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2000 Term, Number 18 / June 25, 2001

Today the Supreme Court granted certiorari in five cases of potential interest to the business community, two of which have been consolidated. Amicus briefs in support of the petitioners are due on Thursday, August 9, 2001, and amicus briefs in support of the respondents are due on Monday, September 10, 2001. Any questions about this case should be directed to Miriam Nemetz (202-263-3253) in our Washington office.

1. Title VII — Statute of Limitations— Continuing Violations. To preserve a claim under Title VII of the Civil Rights Act of 1964, an aggrieved employee must submit a charge of discrimination to the EEOC within 180 days of the allegedly unlawful incident, or within 300 days of the incident if the employee first presented the charge to a state or local equal opportunity agency. See 42 U.S.C. § 2000e-5(e)(1). The Supreme Court granted certiorari in National R.R. Passenger Corp. v. Morgan, No. 00-1614, to decide whether otherwise time-barred Title VII claims can be revived under a "continuing violation" theory by joining them with related claims that were the subject of a timely EEOC charge.

Morgan began working for the National Railroad Passenger Corporation ("Amtrak") as an electrician's helper in 1990. He claims that soon after he started working at Amtrak, several of his supervisors launched a race-based campaign of harassment and adverse employment actions. Morgan asserts, for example, that the supervisors improperly disciplined and even temporarily terminated his employment in 1991 on a pretext. Over the next several years, Morgan claims that he continued to endure harassment and discrimination on a regular basis.

Although Morgan believed as early as 1991 that he was being treated unfairly because of his race, he did not file an EEOC charge until February 1995, two days after Amtrak suspended him again. At that point, only some of the many allegedly discriminatory incidents fell within the 300-day window antedating Morgan's EEOC charge. After discovery, the district court granted Amtrak's motion for partial summary judgment with respect to all conduct outside the limitations period, holding that Morgan had forfeited those claims by failing to report them to the EEOC promptly. The remaining claims proceeded to trial, resulting in a jury verdict in Amtrak's favor.

The Ninth Circuit reversed the judgment in its entirety and remanded the case for a new trial on all of Morgan's allegations. 232 F.3d 1008 (2001). It its view, Morgan had presented sufficient evidence to create a genuine issue of fact regarding the existence of a continuing violation of Title VII. Under "the continuing violations doctrine," it explained, courts may "consider conduct that would ordinarily be time barred as long as the untimely incidents represent an ongoing unlawful employment practice." Id. at 1014 (internal quotation marks and citation omitted). The court of appeals rejected the district court's reliance on a decision by the Seventh Circuit, Galloway v. General Motors Serv. Parts Operations, 78 F.3d 1164 (7th Cir. 1996), which held the continuing violation doctrine to be inapplicable when the employee fails to submit a timely EEOC charge despite having an awareness that the unfair treatment is unlawful. Citing its earlier decision in Fielder v. UAL Corp., 218 F.3d 973 (9th Cir. 2000), a case that is now being held by the Supreme Court pending its resolution of Morgan, the Ninth Circuit explained that it has "never adopted a strict notice requirement as the litmus test for application of the continuing violation doctrine." 232 F.3d at 1015. Instead, the critical inquiry under Fielder and earlier cases for charges of this nature is whether "the evidence indicates that the alleged acts of discrimination occurring prior to the limitations period are sufficiently related to those occurring within the limitations period" to indicate a "serial violation." Id.

As the Ninth Circuit acknowledged, there is a conflict among the Circuits regarding the proper application of the continuing violation theory to employment discrimination claims. The Fifth Circuit has permitted otherwise time-barred incidents to be linked to timely incidents if the nature of the discrimination is similar, the unlawful acts are of a recurring nature, and the untimely acts were not of such a nature that they "‘should trigger an employee's awareness of and duty to assert his or her rights.'" See id. (quoting Berry v. Board of Supervisors of La. State Univ., 715 F.2d 971, 981-982 (5th Cir. 1983)). By contrast, the Seventh Circuit appears to permit invocation of the continuing violation doctrine only when a reasonable person in the plaintiff's position would not have immediately appreciated the unlawful nature of the conduct antedating the limitations period. See Galloway, 78 F.3d at 1167.

This case is of enormous importance for all employers. Although Morgan arose under Title VII, the Ninth Circuit's interpretation of the continuing violation doctrine likely will apply equally to employment discrimination claims asserted under Section 1981, the Age Discrimination in Employment Act ("ADEA"), and the Americans with Disabilities Act ("ADA"). Under the Ninth Circuit's rule, employers will forfeit the benefits of repose that otherwise would attend employment conduct that has gone unchallenged for many years.

