Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associates Gregory Slotnick and Nicolette Zulli with their analysis of a recent ruling issued by a New York Federal Court yet again denying a request to approve a settlement between the EEOC and a union that would have ended a decades-old EEOC race discrimination suit.
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Episode Transcript
Jerry Maatman: Thank you, loyal blog readers and listeners, for joining us on this episode of the Class Action Weekly Wire. I’m joined by my colleagues, Nico Zulli and Greg Slotnick, who are here to talk today about a most interesting consent decree and settlement approval process. Welcome to the show.
Gregory Slotnick: Thanks very much, Jerry. It’s great to be here.
Nicolette Zulli: Thanks so much, Jerry. Nice to join you.
Jerry: We’re going to talk today about a lawsuit that’s one of the longest running lawsuits in the federal court system. It’s still in the federal courts, and it was filed in 1971 – it’s a case involving employment discrimination. Both the EEOC and the defendant in the case appeared in federal court in New York, in the Southern District of New York on November 6, and sought settlement approval with respect to the ongoing nature of the consent decree, Greg, can you tell us a little bit about the background of the litigation and how it’s come to pass and run since 1971?
Gregory: Absolutely, Jerry. Just a few years ago the case was filed – as you mentioned, the dispute started in 1971, when the United States sued Local 580 of the International Association of Bridge, Structural, and Ornamental Ironworkers alleging that an apprenticeship program that it ran, titled the Joint Apprentice-Journeymen Educational Fund of Ironworkers Local 580, which I’ll refer to as AJEF, and Allied Building Metal Industries, an association of metalworking companies that employ Local 580 Union members in New York City, discriminated against applicants on the basis of their race in violation of Title VII of the 1964 Civil Rights Act. So in 1974, exactly 50 years ago, the EEOC was substituted in for the United States as the plaintiff in the case.
As a result of the litigation, the EEOC entered into a consent decree with the defendants back in 1978 to resolve the Commission’s claims and the consent decree was thereafter approved by the court. 10 years later, Local 580 and AJEF were found in contempt of the consent decree, and remedial orders were entered to enforce compliance. These remedial orders included, among other things, appointment of a special master, new rules related to job referrals, the development of a new information tracking system, and some other record keeping requirements. The court entered another remedial order in an attempt to ameliorate the racial disparity in working hours, further revised Local 580’s job referral system, and require its contractors to make at least 65% of their new hires through this new system.
Jerry: Thanks, Greg, that’s a great overview. It sounds to me it’s very much like modern-day EEOC consent decrees. I have a lot of experience in negotiating those that run the gamut in terms of obligations and duties of employers across the board in terms of human resource issues. Nico, what happened in terms of compliance here, and how did the parties find themselves back in court before the judge?
Nicolette: Well, the parties did not comply. Two decades later, in 2011, the court issued its most recent contempt order against the union for failure to adhere to the court-mandated system. Thereafter, the court again rejected the parties’ joint motion to provide adequate information, and the parties subsequently filed a joint motion in June 2023 requesting approval of a proposed consent decree that would wind down the court supervision of the parties’ obligations, and thereafter terminate judicial oversight of the defendants after a three-year period.
Jerry: It’s really interesting – many people think, I believe mistakenly, that getting approval of a consent decree or a class action settlement agreements like a rubber stamp. It’s anything but that. In this case, the judge in the Southern District of New York, Judge Lewis Kaplan, issued one of the strongly-worded orders I’ve ever read in terms of denying entry of the consent decree on November 6, in terms of the parties’ compliance, or lack thereof. What sort of problems did Judge Kaplan identify?
