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Workers Try to Revive Race Bias Lawsuit Against Union at 2d Cir.

Nov. 29, 2019, 8:23 PM

A group of black and Hispanic construction workers seeks to convince a federal appeals court to revive their second lawsuit accusing their union of racial discrimination, in a case that will test how a procedural rule for bias lawsuits fits with a doctrine barring plaintiffs from filing do-over litigation.

The U.S. Court of Appeals for the Second Circuit will hear oral argument Dec. 4 to consider whether the workers’ earlier failed lawsuit, which alleged intentional race bias under a “disparate treatment” theory, precludes their subsequent suit claiming unintentional “disparate impact” discrimination.

The case highlights an intersection between administrative exhaustion requirements, which mandate that plaintiffs first file job-bias charges with relevant agencies before going to court, and the doctrine known as “res judicata,” which forbids plaintiffs from litigating matters that were already decided.

The workers first accused the New York City Housing Authority of race discrimination by misclassifying black and Hispanic workers into a lower-paying job position, despite properly classifying a different position mostly occupied by white workers. The workers named an International Brotherhood of Teamsters affiliate as a co-defendant, arguing it aided the the housing authority’s alleged race bias.

A federal judge threw out the workers’ first lawsuit, which brought disparate treatment claims against the housing authority and the union, finding they hadn’t proved racially motivated discrimination. The judge later tossed the second lawsuit, a class action that only brought disparate impact claims against the union, ruling that res judicata blocked the lawsuit.

Administrative Exhaustion

One of the requirements for invoking res judicata states that the claims asserted in the second action were or could have been raised in the first action, according to Second Circuit case law.

The workers told the Second Circuit in their brief that they couldn’t have brought a disparate impact claim in their first lawsuit. They sued the housing authority and their union under Section 1981 of the 1866 Civil Rights Act, a law that only allows for disparate treatment claims and doesn’t require administrative exhaustion.

They subsequently filed charges with the Equal Employment Opportunity Commission in 2016, two years after first bringing their lawsuit and a month after briefing was finished on the defendants’ summary judgment motion.

The workers got their EEOC authorization to bring a disparate treatment claim in court under Title VII of the 1964 Civil Rights Act in early 2017. Two months later, U.S. District Judge Lorna Schofield tossed their Section 1981 lawsuit, which the Second Circuit upheld in 2018.

Schofield dismissed the workers’ Title VII lawsuit in March.

The union argued in their Second Circuit brief that Schofield was right to apply res judicata to the workers’ second lawsuit, saying their delays in filing charges with the EEOC are “inexcusable.”

Schofield highlighted how late the workers were when she correctly denied their request to amend their first lawsuit with disparate impact claims, the union said. According to the judge, adding that claim “nine months after the close of discovery and following extensive summary judgment briefing would be unduly prejudicial to Defendants.”

Possible Win-Win for Future Plaintiffs?

The case is “strange” because the particular statutes involved bring administrative exhaustion requirements into tension with res judicata in a way that normally wouldn’t happen, said Sandra Sperino, a professor at the University of Cincinnati College of Law who’s written extensively on discrimination law.

Not only does Section 1981 not allow for disparate impact claims, the Lilly Ledbetter Fair Pay Act’s amendments to Title VII for pay bias extended the deadline for filing with an agency far beyond the typical cutoff, said Sperino, who also teaches civil procedure.

If the Second Circuit rules the workers’ claims are blocked by res judicata, that decision in favor of the union defendant could unwittingly help workers with Title VII claims down the road, she said.

Sometimes employers challenge workers’ discrimination claims by saying they exhausted the wrong type of claim with the agency, Sperino said. But a worker could point to such a pro-defendant ruling from the Second Circuit to argue that they exhausted both disparate treatment and disparate impact claims with an agency, she said.

Nevertheless, a Second Circuit decision saying res judicata didn’t block the second lawsuit could also benefit workers if it carves out an exception for claims that require administrative exhaustion, said Vinay Harpalani, a professor at the University of New Mexico School of Law who teaches employment discrimination law and civil procedure.

Several circuit courts, including the Second, have held that workers can request to stay proceedings until they get agency authorization to sue and then amend their complaint to add the Title VII charge, said Rosalie Berger Levinson, a law professor at Valparaiso University.

But the Second Circuit ruled in 1996 that the dismissal of a Section 1981 claim didn’t block a subsequent Title VII challenge raising the same unequal pay argument because those laws provide different causes of action and different liability schemes, said Levinson, co-author of a treatise on government civil rights liability.

Attorneys for the workers and the union didn’t reply to requests for comment.

The case is Wynn v. Union Local 237, 2d Cir., No. 19-962, Oral argument 12/4/19.

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com