Smart, Ronald D. v. Int'l Brohd Elec 702 ( 2002 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 02-1102
RONALD D. SMART, doing business as PASCHALL ELECTRIC,
Plaintiff-Appellant,
v.
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS,
LOCAL 702,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Southern District of Illinois.
No. 99 C 956—David R. Herndon, Judge.
____________
ARGUED JUNE 7, 2002—DECIDED NOVEMBER 15, 2002
____________
Before BAUER, POSNER, and RIPPLE, Circuit Judges.
POSNER, Circuit Judge. The plaintiff in this racial discrimi-
nation case appeals from the grant of summary judgment
to the defendant, a local of the electrical workers union.
Two plaintiffs are listed, but one is a sole proprietorship
and the other the proprietor, so they are one, not two, in
the eyes of the law (with an irrelevant exception for the
case in which an individual is charged under RICO with
using for nefarious ends an enterprise consisting of a sole
proprietorship, McCullough v. Suter, 757 F.2d 142, 143-44
2 No. 02-1102
(7th Cir. 1985)), and the one is the proprietor, Ronald Smart,
not the proprietorship. Troelstrup v. Index Futures Group,
Inc., 130 F.3d 1274, 1277 (7th Cir. 1997); Bartlett v. Heibl, 128
F.3d 497, 500 (7th Cir. 1997); Vega v. National Life Ins. Ser-
vices, Inc., 188 F.3d 287, 293 (5th Cir. 1999) (en banc).
Smart, an electrical contractor who is white, hired Robert
Thompson, who is black, to work for him as an electrician;
Thompson was and is Smart’s only employee. Smart had
not signed on to the collective bargaining agreement that
the IBEW local had signed with the area’s other electrical
contractors. Deciding to do so, he went to the union of-
fice and signed a letter of assent to the agreement. With
him on this visit he took Thompson so that the latter
could join the union. At the office Smart learned that the
union had a program for subsidizing union contractors
to enable them to compete more effectively with nonunion
contractors, and he requested the application form. That
was in July 1998. By October, the union had neither fur-
nished the form nor arranged to swear in Thompson as
a member of the union. Smart complained to the union
and Thompson was sworn in; but still the form did not
arrive. Between October 1998 and March 1999, Smart
called the union officer with whom he had been dealing,
Jim Nolen, 16 times requesting the form and also request-
ing that Thompson be enrolled in a union training program.
He never got through to Nolen and the messages he left
were never returned. Meanwhile in January 1999 Smart’s
union dues had been tripled, and two months later Smart
wrote Nolen that he was terminating his relation with the
union. Nolen promptly called him and asked him why.
Smart explained that it was because of the delay in Thomp-
son’s swearing in and enrollment in the training program,
the failure to send Smart the application form for the
subsidy, and the tripling of his dues. Nolen said that
Smart’s dues had been raised because he was “working
No. 02-1102 3
with the tools”—the union charges higher dues to a union
contractor who is not merely engaged in management
and supervision but is actually working as an electrician.
As for the enrollment of Thompson in the training pro-
gram, Nolen said that if Smart wanted the “little bastard
in school, he [Nolen] would get him there.”
Smart was not satisfied, and so his termination as a union
contractor stood. The union, however, filed a grievance
against him pursuant to the collective bargaining agree-
ment because he had failed to make required contributions
to the union’s welfare (“fringe benefits”) fund. The griev-
ance was arbitrated, and the arbitrators found Smart “guilty
of non-payment of fringes as required. Further, the par-
ties are encouraged to meet as soon as possible to resolve
the current delinquencies.” But the arbitrators did not
specify the dollar amount that he owed the union.
Smart’s suit challenges the arbitrators’ award as inval-
id primarily because of lack of finality, and also claims
that the union discriminated against him, because of his
employing a black person, in violation of 42 U.S.C. § 1981
and Title VII of the Civil Rights Act of 1964. Smart lays
great stress on the fact that Thompson is also his son-in-
law; the implication is that the union’s real objection to
Smart is not that he has a black employee, because the
union has other black members, but that his daughter mar-
ried one. There is, however, no evidence of this.
