Equal Employment Opportunity Commission v. Board of Governors of State Colleges and Universities and University Professionals of Illinois

Citations: 957 F.2d 424; 1992 U.S. App. LEXIS 3421; 58 Empl. Prac. Dec. (CCH) 41,326; 58 Fair Empl. Prac. Cas. (BNA) 292Docket: 90-2440

Court: Court of Appeals for the Seventh Circuit; March 3, 1992; Federal Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

The Equal Employment Opportunity Commission (EEOC) challenged a provision in a collective bargaining agreement between the Board of Governors of State Colleges and Universities and University Professionals of Illinois that prevents employees from pursuing grievance proceedings if they initiate an age discrimination claim in any administrative or judicial forum. The EEOC argued this policy violates Section 4(d) of the Age Discrimination in Employment Act (ADEA), which prohibits discrimination against employees who file claims under the ADEA. The district court initially granted summary judgment for the Board based on a prior case, but the Seventh Circuit Court of Appeals assumed jurisdiction and ultimately reversed this decision. The collective bargaining agreement's Article 17.2 stipulates that if an employee seeks resolution through another forum, the Board is not obligated to continue with the grievance procedure, which the EEOC contended undermines employees' rights under the ADEA by deterring them from filing grievances. Section 4(d) of the ADEA explicitly makes it unlawful for employers to discriminate against employees for participating in ADEA-related proceedings.

Three district court opinions emerged from this lawsuit, known as BOG I, BOG II, and BOG III, addressing a grievance filed by Professor Raymond Lewis regarding his non-recommendation for tenure at Northeastern Illinois University. Following a lengthy grievance process initiated on April 9, 1984, Lewis filed an age discrimination claim with the EEOC on May 14, 1985. This claim led the Board of Governors to terminate his pending grievance, obstructing the arbitration process. The EEOC subsequently brought the case forward, asserting retaliation under Section 4(d) of the Age Discrimination in Employment Act (ADEA). 

Judge Getzendanner ruled that the collective bargaining agreement's provision constituted prima facie evidence of retaliation and denied the Board's dismissal motion, establishing that employee rights under Title VII take precedence over an employer's arbitration rights. After her resignation, Judge Aspen took over the case, resulting in BOG II, where he denied the EEOC's motion for partial summary judgment regarding liability, affirming that the Eleventh Amendment did not bar ADEA claims against the Board and that the Board's good faith in adopting Article 17.2 was a genuine issue. 

In BOG III, cross-motions for summary judgment led Judge Aspen to determine that Article 17.2 was not invalid without evidence of retaliatory intent, resulting in a summary judgment for the Board. The court disagrees with this finding, asserting that Section 4(d) prohibits discrimination for participating in ADEA-related processes without requiring proof of retaliatory intent. The distinction between discrimination and retaliation claims is clarified, noting that retaliation claims demonstrate a higher level of animus but do not necessitate intent under Section 4(d).

Section 4(d) addresses discrimination against employees engaging in protected activities, focusing on the effects of such discrimination rather than the employer's intent. It specifically prohibits retaliation against employees who assert their federal rights, allowing employers to present legitimate, non-discriminatory reasons for adverse actions taken, but not good faith justifications for retaliatory behavior. The Board's rationale for avoiding duplicative litigation does not negate the claim of discrimination against employees participating in protected activities; rather, it suggests a desire to permit non-malicious discrimination, which Congress has deemed unlawful. Congress has not established any defenses against retaliation claims nor exceptions to Section 4(d) based on rational or financial considerations.

Additionally, overlapping contractual and legal remedies do not diminish an employee's right to pursue claims under both grievance-arbitration agreements and Title VII, as affirmed in Alexander v. Gardner-Denver Co. If an employee's participation in protected activity is a decisive factor for adverse employment action, that action is deemed invalid regardless of the employer's intentions. The Board's claims of good faith discrimination lack relevance because the policy leading to differential treatment of employees is invalid if it results in impermissible discrimination. The court's prior decision in Rose v. Hearst Magazines does not alter this conclusion, as it specifically addressed the need for both retaliation and willfulness findings within the context of the ADEA.

If the employer in Rose retaliated against its employee, such conduct must demonstrate a reckless disregard for the ADEA's violation. Retaliation claims, similar to disparate treatment claims, encounter challenges in applying the ADEA's two-tier liability structure. The Rose case, addressing individual disparate treatment, is not applicable to discriminatory policy cases, where the employer's justification for the policy does not affect its legality. In these cases, determining discrimination does not require an examination of the employer's intent. 

For instance, if an employer withdrew benefits after an employee filed a charge, that action would constitute retaliation. In retaliatory policy cases, the employer’s good faith is irrelevant, paralleling situations involving discriminatory policies. Courts have clarified that benign motives do not exempt policies from being discriminatory.

The analysis now shifts to whether Article 17.2 of the collective bargaining agreement constitutes a retaliatory policy regarding ADEA claims. This article stipulates that an employee loses the right to an in-house grievance procedure if they file a discrimination charge. It allows the Board to take adverse actions against an employee solely for engaging in protected activity, effectively forcing employees to choose between their grievance rights and their ADEA litigation rights. This is particularly problematic when the grievance process is lengthy, as seen in Lewis's case, where delays could prevent him from pursuing an age discrimination claim due to statute of limitations concerns.

