Court Opinion

ID: 2996633
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:30:22.725853+00
Date Added: 2024-06-11T11:45:30.609851
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                        ____________

No. 02-1633
CHARLIE REESE, JR.,
                                           Plaintiff-Appellant,
                               v.

ICE CREAM SPECIALTIES, INC.,
                                           Defendant-Appellee.
                        ____________
           Appeal from the United States District Court
     for the Northern District of Indiana, Hammond Division.
             No. 4:01cv0016AS— Allen Sharp, Judge.
                        ____________
    ARGUED APRIL 23, 2003—DECIDED OCTOBER 30, 2003
                      ____________

 Before BAUER, MANION, and DIANE P. WOOD, Circuit
Judges.
  DIANE P. WOOD, Circuit Judge. Charlie Reese, Jr. never
received the raise he claims was due to him after he had
worked six months for Ice Cream Specialties, Inc. (ICS).
Reese says ICS did not award him the higher pay rate
because he is African-American, and he sued for discrimina-
tion under Title VII of the Civil Rights Act of 1964. See 42
U.S.C. § 2000e et seq. The district court granted summary
judgment to ICS, holding that Reese’s claim was untimely
because he waited until years after he was denied the raise
to file a charge of discrimination with the Equal Employ-
ment Opportunity Commission (EEOC). Reese contends
that his claim was timely under the continuing violation
theory because each week’s paycheck was a fresh discrimi-
2                                              No. 02-1633

natory act. We conclude that the rule of Bazemore v. Friday,
478 U.S. 385 (1986), to the effect that each new paycheck is
a separate wrong (recently reaffirmed in National Railroad
Passenger Corp. v. Morgan, 536 U.S. 101, 111-12 (2002)),
governs this case, and that it must therefore be remanded
for further proceedings.

                             I
  Because summary judgment was granted against Reese,
we present the following account of the facts in the light
most favorable to him. Reese began working for ICS in
August 1996; his initial pay rate was $7.85 per hour. When
ICS hired Reese, it promised to raise his hourly wage by
45¢ in February 1997, his six-month anniversary. ICS did
not do so for Reese, however, even though it did award a
six-month raise to its white male employees.
  Reese did not realize that his six-month raise had never
been awarded until August 2000, some three-and-a-half
years later. At that time, prompted by an unrelated state
investigation into allegations of discrimination at ICS,
Reese requested a copy of his payroll records and noticed
that ICS had never paid him the raise. After discovering
that he had not received the raise, Reese filed a charge of
race discrimination with the EEOC in November 2000.
Later that month the EEOC dismissed his charge as un-
timely.
  Reese then sued ICS pro se. ICS moved for summary
judgment on the basis that Reese had not filed his charge
with the EEOC within 300 days of the alleged violation. See
Minor v. Ivy Tech State College, 174 F.3d 855, 857 (7th Cir.
1999). ICS argued that its failure to give Reese his six-
month raise was a single incident that had occurred three-
and-a-half years before Reese filed his charge. The district
court agreed that Reese’s EEOC charge was untimely, rea-
No. 02-1633                                                3

soning that the “sole discriminatory act” had occurred
in February 1997. In a footnote, the court considered the
possible applicability of the “continuing violation” theory,
given that ICS’s alleged failure to award Reese a raise had
continuing consequences for his salary. But the court de-
termined that the company’s failure to pay Reese a higher
amount each pay period did not constitute a series of new
violations or one “continuing” violation.
  Reese appealed. This court appointed counsel to represent
Reese, and directed counsel to address the relevance to
Reese’s claim of the Supreme Court’s application of the
continuing violation theory in Bazemore, supra, which held
that each discriminatory paycheck an employee received
constitutes a separate violation of Title VII.

                             II
  The fate of Reese’s claim turns on the proper character-
ization of the wrong or wrongs he has suffered. Three pos-
sibilities exist. First, ICS’s refusal to award him the raise
might have been a single discriminatory act that took place
in February 1997. Second, the course of events that led to
a long series of paychecks that were lower than they should
have been might be the type of unlawful employment
practice that cannot be said to occur on any particular day,
but instead depends on the cumulative effect of individual
acts—that is, it might have given rise to a continuing
violation. See National Railroad Passenger Corp., 536 U.S.
at 115. Third, Reese might have suffered from numerous
discrete acts of discrimination, each independently action-
able, some of which would now be barred by the 300-day
statute of limitations and others of which would be timely.
The district court thought that the first of these descrip-
tions best applied to Reese’s case; it did not distinguish
sharply between the latter two possibilities.
4                                                 No. 02-1633