Insofar as the suit challenges the arbitrators’ award, it
is founded both on section 301 of the Taft-Hartley Act, 29
U.S.C. § 185, which creates a federal judicial remedy for
breach of a collective bargaining agreement, pursuant to
which the award was issued, and the Federal Arbitration
Act (Title 9 of the United States Code), which creates fed-
eral judicial remedies for disputes arising from certain
agreements to arbitrate, including collective bargaining
4 No. 02-1102
and other employment agreements, with an irrelevant
exception for employment agreements involving trans-
portation workers. 9 U.S.C. § 1; see Circuit City Stores, Inc.
v. Adams, 532 U.S. 105, 119 (2001); Pryner v. Tractor Supply
Co., 109 F.3d 354, 358 (7th Cir. 1997). Section 301 is of
course more than a jurisdictional and procedural statute;
the Supreme Court has held that it is a directive to the
courts to create a federal common law of collective bar-
gaining contracts. The Federal Arbitration Act has no
particular reference to such contracts and so if there were
a conflict between the two statutes we would resolve it
in favor of section 301. See Coca-Cola Bottling Co. of New
York, Inc. v. Soft Drink & Brewery Workers Union Local
812, 242 F.3d 52, 54-55 (2d Cir. 2001). Where there is no
conflict, however, and the FAA provides a procedure
or remedy not found in section 301 but does not step on
section 301’s toes, then, as in Pryner, we apply the Federal
Arbitration Act. We doubt that there was such a conflict
in the Coca-Cola case either, though the court there
thought there was; but that doubt doesn’t have to be re-
solved in this case.
The Act requires the court to vacate an arbitrator’s
award, so far as bears on this case, “where the arbitra-
tors . . . so imperfectly executed [their powers] that a mu-
tual, final, and definite award upon the subject matter
submitted was not made.” 9 U.S.C. § 10(a)(4). Smart
seems to think that this means that an arbitration award
must be vacated if the award, were it a district court’s
judgment, would be unappealable under 28 U.S.C. § 1291
because it was not a final judgment. That is incorrect. It
is apparent from the wording of section 10(a)(4) that it
is not a jurisdictional provision. Rather, it assumes that
the award is properly before the court, and establishes a
ground for vacating it. The purpose of the section is mere-
ly to render unenforceable an arbitration award that is
No. 02-1102 5
either incomplete in the sense that the arbitrators did not
complete their assignment (though they thought they had)
or so badly drafted that the party against whom the
award runs doesn’t know how to comply with it. IDS Life
Ins. Co. v. Royal Alliance Associates, Inc., 266 F.3d 645, 650
(7th Cir. 2001); ConnTech Development Co. v. University of
Connecticut Education Properties, Inc., 102 F.3d 677, 686 (2d
Cir. 1996); Michaels v. Mariforum Shipping, S.A., 624 F.2d 411,
414 (2d Cir. 1980).
There can be a jurisdictional question in cases challeng-
ing or seeking enforcement of arbitration awards, for al-
though no statute corresponding to section 1291 tells the
courts when an arbitration award is ripe for judicial enforce-
ment or review, the courts are naturally reluctant to in-
vite a judicial proceeding every time the arbitrator sneezes.
But beyond that, generalization is difficult. In IDS Life Ins.
Co. v. Royal Alliance Associates, Inc., supra, 266 F.3d at 650,
we expressed skepticism about the propriety of engraft-
ing Fed. R. Civ. P. 54(b) onto the arbitration statute and
might have been understood to be implying a juris-
dictional standard similar to that of section 1291. That
seems to be the position of the Second Circuit as well. See
Michaels v. Mariforum Shipping, S.A., supra, 624 F.2d at 413-
14. But an earlier panel of our court had said that “a ruling
on a discrete, time-sensitive issue may be final and ripe for
confirmation even though other claims remain to be ad-
dressed by arbitrators,” and this sounds Rule 54(b)-ish.
Publicis Communication v. True North Communications, Inc.,
206 F.3d 725, 729 (7th Cir. 2000). The First Circuit is even
more hospitable to what amount to interlocutory appeals
of arbitral awards—to the extent of allowing review of the
arbitrator’s liability determination before he has made an
award of damages, see Providence Journal Co. v. Providence
Newspaper Guild, 271 F.3d 16, 19-20 (1st Cir. 2001); Hart
Surgical, Inc. v. Ultracision, Inc., 244 F.3d 231, 233-35 (1st Cir.
6 No. 02-1102
2001), which Rule 54(b) does not permit, Liberty Mutual Ins.
Co. v. Wetzel, 424 U.S. 737, 742-44 (1976); Mercer v. Magnant,
40 F.3d 893, 896 (7th Cir. 1994); General Motors Corp. v. New
A.C. Chevrolet, Inc., 263 F.3d 296, 311 n. 3 (3d Cir. 2001),
though later we shall note a minor exception to the rule that
a judgment in a case seeking damages is not final and
appealable under section 1291 until the amount of the
damages has been computed and incorporated into the
judgment.
