Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

A 1994 regulation concerning fall protection in the residential construction industry was subject to a 1999 directive instructing OSHA to not commence enforcement actions against employers using certain systems. The directive included notice of rule-making, soliciting comments on how the regulation should be amended. In 2010 the rule-making closed without amendment to the 1994 regulation. The 1999 directive was rescinded and a new directive issued, authorizing proceedings that may require employers to show, on a case-by-case basis, why they employed fall protection other than described in the 1994 regulation. Employers argued that the 2010 directive constituted an occupational health and safety standard, subject to rule-making procedures. The Seventh Circuit dismissed a petition for review. Although employers using certain systems have not been required to make case-by-case showings since 1999, the 1999 directive did not change the 1994 regulation and was only an exercise of prosecutorial discretion, as was the 2010 directive.

The union claimed that the company owed $2.2 million to benefits funds, based on what would have been contributed had the company used plumbers' union workers for certain work, as required by contract. The union submitted a grievance to the Joint Arbitration Board (JAB); the company submitted its own grievance, claiming that some work was performed by members of other unions. The company contacted the Plan for Settlement of Jurisdictional Disputes in the Construction Industry, which determined that the JAB did not have authority over the dispute. The plumbers union is not a participant in the Plan. The JAB was not notified of the order, held a hearing that the company did not attend, found violation of the contract, and ordered payment of $3.3 million. The district court declined to invalidate the order. The Seventh Circuit reversed and remanded. The Union was not required to file suit challenging the Plan order, but was entitled to challenge it when raised as a defense to the JAB order. Two parties can agree to settle a dispute in any way that does not violate the rights of third parties, but the company withdrew its consent to arbitrate with JAB by seeking relief with the Plan. Of the inconsistent arbitration orders, Plan's order takes precedence.

An African-American coroner was elected in 2004. After a contract with Indiana University for pathology services expired, two Caucasian university pathologists formed a company (FP) and contracted to provide services. The new coroner replaced the deputy coroner with an African-American, resulting in a successful claim of reverse discrimination. The new deputy expressed concerns about costs under the FP contract and whether FP used county supplies for outside work allowed by the contract. The county terminated the contract under a six-month notice provision and hired an African-American pathologist without conducting a search or checking references. The change did not save money. FP and the pathologists filed suit under 42 U.S.C. 1983. The district court entered summary judgment for the defendants. The Seventh Circuit reversed and remanded, stating that a reasonable fact-finder would not be compelled to believe that the contract was terminated because of cost. The contract allowed the county to require FP to stop performing outside work, but the defendants chose not to do so despite their statements that they were very satisfied with FP's services. The coroner had made remarks about wanting to replace white workers with African-Americans; although he contracted with FP, it is possible to infer that FP was intended to serve as a "placeholder" for a seamless transition until African-American replacements could be found.

More than 500 female employees at an Indiana Rolls Royce plant were denied class certification under Rule 23 (b)(2) and the court entered summary judgment, rejecting their discrimination claims on the merits. The Seventh Circuit affirmed, first noting that appeal was a risky strategy because it could result in different decisions on certification and the merits, causing individuals to be barred from bringing legitimate claims. After reviewing the evidence, the court found that the there were no sex-based differences in pay or promotions. The named plaintiffs' claims and defenses were not typical of the class; some named plaintiffs had authority over compensation of male and female workers. The court noted that there might be less variance in a suit seeking only injunctive relief, but the suit sought damages. The Rule under which certification was sought, improperly, according to the court, does not permit plaintiffs to opt out, but calculating damages in this case would require 500 hearings. The district court acted within its discretion in denying a motion to substitute named plaintiffs.

After selling a subsidiary, the company no longer had employees participating in the multi-employer pension plan and sought to withdraw. The underfunded plan claimed that the company owed about $5 million. An arbitrator determined that the company did not have withdrawal liability. The district court agreed. The Seventh Circuit affirmed. The plan argued that the company had closed other plants, outsourcing work, so that the sale was not solely responsible for the company not continuing contributions. A company is not liable for withdrawal under 29 U.S.C. 1384 if withdrawal is "solely" because of a bona fide sale. The court stated that there was evidence to support the arbitrator's finding that the sale was not part of a plan by the company to withdraw in stages and that the focus must be the transaction at issue: a sale to an ongoing business that is willing and able to continue contributions.

Three white police officers, in good standing, resigned and later sought to be rehired. They were required to reenter the force as entry-level officers with respect to compensation and seniority. An African-American officer who had resigned was subsequently rehired. The city enacted an ordinance, in the interest of diversity, granting him credit for past service. The union filed suit. A state court determined that the union lacked standing. A state suit later filed by the individuals was dismissed as untimely. The officers filed in federal court, which first applied the "paycheck rule," under which each discriminatory paycheck is a separate act that resets the limitations period, but entered judgment for the city when that rule was rejected by the Supreme Court. In 2009, while appeal was pending, Congress enacted the Ledbetter Fair Pay Act, amending Title VII (42 U.S.C. Sec. 2000e-5(e)(3)(A)), reinstating the paycheck rule. The Act is expressly retroactive. The Seventh Circuit concluded that Title VII and Equal Protection claims, based on actions after the state court's decision, were not barred. The compensation system need not be intrinsically discriminatory under Title VII. The court concluded that the paycheck rule also applies to the Equal Protection claims, the limitations period for which began to run when the officers requested equal treatment. The state court decision did not have preclusive effect because it dealt only with the limitations period and did not address discrimination.