Article 17.2 allows employees to choose between two forms of relief but prohibits them from pursuing both simultaneously. The Board argues that the loss of grievance procedures is acceptable since employers are not required to offer such procedures. However, the Supreme Court in Hishon v. King & Spalding established that benefits integral to employment cannot be distributed in a discriminatory manner, even if the employer is not obligated to provide them. The Board's participation clause in Section 4(d) prohibits denying grievance proceedings based on an employee's involvement in protected activities under the Age Discrimination in Employment Act (ADEA). By including Article 17.2 in its collective bargaining agreement, the Board's policy discriminates against employees who file ADEA complaints, rendering the Board's benign intent irrelevant. 

The Board contests the discriminatory label, asserting that Article 17.2 applies to all employment-related actions, not solely to protected claims. It highlights that employees engaged in unprotected actions also face adverse consequences. However, this argument does not mitigate the discrimination faced by employees filing ADEA claims. A policy is discriminatory if it adversely affects a protected class based on an impermissible criterion, as illustrated in Trans World Airlines v. Thurston. The EEOC example clarifies that a discriminatory policy remains so even if it impacts non-protected individuals. The Board’s argument fails to recognize that both its policy and any similar policies would equally infringe on the rights of protected class members, thereby invalidating the policy regarding them. Any policy that terminates grievance proceedings based on ADEA claims constitutes discrimination under Section 4(d), as it employs an impermissible factor in its criteria.

Members of a protected class should not be required to file individual disparate treatment claims under the McDonnell Douglas burden-shifting framework when adverse employment actions arise from discriminatory policies rather than individual decisions. Accepting the Board's stance that policies impacting all members of a protected class could be considered non-discriminatory if they also affect some non-protected members would allow employers to perpetuate discrimination by broadly defining non-protected categories. Section 4(d) of the ADEA prohibits policies that penalize employees for exercising their statutory rights, including provisions in collective bargaining agreements that restrict grievances based on participation in protected activities. Courts have established that unions cannot waive employees’ ADEA or Title VII rights through collective bargaining. Upholding the Board's argument could discourage employees from asserting their ADEA rights due to potential adverse consequences. Consequently, Article 17.2 of the collective bargaining agreement is found to violate Section 4(d) with regard to ADEA claimants, being discriminatory in nature. The case is reversed and remanded for appropriate injunctive relief in favor of the EEOC. The grievance procedure offered by the collective bargaining agreement aimed to provide a cost-effective resolution for disputes, but the termination of this procedure upon seeking resolution in another forum is deemed discriminatory by the EEOC, as it results in the loss of rights for employees pursuing ADEA remedies.

Article 17.2 does not discriminate based on age and does not specifically target ADEA claimants; however, Section 4(d) prohibits pursuing ADEA remedies as a basis for unfavorable treatment. This results in a technical violation of Section 623(d) of the ADEA, leading to a reluctant agreement with the majority opinion. The concern is that the EEOC's interpretation could undermine the contractual grievance procedure for Union members, potentially removing an alternative dispute resolution pathway. Without Article 17.2, the Board may have less incentive to provide grievance procedures, pushing Union members towards litigation as the sole recourse, which contradicts the intended flexibility of federal anti-discrimination laws.

The Union remains neutral on the case's merits but is open to contract changes mandated by a court ruling. The decision is binding on both the Union and the Board. Despite the Board reinstating Lewis's grievance after EEOC intervention, Article 17.2 remains subject to judicial review as it has affected other employees filing discrimination complaints. Amici curiae briefs from various associations support affirmance of the decision. The terms "retaliation" and "discrimination" are interchangeable in the context of Section 4(d) claims, as illustrated in prior case law. Lewis's grievance relates to tenure procedures, whereas his EEOC complaint concerns age discrimination. In assessing damages under the ADEA, the willfulness of the violation is significant, with the standard established in Trans World Airlines, Inc. v. Thurston applying in this context.

Coston v. Plitt Theatres, Inc., 860 F.2d 834 (7th Cir. 1988), overruled the "knew or should have known" standard from Syvock v. Milwaukee Boiler Mfg. Co., 665 F.2d 149 (7th Cir. 1981), allowing defendants to assert a belief in the legality of their policy rather than the benign intent behind it. The decision has been rejected by two other appellate courts: Grant v. Hazelett Strip-Casting Corp., 880 F.2d 1564 (2d Cir. 1989), which stated that retaliation findings do not always imply willfulness, and Anderson v. Phillips Petroleum Co., 861 F.2d 631 (10th Cir. 1988), which challenged the notion that a finding of intentional discrimination must align with a lack of willfulness. Manion, J., in a concurring opinion, argued against imposing single-tier liability in retaliation cases. The Fifth Circuit's ruling in EEOC v. J.M. Huber Corporation, 927 F.2d 1322 (1991), has been seen as inconsistent with Cosmair, although it does not address ADEA claims and denies any inconsistency. This is also at odds with the Supreme Court's ruling in International Union, UAW v. Johnson Controls, which stated that a lack of malevolent motive does not negate a discriminatory policy's effect. While focused on age discrimination under the ADEA, the case recognizes that employees are also protected against retaliation under Title VII. Lastly, the Supreme Court has indicated that ADEA claims may be subject to compulsory arbitration in certain contexts, but distinguished these from cases involving collective bargaining agreements.