BCI Coca-Cola Bottling Co. of Los Angeles v. EEOC

BY KATHERINE GLOVER, MEDILL NEWS SERVICE

When Pat Edgar fired Stephen Peters from the BCI Coca-Cola bottling facility in Albuquerque, N.M., she had no idea Peters was black. But Cesar Grado, Peters' manager, had a reputation for treating blacks differently – and it was information passed on by Grado that led Edgar to make her decision.

Should the company be held liable in an anti-discrimination suit? Under what circumstances? These are the questions the Supreme Court will address in BCI Coca-Cola Bottling Co. of Los Angeles v. EEOC.

Peters was fired in 2001 for insubordination after calling in sick. Grado had asked him to work on his day off, and Peters had refused, saying he had plans. Grado had then informed Peters that he was giving an order and that Peters' refusal would be considered insubordination. When the day came, however, Peters was sick and got permission from another supervisor – not Grado – to stay home. Grado reported to Edgar that Peters had refused to work and then called in sick, though he did not make any specific recommendation to fire Peters.

There is some disagreement over the facts, including what Peters said to Grado during the first encounter, whether or not he threatened to call in sick, and what information Grado passed along to Edgar at what time. However, the Supreme Court will not be trying the case. Instead, it will examine the issue of liability and decide whether the case has enough merit to go to trial.

In December, 2002, the Equal Employment Opportunity Commission sued BCI on Peters' behalf. The district court for New Mexico dismissed the case. It acknowledged evidence that Grado harbored a bias against blacks. Several employees stated that Grado treated black employees worse than he treated whites or Hispanics, and Grado had purportedly shrugged it off when a Latina employee refused orders to work on her birthday. However, the court said, EEOC had not demonstrated that Grado's bias had a significant influence on Edgar's decision to fire Peters, especially given that Grado had never made any specific recommendations as to what Edgar should do.

EEOC appealed and in June 2006 the 10th U.S. Circuit Court of Appeals reversed the district court's summary judgment, saying the case should go to trial. The circuit court said it didn't matter that Grado had not recommended firing Peters; his actions had still led to the decision, and Edgar's independent investigation had not been sufficient to shield the company from subordinate bias liability.

BCI appealed to the Supreme Court in September, and certiorari was granted in January, 2007.

"The issue is a huge one for employers – in particular for large employers who have instituted a centralization process so they can try to ensure consistent employment decisions that are made neutrally and not based on some discriminatory reason," said E. Todd Presnell of Miller & Martin PLLC, the attorney representing BCI. If the Supreme Court rules for EEOC, Presnell said, it will place "a tremendous burden on companies that are in that situation."

Nancy Cornish, an attorney at Kissinger & Fellman in Denver who specializes in employment discrimination, said one's take on the matter might depend on on what side of the fence you're on. If the Supreme Court rules that BCI can be held liable, Cornish said, "Employers, especially large companies, are going to have to be very careful with taking input from managers or local managers. They might not be able to rely so heavily on those reports and they might need to invest more time and money into doing investigations."

On the other hand, she said, from the employee's perspective, it could be a good thing. "[Otherwise] an employee might get bad reports, bad evaluations, or notes in their file which are often based on illegal discrimination, and the employee is sort of stuck with this person's report."

The 10th Circuit opinion said that allowing the suit to go forward would "encourag[e] employers to verify information and review recommendations before taking adverse employment actions against members of protected groups."

A Supreme Court decision on this issue would be significant because the circuit courts have not been in agreement on the standard for liability.

The 5th Circuit has suggested an employer can be held liable if any employee with a racial bias gave input that influenced a termination decision. The 4th Circuit, on the other hand, has argued that a company is only liable if the biased employee was the one who, directly or indirectly, was principally responsible for the decision.

In the BCI case, the 10th Circuit took a middle ground between these two positions, going with a "causation" standard. The biased employee doesn't have to be the effective decision-maker for there to be liability, but, more than just showing "influence," the plaintiff must show that "the biased subordinate's discriminatory reports, recommendation, or other actions caused the adverse employment action."

Other circuit court decisions have held that a subordinate bias liability case requires the discriminatory party to play a "meaningful role," "somehow influence," or even just be "involved," with contradictory decisions sometimes emerging from within the same court.

Arguing for the EEOC, Solicitor General Paul D. Clement said the Court did not need to review the case. "Petitioner contends that there is a conflict among the courts of appeals concerning the appropriate standard for subordinate-bias liability under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq.," Clement wrote. "Although there is a circuit conflict on that issue, that conflict is not as extensive as petitioner asserts. In any event, this case would constitute a poor vehicle for resolution of that conflict because it arises in an interlocutory posture (and it is therefore unclear whether resolution of that conflict would affect the outcome of this case)."

But the Supreme Court granted the petition for certiorari, in which BCI argued, "Such indirection and ambiguity in the law severely undermine the best efforts of multi-jurisdictional employers such as BCI to comply with Title VII and other anti-discrimination laws. BCI is hopeful the Court will seize upon this renewed opportunity to articulate a reasonable, universal standard for application of the subordinate bias theory of liability."

The case is scheduled for oral argument on April 18.