician is a hospital employee, the court
must therefore look beyond the degree of control to the full context
of the physician's work environment.
Cilecek was a case about doctors and hospitals; the instant case, by
contrast, concerns contingent workers in the information technology
industry. We find that it was not a priori unreasonable for the EEOC
to distinguish Cilecek on this basis, or for the agency to argue on
these facts that MCIT's contingent workers should rightfully be des-
ignated common-law employees for the purpose of Title VII litiga-
tion. Indeed, the Ninth Circuit accepted a similar argument when it
held that certain contingent information technology workers engaged
by the Microsoft Corporation were common-law employees entitled
to benefits under the federal Employee Retirement Income Security
Act (ERISA). See Vizcaino v. Microsoft Corp., 120 F.3d 1006, 1012-
1014 (9th Cir. 1997).
IV.
Because Cox's claim fails for want of sufficient proof of discrimi-
nation, we need not decide today whether an unsuccessful applicant
for an independent contractor position may sue under Title VII, if a
court later determines that the person actually hired for the position
was a common-law employee. We simply note that our holding in
Cilicek did not squarely resolve this issue. The district court erred in
concluding otherwise, and thus MCIT is not entitled to the court's
award of attorneys' fees and costs.
AFFIRMED IN PART AND REVERSED IN PART
8