Mercado v. The Ritz-Carlton ( 2005 )

United States Court of Appeals
For the First Circuit
No. 04-1630
MARCOS MERCADO AND SUZANNE HEBERT-JOMP,
Plaintiffs, Appellants,
v.
THE RITZ-CARLTON SAN JUAN HOTEL, SPA & CASINO,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jay A. Garcia-Gregory, U.S. District Judge]
Before
Torruella, Circuit Judge,
Coffin, Senior Circuit Judge,
and Lipez, Circuit Judge.
Godwin Aldarondo-Girald for appellants.
James W. McCartney with whom Cancio, Nadal, Rivera & Díaz was
on brief for appellee.
May 31, 2005
COFFIN, Senior Circuit Judge. Appellants Marcos Mercado and
Suzanne Hebert-Jomp claim that they experienced unlawful
discrimination while working at the Ritz-Carlton San Juan Hotel,
Spa & Casino ("Ritz-Carlton"), and they brought suit under Title
VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a)(1), and
similar Puerto Rico laws. To sue under Title VII, individuals must
have filed a charge with the Equal Employment Opportunity
Commission ("EEOC") within a specified time after the alleged
unlawful practices occurred. See id. § 2000e-5(e)(1). Appellants
did not file their charges within the statutory period, and the
district court dismissed their claims on that ground. On appeal,
appellants assert that the court erred in refusing to give them the
benefit of equitable tolling. As we shall explain, we conclude
that appellants are entitled to factual development of their
tolling claim, and we therefore vacate the dismissals and remand
for further proceedings.
I. Background
This suit was filed by appellants and a co-worker, Sandra
Megwinoff, each of whom alleged different instances of
discriminatory conduct on the part of their Ritz-Carlton
supervisors. Appellant Mercado claimed discrimination on the basis
of national origin; appellants Hebert and Megwinoff both alleged
sexual harassment, as well as gender and national origin
discrimination; Megwinoff additionally asserted age discrimination.
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All three employees, who began working at the hotel in 1997,
claimed that their unlawful treatment and "unsustainable working
conditions" forced them to resign from their jobs in 1999.1 The
three employees met with an attorney on November 11, 1999, and
filed charges with the EEOC on December 14, 1999.
It is undisputed that Mercado's and Hebert's filings were
untimely. Under Title VII, they were required to file charges with
the EEOC within 300 days after the allegedly unlawful practice, see
42 U.S.C. § 2000e-5(e)(1),2 and the most generous calculation of
the trigger date renders Mercado's filing 32 days late and Hebert's
23 days late.3 The EEOC, without making either a determination on
the merits or a finding on timeliness, issued all three plaintiffs
right-to-sue letters. They filed their joint suit in March 2003,
1
Mercado and Hebert resigned in January 1999; Megwinoff
resigned on November 1, 1999.
2
Because Puerto Rico is a so-called "deferral jurisdiction,"
the 300-day period, rather than a shorter 180-day filing period, is
applicable. See Lebron-Rios v. U.S. Marshal Serv., 341 F.3d 7, 11
n.5 (1st Cir. 2003); Bonilla v. Muebles J.J. Alvarez, Inc., 194
F.3d 275, 278 n.4 (1st Cir. 1999).
3
For purposes of this appeal, Ritz-Carlton accepts the
effective dates of appellants' terminations as the trigger dates
for the statutory filing period: January 15, 1999, for Mercado, and
January 24, 1999, for Hebert. Ritz-Carlton has noted, however,
that the dates of their resignation letters, rather than the
effective date of the resignations, arguably should be considered
the starting point, in which case the filings would be even more
untimely. We offer no view on the appropriate start date, assuming
for purposes of this appeal, as did Ritz-Carlton, that the actual
resignation dates are the applicable ones.
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and Ritz-Carlton subsequently filed a motion seeking dismissal of
Mercado's and Hebert's claims based on their untimely EEOC charges.