Nicolette: So, Jerry, the judge denied the second joint motion for largely the same reasons that it denied the first joint motion for approval of the consent decree. Namely, because of (1) the parties’ failure to provide the data underlying employment opportunities for Black and Hispanic union members, and then (2) the lack of detailed accounting of the parties’ efforts to achieve proportionate working hours. The court went on to state its belief that, based on the parties’ recent filings as part of their second joint motion for approval, the data and information in question do not exist at all. The court dispatched with the parties’ expert testimony, observing that the expert had only used data after June 19th of 2018, despite the fact that his report was meant to analyze a decade-long period from 2009 to 2019. Further, according to the court, the expert witness attempted to use incomplete data from a source other than the union’s own records. However, the expert concluded that even this data contained “critical limitations” and could not provide “any meaningful value” to his report. Accordingly, the court held that “one year of partial data is not sufficient to justify a conclusion that defendants and contractors no longer discriminate against Black and Hispanic Union members and now are committed to providing them with equal employment opportunities.” So, indeed, this is particularly true given the long and well-documented history of discrimination by the defendants, as well as the existence of current evidence suggesting that Black and Hispanic workers still are not receiving the same hours of work as other union members.
Gregory: Thanks, Nico, and not only that the court was also critical of the parties’ attempt to dispute whether the court’s previous order placed an affirmative obligation on Local 580 to address the hours disparities between its minority and non-minority members, the court concluded that, based on the clear order of the text, defendants were obligated to work proactively to ensure proportionate employment opportunities for those Black and Hispanic union members. The court also added that, it “will not reward defendants for their apparent indifference to minority workers and to the law by entering into a less stringent regime with the aim of winding down any and all supervision in only three years.” So, obviously the court was not happy with the way that this was going.
The court also concluded that by stating that approval of the proposed consent decree would harm the public interest, since the existing orders “can produce the desired results if adequately pursued,” and it also concluded that “entry of the Proposed Consent Decree – which would decrease oversight and reduce the obligations imposed upon defendants known to be in violation of Court orders and demonstrably unwilling to eradicate racial disparities – would disserve the public interest.”
Jerry: I’m a student of history, and it seems remarkable to me that Richard Nixon would have been sitting in the White House at the time that this litigation started, and that the Allies invaded Europe on D-Day, and it took them a year to plan that – and here we’re 50 years into this litigation. What are the takeaways for employers that are facing consent decrees or facing class action settlement agreements that federal court judges have the power to review, approve, and manage?
Nicolette: To your earlier point, Jerry, while it may strike, you know, an employer initially as sort of a rubber stamp issue – it’s certainly this case illustrates that it’s not, and this case, furthermore, illustrates the risks employers face when they fail to comply with court-mandated record-keeping requirements in connection with EEOC consent decrees, and the possible longevity of these consent decrees in the event the court is not satisfied, as was the case here, with compliance and enforcement of the same. The court stated that perpetual oversight is normally disfavored, but still necessary if the parties fail to comply with the court’s express orders.
Gregory: I think that employers and businesses should definitely heed the court’s warning and ensure that relevant data and information that applies to analyzing potential discrimination of any kind is collected and preserved in the normal course of business, regardless of litigation. I think companies should apply this principle also, regardless of whether or not they’re subject to a court order or any other oversight for compliance with practices that are required to fight against and eliminate discrimination. I think the case also serves as a critical reminder that when an agency files a lawsuit in federal court – as you said, Jerry – the parties can’t, just, you know, simply agree on their own to settle claims. And it’s not just a rubber stamp, it really does have meaning. So, this is especially so where defendants time and time again fail to abide by the court’s orders. And then, as this litigation demonstrates, federal judges really have a ton of patience, including decades of it, for some of them to ensure that litigants actually adhere to these mandated requirements in order to justify dismissal.
Jerry: Thanks to your observations and thought leadership in this space. It strikes me that it’s like a contract, and the federal judge is there to make sure it’s enforced and abided by, and all the i’s are dotted, and all the t’s are crossed. Well, thank you, loyal blog readers, for joining us for this installment of the Class Action Weekly Wire. And please mark your calendars for Friday, November 22, when we have our annual EEOC webinar for all things involving the litigation enforcement program of the Commission. Thanks so much, Nico, thank you, Greg, for joining us this week.
Gregory: Absolutely, thanks so much for having me, Jerry. It was great to be on the pod, and, thanks to all the loyal listeners.
Nicolette: Thanks so much, Jerry, and, thanks to the listeners.