Johnson v. Ryder Truck Lines, Inc.

BUTZNER, Circuit Judge: After affirming the district court’s grant of injunctive relief, retroactive seniority, and back pay in this class action brought under Title VII of the Civil Rights Act of 1964 [42 U.S.C. § 2000e et seg.] and § 16 of the Civil Rights Act of 1870 [42 U.S.C. § 1981], we granted rehearing to consider the effect of International Brotherhood of Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977).1 The principal question to emerge on rehearing is whether some employees can obtain relief under § 1981 that is not available to them under Title VII. We hold that in this instance they cannot, and we modify our initial opinion and remand the case for further proceedings. I Incumbent black employees who were discriminated against when hired before the effective date of Title VII in 1965 were subsequently prevented by the company’s bargaining agreement from obtaining jobs as line drivers while maintaining their full company seniority. The district court’s order provided relief to employees who suffered in this way from the present effects of pre-Act discrimination. Rehearing disclosed that the relevant provisions of the bargaining contract involved in this case and the one considered in Teamsters are virtually identical. Both contracts provided that employees could not carry their full company seniority for all purposes with them when they transferred to line driver positions. In Teamsters the Court considered the effects of § 703(h) of the 1964 Act [42 U.S.C. § 2000e-2(h)] on the contract’s seniority system.2 It said: [W]e hold that an otherwise neutral, legitimate seniority system does not become unlawful under Title VII simply because it may perpetuate pre-Act discrimination. Congress did not intend to make it illegal for employees with vested seniority rights to continue to exercise those rights, even at the expense of pre-Act discriminatees. 431 U.S. at 353-54, 97 S.Ct. at 1864. Therefore, Teamsters invalidates our af-firmance of the district court’s conclusion that the company’s seniority system violated Title VII. The employees assert, however, that § 703(h) is expressly limited to Title VII and that it should not be construed as a restriction on § 1981. They therefore insist that the seniority system violates their rights secured by § 1981 and that they are entitled to relief under that statute. It is this issue that we now address. II Title 42 U.S.C. § 1981, provides: All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other. The Civil Rights Act of 1964 did not repeal by implication any part of § 1981. This is firmly established by both the legislative history of the 1964 Act and its 1972 amendments. Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 457-61, 95 S.Ct. 1716, 44 L.Ed.2d 295 (1975); cf. Jones v. Alfred H. Mayer Co., 392 U.S. 409, 416 n.20, 88 S.Ct. 2186, 20 L.Ed.2d 1189 (1968). Section — 474 — 1981 affords a federal remedy against racial discrimination in private employment that is “separate, distinct, and independent” from the remedies available under Title VII of the 1964 Act. Johnson v. Railway Express Agency, Inc., supra, 421 U.S. at 461, 95 S.Ct. 1716. Thus an employee “who establishes a cause of action under § 1981 is entitled to both equitable and legal relief, including compensatory and, under certain circumstances, punitive damages.” 421 U.S. at 460, 95 S.Ct. at 1770. This case therefore presents the question of whether the incumbent employees who were discriminatorily hired before 1965 when Title VII became effective have a cause of action under § 1981 because the bargaining contract’s restriction of carryover seniority perpetuates the pre-1965 hiring discrimination.3 Of course, each pre1965 incumbent black employee had a cause of action under § 1981 because of the company’s discriminatory hiring practices. But all parties recognize that this cause of action is barred by North Carolina’s three year statute of limitations, N.C. Gen.Stat. § 1-52(1), which is made applicable to the § 1981 claim. Johnson v. Railway Express Agency, Inc., supra, 421 U.S. at 462, 95 S.Ct. 1716. The seniority provision of the bargaining contract was facially neutral, applying to both white and black employees if they transferred to the higher paying position of a line driver. Both black and white employees were subject to loss of their former departmental seniority and had to start at the bottom of the seniority list for line drivers even though they may have had more employment seniority than line drivers higher on the ladder. Consequently, § 1981 does not afford the black employees relief, because this statute confers on black persons only the same rights possessed by white persons. Moreover, the application of 42 U.S.C. § 1988 does not lead to a different conclusion. Section 1988 directs federal courts to enforce § 1981 “in conformity with the laws of the United States, so far as such laws are suitable . . ”4 Section 1988 in itself does not create any cause of action, but it “instructs federal courts as to what law to apply in causes of action arising under federal civil rights acts.” Moor v. County of Alameda, 411 U.S. 693, 703-06, 