No. 11-1957 IN THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT GEORGE MCREYNOLDS, MAROC HOWARD, FRANKIE ROSS, ET AL., Plaintiffs/Appellants, v. MERRILL LYNCH & CO., INC.; MERRILL LYNCH, PIERCE, FENNER & SMITH; BANK OF AMERICA CORPORATION, Defendants/Appellees. On Appeal from the United States District Court for the Northern District of Illinois The Honorable Robert W. Gettleman BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE IN SUPPORT OF APPELLANTS AND REVERSAL P. DAVID LOPEZ General Counsel LORRAINE C. DAVIS Acting Associate General Counsel VINCENT J. BLACKWOOD Assistant General Counsel JULIE L. GANTZ Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M St. N.E., 5th Floor Washington, D.C. 20507 (202) 663-4718 [email protected]Case: 11-1957 Document: 10-1 Filed: 07/26/2011 Pages: 21
21
Embed
No. 11-1957 GEORGE MCREYNOLDS, MAROC HOWARD, FRANKIE …merrillclassaction.com/pdfs/EEOC_Amicus_Brief_072611.pdf · GEORGE MCREYNOLDS, MAROC HOWARD, FRANKIE ROSS, ... Plaintiffs/Appellants,
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
No. 11-1957
IN THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT
GEORGE MCREYNOLDS, MAROC HOWARD, FRANKIE ROSS, ET AL.,
Plaintiffs/Appellants, v. MERRILL LYNCH & CO., INC.; MERRILL LYNCH, PIERCE, FENNER & SMITH; BANK OF AMERICA CORPORATION,
Defendants/Appellees.
On Appeal from the United States District Court for the Northern District of Illinois
The Honorable Robert W. Gettleman
BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE
IN SUPPORT OF APPELLANTS AND REVERSAL P. DAVID LOPEZ General Counsel LORRAINE C. DAVIS Acting Associate General Counsel VINCENT J. BLACKWOOD Assistant General Counsel JULIE L. GANTZ Attorney
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M St. N.E., 5th Floor Washington, D.C. 20507 (202) 663-4718 [email protected]
THE COMPLAINT STATES A TITLE VII CLAIM NOTWITH-STANDING § 703(H) BECAUSE THE COMPLAINT ALLEGES THAT THE DISPARITIES IN COMPENSATION BETWEEN BLACK AND WHITE FINANCIAL ADVISORS CAUSED BY THE DEFENDANTS’ COMPENSATION SYSTEM WERE THE RESULT OF INTENTIONAL DISCRIMINATION. ............................................6
Ledbetter v. Goodyear Tire, 550 U.S. 618 (2007).........................................12 McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, No. 05-6583,
2010 WL 3184179 (N.D. Ill. Aug. 9, 2010)...............................................5
Ryduchowski v. Port Authority of New York, 203 F.3d 135 (2d Cir. 2000) ...........................................................................................................9
Teamsters v. United States, 431 U.S. 324 (1977) ........................... 4, 9, 10-11
United Air Lines v. Evans, 431 U.S. 553 (1977) .................................... 10-11
FEDERAL RULES AND STATUTES
Title VII of the Civil Rights Act of 1964 42 U.S.C. § 2000e et seq ............................................................................1 42 U.S.C. § 2000e-2(h)......................................................................passim
(“McReynolds I”)).2 The court concluded that, “even if plaintiffs’ factual
allegations with respect to the inputs (which are the subject of McReynolds I) were
sufficient to allow the court to infer more than the mere possibility that Merrill
Lynch designed the ATP with discriminatory intent (and they clearly are not),
those same allegations in no way suggest that BOA acted with any discriminatory
intent.” A.9 (Mem. at 8). “There are simply no facts in the complaint to suggest
even the possibility that BOA ever discriminated against African-Americans.” Id.
2 The district court denied class certification in that case on August 9, 2010. No. 05-6582, 2010 WL 3184179, at *6 (N.D. Ill. Aug. 9, 2010). The individual claims of the named plaintiffs in McReynolds I remain pending in the district court.
THE COMPLAINT STATES A TITLE VII CLAIM NOTWITH-STANDING § 703(H) BECAUSE THE COMPLAINT ALLEGES THAT THE DISPARITIES IN COMPENSATION BETWEEN BLACK AND WHITE FINANCIAL ADVISORS CAUSED BY THE DEFENDANTS’ COMPENSATION SYSTEM WERE THE RESULT OF INTENTIONAL DISCRIMINATION. The complaint alleges that the defendants violated Title VII by
providing lower retention bonuses to black FAs than white FAs pursuant to
its ATP system. The district court held that this allegation fails to state a
claim under Title VII because the ATP was protected from challenge under
§ 703(h). Section 703(h) of Title VII provides:
[I]t shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment pursuant to a bona fide seniority or merit system, or a system which measures earnings by quantity or quality of production . . . provided that such differences are not the result of an intention to discriminate because of race . . . .