2. Title VII — Statute of Limitations — Relation Back of Amendments To The Charge. The Supreme Court granted certiorari in Edelman v. Lynchburg College, No. 00-1072, to decide the validity of an EEOC regulation stating that any charge of employment discrimination filed with the EEOC may later be amended to cure "technical defects or omissions, including failure to verify the charge," and that an amendment verifying the charge "will relate back to the date the charge was first received" by the EEOC. 29 C.F.R. § 1601.12(b).
On June 6, 1997, Leonard Edelman was denied tenure by Lynchburg College. The applicable statute of limitations for his claim was 300 days. On November 14, 1997 (160 days later), Edelman sent a detailed letter to the EEOC alleging discrimination based upon gender and national origin, charging that Lynchburg's dean had denied him tenure because she was systematically purging white men from the faculty. Edelman did not submit a verified formal Charge of Discrimination (on EEOC's "Form 5") until April 15, 1998 — 313 days after the tenure denial. When Edelman sued Lynchburg College, the district court dismissed the claim as time-barred. 66 F. Supp. 2d 777, 780 (W.D. Va. 1999) (citing 42 U.S.C. § 2000e-5(b)).

The Fourth Circuit affirmed. 228 F.3d 503 (2000). The court of appeals held that the EEOC's regulation permitting the verification to relate back to the filing of the initial charge, 29 C.F.R. § 1601.12(b), is invalid because it conflicts with 42 U.S.C. § 2000e-5(b), which requires that a charge be filed before the limitations period expires, and be in writing under oath or affirmation. "The plain meaning of this language compels the conclusion that if a discrimination claim is not in writing, under oath or affirmation, containing the information and in the form required by the Commission, it is not a charge." 228 F.3d at 508. Edelman's November 14, 1997 verified charge thus did not "relate back" to a timely-filed "charge," but rather revived a claim for which no charge had been timely filed. See id.

Stating that he was "uncomfortable with the broad[] ground for decision set forth in the majority opinion, that verification may never relate back after 180 days from the date of the alleged discriminatory action," Judge Luttig concurred only in the judgment, based on the peculiar facts of this case. 228 F.3d at 512. Judge Luttig pointed out that Title VII does not contain a single provision "stating either by terms or in effect that ‘a verified charge must be filed within 180 days of a discriminatory action'" — in which case the "opinion for the court would * * * be unassailable." Id. "Instead, we are presented with two statutes, the first providing that a charge shall be filed within 180 days of the unlawful employment practice, and the second providing that charges shall be in writing and include an oath or affirmation." Id. Judge Luttig opined that it was thus "at least plausible to read the first statute to require simply that a charge be filed within 180 days, and the second * * * simply to require that, before a charge is finalized, all of the allegations and information required by the EEOC be provided and verified." Id. (emphasis omitted). Further, he observed, Title VII contains no definition of the term "charge," and thus no requirement that, to constitute a charge, a claim must be verified. Id.

As the Fourth Circuit acknowledged, its decision conflicts with rulings on the same issue by the Fifth, Seventh, Ninth and Tenth Circuits. Id. at 510-511 (citing Price v. Southwestern Bell Tel. Co., 687 F.2d 74 (5th Cir. 1982); Philbin v. General Electric Capital Auto Lease, Inc., 929 F.2d 321 (7th Cir. 1991); Casavantes v. California State Univ., 732 F.2d 1441 (9th Cir. 1984); Peterson v. City of Wichita, 888 F.2d 1307 (10th Cir. 1989)). The Eighth Circuit, on the other hand, has reached a conclusion similar to that of the Fourth Circuit. See Shempert v. Harwick Chem. Corp., 151 F.3d 793, 796-797 (8th Cir. 1998).

This case is of substantial importance to every business that may be subject to an employment discrimination claim.

3. Family And Medical Leave Act of 1993 — Notice of Leave Designation. The Family and Medical Leave Act of 1993 ("FMLA"), 29 U.S.C. § 2601 et seq., requires employers to provide eligible employees with 12 weeks of unpaid leave during any 12-month period upon the birth or adoption of a child, to care for a close relative with a serious health condition, or because of the employee's own serious health condition. 29 U.S.C. § 2612(a)(1). The Secretary of Labor has promulgated regulations providing that an employer must give the employee advance notice that the employer will treat leave taken by the employee as FMLA leave. Under the regulations, if the employer fails to notify an employee that any paid or unpaid leave taken pursuant to company leave policy is also designated as FMLA leave, then the employee will retain his or her right to take 12 additional weeks of leave under the FMLA. See 29 C.F.R. §§ 825.700(a), 825.208(c). The Supreme Court granted certiorari in Ragsdale v. Wolverine Worldwide, Inc., No. 00-6029, to consider whether these regulations are a permissible interpretation of the FMLA.

Tracy Ragsdale began working at Wolverine Worldwide on March 17, 1996. She was diagnosed with cancer in February, 1996, and requested medical leave on February 21, 1996. Under Wolverine's leave policy, Ragsdale was eligible for seven months unpaid leave, but was obligated to request extensions of her leave every 30 days. Wolverine granted Ragsdale's initial request for leave, and granted the six 30-day extension requests she thereafter made. Because Ragsdale had been employed by Wolverine for only 11 months when she first went on leave, Wolverine believed that she was not covered by the FMLA, which applies only to employees who have been at a company for more than a year. Wolverine therefore never notified Ragsdale that it would count her leave as FMLA leave. On September 20, 1996 — after Ragsdale had taken the full seven months of leave for which she was eligible under Wolverine policy — Wolverine terminated Ragsdale's employment. Ragsdale thereafter requested an additional 12 weeks of FMLA leave, which Wolverine refused to provide.

