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Malhotra v. Cotter & Co.

decided: September 12, 1989.

SUBHASH C. MALHOTRA, PLAINTIFF-APPELLANT,
v.
COTTER & COMPANY, DEFENDANT-APPELLEE



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 86 C 9460 -- James F. Holderman, Judge.

Cudahy, Posner, and Ripple, Circuit Judges.

Author: Posner

POSNER, Circuit Judge

Subhash Malhotra, an accountant of Indian birth and ancestry, brought this suit in 1986 against his former employer, Cotter & Company (a distributor of tools). The suit charged ethnic discrimination, in violation of both 42 U.S.C. § 2000e (Title VII of the Civil Rights Act of 1964) and 42 U.S.C. § 1981 (Civil Rights Act of 1866). The district judge granted Cotter's motion for summary judgment and dismissed the suit. 696 F. Supp. 1203 (N.D.Ill. 1988). After oral argument of Malhotra's appeal, the Supreme Court decided Patterson v. McLean Credit Union, 491 U.S. 164, 109 S. Ct. 2363, 105 L. Ed. 2d 132 (1989), which narrows the interpretation of section 1981.

Malhotra, a C.P.A., had first gone to work for Cotter in 1978 as an auditor. According to the administrative charge that he filed in 1985, kicking off this litigation, between 1979 and 1984 Cotter on ten separate occasions refused, because of Malhotra's Indian ancestry, to promote him. Although the parties describe the charge as one of racial discrimination, it is more accurately described as a charge of discrimination based on color, ethnicity, or national origin, rather than on race, since Indians are Caucasians. But the precise characterization makes no difference in this case. Section 1981 protects persons colloquially described as "nonwhites" even when technically they are Caucasians, St. Francis College v. Al-Khazraji, 481 U.S. 604, 95 L. Ed. 2d 582, 107 S. Ct. 2022 (1987), while Title VII forbids discrimination on the basis of national origin and ethnicity as well as on the basis of race or color. It is true that Title VII's defense of bona fide occupational qualification, 42 U.S.C. § 2000e-2(e)(1), available in cases of discrimination on the basis of sex or national origin, is unavailable where discrimination is based on race, color, or ethnicity. But Cotter did not raise such a defense. And notice that Title VII groups discrimination on grounds of race with discrimination on grounds of color; although Indians are Caucasians, they are generally of darker skin color than "white" Americans.

Malhotra was finally promoted in 1986. However, according to his complaint (rather than his administrative charge, which had been filed before his promotion), Malhotra's new supervisor harassed Malhotra by dumping papers on his desk, by humiliating him in front of his secretary, and by forbidding the secretary to photocopy his work. Malhotra contends that the supervisor's acts amounted to racial harassment. Such harassment can be actionable under Title VII, see, e.g., Nazaire v. Trans World Airlines, Inc., 807 F.2d 1372, 1380-81 (7th Cir. 1986), but not every act of harassment of a person who happens to belong to a racial minority or other protected group violates the statute. A member of such a group has no right to have a more congenial working environment than a white male, and therefore he can complain only about harassment that is discriminatory in character or purpose. The acts of a supervisor, moreover, are not automatically attributed to the company. See Meritor Savings Bank v. Vinson, 477 U.S. 57, 72, 91 L. Ed. 2d 49, 106 S. Ct. 2399 (1986). But as we explain, it will not be necessary to decide whether Malhotra has stated a claim of racial harassment.

In 1987, after the filing of this suit, Cotter fired Malhotra -- in retaliation, the complaint alleges, for the Title VII administrative charge that Malhotra had filed in 1985. The amended complaint that the district judge dismissed alleges retaliation in violation both of Title VII's retaliation provision, 42 U.S.C. § 2000e-3(a), and of section 1981, as well as repeating the other charges.

