2nd Circuit Revives Transgender Welder’s Discrimination Case Against Ironworkers Union

A unanimous panel of the U.S. Court of Appeals for the 2nd Circuit, reversing the dismissal of a Title VII discrimination claim filed by a transgender welder against his union, ruled that failure to exhaust administrative remedies is not a jurisdictional bar and that the district court incorrectly failed to discern an alternative federal ground for the lawsuit under the National Labor Relations Act.  As such, the district court must reconsider both its decision on the motion to dismiss and its decision not to assert jurisdiction over state and local law claims.  Fowlkes v. Ironworkers Local 40, 2015 WL 3796386, 2015 U.S. App. LEXIS 10339 (2nd Cir., June 19, 2015).  The decision is particularly notable in flagging the possibility that gender identity discrimination by a union hiring hall may violate the union’s duty of fair representation under the National Labor Relations Act, a little-explored source of protection for sexual minority employees.

Cole Fowlkes, “who self-identifies as male but was born biologically female” according to Circuit Judge Susan L. Carney’s opinion for the court, alleges that his union and two of its business agents, Danny Doyle and Kevin O’Rourke, “discriminated against him on the basis of sex and retaliated against him for filing an earlier action against them.”  Although various forms of discrimination are alleged, the most egregious is refusal to refer Fowlkes for work through the Local’s hiring hall.  In the construction industry in New York City, most union-represented jobs are obtained through hiring hall referrals.  Although Fowlkes received a few referrals, he claims to have not received the number of referrals to which he was entitled by virtue of his position on the union seniority list and level of experience.  He also recounted various remarks made to him by the union agents reflecting discriminatory attitudes because of his gender identity.

Fowlkes first filed a charge with the Equal Employment Opportunity Commission (EEOC) alleging a violation of Title VII on May 29, 2007.  EEOC issued a “right to sue” letter on July 10, 2007, informing Fowlkes that it had decided not to take further action on his claims but he was free to sue on his own behalf.  At the time, during the Bush Administration, the EEOC was set against sex discrimination claims by transgender complainants under Title VII.  Fowlkes then filed an action pro se in the U.S. District Court for the Southern District of New York on January 25, 2008, unfortunately more than 180 days after the right to sue letter was issued, and the district court dismissed the case upon the defendants’ motion as time-barred, since the statute provides that a complainant has 90 days to file suit after receiving such a letter from the EEOC.  As Fowlkes continued to experience discrimination, he filed a second federal court complaint pro se, also in the U.S. District Court for the Southern District of New York, in July 2011, alleging that the defendants violated his “Civil Rights (involving Employment)” by subjecting him to harassment and refusing to refer him for work based on his sex.  He did not file a new EEOC charge or obtain a new “right to sue” letter before filing this second complaint.  He also asserted discrimination claims under the New York State and City Human Rights Laws.  Again the defendants moved to dismiss, this time resting on the argument that Fowlkes’s failure to file a new EEOC charge deprived the court of jurisdiction to hear his federal claims.  The District Court responded that because Fowlkes had not complained to the EEOC about conduct occurring after his earlier EEOC complaint was filed, the court’s jurisdiction was “uncertain.”  The judge gave Fowlkes leave to amend his complaint to detail any state claims that weren’t raised in the prior, dismissed action, and to allege any facts relevant to his attempt to exhaust administrative remedies prior to filing this new lawsuit.  Fowlkes filed an amended complaint in November 2011, but the court concluded that his Title VII claim “must be dismissed because he does not allege that he exhausted his administrative remedies,” so the court concluded it lacked jurisdiction over the Title VII claim and thus that it lacked jurisdiction to entertain his state law claims without any federal claim remaining in the case.

Fowlkes appealed to the 2nd Circuit, this time represented by counsel, Robert T. Smith of Katten Muchin Rosenman LLP, who in addition to arguing that the failure to exhaust was not necessarily fatal on the question of jurisdiction first advanced the idea that Fowlkes’ factual allegations could support a federal claim under the National Labor Relations Act for violation of the duty of fair representation.  The 2nd Circuit found merit in both arguments.