Ragsdale filed suit in the United States District Court for the Eastern District of Arkansas, claiming in relevant part a violation of the FMLA. In an unpublished opinion, the court held that Ragsdale was covered by the FMLA because her time on medical leave counted toward the year of employment required for FMLA eligibility — a decision not presented for review to the Supreme Court. The district court also concluded that the regulations providing that an employer may not retroactively designate leave as FMLA leave were inconsistent with the FMLA and hence invalid. Because Wolverine had provided Ragsdale with considerably more than the 12 weeks of leave required by the FMLA, the court held that the company had satisfied its obligations under the statute.

The Eighth Circuit affirmed. 218 F.3d 933 (8th Cir. 2000). According to the court, "[t]he FMLA was intended only to set a minimum standard of leave for employers to provide to employees" (id. at 937), and was not "designed to entitle an employee to additional leave under the FMLA when the employer's leave plan already provides for twelve weeks of FMLA qualifying leave" (id. at 938). The court also explained that, "where Congress desired explicit notice provisions with significant consequences for their violation, it provided for them in the text of the statute." Ibid. Opining that the regulations thus "create rights which the statute clearly does not confer" (id. at 939), the court concluded that they were invalid. 

In striking down the regulations, the Eight Circuit followed a decision of the Eleventh Circuit. See McGregor v. Autozone, Inc., 180 F.3d 1305 (11th Cir. 1999). The Sixth Circuit has upheld the regulations. See Plant v. Morton Int'l, Inc., 212 F.3d 929 (6th Cir. 2000).
This case is significant to all employers covered by the FMLA.

4. Telecommunications — Federal Jurisdiction to Review State Commission Determinations. In the landmark Telecommunications Act of 1996 ("TA 96"), Congress fundamentally restructured local telecommunications markets and regulation in the United States. Prior to TA 96, local telecommunications regulation was largely a matter under the control of the individual states. TA 96 creates a new federal regime, under which the Federal Communications Commission and the federal courts have assumed new regulatory and oversight roles. Section 252(e)(6) of TA 96 provides in relevant part:

REVIEW OF STATE COMMISSION ACTIONS. — * * * In any case in which a State commission makes a determination under this section, any party aggrieved by such determination may bring an action in an appropriate Federal district court to determine whether the agreement * * * meets the requirements of section 251 and this section. 

Section 252(e)(4) of TA 96 adds that "[n]o state court shall have jurisdiction to review the action of a State commission in approving or rejecting an agreement under this section."

In the five years since TA 96 was enacted, the federal district courts and courts of appeals have struggled with the scope of their jurisdiction under these provisions and whether the Eleventh Amendment prohibits suits under those provisions against state regulators and state regulatory bodies. Earlier this year, the Supreme Court granted certiorari in Mathias v. WorldCom Technologies, Inc., No. 00-878, to resolve conflicts in the circuits concerning (i) the scope of federal jurisdiction under section 252(e)(6) in cases involving a state commission's enforcement of a previously approved section 252 interconnection agreement and (ii) whether the Eleventh Amendment permits a state commission or its individual commissioners to be sued in federal court in such cases. 

This week the Court granted two petitions for certiorari, arising out of a single Fourth Circuit decision (Bell Atlantic Maryland, Inc. v. MCI WorldCom, Inc., 240 F.3d 279 (4th Cir. 2001)), that present an issue that is closely related to the questions that the Court will address in Mathias. Verizon Maryland, Inc. v. Public Service Comm'n of Maryland, No. 00-1531, and United States of America v. Public Service Comm'n of Maryland, No. 00-1711 (consolidated) (collectively, "Verizon"). That issue is "[w]hether a federal district court has subject matter jurisdiction under 28 U.S.C. § 1331 to determine whether a state commission's action interpreting or enforcing an interconnection agreement violates the 1996 Act." 

The Supreme Court has set the Mathias and Verizon cases for oral argument in tandem. The Supreme Court's resolution of these issues will have a significant impact on all of those affected by TA 96. Mayer, Brown & Platt represents respondent Illinois Bell Telephone Company d/b/a Ameritech Illinois in the Mathias case.

* * * * *

The Court invited the Solicitor General to express the views of the United States in the following case of interest to the business community:

Kentucky Association of Health Plans Inc. v. Nichols, No. 00-1471: The question presented is whether state "any willing provider" statutes that prohibit health insurers from discriminating against providers who are willing to meet the conditions of participation in a health plan are preempted by ERISA, or instead are saved from preemption because they are laws "which regulate insurance." Decision below: 227 F.3d 352 (6th Cir. 2000).

This Mayer, Brown, Rowe & Maw Supreme Court Docket Report provides information and comments on legal issues and developments of interest to our clients and friends. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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