  Because it represents the Supreme Court’s most recent
word on this subject, we begin our analysis with a look at
National Railroad Passenger Corp. In that case, the re-
spondent Morgan had sued the National Railroad Passen-
ger Corporation (known everywhere as Amtrak) raising
claims of both discrete discriminatory and retaliatory acts
and of a racially hostile work environment. The Court took
the case to consider “whether, and under what circum-
stances, a Title VII plaintiff may file suit on events that fall
outside [the 180 or 300-day] statutory time period.” 536
U.S. at 105. In its decision, the Court first addressed the
question of when an unlawful employment practice “oc-
curred” for purposes of the limitations period. It began with
the straightforward observation that “[a] discrete retalia-
tory or discriminatory act ‘occurred’ on the day that it
‘happened.’ ” Id. at 110. It went on to explain why the use of
the term “unlawful employment practice” did not warrant
the conclusion that a practice could endure or recur over a
period of time:
      We have repeatedly interpreted the term “practice” to
    apply to a discrete act or single “occurrence,” even when
    it has a connection to other acts. For example, in
    Electrical Workers v. Robbins & Myers, Inc., 429 U.S.
    229, 234 (1976), an employee asserted that his com-
    plaint was timely filed because the date “the alleged
    unlawful employment practice occurred” was the date
    after the conclusion of a grievance arbitration proce-
    dure, rather than the earlier date of his discharge. The
    discharge, he contended, was “tentative” and “nonfinal”
    until the grievance and arbitration procedure ended.
    Not so, the Court concluded, because the discriminatory
    act occurred on the date of the discharge— the date that
    the parties understood the termination to be final. Id.,
    at 234-235. Similarly, in Bazemore v. Friday, 478 U.S.
    385 (1986) (per curiam), a pattern-or-practice case,
    when considering a discriminatory salary structure, the
No. 02-1633                                                   5

    Court noted that although the salary discrimination
    began prior to the date that the act was actionable
    under Title VII, “[e]ach week’s paycheck that
    deliver[ed] less to a black than to a similarly situated
    white is a wrong actionable under Title VII . . . .” Id., at
    395.
536 U.S. at 111-12. Later in the opinion, the Court recog-
nized that a certain class of violations does not involve
discrete acts, and thus these violations do not lend them-
selves to as much temporal precision. “Their very nature
involves repeated conduct.” Id. at 115. Unlike discrete dis-
criminatory acts, a single act of harassment may not be
actionable on its own; it is the cumulative effect instead
that matters. Id.
   Applying this framework to the case before us, it is rela-
tively easy to rule out the middle option of a continuing
violation. Either one discrete act occurred in February 1997,
or a series of separate discrete acts occurred (one per
paycheck), each one of which would be actionable on its own
if the other prerequisites to suit were satisfied.
   Reese argues that his claim is timely because each pay-
check he received during the 300-day period before he filed
his EEOC charge was a fresh act of discrimination within
the limitations period. (Note that he wisely concedes that he
cannot recover for pay periods that ended prior to the 300-
day cutoff.) In support he relies on Bazemore, which this
court followed in Wagner v. NutraSweet Co., 95 F.3d 527,
534 (7th Cir. 1996), another case in which a plain-
tiff’s paychecks continued to be affected adversely by the
employer’s prior discriminatory practices in setting em-
ployee wages. The plaintiff in Wagner continued working for
her employer after signing an agreement in which she
released all existing claims. Id. at 530. She later sued her
employer for wage discrimination based upon the paychecks
she received after signing the release. Id. at 534. This court
6                                                No. 02-1633

concluded that each paycheck she received was a fresh act
of discrimination regardless of when the discriminatory
wage practices began. Id.
  Cases in which the focal point of the plaintiff’s complaint
is a singular event or a broad program or system that af-
fects pay, as opposed to the pay level itself, are different.
Thus, the Supreme Court held in Delaware State College v.
Ricks, 449 U.S. 250 (1980), that a university’s allegedly
discriminatory decision to deny tenure to the plaintiff was
a discrete act, and that the plaintiff’s claim accrued at the
time of the tenure denial. Id. at 257-58. See also United Air
Lines v. Evans, 431 U.S. 553, 558 (1977) (continuing impact
of facially neutral seniority system did not support a finding
of a present violation). Thus, for example, in Elmenayer v.
ABF Freight Sys., Inc., 318 F.3d 130 (2d Cir. 2003), the
court found that an employer’s rejection of an employee’s
proposed accommodation of his religious observance
requirements was a discrete act that must be the subject of
a complaint to the EEOC within 300 days of its occurrence.
It explained that “[o]nce the employer has rejected the
proposed accommodation, no periodic implementation of
that decision occurs, comparable to the weekly cutting of a
payroll check in Bazemore.” Id. at 135. Similarly, in Carter
v. West Pub. Co., 225 F.3d 1258 (11th Cir. 2000), the court
rejected the argument that West Publishing Company’s
employee stock program was a present violation of the law
because the payment of dividends was a wage premium that
enhanced employee compensation. Id. at 1264. The em-
ployee stock program itself was the “act” of the employer
that was being challenged, not the neutral, nondiscrimina-
tory payment of dividends after the fact. As in Evans, it was
too late to challenge the system as a whole. See also
Lorance v. AT&T Technologies, Inc., 490 U.S. 900, 911
(1989) (when seniority system is nondiscriminatory in form
and application, limitations period runs from date of
allegedly discriminatory adoption); Florida v. Long, 487
No. 02-1633                                                  7