One thing is clear, however: if the arbitrator himself
thinks he’s through with the case, then his award is final
and appealable, Local 36, Sheet Metal Workers Int’l Associa-
tion, AFL-CIO v. Pevely Sheet Metal Co., 951 F.2d 947, 949
(8th Cir. 1992), for that is the rule under section 1291 as well,
Bankers Trust Co. v. Mallis, 435 U.S. 381, 387-88 (1978)
(per curiam); Miller v. Artistic Cleaners, 153 F.3d 781, 783-84
(7th Cir. 1998); Student Loan Marketing Ass’n v. Lipman, 45
F.3d 173, 177 (7th Cir. 1995); and then section 10(a)(4) comes
into play to guide the court in deciding whether the
award is either incomplete (the arbitrator was wrong to
think he was through with the case) or indefinite. Neither
circumstance is present here. The question put to the arbi-
trators was whether Smart owed the “fringes,” not how
much he owed. The parties assumed that once that issue
was resolved, if it was resolved against Smart, they could
figure out readily enough how much he owed. And there
is no ambiguity about what the arbitrators decided: they
decided that Smart owed the fringes and they directed
the parties to compute the amount owed.
This case illustrates why section 10(a)(4) should not be
interpreted to incorporate the final-judgment rule of 28
U.S.C. § 1291. The idea behind arbitration is that it is good
to allow parties to contracts to design the method of dis-
pute resolution that is best for them. Since they bear the full
No. 02-1102 7
expense—arbitration is not subsidized by the taxpayer,
as litigation is—they naturally want to economize on the
cost of the procedure and so they may decide to confine
the arbitrator to deciding liability, on the theory that once
that decision is made it will be easy enough to determine
the proper relief themselves, especially when the amount
of money in issue is likely to be modest. There are anal-
ogies in litigation: declaratory judgments, and the prin-
ciple that a judgment in a money case can be final if the
computation of the money owed the plaintiff is mechani-
cal (“ministerial,” as the cases say), so that no further
adjudicative process is necessary to determine what the
amount owed is. E.g., Mercer v. Magnant, supra, 40 F.3d
at 896; Production & Maintenance Employees’ Local 504 v.
Roadmaster Corp., 954 F.2d 1397, 1401-02 (7th Cir. 1992).
Indeed, if the final-judgment rule applied to arbitrators’
awards, the award in this case might pass muster anyway,
because the computation of the fringes owed by Smart
may be mechanical. But even if it would not be, if it were
clear that the arbitrators had finished their assignment
and clear as well what their award required the award
would be enforceable even if all it did was determine
liability, leaving thorny remedial issues for future deter-
mination.
We move on to the discrimination issues. Section 1981 of
Title 42, one of the post-Civil War antidiscrimination
statutes, guarantees, so far as bears on this case, equal
rights “to make and enforce contracts.” Smart argues that
if as he believes the union failed to give him the applica-
tion form for the subsidy for union contractors because
he employed a black person, it was impeding his ability to
make contracts by denying him a subsidy that would
have made it easier for him to compete with nonunion
contractors, and it was doing so on racial grounds albeit
he is white. Fiedler v. Marumsco Christian School, 631 F.2d
8 No. 02-1102
1144, 1149 and n. 7 (4th Cir. 1980); cf. Adickes v. S. H. Kress &
Co., 398 U.S. 144, 150-52 (1970). This is a tenuous argument.
Smart has made no effort to show that the alleged discrimi-
nation, unlike the discriminatory union job-referral service
involved in Daniels v. Pipefitters’ Ass’n Local Union No.
597, 945 F.2d 906, 914-15 (7th Cir. 1991), actually affected
his business, specifically his ability to get new business
(“make . . . contracts”). See also London v. Coopers & Lybrand,
644 F.2d 811, 818 (9th Cir. 1981). He points to no contract
that he bid on and failed to obtain because of racial animus
by the union. See Morris v. Office Max, Inc., 89 F.3d 411, 414-
15 (7th Cir. 1996); Harris v. Allstate Ins. Co., 300 F.3d 1183,
1195-97 (10th Cir. 2002). The absence of evidence is unsur-
prising, since it would not be the union but the prime
contractor or other entity that had let the bid who would
decide who the winning bidder was. Smart might have
a better argument that the alleged discrimination in effect
prevented him from enforcing his contract with the union
itself, since he contends (as we’re about to see) that had
he not hired a black the union would not have enforced
the provision—to which he became bound when he regis-
tered as a union contractor—in the union bylaws specifying
the dues obligations of union contractors. But not having
been made in the district court, the argument is forfeited
in this court.