In their opposition to the dismissal motion, appellants
contended first that the timeliness defense was waived because it
had not been raised before the EEOC. In addition, they claimed
that Ritz-Carlton was barred from asserting timeliness as a defense
because the hotel failed to comply with EEOC regulations requiring
employers to post notices advising employees of their legal rights
relating to employment discrimination. See 42 U.S.C. § 2000e-
10(a).4 Invoking the doctrine of equitable tolling, appellants
claimed that the filing period did not begin to run until they
received notice of their rights when they met with an attorney.
The district court rejected appellants' arguments and
concluded that it lacked jurisdiction to consider the merits of
their claims because of the late EEOC filings. The court reasoned
that the equitable tolling doctrine may be utilized only when there
is "active misleading" on the part of the employer, and it held
that Ritz-Carlton's failure to post the mandatory notices was
insufficient to satisfy that standard. The court implicitly
4
Section 2000e-10 provides, in pertinent part, that an
employer "shall post . . . in conspicuous places upon its premises
. . . a notice to be prepared or approved by the [EEOC] setting
forth excerpts from or, summaries of, the pertinent provisions of
this subchapter and information pertinent to the filing of a
complaint." See also 29 C.F.R. § 1601.30(a) ("Such notice must be
posted in prominent and accessible places where notices to
employees, applicants and members are customarily maintained.").
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rejected appellants' argument that Ritz-Carlton had waived the
timeliness issue by failing to raise it with the EEOC, noting that
the agency's issuance of right-to-sue letters did not insulate the
filing defect from independent evaluation by the court.
On appeal, Mercado and Hebert reiterate both their waiver and
equitable tolling arguments. We first briefly address the
threshold question of waiver, along with Ritz-Carlton's contention
that the appeal is premature, and then turn to the equitable
tolling doctrine.
II. Discussion
A. Waiver
Appellants contend that Ritz-Carlton waived the timeliness
defense by failing to bring the issue to the attention of the EEOC;
they claim it was raised for the first time in Ritz-Carlton's
motion for partial dismissal in the district court. Appellants are
wrong both legally and factually.
First, appellants offer no support for their assertion that
the failure to initially raise the defense before the EEOC was
fatal, given that the EEOC did not reach a decision on the merits.
Both of their cited cases involve instances in which parties
belatedly sought to rely in court on procedural flaws that had not
been raised in earlier administrative proceedings that reached
substantive outcomes. See United States v. L.A. Tucker Truck
Lines, 344 U.S. 33, 36-38 (1952); Ester v. Principi, 250 F.3d 1068-5-
(7th Cir. 2001). In Ester, the Seventh Circuit held that an agency
waives a timeliness defense in a subsequent lawsuit if it decides
the merits of a complaint, but noted the court's adherence to "the
well-settled rule that agencies do not waive a timeliness defense
merely by accepting and investigating a discrimination complaint."
Id. at 1072 n.1 (citing Fifth, Ninth and D.C. Circuit cases); see
also Belgrave v. Pena, 254 F.3d 384, 387 (2d Cir. 2001); cf. Bruce
v. U.S. Dep't of Justice, 314 F.3d 71, 74-75 (2d Cir. 2002)
(concluding that timeliness defense was waived where a government
agency made "an express determination that [a complaint] was timely
based on a specific factual finding"). We find that principle to
be applicable here, where the EEOC issued right-to-sue letters
without reaching the merits of appellants' claims.
Nor did appellee belatedly raise the claim in the district
court. In its answer to appellants' complaint, Ritz-Carlton
asserted as its initial affirmative defense that "[t]he claims
alleged in the plaintiffs' complaint are partially and/or totally
barred by the applicable statute of limitations and/or
jurisdictional time frames." Although conclusory, this assertion
adequately identified the issue. The subsequent motion for partial
dismissal elaborated on the untimeliness defense by setting out the
argument that Mercado and Hebert exceeded the 300-day statutory
period for filing a charge with the EEOC. Thus, contrary to
appellants' contention, the issue was raised by Ritz-Carlton at its
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first opportunity in the litigation and it was thus fully
preserved.
