Source: https://openjurist.org/701/f2d/397
Timestamp: 2019-04-20 02:18:26+00:00

Document:
Israel Trevino appeals from the district court's grant of summary judgment to defendants Celanese Corporation, Celanese Chemical Company,1 and Arthur Brothers, Inc. (ABI) on his Title VII claim, and from the court's award of attorney's fees against him based on its finding that his action was frivolous, unreasonable and without foundation. Texas Rural Legal Aid, Inc. (TRLA) appeals the award of attorney's fees against it for what the court found was an abuse of legal process. Careful review of the record leads us to conclude that summary judgment was inappropriate on the facts before the district court, and that Trevino's suit was neither frivolous, unreasonable, baseless, nor an abuse of legal process. Accordingly, we reverse and remand for a new trial, and vacate the award of attorney's fees against both Trevino and TRLA.
On August 1, 1980, the court denied Trevino's motion to consolidate this case with Mireles.5 Finally, on December 15, 1980, the court granted summary judgment for Celanese. Narrowing its focus to Trevino's most recent job application, the court chose to view Trevino's action as a simple failure-to-hire claim, and under that theory quite properly determined that Trevino had failed to make out the elements of a prima facie case. Having narrowly circumscribed the scope of discovery, the court did not address Trevino's challenge to the joint Celanese-ABI promotion procedures alleged in the complaint as a continuing violation of his Title VII rights. The court further held that there was no genuine issue of material fact with respect to the claim that Celanese and ABI were joint employers, or that they operated an integrated business or enterprise. A similar order granting summary judgment for ABI was entered on January 12, 1981. At the same time, and by a separate order, the court dismissed all claims raised by Trevino on behalf of the class he claimed to represent.
Trevino then filed a motion to vacate the summary judgments, supported by numerous records and documents obtained in the related Mireles litigation that showed Celanese's involvement in ABI personnel decisions. The court denied the motion and entered final judgment for Celanese and ABI on October 20, 1981. In its order, the court awarded defendants $24,541 in attorney's fees, ten percent to be paid by Trevino, and ninety percent by TRLA. The court concluded that since there were no openings in the position for which Trevino had applied, his claim was frivolous. The court further determined that TRLA had set about fabricating the Trevino suit solely to circumvent the court's previous order denying consolidation of this case with the Mireles case, and concluded that this amounted to nothing less than an abuse of legal process.
We finally must take up the factor of timing. The court found that in some instances there were no openings in positions for which the plaintiffs were qualified within the 90 days [now 180 days] prior to the filing of charges with the EEOC. The court apparently read McDonnell-Douglas [McDonnell-Douglas v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668] as saying that if an employer has employed no one during the 90 days [now 180 days] preceding the filing of charges with the EEOC, it is impossible to have an unlawful employment practice committed within the time limitations of 42 U.S.C. Sec. 2000e-5(e).
This is in relation to the McDonnell-Douglas criterion requiring that plaintiff show that he applied for a job for which the employer was seeking applicants. Clearly this applies to new employment and is different from an employee who is seeking promotion. The former takes place on a particular day, whereas in the promotion area it invariably arises during a lengthy period of time. Plaintiffs here challenge the entire promotion system maintaining that it continually operated so as to hold them in lower echelons. Hence, the 90 day period [now 180 days] period [sic] prior to the filing of the EEOC charges looms inconsequential in this kind of case. If proven, these charges of discriminatory refusal to promote would be violative of 42 U.S.C. Sec. 2000e-5.
In order to demonstrate that Celanese's persistent refusal to transfer him out of the ranks of ABI amounted to actionable failure to promote, Trevino must first demonstrate that ABI and Celanese acted jointly as employers with respect to him, and to those he purports to represent. Otherwise, the alleged failure to promote is reduced to Celanese's failure to hire him--a nonactionable claim on the facts before us.
