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Lebeau v. Libbey-Owens-Ford Co.

decided: August 22, 1986.

LORRAINE LEBEAU, ET AL., PLAINTIFFS, AND EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, PLAINTIFF-INTERVENOR-APPELLANT,
v.
LIBBEY-OWENS-FORD COMPANY, AN OHIO CORPORATION, AND LOCAL 19, UNITED GLASS AND CERAMIC WORKERS, DEFENDANTS-APPELLEES



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 71 C 1902-James B. Parsons, Judge.

Author: Cudahy

Before: CUMMINGS, Chief Judge, CUDAHY, Circuit Judge, and ESCHBACH , Senior Circuit Judge.

CUDAHY, Circuit Judge.

The Equal Employment Opportunity Commission ("EEOC") appeals from an order of the district court granting Libbey-Owens-Ford Company ("LOF") and Local 19, United Class and Ceramic Workers ("Local 19") the attorneys' fees they incurred defending this Title VII lawsuit.*fn1 We reverse.

I

The factual background and complicated procedural history of this protracted litigation, now in its fifteenth year, are set forth in detail in our 1984 opinion disposing of the EEOC's appeal on the merits. LeBeau v. Libbey-Owens-Ford Co., 727 F.2d 141 (7th Cir. 1984) (the "1984 Appellate Opinion"). We provide here only those facts that are necessary to understand the issues now before us.

This case has revolved around the impact of Title VII on pre-existing state "protective" labor legislation, which regulated the conditions under which women could work. From 1909 until 1970, when it was declared unconstitutional, Caterpillar Tractor Co. v. Grabiec, 317 F. Supp. 1304 (S.D. Ill. 1970), Illinois had such a protective statute in effect. Called the Illinois Female Employment Act, it provided that women could not be employed in factory work for more than eight hours in any one day or more than forty-eight hours in any one week. Laws 1909, p. 212, § 1 (as amended); Ill. Rev. Stat. ch. 48, § 5 (1969).*fn2 The act was enforced with criminal penalties. On the other hand, Title VII provides that it is an unlawful employment practice for an employer to "limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's . . . sex . . ." 42 U.S.C. § 2000e-2(a)(2). Virtually the same proscription applies to labor organizations. Id. § 2000e2(c)(2). Thus, when Title VII became effective a conflict arose as to the application of the federal in relation to the state law.

In November 1965 the EEOC issued the following guidelines, stating its position on the conflict.

The Commission does not believe that Congress intended to disturb such laws and regulations which are intended to, and have the effect of, protecting women against exploitation and hazard. Accordingly, the Commission will consider limitations or prohibitions imposed by such state laws or regulations as a basis for application of the bona fide occupational qualification exception. However, in cases where the clear effect of a law in current circumstances is not to protect women but to subject them to discrimination, the law will not be considered a justification for discrimination. So, for example, restrictions on lifting weights will not be deemed in conflict with Title VII except where the limit is set at an unreasonably low level which could not endanger women.

(1) An employer, accordingly, will not be considered to be engaged in an unlawful employment practice when he refuses to employ a women in a job in which women are legally prohibited from being employed of which involve duties which women may not legally be permitted to perform because of hazards reasonably to be apprehended from such employment.

(2) On the other hand, an employer will be deemed to have engaged in a unlawful employment practice if he refuses to employ or promote a woman in order to avoid providing a benefit for her required by law-such as minimum wage or premium overtime pay.

(3) Where state laws or regulations provide for administrative exceptions, the Commission will expect and employer asserting a bona fide occupational qualification pursuant to this paragraph to have attempted in good faith to obtain an exception from the agency administering the state law or regulation.

29 C.F.R. § 1604.1(c) (1965); 30 Fed. Reg. 14,927.

In August 1969, the EEOC changed its position on state protective legislation and amended its guidelines to state that such laws conflicted with Title VII and could never be the basis for a bona fide occupational qualification exception. See 45 Fed. Reg. 13,367 (August 19, 1969); 29 C.F.R. § 1604.1(b)(2) (1970).

LOF operates two plants in Ottawa, Illinois, which make automobile windshields and other automobile glass products. Until 1970, LOF segregated its production workforce by sex, allowing women to work only in "plastics" and "assembly." Women were maintained on a separate seniority list ("Plastic and Assembly Girls") and were subject to a different system for layoff and recall. The most senior female employees worked fulltime in either plastics or assembly; the more junior were maintained on a list, called the "extra board," from which they were called in if a replacement or an extra worker were needed. In late 1969 and early 1970, LOF took steps to eliminate the sex-segregated system at Ottawa. The process was complete by March 1970.

Also in March 1970, eleven days after the LOF switch-over was complete, plaintiff LeBeau and other female employees at Ottawa filed a charge with the EEOC alleging sex discrimination at Ottawa. (No such charge had ever been filed while the discriminatory system was in place.) Upon receiving their "right to sue" letter from the EEOC, the women filed this suit in federal district court for the Northern District of Illinois on August 3, 1971. They claimed that the defendants had (1) segregated departments and jobs by sex; (2) maintained sex-segregated seniority lists; and (3) operated sex-segregated systems of job assignment, layoff and recall--all in violation of Title VII. They also alleged continuing gender discrimination and sought both injunctive and monetary relief.