B. Rule 54(b)
Ritz-Carlton, meanwhile, seeks dismissal of the appeal as
premature. It argues that no final, appealable judgment has been
rendered because the district court has not yet resolved the case
of their co-plaintiff, Megwinoff. Although the district court
certified the judgments with respect to Mercado and Hebert as final
under Fed. R. Civ. P. 54(b), finding that there is "no just reason
for delay," see, e.g., Quinn v. Boston, 325 F.3d 18, 26 (1st Cir.
2003), Ritz-Carlton claims the court erred in doing so. The hotel
maintains that the equities counsel against a "piecemeal appeal."
The district court did not explain its Rule 54(b) decision,
but we think it sufficiently apparent why it acted as it did.5 If
the court's ruling dismissing Mercado's and Hebert's claims proved
to be incorrect, the most efficient course of action would be for
all three employees' claims to proceed together. Although their
individual factual contentions and theories vary, the same general
environment is at issue and at least some witnesses would be
expected to testify on each case. By certifying the judgments
5
We do not condone the lack of explicit findings and the
reasoning underlying the court's certification, see Quinn v.
Boston, 325 F.3d 18, 26 (1st Cir. 2003); Spiegel v. Trustees of
Tufts Coll., 843 F.2d 38, 43-44 (1st Cir. 1988), but conclude that
this is a case in which the circumstances plainly support an appeal
from the partial judgment. See Quinn, 325 F.3d at 26.
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against Mercado and Hebert as final and allowing this court to
review the discrete legal issue underlying them without delay, the
district court was maximizing the potential for the most
expeditious resolution of the entire case. We see no error in this
approach.
We thus turn to the substance of the appeal.
C. Equitable Tolling
Appellants contend that their late filing of charges with the
EEOC should be forgiven under the doctrine of equitable tolling
because of Ritz-Carlton's failure to post statutorily mandated
notices of their employment rights.6 As noted earlier, the
district court rejected this excuse. The court relied on a line of
precedent describing equitable tolling as a narrow doctrine
"reserved for exceptional cases," see Chico-Velez v. Roche Prods.,
Inc., 139 F.3d 56, 58-59 (1st Cir. 1998), and permitted "only where
the employer has actively misled the employee," Thomas v. Eastman
Kodak Co., 183 F.3d 38, 53 (1st Cir. 1999).
6
The filing requirement is mandatory but not jurisdictional
and, like a statute of limitations, is subject to equitable
exceptions. Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 393
(1982); Jorge v. Rumsfeld, 404 F.3d 556, 565 (1st Cir. 2005);
Bonilla, 194 F.3d at 278. Ritz-Carlton has acknowledged that, as
a consequence of that precedent, its motion to dismiss the Title
VII claims for lack of subject-matter jurisdiction under Fed. R.
Civ. P. 12(b)(1) is more properly considered a motion to dismiss
for failure to state a claim under Fed. R. Civ. P. 12(b)(6).
Accordingly, we treat it as such.
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The district court correctly identified "[t]he baseline rule
. . . that time limitations are important in discrimination cases,
and that federal courts therefore should employ equitable tolling
sparingly," Bonilla v. Muebles J.J. Alvarez, Inc., 194 F.3d 275,
278 (1st Cir. 1999); see also Nat'l R.R. Passenger Corp. v. Morgan,
536 U.S. 101, 113-14 (2002). After careful review of the case law,
however, we conclude the court erred in utilizing the "actively
misled" standard in the context of a failure-to-post claim.
While an employer's affirmative misconduct provides one
rationale for extending the filing period, we have recognized that
an employer's violation of the EEOC posting requirement may provide
a second basis for an extended filing period "where the employee
had no other actual or constructive knowledge of [the] complaint
procedures," Earnhardt v. Commonwealth of Puerto Rico, 691 F.2d 69,
72 (1st Cir. 1982).7 In Earnhardt, we first discussed plaintiff's
contention that his employer's silence in the face of inquiries
prevented him from learning that his discharge stemmed from
discrimination, resulting in his untimely EEOC filing. See 691
7
Although a number of the cases we cite for this proposition
involved the ADEA, rather than Title VII, we have held repeatedly
that "the ADEA and Title VII 'stand[] in pari passu' and that
'judicial precedents interpreting one such statute [are]
instructive in decisions involving [the other],'" Camacho v. P.R.