First, Judge Carney pointed out, there is ample precedent for the argument that the statutory exhaustion requirement under Title VII may be waived on equitable grounds, and in this case there were two possible arguments to be made.  One is that filing a second EEOC complaint would have been futile, since at the time Fowlkes filed his second complaint in federal court, the EEOC was still adhering to the position it had taken in response to his first complaint: that gender identity discrimination is not actionable under Title VII.  “When Fowlkes filed his 2011 complaint,” Carney explained, “the EEOC had developed a consistent body of decisions that did not recognize Title VII claims based on the complainant’s transgender status.  It was not until Macy v. Holder, NO. 0120120821, 2012 WL 1435995 (E.E.O.C. Apr. 20, 2012), published after Fowlkes filed his 2011 complaint, that the EEOC altered its position and concluded that discrimination against transgender individuals based on their transgender status does constitute sex-based discrimination in violation of Title VII.  Thus, Fowlkes’s failure to exhaust could potentially be excused on the grounds that, in 2011, the EEOC had ‘taken a firm stand’ against recognizing his Title VII discrimination claims.”  Furthermore, the court noted that there was a second possible equitable defense for failure to file a new EEOC claim: that “his more recent allegations of discrimination may be ‘reasonably related’ to the discrimination about which he had filed an earlier charge with the EEOC.”  In such a case, wrote Carney, citing the 2nd Circuit’s decision in Terry v. Ashcroft, 336 F.3d 128 (2003), “the failure to raise the allegations in the complaint before the EEOC may not bar federal court proceedings.”  Judge Carney pointed out, based on the allegations in the most recent federal court complaint, that Fowlkes could plausibly make such an argument in this case, so the matter should be remanded in order for the district court to determine whether “futility” might be a cognizable equitable defense to the motion to dismiss “and, in this particular case, whether futility, ‘reasonable relatedness,’ or any other equitable doctrine excuses Fowlkes’s failure to exhaust his administrative remedies.”

But furthermore, the court was willing to entertain the argument, first raised on appeal but based on the factual allegations from the complaint, that Fowlkes might alternatively have a federal claim under the National Labor Relations Act.  Because Fowlkes filed his complaint pro se, “he is ‘entitled to special solicitude,’ and we will read his pleadings ‘to raise the strongest arguments that they suggest,’” wrote Carney, quoting from Triestman v. Fed. Bureau of Prisons, 470 F.2d 471, 477 (2nd Cir. 2006). “The duty of fair representation is a ‘statutory obligation’ under the NLRA, requiring a union ‘to serve the interests of all members without hostility or discrimination. . . to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct,” quoting Vaca v. Sipes, 386 U.S. 171, 177 (1967), in which the Supreme Court had definitely recognized that the Act’s conferral of exclusive representative power on unions implied a duty to exercise such power fairly.  The Supreme Court has found that this duty applies to hiring hall operations.  “A union breaches its duty of fair representation if its actions with respect to a member are arbitrary, discriminatory, or taken in bad faith,” wrote the Supreme Court in Air Line Pilots Ass’n, Int’l v. O’Neill, 499 U.S. 65, 67 (1991).

“Although Fowlkes’s amended pro se complaint did not flag the NLRA, we nonetheless are persuaded, with the benefit of a counseled brief on Fowlkes’s behalf, that Fowlkes has stated a plausible claim for a breach of the duty of fair representation,” wrote Judge Carney.  “In his amended complaint, Fowlkes alleges that the Local refused to refer him for work for which he was qualified because of his transgender status and in retaliation for instituting legal proceedings against the Local.  Allegations that a union abused its hiring hall procedures to undermine a member’s employment opportunities warrant particularly close scrutiny when a union wields special power as the administrator of a hiring hall. . .  Assuming, as we must, that Fowlkes’s allegations are true, the Local’s conduct was at the very least arbitrary, if not discriminatory or indicative of bad faith.”  The defendants urged a six months statute of limitations as barring this claim, but Carney found that Fowlkes had adequately alleged discriminatory referral practices occurring within the six-month period before his pro se complaint was filed with the court.  She also rejected the union’s argument that because Fowlkes received some referrals, he could not bring this claim, asserting that “the mere fact that Fowlkes was referred for some work during the relevant period does not defeat a claim that he was subjected to arbitrary, discriminatory, or bad-faith treatment by a Local’s overall distribution of work.  A union need not completely eliminate a member’s employment opportunities before the member may be entitled to relief.”  She also rejected the union’s argument that it could defeat this claim with a motion to dismiss based on an argument that Fowlkes should have exhausted internal union grievance proceedings first, stating that “a cursory invocation of an intra-union exhaustion requirement in their appellate brief certainly does not suffice to bar the duty of fair representation claim from proceeding past the pleadings stage.”  Having concluded that Fowlkes “has stated a claim for breach of the duty of fair representation against the Local,” the court found alternative grounds to “vacate the District Court’s determination that Fowlkes stated federal claims under only Title VII, and we remand for further proceedings on his duty of fair representation claim.”

Since the 2nd Circuit had identified an alternative ground for federal jurisdiction, it was also appropriate to have the district court reconsider its decision to dismiss the supplementary state and local law discrimination claims.  “Because we have now concluded that (1) Fowlkes’s failure to exhaust administrative remedies did not deprive the District Court of jurisdiction over his Title VII claims, and (2) Fowlkes has stated a claim under the NLRA for breach of the duty of fair representation, we vacate the dismissal of Fowlkes’s pendent state- and city-law claims to allow the District Court to reconsider on remand whether exercising supplemental jurisdiction is appropriate given our conclusions regarding his federal claims.”

If the defendants don’t offer a decent settlement in response to this decision, they are missing a good opportunity to avoid lengthy and expensive litigation, since the panel clearly signaled its view that Fowlkes’s allegations, if proven, would provide multiple grounds for liability by the union.  The other members of the 2nd Circuit panel were Circuit Judges Pierre Leval and Denny Chin.

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