In June 1975 the EEOC intervened in this action as a party plaintiff and filed a complaint claiming that the defendants had discriminated and were currently discriminating against female employees at Ottawa by maintaining policies and practices with respect to hiring, assignment, compensation and other terms of employment that denied women equal employment opportunity. Three years later, in October 1978, the EEOC was granted leave to file an amended complaint, which omitted any reference to continuing discrimination and any prayer for relief beyond backpay. In this posture, as a suit for backpay as a result of discrimination between July 2, 1965 and March, 1970, the suit survived motions to dismiss and for summary judgment and finally went to trial in October and November 1981. In march 1982 the district court entered judgment for the women plaintiffs on the issue of liability but for the defendants "on the question of back wages."*fn3 It found for the defendants as against the EEOC on all issues.

In the Memorandum Opinion accompanying the order, LeBeau v. Libbey-Owens-Ford Co., No. 71-C-1902 (Mar. 31, 1982) (the "1982 District Court Opinion"), the district court acknowledged that the plaintiffs had made out a prime facie case of gender discrimination, id. at 14. It noted that the defendants raised as affirmative defenses their reliance upon the EEOC's 1965 guidelines and the terms of the Illinois protective statute and it found that they had met their rebuttal burden:

I conclude that the defendants have proved by a preponderance of evidence reliance upon the Illinois laws in support of their practices, and reliance upon the guidelines of E.E.O.C. itself in continuing their reliance upon the state law. I conclude that the government is equitably estopped from claiming that the defendants violated the Act of 1964, and that the individual plaintiffs, although they established a prima facie case under the Act, are equitably estopped from asking damages, in the form of claimed back wages or any other form.

Id. at 30.

The EEOC appealed this ruling. It argued that the defendants were not entitled to a defense of good faith reliance upon the Illinois protective statute because they had not shown that the full range of their discriminatory practices was mandated by the statute. To deny backpay in the absence of an actual conflict, it asserted, would frustrate the policies of Title VII. It also argued that the defendants were not entitled to a defense of good faith reliance upon the EEOC guidelines because (a) their discriminatory employment practices were not authorized by the guidelines and (b) they had not proven actual reliance upon the guidelines. We affirmed, finding that the district court had not clearly erred in finding that the defendants had relied in good faith on both the Illinois statute and the EEOC guidelines and rejecting as unreasonable the EEOC's reading of its guidelines as prohibiting the defendants' practices. 1984 Appellate Opinion, 727 F.2d at 147-48.

The defendants then returned to the district court seeking attorneys' fees for their defense of this lawsuit at both the trial and appellate levels. The district court granted their fee request,*fn4 and it is from that order that the EEOC now appeals.

II

Section 706(k) of Title VII, 42 U.S.C. § 2000e-5(k), provides that the trial court may in its discretion allow the prevailing party "a reasonable attorney's fee as part of the costs."*fn5 A prevailing plaintiff is awarded attorneys' fees unless special circumstances would make the award unjust, but a prevailing defendant will recover fees only upon a showing that "the plaintiff" action was frivolous, unreasonable, or without foundation . . . or that the plaintiff continued to litigate after it clearly became so." Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421-22, 54 L. Ed. 2d 648, 98 S. Ct. 694 (1978). The reason for the distinction is that the policies that favor fee awards to prevailing plaintiffs are not in effect in the case of a prevailing defendant. Id. at 418; see also Hamilton v. Daley, 777 F.2d 1207, 1211-12 (7th Cir. 1985).

The decision whether or not to award attorneys' fees is committed to the discretion of the district judge, see, e.g., Eichman v. Linden & Sons, Inc., 752 F.2d 1246, 1249 (7th Cir. 1985), and ever lightly reversed. We hold here, however, that the trial court abused its discretion when it awarded attorneys' fees to the defendants in this this case.

III

In its decision on fees, LeBeau v. Libbey-Owens-Ford Co., No. 71-C-1902 (Dec. 17, 1984) (the "1984 District Court Opinion"), the district court relied on our decision in Reichenberger v. Pritchard. 660 F.2d 280 (7th Cir. 1981), in ruling on the defendants' application for fees. It relied on four factors that we said were relevant to this inquiry: (1) whether the issue involved in the case was one of first impression requiring judicial resolution; (2) whether the controversy was sufficiently based upon a real threat of injury to the plaintiff; (3) whether the trial court makes a finding that the suit was frivolous under Christiansburg; and (4) whether the record will support such a finding.*fn6 1984 District Court Opinion at 3 (citing Reichenberger, 660 F.2d at 288).

With respect to the first factor, the district court noted that the case was not one of first impression: there had been other cases concerning the impact of Title VII on state protective legislation, one of them an Ohio case involving a LOF plant in Ohio. 1984 District Court Opinion at 3. Second, the district court noted that there was no real threat of injury to the women because the discrimination had ended before the women brought the suit and well before the EEOC had intervened. Id. at 3-4. As to the third and fourth factors, the district court found it to be the "apex of unreasonableness" for the EEOC to have brought and maintained this suit in light of its 1965 guidelines, which the court had ruled allowed the defendants to maintain their employment practices in order to ...


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