Ordinarily, promotion is perceived as occurring within a single company or organization. It is clear, however, that an employee may also be promoted, or denied promotion, from one to another nominally independent entity, provided these two entities' activities, operations, ownership or management are sufficiently interrelated. Whether transfer from one workforce to another constitutes a "promotion" or a "hiring" depends on the facts of each particular case; however, the degree of interrelatedness between companies required before an employee will be considered to have been "promoted" as he transfers from one to the next cannot reasonably be said to exceed that degree of connexity which the courts require for a finding of joint employer or integrated enterprise status.
Courts applying this four-part standard in Title VII and related cases have focused on the second factor: centralized control of labor relations. Oaks v. City of Fairhope, 515 F.Supp. 1004 (S.D.Ala.1981); Fike v. Gold Kist, Inc., 514 F.Supp. 722, 727 (N.D.Ala.1981); EEOC v. Cuzzens of Georgia, 15 FEP 1807 (N.D.Ga.1977), rev'd on other grounds, 608 F.2d 1062 (5th Cir.1979). This criterion has been further refined to the point that "[t]he critical question to be answered then is: What entity made the final decisions regarding employment matters related to the person claiming discrimination?" Odriozola v. Superior Cosmetic Distributors, Inc., 531 F.Supp. 1070, 1076 (D.P.R.1982).
We need not speculate as to the quality or quantity of additional information showing Celanese control over ABI employees that Trevino might have obtained had full discovery been permitted in this case. (See Part B infra ). The district court in its memorandum and order makes no mention of the record evidence detailed above. This evidence clearly raises a genuine issue of material fact as to Celanese's employer status. While it would be premature on the basis of the record before us to decide that Celanese and ABI constitute a single employer for the purposes of this action, the facts do not clearly indicate that Trevino cannot under any discernible circumstance prove single employer status. Everhart v. Drake Management, Inc., 627 F.2d 686, 690 (5th Cir.1980). We therefore reverse the district court's grants of summary judgment to Celanese and ABI on the issue of single employer status.
Returning to our initial inquiry, the complaint filed in this case plainly alleges that: (1) Celanese and ABI are either joint employers or an integrated business enterprise, and (2) the two companies acted in concert in a number of ways to limit the post-employment promotional opportunities of Trevino and his Mexican-American fellow-workers. The fact that the complaint also alleges discrimination in hiring and firing does not automatically convert this into a mere failure-to-hire case.
It is evident from the foregoing discussion that, regardless of the merits of his claim, the legal theory upon which Trevino sought to recover was a valid one. Two or more closely linked entities may combine to deprive an employee of his Title VII rights in matters of promotion, just as they may discriminate in the areas of hiring, firing, lay-offs and seniority. Trevino should be accorded a full and fair opportunity to develop his case under this theory.
Rule 1 of the Federal Rules of Civil Procedure directs that the rules "shall be construed to secure the just, speedy, and inexpensive determination of every action." (Emphasis added.) "There probably is no provision in the federal rules that is more important than this mandate. It reflects the spirit in which the rules were conceived and written, and in which they should be, and by and large have been, interpreted. The primary purpose of procedural rules is to promote the ends of justice." 4 C. Wright and A. Miller, Federal Practice and Procedure Sec. 1029 (1969). The Supreme Court of the United States has stated that these rules "are to be accorded a broad and liberal treatment." Hickman v. Taylor, 329 U.S. 495, 507, 67 S.Ct. 385, 391, 91 L.Ed. 451 (1947); Schlagenhauf v. Holder, 379 U.S. 104, 114-15, 85 S.Ct. 234, 240, 13 L.Ed.2d 152 (1964).
The imposition of unnecessary limitations on discovery is especially frowned upon in Title VII cases.... Because discovery matters are committed almost exclusively to the sound discretion of the trial Judge, appellate rulings delineating the bounds of discovery under the Rules are rare. But the Judge's discovery rulings, like his other procedural determinations, are not entirely sacrosanct. If he fails to adhere to the liberal spirit of the Rules, we must reverse. See Wallin v. Fuller and Nationwide Mutual Insurance Co., 5 Cir.1973, 476 F.2d 1204 . And this is especially true in Title VII cases where courts have refused to allow procedural technicalities to impede the full vindication of guaranteed rights. Sanchez v. Standard Brands, Inc., 5 Cir.1970, 431 F.2d 455, 461.