U.S. 223, 239 (1988) (Bazemore applies to continuing
payments of discriminatory wages, which differs from
payments under a pension plan, which is funded on an
actuarial basis).
  In contrast, the Third Circuit had a case much like ours,
in which the plaintiff-employee claimed that he fell within
the Bazemore rule because his initial pay grade classifica-
tion was set too low because of his national origin (His-
panic), and each paycheck he received thereafter continued
to reflect this discrimination. Cardenas v. Massey, 269 F.3d
251 (3d Cir. 2001). The court agreed that this was enough
to defeat summary judgment, and it remanded the plaintiff  ’s
disparate pay claims for a determination on the merits. Id.
at 258. As the Supreme Court put it in Long, “[i]n a salary
case, . . . each week’s paycheck is compensation for work
presently performed and completed by an employee.” 487
U.S. at 239. That point is especially true for the many
employees in the U.S. economy who hold their jobs as
employees-at-will, but it holds for everyone.
  Notwithstanding these decisions, there is a line of cases
decided in this court prior to National Railroad Passenger
Corp. that are in tension with the rule that treats each
check in a simple discriminatory pay claim as a new vio-
lation, but that treats other acts affecting pay more indi-
rectly (tenure decisions, promotions, seniority systems,
pension arrangements, etc.) as single-time events with
future consequences. In Dasgupta v. Univ. of Wis. Bd. of
Regents, 121 F.3d 1138, 1139 (7th Cir. 1997), issued a year
after Wagner, the court decided that the continuing vio-
lation theory did not apply to a professor’s claim that his
employer subjected him to discriminatory pay and promo-
tion decisions. As far as it goes, this conclusion is perfectly
consistent with Bazemore and National Railroad Passenger
Corp. As we explained above, the continuing violation
concept is reserved for theories of liability that depend on
8                                                  No. 02-1633

the cumulative impact of numerous individual acts, none of
which is necessarily actionable in itself. Nonetheless, the
panel also distinguished Bazemore itself, writing that:
    [i]n Bazemore and NutraSweet, the plaintiffs alleged
    that during the limitations period they failed to receive
    the amount of compensation that the law entitled them
    to. The fact that this level had been determined before
    the limitations period meant only that the violation of
    their rights was predictable. If an employer tells his
    employee, “I am going to infringe your rights under
    Title VII at least once every year you work for me,” this
    does not start the statute of limitations running on the
    future violations, violations that have not yet been
    committed. This case is at the opposite pole. There were
    no new violations during the limitations period, but
    merely a refusal to rectify the consequences of time-
    barred violations. It is not a violation of Title VII to tell
    an employee he won’t get a raise to bring him up to the
    salary level that he would have attained had he not
    been discriminated against at a time so far in the past
    as to be outside the period during which he could bring
    a suit seeking relief against that discrimination.
121 F.3d at 1140. See also Snider v. Belvidere Township,
216 F.3d 616, 618 (7th Cir. 2000).
  The Dasgupta panel ultimately concluded that the profes-
sor’s claim was untimely because he did not file a charge
with the EEOC until eight years after his employer’s last
allegedly discriminatory decision affecting his pay. Id. at
1140. It held that the professor’s paychecks were merely
“effects within the limitations period of unlawful acts that
occurred earlier. . . . A lingering effect of an unlawful act is
not itself an unlawful act, however, so it does not revive an
already time-barred illegality . . . .” Id. Relying on
Dasgupta, the defendants argue that the continuing vio-
No. 02-1633                                                    9