We are also skeptical that Smart, as an employer, can
sue under Title VII, a statute that forbids employment
discrimination. Although it forbids a union “to cause or
attempt to cause an employer to discriminate against an
individual,” 42 U.S.C. § 2000e-2(c)(3), an apt description
of the misconduct that he is alleging, the obvious import
of the provision is that an employee may sue a union
that caused his employer to discriminate against him. That
is, Thompson could sue Local 702; but he is not the plain-
tiff in this case. In Northwest Airlines, Inc. v. Transport Work-
No. 02-1102 9
ers Union of America, 451 U.S. 77, 93-95 (1981), the Su-
preme Court held that an employer found to have vio-
lated Title VII cannot obtain contribution from a union
that shared responsibility for the employer’s discrimina-
tion. Title VII does not mention contribution and the Court
was unwilling to create an implied remedy, since “it can-
not possibly be said that employers are members of the
class for whose especial benefit . . . Title VII was enacted.”
Id. at 92. The union fastens on this language. But Smart
points out that the Court also said that the provisions of
Title VII that forbid discrimination by unions, such as
section 2000e-2(c)(3), “construed most favorably to peti-
tioner, could at most provide a basis for implying a rem-
edy for harm to an employer caused by union wrongdoing.”
Id. at 93. This is classic dictum, and if anything evinces
skepticism about implying such a right (“construed most
favorably to petitioner, could at most . . .”). Moreover, in
the more than two decades since the Northwest Airlines
decision, the Supreme Court has become ever more re-
luctant to imply private rights of action, see, e.g., Alex-
ander v. Sandoval, 532 U.S. 275, 286-89, 293 (2001), although
its change of heart was announced earlier, in Cort v. Ash,
422 U.S. 66, 77-78 (1975). See Merrill Lynch, Pierce, Fenner
& Smith, Inc. v. Curran, 456 U.S. 353, 377 (1982). No cases
support Smart’s position, though, surprisingly, none
rejects it—but perhaps only because no one else has
thought it had sufficient merit to be worth advancing.
And whether or not Smart has any statutory basis for
his discrimination suit, he hasn’t enough evidence to
withstand summary judgment. That he was mistreated
by the union is not evidence of racial animus. The delay in
providing him with the application form, in swearing
in Thompson, and in enrolling Thompson in a training
program need not have had anything to do with Thomp-
son’s race. “Little bastard” has no racial connotation and
10 No. 02-1102
the tripling of Smart’s dues was done pursuant to the
express terms of the union’s bylaws, which bound him. He
did present evidence that two union contractors who like
himself “work with the tools” paid only the single, not
the triple, dues, and asks us to infer from this that the
union’s invocation of the bylaws was merely a pretext.
But there isn’t even evidence that either of those contrac-
tors were white and employed only whites, and if they
were black or had black employees Smart failed to get
even to first base in opposing summary judgment.
Laying this problem to one side and assuming therefore
that one or both of the other contractors were all white,
we still find that Smart failed to make a showing of pre-
text. An absence of uniform treatment need not be evi-
dence that someone is lying. Suppose a black driver is giv-
en a ticket for driving 10 miles over the speed limit. He
sues, alleging that he was given a ticket because he is
black. The police officer who ticketed him submits an af-
fidavit which states that he ticketed him because he was
driving 10 miles over the speed limit. The driver does
not deny that he was speeding but argues pretext and
in support produces affidavits from two white drivers
that they also drove 10 miles over the speed limit on the
same highway during the period when this police officer
was on duty and they did not get ticketed. This would
not be evidence of pretext, because as is well known most
speeding is not even detected. One cannot be guilty of
treating people unequally if one doesn’t know they’re not
the same, as the Supreme Court made clear in Oyler v.
Boles, 368 U.S. 448 (1962), in the related context of a charge
of selective enforcement in violation of the equal protec-
tion clause. The claim was that the state was discriminat-
ing against certain three-time offenders, but the evidence
was merely that “according to penitentiary records a high
percentage of those subject to the law have not been pro-
No. 02-1102 11
ceeded against. There is no indication that these records
of previous convictions, which may not have been com-
piled until after the three-time offenders had reached the
penitentiary, were available to the prosecutors. Hence the
allegations set out no more than a failure to prosecute
others because of a lack of knowledge of their prior of-
fenses.” Id. at 456; see also LaTrieste Restaurant v. Village
of Port Chester, 188 F.3d 65, 69 (2d Cir. 1999). This case is
the same. There is no evidence that the union was aware
that the two other contractors were “working with the
tools,” and in the absence of such evidence it is pure con-
jecture that the bylaws were enforced against Smart be-
cause he employs a black.
