A federal appeals court has refused to grant federal employment discrimination regulators the chance to renew their arguments that Autozone’s transfer of a black employee from a store serving a predominantly Hispanic clientele to another in a predominantly African-American neighborhood, should be considered illegal racial discrimination and segregation, even though the transferred worker suffered no loss of income, responsibilities or job opportunities.

 And that decision to not rehear the case has drawn a rebuke from the court’s chief judge, who says the decision amounts to essentially signing off on the proposition that a business can maintain “separate, but equal” employment practices.

On Nov. 21, the full panel of judges at the U.S. Seventh Circuit Court of Appeals in Chicago announced its refusal to reconsider a three-judge panel’s decision earlier this summer to reject the U.S. Equal Employment Opportunity Commission’s case against auto parts seller Autozone, in which the regulatory agency took up a former store employee’s accusations the retailer violated federal civil rights law by allegedly attempting to match racial makeup of its store’s workers to the demographic characteristics of the communities in which those stores may be located.  

In June, the panel, including judges Frank H. Easterbrook, Michael S. Kanne and Diane S. Sykes, rejected the EEOC’s appeal of Chicago federal district judge’s decision. In that decision, the Seventh Circuit judges unanimously shot down the EEOC’s contention federal civil rights law allows for discrimination actions to be brought, even if no employees suffered any loss in pay, benefits, job position or responsibilities as a result of the alleged discriminatory action.

In this particular case, the EEOC had sued on behalf of plaintiff Kevin Stuckey, who had quit his job after Autozone had attempted in 2012 to transfer from its store in the 4400 block of S. Kedzie Avenue on Chicago’s West Side Brighton Park neighborhood, to a store at 103rd Street and S. Michigan Avenue in the Roseland neighborhood on the city’s South Side.

The EEOC backed Stuckey’s assertions he had been transferred because Autozone wished to make its Kedzie store a “Hispanic” store, because the neighborhood in that section of Chicago is predominantly Hispanic. The EEOC argued such an action would violate Title VII of the federal Civil Rights Act.

Autozone managers denied that accusation, noting the store to which Stuckey would have been transferred was closer to his home, and would have allowed him to escape an allegedly negative relationship with his immediate supervisor.

The federal district judge and the appeals judges sided with Autozone, saying, in this case, nothing in Stuckey’s situation demonstrated he was discriminated against or harmed.

“The evidence does not permit a reasonable jury to find that Stuckey’s lateral transfer deprived or even tended to deprive him of any employment opportunity or otherwise adversely affected his employment status,” the appellate judges wrote in June. “Indeed, at oral argument the EEOC disclaimed any interest in an opportunity to present such evidence, resting its entire case on the argument that no such evidence is required.”

That, the judges said, represents “an incorrect reading of the statute” by the EEOC.

The June opinion was authored by Sykes.

After that decision, the EEOC asked the judges to reconsider the matter, requesting a hearing before the entire panel of eight judges, to give other judges the chance to weigh in on the question.

According to an opinion issued Nov. 21, five of the current eight Seventh Circuit judges voted to deny that rehearing request.

However, the rehearing denial drew a dissent from Seventh Circuit Chief Judge Diane Wood. Judges Ilana Rovner and David Hamilton joined in the dissent.

Wood argued the rehearing denial was tantamount to enshrining permission to discriminate in staffing assignments on the basis of race.

“Under the panel’s reasoning, this separate-but-equal arrangement is permissible under Title VII so long as the ‘separate’ facilities really are ‘equal,’” Wood wrote.  “In other words, if a Title VII plaintiff cannot prove that her employer’s intentional maintenance of racially segregated facilities diminished her ‘pay, benefits, or job responsibilities,’ then her employer has not violated section 2000e-2(a) (of Title VII).

“That conclusion, in my view, is contrary to the position that the Supreme Court has taken in analogous equal protection cases as far back as Brown v. Board of Education…”

She particularly rejected the panel’s view that backing the EEOC in Stuckey’s case would in some way invalidate other text within Title VII, requiring findings of concrete harm arising from an employment decision.

“The facts of this case are (I hope) unusual,” Wood wrote in her dissent. “We have a plausible allegation, backed up with evidence appropriately presented at the summary judgment stage, that an employer is deliberately maintaining racially segregated workplaces.

“Such a practice is one that, at a minimum, tends to deprive a person of employment opportunities (i.e., all jobs at the locations for which his race is not a match) and adversely affects his status as an employee by telling him that his job opportunities with this employer are limited by his race.”

Autozone was defended in the action by attorneys with the firms of SmithAmundsen LLC, of Chicago, and Jones, Walker, Waechter, Poitevent, Carrere & Denegre LLP, of New Orleans.

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SmithAmundsen LLC - Chicago U.S. Court of Appeals for the Seventh Circuit U.S. District Court for the Northern District of Illinois

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