lation theory does not apply to Reese’s contention that each
paycheck he received was a fresh act of discrimination, and
that therefore Reese’s claim is untimely.
  We understand why not only the defendants here, but
parties around this circuit in general, find the current state
of affairs to be confusing. It is difficult, to say the least, to
distinguish between the situation in Dasgupta and that in
Wagner, a case that Dasgupta did not purport to overrule.
It is possible, of course, that the Dasgupta panel thought
that Wagner did not give adequate scope to the Supreme
Court’s decision in Ricks, and it might have been influenced
by the fact that Bazemore was a per curiam opinion (albeit
one that adopted in this particular instance the language
found in Justice Brennan’s concurring opinion, see 478 U.S.
at 386). Any doubts about the continuing validity of the
Bazemore rule, however, were put to rest by National
Railroad Passenger Corp. As a matter of theory, the
plaintiff in Dasgupta may have doomed himself by arguing
the wrong theory (continuing violation). His case was also
more complex than a simple pay allegation, as he was also
trying to pursue claims for alleged discrimination in
refusing to promote him. But at least in part, all of these
cases involved discriminatory decisions made outside the
limitations period that continued to have an adverse effect
on the subset of paychecks that the plaintiff received during
the limitations period. The only act repeated during the
limitations period was the employer’s delivery of the
paycheck that was allegedly lower than the checks delivered
to similarly situated employees outside the protected class.
  In light of the fact that the Supreme Court itself is not yet
ready to give up on Bazemore, we conclude that we are
obliged to follow its rule for strict paycheck cases that do
not involve allegations of discrete discriminatory acts such
10                                                   No. 02-1633

as failures to promote, or discriminatory plans or systems.1
Indeed, our sense of the law here is analogous to the opin-
ion the Second Circuit had of the law relating to a manufac-
turer’s right under the antitrust laws to insist unilaterally
on a specific resale price, which in the years prior to
Business Electronics Corp. v. Sharp Electronics Corp., 485
U.S. 717 (1988), gave little leeway for such practices. In
George W. Warner & Co. v. Black & Decker Mfg. Co., 277
F.2d 787 (2d Cir. 1960), the court commented that “[t]he
Supreme Court has left a narrow channel through which a
manufacturer may pass even though the facts would have
to be of such Doric simplicity as to be somewhat rare in this
day of complex business enterprise.” Id. at 790. Just so
here: the Court has left a similar narrow channel for Title
VII plaintiffs who wish to complain that their paychecks, in
compensation for work they have presently performed and
completed in pay periods within the limitations period, are
discriminatorily low because of an earlier act that occurred
outside the limitations period. Each paycheck is the kind of
discrete act to which the Court referred in National Rail-
road Passenger Corp.; thus, checks corresponding to pay
periods before the 300-day limit are time-barred, but those
within it may form the basis of a claim.
  Applying this theory to Reese’s case, we conclude that his
claims for pay within the 300-day period are not time-
barred, because each check that ICS paid Reese was poten-
tially a fresh act of discrimination. This conclusion is con-
sistent with similar results our colleagues in numerous
other circuits have reached. See Anderson v. Zubieta, 180

1
   This conclusion is consistent with that reached by another panel
of this court on the identical issue, in an opinion issued contempo-
raneously with this one. See Hildebrandt v. Illinois Dept. of
Natural Resources and Richard Little, Nos. 01-3064 and 01-3690,
slip op. at 18 (7th Cir. October 30, 2003).
No. 02-1633                                                 11

F.3d 329, 335-37 (D.C. Cir. 1999); Pollis v. New Sch. for Soc.
Research, 132 F.3d 115, 119 (2d Cir. 1997); Cardenas, supra
(Third Circuit); Brinkley-Obu v. Hughes Training, Inc., 36
F.3d 336, 345-51 (4th Cir. 1994); Ashley v. Boyle’s Famous
Corned Beef Co., 66 F.3d 164, 167-68 (8th Cir. 1995) (en
banc); Goodwin v. General Motors Corp., 275 F.3d 1005,
1011 (10th Cir.), cert. denied, 537 U.S. 941 (2002). Reese
has shown (for purposes of summary judgment) that ICS
gave six-month raises only to similarly-situated white
employees, not to him, and that ICS’s conduct adversely af-
fected every paycheck Reese has since received. We con-
clude that Bazemore compels the conclusion that each pay-
check constituted a fresh act of discrimination, and thus
that his suit is not untimely solely because the initial act of
discrimination occurred when it did. We naturally express
no opinion on any other aspect of the case, including the
question whether the white employees who did receive the
six-month raise are still employed with the company, and
if not, whether that affects his claim on the merits.

                              III
  For these reasons, we VACATE the judgment of the district
court and REMAND the case for further proceedings consis-
tent with this opinion.
A true Copy:
       Teste:

                         ________________________________
                         Clerk of the United States Court of
                           Appeals for the Seventh Circuit

                   USCA-02-C-0072—10-30-03