93 S.Ct. 1785, 1792, 36 L.Ed.2d 596 (1973); Scott v. Vandiver, 476 F.2d 238, 242 (4th Cir. 1973). In Griggs v. Duke Power Co., 401 U.S. 424, 430, 91 S.Ct. 849, 853, 28 L.Ed.2d 158 (1971), the Court held: “Under the [1964] Act, practices, procedures, or tests neutral on their face, and even neutral in terms of intent, cannot be maintained if they operate to ‘freeze’ the status quo of prior discriminatory employment practices.” This concept is essential to the employees’ suit. However, in Teamsters v. United States, supra, 431 U.S. at 349, 97 S.Ct. 1843, the Court held that the Griggs rationale is not applicable to a seniority system that is lawful under § 703(h). Ordinarily, § 1988 enables a district court to utilize Griggs’ interpretation of Title VII in a § 1981 employment discrimination suit, but the court cannot transgress the limitation placed on the Griggs rationale in Teamsters with respect to § 703(h). A ruling that a seniority system which is lawful under Title VII is nevertheless unlawful under § 1981 would disregard the precepts of § 1988. An analogous situation concerning the application of — 475 — § 1988 is presented by Moor v. County of Alameda, 411 U.S. 693, 93 S.Ct. 1785, 36 L.Ed.2d 596 (1973), dealing with the enforcement of a § 1983 claim by utilization of a state law which made municipalities vicariously liable for the acts of their employees.5 The Court held that such a state law could not be utilized to enforce the rights secured by § 1983 because it was inconsistent with federal law that excludes municipal corporations from liability under § 1983. 411 U.S. at 706, 93 S.Ct. 1785. Our conclusion accords with decisions that have held, although in different context, that § 1981 does not invalidate bona fide seniority provisions. See, e. g., Chance v. Board of Examiners, 534 F.2d 993, 998 (2d Cir. 1976); Watkins v. United Steel Workers Local 2369, 516 F.2d 41, 49-50 (5th Cir. 1975); Waters v. Wisconsin Steel Works, 502 F.2d 1309, 1320 n.4 (7th Cir. 1974); cf. Patterson v. American Tobacco Co., 535 F.2d 257, 270 (4th Cir. 1976). It is also consistent with the Supreme Court’s opinion in Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 95 S.Ct. 1716, 44 L.Ed.2d 295 (1975). Johnson emphasized that a party proceeding under § 1981 is not restricted by the administrative and procedural requirements of Title VII, but nothing in Johnson suggests that a practice lawful under Title VII can be held unlawful under § 1981. On the contrary, Johnson recognizes that Congress noted that Title VII and § 1981 are “co-extensive” and that they “augment each other and are not mutually exclusive.” 421 U.S. at 459, 95 S.Ct. at 1719. Johnson gives no indication, however, that Congress intended to create conflicting and contradictory standards for determining what constitutes illegal discrimination. We therefore withdraw our mandate and direct that a new judgment issue consistent with this opinion. We remand the case to the district court for reconsideration of the claims made by those employees who were afforded relief on the basis of the seniority system that Teamsters later held to be lawful. The parties suggest that additional evidence may be necessary, and the district court should reopen the proceedings for this purpose. Although the union did not appeal from the entry of the injunction against it, we direct the district court to permit it to move for relief from this order. Fed.R.Civ.P. 60(b)(6). The union’s conduct in agreeing to the seniority system violated neither Title VII nor § 1981. Therefore, the judgment against it should be vacated. See, Teamsters v. United States, supra, 431 U.S. at 356, 97 S.Ct. 1843. In all other respects we affirm the district court for the reasons stated in our initial opinion. Footnotes [1] Our initial decision is reported as Johnson v. Ryder Truck Lines, Inc., 555 F.2d 1181 (4th Cir. 1977). [2] Section 703(h) of the 1964 Act [42 U.S.C. § 2000e-2(h)] provides in part: Notwithstanding any other provision of this subchapter, it shall not be 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, . . . provided that such differences are not the result of an intention to discriminate because of race . . . . [3] Applicants refused jobs after 1965 on account of their race are entitled to an award of seniority retroactive to the date of application. Franks v. Bowman Transportation Co., 424 U.S. 747, 762-70, 96 S.Ct. 1251, 47 L.Ed.2d 444 (1976). Theoretically, the same measure of retroactive seniority would be available to pre-1965 incumbents who sought linehaul jobs, but it would be of less value to them because they could not carry over their full employment seniority to their new job assignment. [4] Title 42 U.S.C. § 1988 provides in part: The jurisdiction in civil . . . matters conferred on the district courts by the provisions of this chapter . . . shall be exercised and enforced in conformity with the laws of the United States, so far as such laws are suitable to carry the same into effect [5] Section 1988 also authorizes resort to state laws for enforcement of the civil rights acts if they are not “inconsistent with the Constitution and laws of the United States.”