As previously noted, the district court read Trevino's complaint to allege no more than a simple failure-to-hire. When those facts ascertained under the court's limited discovery order failed to fit this particular Procrustean bed, the court concluded that Trevino and Trevino's lawyers were wasting its time, entered summary judgment against Trevino, and awarded attorney's fees to Celanese and ABI. Trevino, however, never made the bed in which he was told to lie, and should not be asked to pay for it.
Under Federal Rule of Civil Procedure 56, summary judgment is appropriate only where everything in the record--pleadings, depositions, interrogatories, affidavits, etc.--demonstrates the absence of any genuine issue of material fact. Erco Industries Limited v. Seaboard Coastline Railroad Company, 644 F.2d 424 (5th Cir.1981). In considering whether to grant a motion for summary judgment, the court must view the evidence in the light most favorable to the party resisting the motion. Joplin v. Bias, 631 F.2d 1235, 1237 (5th Cir.1980). "Ordinarily, summary disposition of Title VII cases is not favored, especially on a 'potentially inadequate factual presentation.' " Jones v. Western Geophysical Company of America, 669 F.2d 280, 283 (5th Cir.1982) (quoting Logan v. General Fireproofing Co., 521 F.2d 881, 883 (4th Cir.1971)). See Equal Employment Opportunity Commission v. Southwest Texas Methodist Hospital, 606 F.2d 63, 65 (5th Cir.1979), cert. denied, 445 U.S. 928, 100 S.Ct. 1314, 63 L.Ed.2d 761 (1980); Hayden v. First National Bank of Mt. Pleasant, Texas, 595 F.2d 994, 997 (5th Cir.1979). The district court may normally grant summary judgment "only when the moving party has established his right to judgment with such clarity that the nonmoving party cannot recover ... under any discernible circumstance." Everhart v. Drake Management, Inc., 627 F.2d 686, 690 (5th Cir.1980). Where, as here, a court simply declines to entertain the theory of recovery advanced by plaintiff, its determination that there exists no genuine issue of material fact under the theory it applies cannot be supposed to extend to facts material under the rejected theory. We reverse the district court's award of summary judgment not because the court decided factual issues properly reserved for trial, but because it failed to determine that there was no genuine issue of fact material to the action pleaded and argued by plaintiff.
The district court awarded attorney's fees against Trevino because it found his cause of action "frivolous, unreasonable or without foundation, even though not brought in bad faith." Christiansburg Garment Company v. Equal Employment Opportunity Commission, 434 U.S. 412, 421, 98 S.Ct. 694, 700, 54 L.Ed.2d 648 (1978). A necessary consequence of our decision that summary judgment was improper in this case is that Trevino's action was neither frivolous, unreasonable, nor baseless. Similarly, since Trevino's action was not one for failure-to-hire, TRLA could not have abused the legal process by fabricating that nonexistent cause of action. Accordingly we vacate the court's award of attorney's fees as against both Trevino and TRLA.
Citing East Texas Motor Freight System, Incorporated v. Rodriguez, 431 U.S. 395, 97 S.Ct. 1891, 52 L.Ed.2d 453, the court below dismissed the class allegations in this cause. In Rodriguez, a failure-to-hire case, the district court found upon abundant evidence that the members of the class plaintiff sought to represent were unqualified for the positions for which they applied. Id., 97 S.Ct., at 1897. Here, however, the district court made no finding that the members of the class represented by Trevino were ineligible for promotion.
Class actions are generally appropriate in Title VII employment discrimination cases. The reason for this is that although these suits are self-help, so to speak, actions, they also have a broad public interest in that they seek to enforce fundamental constitutional principles as well as to advance the rights of the individual plaintiffs who bring the action.
Rich v. Martin Marietta Corporation, 522 F.2d 333, 340 (10th Cir.1975) (citations omitted). Here, decertification followed naturally as a consequence of summary judgment. Having determined that summary judgment was improper, and that Rodriguez does not support decertification on the limited facts before us, we accordingly vacate the court's dismissal of the class allegations in this action.