Ports Auth., 369 F.3d 570, 578 n.5 (1st Cir. 2004) (quoting
Serapion v. Martinez, 119 F.3d 982, 985 (1st Cir. 1997)); see also
Earnhardt v. Commonwealth of Puerto Rico, 691 F.2d 69, 72 (1st Cir.
1982) ("[C]ourts often accept ADEA precedents as persuasive
interpretations of similar provisions appearing in Title VII.").
We continue that approach here.
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F.2d at 71-72. We rejected this basis for tolling because
"equitable modification is appropriate only where the employer
actively misled the employee concerning the reasons for the
discharge." Id. at 71. We then separately addressed plaintiff's
argument that the failure to post statutory notice excused his
untimely filing and remanded for inquiry into the facts concerning,
inter alia, the plaintiff's knowledge. We thus treated the
employer's violation of the posting duty as a possible alternative
path to equitable tolling, an approach we adopted again in
subsequent cases. See Kale v. Combined Ins. Co. of Am., 861 F.2d
746, 752-53 (1st Cir. 1988) (where an employee's ignorance of his
statutory rights "is caused . . . by failure of that employer to
conspicuously post the informational EEOC notices . . . , there may
be a valid claim for equitable tolling"); Cano v. U.S. Postal
Serv., 755 F.2d 221, 222-23 & n.5 (1st Cir. 1985) (per curiam).8
8
Ritz-Carlton attempts to blur the distinction between the
two different bases for equitable tolling by quoting, out of
context, our statement in Thomas v. Eastman Kodak Co., 183 F.3d 38,
53 (1st Cir. 1999), that "First Circuit law permits equitable
tolling only where the employer has actively misled the employee."
Viewed in context, it is clear that the "active misleading"
requirement applies when the employee invokes equitable tolling
based on lack of knowledge of the reasons for the adverse action –
and not when the employer effectively has prevented the plaintiff
from learning of his legal rights by failing to post the required
notice. In asserting the First Circuit standard, Thomas relied on
two earlier cases involving claims that employees lacked knowledge
of the employer's discriminatory motivation. See Jensen v. Frank,
912 F.2d 517, 521 (1st Cir. 1990) (plaintiff could only qualify for
equitable tolling if he could demonstrate "not only that he had no
reason to be aware of his employer's improper motivation when the
putative violation occurred, but also that the employer actively
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Many other courts similarly view lack of notice as adequate
justification for equitable tolling. See, e.g., Baldwin County
Welcome Ctr. v. Brown, 466 U.S. 147, 151 (1984) (rejecting
equitable tolling because "[t]his is not a case in which a claimant
has received inadequate notice" or where "affirmative misconduct on
the part of a defendant lulled the plaintiff into inaction"); EEOC
v. Ky. State Police Dep't, 80 F.3d 1086, 1096 (6th Cir. 1996) ("If
an employer fails to comply with § 627 by not posting the required
ADEA notices, 'the charge-filing period will not begin to run until
the employee either retains an attorney or acquires actual
knowledge of his rights under the ADEA.'"); Unterreiner v.
Volkswagen of Am., 8 F.3d 1206, 1209 (7th Cir. 1993) ("Under some
circumstances, a company's failure to post a notice of employees'
rights under the ADEA may toll the statute of limitations.");
Callowhill v. Allen-Sherman-Hoff Co., 832 F.2d 269, 272 (3rd Cir.
1987) ("[A]n employer's neglect to post the notice . . . will toll
the running of the period for filing the administrative charges, at
least until the 'aggrieved person seeks out an attorney or acquires
actual knowledge of his rights under the [ADEA]'"); English v.
misled him and that he relied on the (mis)conduct to his
detriment"); Mack v. Great Atl. & Pac. Tea Co., 871 F.2d 179, 185
(1st Cir. 1989) (no equitable tolling because no active deception
in company's failure to post job openings). In short, our case law
reflects two distinct lines of cases applying two distinct
standards to two distinct bases for equitable tolling. As we
explain infra, the failure to post notice of legal rights triggers
a "totality of the circumstances" kind of review.
