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Race Discrimination


Supreme Court Lets Stand Decision Holding LIUNA Liable for Local's Bias


By Susan J. McGolrick

Wednesday, February 23, 2000


The U.S. Supreme Court Feb. 22 let stand a divided appeals court decision that the Laborers' International Union of North America is liable for a local union's racially discriminatory membership and job referral practices (Laborers' Int'l Union of N. Am. v. Alexander, U.S., No. 99-739, cert. denied 2/22/00).


LIUNA sought review of a 2-1 decision last April by the U.S. Court of Appeals for the Sixth Circuit finding that Local 496 acted as the international's agent. The appeals court also found that the international instigated a membership rule having a disparate impact on African Americans and breached its affirmative duty to investigate the local's discriminatory conduct (177 F.3d 394, 79 FEP Cases 1057 (6th Cir. 1999)).


The appeals court held both LIUNA and the local liable for violating Title VII of the 1964 Civil Rights Act and the Civil Rights Act of 1866 (42 U.S.C. § 1981). Under a settlement agreement on damages, a class of 52 black workers who were denied union membership or job referrals by Local 496 will be entitled to $1.8 million in damages, $300,000 of which was already paid. The settlement gives class members preference in job referrals.


Local 496, whose membership is overwhelmingly white, signed a project labor agreement with the Cleveland Electric Illuminating Co. in 1973 under which the local acted as the exclusive hiring hall for laborers involved in building the Perry Nuclear Power Plant in Lake County, Ohio. The local's constitution, dictated by LIUNA , requires that a person seeking union membership first be employed at a union shop in Lake County. The Sixth Circuit found that the local regularly waived the rule for white applicants but not blacks.


When construction ended in 1985, Cleveland Electric entered into a national maintenance agreement with LIUNA that called for Local 496 to act as the international's agent in filling laborer vacancies at the Perry plant. Under the National Labor Relations Act, the local was not permitted to discriminate between members and nonmembers in making job referrals, but the appeals court found the local never referred nonmembers.


Black applicants initiated a class action in 1984. The U.S. District Court for the Northern District of Ohio in 1988 certified a class of black workers who sought union membership or job referrals for the Perry plant. In 1991, the district court found both the local and LIUNA liable for disparate treatment and disparate impact race discrimination in violation of Title VII and Section 1981.


Affirming, the Sixth Circuit ruled that LIUNA was vicariously liable for Local 496's actions because the local was acting as the international's agent and was directly liable because the international breached its duty to investigate the alleged discrimination when it learned about charges filed with the Equal Employment Opportunity Commission. Finding a continuing violation, the appeals court declined to cut off consideration of alleged discriminatory acts prior to 300 days before an EEOC charge was filed against LIUNA.


Creation of Third-Person Liability Opposed


In its petition for Supreme Court review, LIUNA argued that the Sixth Circuit decision fundamentally alters the Title VII/Section 1981 antidiscrimination scheme that imposes liability on employers and unions that directly engage in discriminatory employment practices. Instead of just imposing liability on "first persons," the appeals court created "a third person duty to intervene to correct and prevent first person discriminatory employment practices and a third person liability for the first person discrimination that the third person did not correct and prevent."


The appeals court decision means "any local union discriminatory action that an international union with 'notice' fails to intervene to correct and to prevent generates both a local union liability and an international liability," LIUNA contended. It warned that "there is nothing in § 1981/Title VII or in the law of agency that could possibly justify a different result in the subsidiary corporation-parent corporation context or in the affiliated employer association context."


The Supreme Court and the federal appeals courts "have uniformly rejected attempts to interject 'affirmative duty' concepts into the federal labor relations statutes," LIUNA wrote. It asserted that the Supreme Court in General Bldg. Contractors v. United Engineers & Constr. , 458 U.S. 375 (1982), rejected the theory that a group of employers and trade associations were liable under Section 1981 for discriminatory job referrals by a union that had a collective bargaining relationship with the employers/associations.


Agency Law Supports LIUNA Liability


In their brief opposing Supreme Court review, the African American laborers argued that "agency law has long been applied in cases involving the question of an international union's liability for actions of a local." Noting that the determination is highly fact-specific, the laborers emphasized the evidence supporting the finding of an agency relationship between LIUNA and Local 496.


They noted that the maintenance agreement was between Cleveland Electric and the international and that the contract provided for the local to act as the international's agent for job referrals. The laborers also pointed out that the local had a history of race discrimination, LIUNA was responsible for the requirement that applicants already be employed in a union shop in the county, and the rule had a disparate impact on black applicants.


Turning to the affirmative duty issue, the laborers wrote: "It is true that a number of courts have rejected claims of liability premised on affirmative obligations, but those decisions are based on the facts presented in those cases. None of the decisions precludes the possibility of such a claim." The district court found that LIUNA was or should have been aware of Local 496's discriminatory practices and refused to investigate or take any other action to stop it although the international was responsible as a signatory to the bargaining contract, the laborers pointed out.


Summaries of labor and employment law cases denied Supreme Court review appear in Section E.


Copyright © 2000 by The Bureau of National Affairs, Inc., Washington D.C.

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