Class Action

Labor Law Class Action Defense Cases-McClain v. Lufkin: Fifth Circuit Issues Mixed Opinion On Class Action Appeal Following Judgment In Favor Of Plaintiff On Title VII/§ 1981 Discrimination Class Action Complaint

By Michael J. Hassen

District Court Judgment on Discrimination Class Action Complaint Required Reversal and Remand as to Certain Issues Necessitating Remand of Class Action to District Court for Further Proceedings Fifth Circuit Holds

Plaintiffs filed a class action against their employer, Lufkin Industries, alleging violations of Title VII and 42 U.S.C. § 1981 based on the allegation that Lufkin’s “practice of delegating subjective decision-making authority to its managers with respect to initial assignments and promotions disparately affected them.” McClain v. Lufkin Industries, Inc., ___ F.3d ___ (5th Cir. February 29, 2008) [Slip Opn., at 2]. Among the many named plaintiffs in the class action complaint, only two had filed charges with the EEOC and received right-to-sue letters, id. The class action involved all four of Lufkin’s production divisions, and the company has approximately 1,500 hourly and salaried workers. Id. The district court granted plaintiffs’ request to certify the litigation as a class action with respect to the disparate-impact claims, but the court refused to give class action treatment to plaintiffs’ disparate-treatment claims. Id., at 3. Following a bench trial, at which “the court strictly limited each party to twenty hours for the presentation of its case,” the court found in favor of the plaintiffs and awarded $3.4 million in back pay, together with injunctive relief and attorney fees. Id. Both sides appealed: plaintiffs argued the court should have granted class action treatment to the disparate-treatment claims, and defense attorneys argued (1) plaintiffs failed to exhaust administrative remedies, (2) lacked standing to represent the class, and (3) the district court committed various errors in finding for plaintiffs and calculating damages. Id., at 4. The Fifth Circuit issued an opinion “unfortunately inconclusive of the litigation,” id., at 1.

The Fifth Circuit addressed first the defense claim that plaintiffs failed to exhaust their EEOC remedies, which the Circuit Court characterized as the “mainstay of proper enforcement of Title VII remedies.” McClain, at 4. The defense argued that the class action’s disparate-impact claims concerning its hiring and promotional practices, id., at 4-5. Relying on Pacheco v. Mineta, 448 F.3d 783 (5th Cir.), cert. denied, 127 S.Ct. 299 (2006), the Circuit Court concluded that the January 1995 letter from plaintiff McClain to the EEOC (relied on by the district court in finding that plaintiffs had exhausted their administrative remedies) complained only about demotion and was thus insufficient to support the hiring and promotion class action claims. See McClain, at 5-8. The Court concluded, however, that plaintiff Thomas’s EEOC charge satisfied the exhaustion requirement, id., at 8-9. However, the Fifth Circuit agreed with defense attorneys that neither McClain nor Thomas adequately complained about Lufkin’s “Foundry” division, and therefore vacated the judgment insofar as it affected the Foundry division, id., at 9. Indeed, the Court noted that “considerable doubt” existed as to whether either of these individuals even had standing to represent a class consisting of Foundry division workers. Id., at 9 n.2.

Full post as published by Class Action Defense Blog on March 06, 2008 (boomark / email).