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Pabst Brewing Co., 828 F.2d 1047, 1049 (4th Cir. 1987) ("If an
employer violates the posting requirement, the charging period is
tolled until the plaintiff 'acquires actual knowledge of his rights
or retains an attorney.'"); but see Wilkerson v. Siegfried Ins.
Agency, 683 F.2d 344, 347 (10th Cir. 1982) (stating that failure to
post EEOC notices will not toll absent employer's "intent to
actively mislead the plaintiff").
Here, where appellants have asserted that no informational
notices were posted and that they had no knowledge of their legal
rights until informed by their attorney,9 they have met the
threshold requirements for avoiding dismissal of their Title VII
suit. See Kale, 861 F.2d at 753 ("If . . . the employee has no
knowledge of his rights and his ignorance is due to misleading
conduct by the defendant or failure of the defendant to post the
9
We note that appellants made these assertions not in their
complaint but in sworn statements submitted in response to Ritz-
Carlton's motion for partial dismissal, and we further note that
the district court referred to the failure-to-post allegation in
its decision. Although a court's consideration of materials
outside the pleadings typically converts a motion to dismiss into
one for summary judgment, see Fed. R. Civ. P. 12(b); Greene v.
Rhode Island, 398 F.3d 45, 48 (1st Cir. 2005), an affirmative
defense may be adjudicated on a motion to dismiss for failure to
state a claim "'[i]n an appropriate case,'" Greene, 398 F.3d at 49(quoting In re Colonial Mortgage Bankers Corp., 324 F.3d 12, 16
(1st Cir. 2003)). We need not dwell on whether the district court
properly looked beyond the pleadings in this case. The bottom line
is that the court made a legal error in viewing "active misleading"
as a prerequisite to equitable tolling and, as we shall discuss,
factual issues pertinent to the tolling question thus remain.
Judgment of dismissal, however framed, was therefore premature.
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required EEOC notices, then an initial case for equitable tolling
has been made.") (emphasis added). The viability of their claims
beyond that preliminary stage will depend, however, upon facts that
have yet to be developed.
Courts generally weigh five factors when considering whether
to allow equitable tolling in a particular case: "'(1) lack of
actual notice of the filing requirement; (2) lack of constructive
knowledge of the filing requirement; (3) diligence in pursuing
one's rights; (4) absence of prejudice to the defendant; and (5) a
plaintiff's reasonableness in remaining ignorant of the [filing]
requirement.'" Kelley v. N.L.R.B., 79 F.3d 1238, 1248 (1st Cir.
1996) (quoting Kale, 861 F.2d at 752). These factors are not
exhaustive, however; "[i]t is in the nature of equity to entertain
case-specific factors that may counsel in favor of tolling." Kale,
861 F.2d at 753 n.9.
The factual inquiry in this case thus must begin with an
examination of whether – despite their assertion of ignorance –
appellants had either actual or constructive knowledge of their
Title VII rights within the meaning of our case law. Actual
knowledge does not mean specific awareness of the 300-day statutory
filing period; rather, actual knowledge occurs when an employee
becomes generally aware that he possesses a legal right to be free
from the type of discrimination he has alleged. Kale, 861 F.2d at
753 ("Once an employee is 'generally aware of his legal right to
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obtain redress for that wrong . . . , he possesses sufficient
knowledge to enable him to vindicate his rights[,] if he so
desires.'") (quoting McClinton v. Ala. By-Products Corp., 743 F.2d
1483, 1486 (11th Cir. 1984)).10 Constructive knowledge, meanwhile,
would be presumed if the employer had complied with its statutory
obligation to post the EEOC notices in conspicuous locations, and
it also is presumed when an employee has retained an attorney – in
both instances, regardless of whether the plaintiff in fact is
aware of his rights. Id.Factual development may well show that appellants possessed
sufficient knowledge to entitle Ritz-Carlton to summary judgment.