Although the order denying Trevino's motion to consolidate this action with Mireles redates the award of summary judgment, it follows the protective order issued by the court in the mistaken belief that this case involved nothing more than Celanese's failure to hire Trevino. We need not consider whether the court was correct in denying the motion to consolidate a failure-to-hire case with Mireles; it clearly never considered Trevino's motion to consolidate a continuing failure-to-promote case with Mireles. Its denial of the motion to consolidate must therefore be vacated.
Accordingly, we VACATE the protective order, the dismissal of class allegations, and the denial of the motion to consolidate; REVERSE the grants of summary judgment and the awards of attorney's fees, and REMAND for further proceedings consistent with this opinion.
Celanese Chemical Company is a subsidiary of Celanese Corporation. The two are indistinguishable for the purposes of this litigation, and in the interests of simplicity shall be referred to jointly as "Celanese."
Additionally, former ABI supervisor Angel Gonzales testified that he always considered Celanese to be his "boss." Former ABI supervisor Donald Van Schuette testified that it was common practice for Celanese management to call ABI in order to secure employment for their friends and relatives. He also testified that preference was given mostly to children of Celanese personnel, and that ABI would consider regular employment applications only after these relatives had been hired. According to Van Schuette, Celanese-referred friends and relatives were also accorded preferred treatment in promotion decisions after they were hired by ABI. Van Schuette and ABI employee Oscar Guerra both testified that the decision to lay off an ABI employee depended upon whether he had a relative or close friend on the Celanese staff. When Guerra asked why he had been laid off while an Anglo co-worker who had been hired only three weeks earlier was retained, he was told by ABI that the Anglo worker's father-in-law worked for Celanese. The Anglo in question corroborated this by telling Guerra that "they have to give me a job so I can support his daughter."
c. Defendant Celanese historically has demonstrated that it gives hiring preferences to Arthur Brothers employees who have relatives already working with Celanese; this policy of nepotism limits employment opportunities for Hispanic applicants and potential applicants.
Section 12 of the complaint constitutes a separate charge of retaliation by defendants for Trevino's participation in the Mireles case.
A discriminatory act which is not made the basis for a timely charge is the legal equivalent of a discriminatory act which occurred before the statute was passed. It may constitute relevant background evidence in a proceeding in which the status of a current practice is at issue, but separately considered, it is merely an unfortunate event in history which has no present legal consequences.
Evans, 431 U.S. 558, 97 S.Ct. at 1889 (emphasis added); see Fisher, 613 F.2d at 540. See also Delaware State College v. Ricks, 449 U.S. 250, 101 S.Ct. 498, 66 L.Ed.2d 431 (1980); cf. Rubin v. O'Koren, 644 F.2d 1023 (5th Cir.1981). This does not mean, however, that a continuing violation can never constitute an actionable wrong; nonfrivolous allegations of the present existence of discriminatory practices in promotion or transfer clearly fall without the proscription of Evans. The persistence of a system of promotion and transfer which experience has shown to be animated by a spirit of unlawful discrimination constitutes a continuing violation of Title VII.
Although we declined to apply the integrated enterprise standard in Dumas v. Town of Mt. Vernon, 612 F.2d 974, 979 n. 9 (5th Cir.1980), that case is readily distinguishable on its facts. Plaintiffs in Dumas sought under the four-part standard to integrate the Town of Mt. Vernon with either the county, or the state. As articulated, the standard is not readily applicable to governmental subdivisions, for it was "developed by the National Labor Relations Board to determine whether consolidation of separate private corporations is proper in determining the relevant employer for purposes of enforcing the National Labor Relations Act." Owens v. Rush, 636 F.2d 283, 286 n. 2 (10th Cir.1980) (emphasis in original).
10(a) Composition of the Record on Appeal. The original papers and exhibits filed in the district court, the transcript of proceedings, if any, and a certified copy of the docket entries prepared by the clerk of the district court shall constitute the record on appeal in all cases.
These documents in question were all filed with the district court.

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