The principal grounds on which Cotter had urged summary judgment were procedural: the 300-day (sometimes but not here 180-day) statute of limitations in Title VII for filing the administrative charge, see 42 U.S.C. § 2000e-5(e); the two-year borrowed statute of limitations applicable to section 1981, see Goodman v. Lukens Steel Co., 482 U.S. 656, 107 S. Ct. 2617, 96 L. Ed. 2d 572 (1987), and Ill.Rev.Stat. ch. 110, para. 13-202; and Malhotra's failure to mention either racial harassment or retaliatory dismissal in his administrative charge. However, Cotter also filed a substantive affidavit in support of the motion for summary judgment. The affidavit, signed by the officer in charge of finance and accounts receivable, concerned two of the denials of promotion to Malhotra. One was Cotter's refusal -- late in 1984, less than 300 days before the filing of the administrative charge -- to appoint Malhotra to the position of Finance Manager. Malhotra believed himself better qualified for the position than Thomas Sweenie, who received the appointment, because Malhotra was a C.P.A. and Sweenie was not, and because Malhotra had audited the Finance Department. Cotter's affidavit explained, however, that Sweenie -- who had an M.B.A. in finance from Northwestern University and had been acting manager of the Finance Department for six months before he received the permanent appointment -- was better qualified for a managerial position (especially for the managerial position that he already held on an acting basis) than an accountant would be, because the position required managerial rather than auditing or accounting skills. Malhotra did not attempt to meet this evidence head-on but instead presented exceptionally weak, indeed largely false, evidence to show that Cotter's real reason for preferring Sweenie was ethnic bias -- evidence such as Cotter's having no members of minority groups in managerial positions. Actually it has eleven. No rational trier of fact could have inferred that prejudice was a factor in denying Malhotra promotion to Finance Manager.

The other issue that the substantive affidavit addressed was Cotter's refusal in 1983 to appoint Malhotra to the position of Accounts Receivable Manager. This refusal took place more than 300 days before Malhotra filed his administrative charge and more than two but less than five years before he filed his suit. The affidavit attests that Malhotra was not promoted because he was not as well qualified as the person whom the affiant did appoint to the position. The statement is brief and conclusional, and we have remarked in another context that conclusional statements in affidavits "are entitled to little weight in deciding whether to grant" a motion for summary judgment. Products Liability Ins. Agency, Inc. v. Crum & Forster Ins. Cos., 682 F.2d 660, 662 (7th Cir. 1982). We said "little" weight -- not zero weight. Malhotra calls the statement in Cotter's affidavit a "shred." This is argument by epithet. Malhotra has provided us with no authority or reason for giving the statement no weight, and in the district court he submitted no evidentiary materials to rebut the statement. Cotter's affidavit named the person who was appointed Accounts Receivable Manager in Malhotra's stead, and Malhotra could have presented evidence that that person was not as well qualified as he. He did not respond to the affidavit, and as a result again failed to create a triable issue.

None of the denials of promotion except with regard to the Finance Manager's job occurred within two years prior to the filing of Malhotra's complaint; are they therefore time-barred by virtue of the Supreme Court's decision in Goodman v. Lukens Steel Co., supra? We declined to apply the Supreme Court's decision in Wilson v. Garcia, 471 U.S. 261, 85 L. Ed. 2d 254, 105 S. Ct. 1938 (1985) (see also Owens v. Okure, 488 U.S. 235, 109 S. Ct. 573, 102 L. Ed. 2d 594 (1989))--which adopted state personal-injury statutes of limitations for use in section 1983 suits and clearly presaged Goodman -- retroactively, because of clear precedent in this circuit allowing Illinois plaintiffs five years to bring such suits. Anton v. Lehpamer, 787 F.2d 1141 (7th Cir. 1986). Equally clear precedent had given section 1981 plaintiffs five years, see Waters v. Wisconsin Steel Works, 427 F.2d 476 (7th Cir. 1970), and after oral argument in the present case we held that Goodman like Garcia would not be applied retroactively. Smith v. Firestone Tire & Rubber Co., 875 F.2d 1325, 1326-28 (7th Cir. 1989). The adoption of a statute of limitations is no less legislative when done by a court than when done by a legislature, and until the handwriting on the wall is unmistakable plaintiffs should be able to rely on the previous limitations period. So Malhotra may reach back five years before the filing of his complaint. Four of the ten denials of promotion occurred within that five-year period. Two, involving the Finance Manager position and the Accounts Receivable Manager, Cotter successfully defended against in its substantive affidavit, as we have seen. However, with respect to the other two, Cotter staked its all on persuading the district court and us to apply the two-year rather than five-year statute of limitations.