10
We elaborated in Kale as follows:
[E]quitable tolling is not properly invoked where a
plaintiff alleges mere ignorance of a specific provision
contained in a statute. Instead, ignorance in the
context of equitable tolling under the ADEA, means
ignorance of the unlawfulness of the defendant's conduct
that is proscribed by the statute. Equity only requires
that a plaintiff be aware that a statute has been passed
that protects workers against age discrimination. It
does not require that he know of all the filing periods
and technicalities contained in the law. . . . Thus, a
plaintiff who is aware of his ADEA rights but unaware of
the filing deadlines cannot, without more, invoke the
doctrine of equitable tolling.
861 F.2d at 754. See also, e.g., Schroeder v. Copley Newspaper,
879 F.2d 266, 271 (7th Cir. 1989) ("The information [plaintiff]
needed to know before filing a charge was straightforward: that it
was unlawful to discriminate on the basis of age, and that he was
required to file a charge with the EEOC to pursue a discrimination
claim."); Clark v. Resistoflex Co., 854 F.2d 762, 769 (5th Cir.
1988) (plaintiff need only have general knowledge of his ADEA
rights "'or the means of obtaining such knowledge'") (quoting
McClinton, 743 F.2d at 1486).
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Ritz-Carlton argued below that the required notices had been
posted, a factual assertion that the district court could not
credit in the context of a motion to dismiss. In addition,
appellants admit receiving Ritz-Carlton's "Ladies & Gentlemen's
Handbook," which they say contains a "general 'Equal Employment
Standard' and a 'Sexual Harassment Policy.'" If the handbook
advises employees that they have a right under Title VII to seek
redress in the event of gender or national origin discrimination,
appellants may be deemed to have notice sufficient to foreclose
equitable tolling. Their sworn statements also refer to complaints
they lodged with the hotel about discriminatory treatment. These
complaints may or may not reflect knowledge of their statutory
rights; if the handbook simply advised about company policy without
reference to the availability of legal redress, for example, these
internal complaints may signal neither actual nor constructive
knowledge of their Title VII rights.11
The next point of inquiry – appellants' diligence in pursuing
their rights – also needs factual development. Appellants did not
consult with an attorney until nearly ten months after leaving
their jobs. Appellants suggest that they were unaware for those
months that they had a right to seek redress for discrimination;
11
We note that the complaint specifically alleges that Hebert
spoke to her supervisor about "the illegality of his discriminatory
conduct," but the significance of this allegation needs to be
assessed in context.
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whether their eventual visit to an attorney was prompted by new
information or reflected long-standing general awareness of a
potential claim is also relevant. Appellants met with the attorney
one day before the 300 days had run for Mercado and ten days before
it had run for Jomp, but their charges were not filed with the EEOC
until 33 days later. Did this reflect diligence under the
circumstances? See, e.g., Callowhill, 832 F.2d at 270-71, 274(noting that plaintiffs promptly filed charges after retaining
counsel; longest time lapse was eleven days).
These questions and others bearing on the appropriateness of
equitable relief, including possible prejudice to the defendants
and appellants' reasonableness in remaining ignorant of the 300-day
filing period, must be considered before a judgment may be made on
appellants' request for tolling. Moreover, in evaluating
appellants' claims, the district court may need to address the
unresolved issue of the start date for the filing period, a
question outside the scope of this appeal. See supra note 3. We
have given no consideration to that question and intimate no view
as to its outcome or, for that matter, its relevancy in the
particular context of this case.
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We therefore vacate the dismissal of appellants' claims and
remand the case for further proceedings consistent with this
opinion.12
Vacated and remanded.
12
At oral argument, appellants' attorney argued that his
clients were "actively misled" by Ritz-Carlton based on facts
unrelated to the failure to post notice. That view was not argued
in appellants' brief, and it therefore is not before us. See,
e.g., Sullivan v. Neiman Marcus Group, Inc., 358 F.3d 110, 114 n.1
(1st Cir. 2004) (issues not raised in an opening brief on appeal
are waived).
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