42 U.S.C. § 2000e-2(h). To fall within this provision, the racial disparities in the
retention bonuses based on the ATP (1) must be “pursuant to a bona fide merit
system or system that measures earnings by quantity or quality of production;” and
(2) cannot be “the result of an intention to discriminate because of race.”
Accordingly, even if the ATP is a bona fide system that measures earnings by the
quantity of production, the racial disparities it produces are still illegal if they are
the result of intentional discrimination.3 In dismissing the complaint, the district
court erred by overlooking this proviso in holding that § 703(h) protects the racial
disparities in bonuses simply because it believed the ATP itself is a bona fide
compensation system.
The complaint alleges that the defendants discriminated on the basis of race
in assigning accounts, and giving out leads, referrals, and other forms of assistance.
A.19 (FAC ¶ 16). Because black FAs were assigned less lucrative accounts than
white FAs, the complaint alleges, their accounts generated less income and they
were significantly more likely to wind up in lower quintiles than white employees.
A.21 (FAC ¶ 20). Under the ATP, the placement of black FAs in lower quintiles
allegedly caused the defendants to pay them less and, as relevant to this suit, to
offer them lower retention bonuses. Thus the complaint alleges that the racial
disparity in compensation under the ATP is a direct result of the earlier
discriminatory allocations of accounts, leads, and other benefits. This is sufficient
3 The plaintiffs argue on appeal that the term “merit system, or a system which measures earnings by quantity or quality of production,” which was borrowed by Congress from the Equal Pay Act, 29 U.S.C. § 206(d)(1), encompasses only piece work systems such as those used to compensate some employees in an assembly line manufacturing process, relying on the legislative history of the EPA. It is not necessary for the Court to decide whether the ATP is the type of system that may be excepted by § 703(h) because, even if the ATP is such a system, § 703(h) does not shield the disparities in the retention bonuses offered to black and white FAs pursuant to the ATP because the complaint adequately alleges that those disparities are the result of intentional race discrimination.
decision in this case were correct, her claim would presumably founder on
§ 703(h) as well.
Ledbetter’s salary was based on a facially neutral merit system that was not
enacted for the purpose of sex discrimination. Her showing that the disparity was
caused by intentional discrimination in the evaluations entered into the system
would, under the district court’s analysis here, be merely a perpetuation of past
discrimination. Neither in Ledbetter nor in this case is that a fair characterization.
Because in each case the lower compensation challenged by the plaintiffs was the
first tangible consequence of the discriminatory evaluations or account
assignments, the plaintiffs can show that the challenged disparities were the result
of the defendants’ intentional discrimination.
CONCLUSION
For the foregoing reasons, the judgment of the district court should be
reversed and the case remanded for further proceedings.
Respectfully submitted, P. DAVID LOPEZ General Counsel LORRAINE C. DAVIS Acting Associate General Counsel VINCENT J. BLACKWOOD Assistant General Counsel
/s/ Julie L. Gantz ______________________________ JULIE L. GANTZ Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M St. N.E., 5th Floor Washington, D.C. 20507 (202) 663-4718 [email protected]
This brief complies with the type-volume limitation of Fed. R. App. P.
32(a)(7)(B) because it contains 3,261 words, excluding the parts of the brief
exempted by Fed. R. App. P. 32(a)(7)(B)(iii).
This brief complies with the typeface requirements of Fed. R. App. P.
32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because it has
been prepared in a proportionally spaced typeface using Microsoft Word 2003 in
Times New Roman 14 point.
/s/ Julie L. Gantz _________________________________ JULIE L. GANTZ Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M St. N.E., 5th Floor Washington, D.C. 20507 (202) 663-4718 [email protected]
I, Julie L. Gantz, hereby certify that on July 26, 2011, I electronically filed
the foregoing with the Clerk of the Court for the United States Court of Appeals
for the Seventh Circuit by using the CM/EFC system. I certify that all participants
in the case are registered CM/ECF users and that service will be accomplished by
the CM/ECF system.
/s/ Julie L. Gantz ____________________________ Julie L. Gantz Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M St. N.E., 5th Floor Washington, D.C. 20507 (202) 663-4718 [email protected]