AFFIRMED.
RIPPLE, Circuit Judge, dissenting. My colleagues lay too
heavy a burden of production on Paschall Electric. Mr.
Smart has established a prima facie case that the Union
has violated 42 U.S.C. § 2000e-2(c)(3) by attempting to
cause Mr. Smart to discriminate against his employee,
Mr. Thompson. Mr. Smart, moreover, has rebutted the
Union’s explanation. He has come forward with evidence
that his dues were raised in January 1999. He was ini-
tially told that his dues were raised because he was not
working enough hours, but the Union later explained
that in raising his dues it merely was applying the rate
applicable “for contractors, like Mr. Smart, who worked
with the tools in the field as electricians.” App. 61, ¶ 18
(affidavit of James Nolen). In reply, Mr. Smart has pro-
12 No. 02-1102
duced specific evidence of one other contractor, Daniel
Wilke, who works with the tools in the field as an electri-
cian, is charged the lower dues rate and has no African-
American employees. Mr. Wilke, in fact, had no employ-
ees in January 1999, which is why we may assume that he
1
worked in the field as an electrician.
The Union has not explained why it charged Mr. Wilke
the lower dues rate that it charged Mr. Smart before it
became evident that he had an African-American employ-
ee. It claims that it charges all owner-workers the higher
rate, but the only evidence of this is Mr. Nolen’s state-
ment in his affidavit that it does so; it has not come for-
ward with evidence of any other owner-worker, like Mr.
2
Smart and Mr. Wilke, who is charged the higher rate.
In fact, it has not come forward with evidence that it has
charged any other contractor the higher rate. Mr. Smart,
however, has come forward with evidence of two other
contractors who are charged the lower rate, Mr. Wilke and
Harold Fitts, though Mr. Smart has not shown that Mr.
3
Fitts works in the field. Uneven application of union
rules, when coupled with the other instances of mistreat-
1
The fact that Mr. Wilke had no employees does not distin-
guish his case from Mr. Smart’s. The relevant traits for purposes
of determining whether Mr. Wilke is similarly situated are that
Mr. Wilke was an electrical contractor who worked in the field
as an electrician.
2
The Union points to a dues schedule that it produced, but
the schedule does not distinguish between contractors who
do not work in the field and contractors who do; it distin-
guishes between “wireman” contractors and “residential”
contractors. App. 67.
3
Mr. Smart only produced two photographs taken from a
distance of a person he claims to be Mr. Fitts standing in the
back of a pick-up truck.
No. 02-1102 13
ment, raise sufficient circumstantial evidence of discrim-
inatory intent to make summary judgment inappropriate.
The court ought to conclude, therefore, that Mr. Smart
has provided enough evidence to make out a prima facie
case and that the Union has failed to carry its burden
of demonstrating that, despite these differences, it ap-
plies the requirement of higher dues for owner-workers in
an evenhanded manner.
Because I believe that Mr. Smart has produced facts that
would survive summary judgment, I would be required,
were I in the majority, to reach the question of whether
Title VII provides an employer in this situation a cause
of action. Because the court declines to answer this ques-
tion definitively, I believe the prudent course is to re-
frain from stating a definitive view on the matter until
the issue necessarily must be decided. I simply note that
Northwest Airlines, Inc. v. Transport Workers Union of Amer-
ica, AFL-CIO, 451 U.S. 77 (1981), in reserving the question,
certainly does not support the skepticism of my col-
leagues that Title VII provides such protection. I am also
constrained to point out that, unlike the situation pre-
sented in Northwest Airlines, we are not faced with teasing
an implied right of action out of a text that does not ad-
dress the situation; rather the situation before us involves,
as my colleagues acknowledge, whether we would be jus-
tified in denying coverage by going beyond the plain
text of the statute that traditionally has been interpreted
broadly. Cf. Trafficante v. Metropolitan Life Ins. Co., 409 U.S.
205 (1972). Perhaps, before the issue again makes its way
to an appellate court, new scholarship in the field will
shed more light on the appropriate approach to this ques-
tion.
14 No. 02-1102
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—11-15-02