The remaining six denials of promotion took place more than five years before the filing of the complaint. With respect to them the question of limitations is whether Malhotra may reach back that far on a theory of "continuing violation." As an original matter we might have some doubts; such banking of grievances could turn an employment discrimination suit into an inquest on the employee's entire employment history with the defendant. We know from Lorance v. AT & T Technologies, Inc., 490 U.S. 900, 109 S. Ct. 2261, 104 L. Ed. 2d 961 (1989), and the cases cited in that opinion, that Title VII's statute of limitations begins to run when the employer implements a discriminatory policy (or the plaintiff is hired by an employer who has such a policy in force), even if its effects are not felt until many years later. These decisions express a strong preference for prompt adjudication of employment grievances, but do not read directly on the principle of Stewart v. CPC International, Inc., 679 F.2d 117, 121 (7th Cir. 1982) (per curiam), that no part of a continuing violation which persists into the period within which suit is allowed is time-barred. See also Nazaire v. Trans World Airlines, Inc., supra, 807 F.2d at 1377-79; cf. Havens Realty Cop. v. Coleman, 455 U.S. 363, 380-81, 71 L. Ed. 2d 214, 102 S. Ct. 1114 (1982). The qualification is essential. There must be a violation within the period of the statute of limitations. Young v. Will County Department of Public Aid, 882 F.2d 290, slip op. at 4-5 (7th Cir. 1989). If, having proved such a violation, the plaintiff goes on to prove that it began earlier and that its earlier manifestation caused him additional injury, he can obtain a remedy for the increment as well as for the injury inflicted by the recent violation. This is nothing special to section 1981; it is a general principle of our law. See, e.g., Taylor v. Meirick, 712 F.2d 1112, 1118-19 (7th Cir. 1983).

But what exactly does it mean to say that a violation "began" before the statutory period? Here as in most cases there are discrete violations -- separate failures to promote. What justifies treating a series of separate violations as a single continuing violation? Only that it would have been unreasonable to require the plaintiff to sue separately on each one. In a setting of alleged discrimination, ordinarily this will be because the plaintiff had no reason to believe he was a victim of discrimination until a series of adverse actions established a visible pattern of discriminatory mistreatment. See Glass v. Petro-Tex Chemical Corp., 757 F.2d 1554 (5th Cir. 1985). The district judge did not address the question whether this condition had been satisfied here. The reason is that although he anticipated Smith v. Firestone Tire & Rubber Co. and therefore properly refused to apply Goodman retroactively, he nevertheless granted summary judgment on all the claims of discrimination in promotion, including those that Cotter had not rebutted on the merits, on the ground that Malhotra had not produced enough evidence to justify a finding that the denial of any of the promotions was due to Malhotra's ancestry. He thought in other words that Malhotra had not reached the threshold of showing discrimination. But it was not Malhotra's burden to produce evidence concerning claims as to which Cotter's sole ground for summary judgment was the statute of limitations. When a party moves for summary judgment on ground A, his opponent is not required to respond to ground B -- a ground the movant might have presented but did not. See Bonilla v. Nazario, 843 F.2d 34, 37 (1st Cir. 1988); John Deere Co. v. American National Bank, 809 F.2d 1190, 1192 (5th Cir. 1987). Except with regard to the two denials of promotion that did evoke affidavits from Cotter containing evidence that discrimination had not figured in those denials, it was enough for Malhotra to argue -- as he did, and successfully -- that his claims were timely.

Malhotra is therefore entitled to a remand on all but two of his failure-to-promote claims -- provided that claims of racially motivated denial of promotion based on section 1981 survive Patterson v. McLean Credit Union. As Title VII claims, they are time-barred; so without the five-year statute of limitations for section 1981 claims, Malhotra is lost (so far as the denials of promotion are concerned). Some claims of racially discriminatory denials of promotion do survive Patterson; others do not. It is uncertain where Malhotra's fit.

Noting the statutory language "the same right [as white people] . . . to make . . . contracts," the Supreme Court held in Patterson that "the question whether a promotion claim is actionable under § 1981 depends upon whether the nature of the change in position was such that it involved the opportunity to enter into a new contract with the employer. . . . Only where the promotion rises to the level of an opportunity for a new and distinct relation between the employee and the employer is such a claim actionable under § 1981. Cf. Hishon v. King & Spalding, 467 U.S. 69, 81 L. Ed. 2d 59, 104 S. Ct. 2229 (1984) (refusal of law firm to accept associate into partnership) (Title VII)." 109 S. Ct. at 2377. The Court's reference to contract and its citation to Hishon suggest that in deciding whether a promotion would create "a new ...


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