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for Legal Features People v. Caballes: Illinois Search and Seizure Jurisprudence Fails to Pass The Sniff Test Issues and Concerns When Settling Title Vii Claims Involving Illinois Local Governments Human Embryos and the Illinois Wrongful Death Act: A Physician’s Perspective Pre-trial Dismissal Based On Other Affirmative Matter: An Open Invitation Has Its Limits, Too ©
1996 - 2005 |
Issues and Concerns When Settling Title Vii Claims Involving Illinois Local Governments By Marcus J. Zarlengo I. Introduction The case of Carver v. Sheriff of LaSalle County3 best illustrates these legal traps and pitfalls that parties may encounter when settling Title VII intentional discrimination claims with local government entities in Illinois. That involves a former employee of the LaSalle County Sheriff’s Department who sued the LaSalle County Sheriff’s Office, the sheriff individually, and LaSalle County in federal court for intentional employment discrimination under Title VII. Ultimately, the Seventh Circuit concluded that LaSalle County was the responsible party for compensating the plaintiffs under a settlement agreement. More importantly, however, was the way in which the federal courts and the Illinois Supreme Court reached their conclusions. What becomes clear from the Carver cases is that to create a valid and functional settlement agreement between the employee and the government employer, both parties must ensure that the employer is the correct entity to settle an employment claim, make certain that the individual making the settlement on behalf of the governmental unit has authority to settle, and that all government entities with an interest in settling have the opportunity to participate. II. Carver v. Sheriff of LaSalle County Although the parties agreed the settlement obligation was the sheriff’s department, the plaintiffs filed and served a third party citation to discover assets on LaSalle County to satisfy the terms of the consent decree because the Counties Code appeared to require the county to indemnify the sheriff’s office.6 The county responded with a motion to set aside the consent decree, but the court denied the motion because the county was no longer a party to the case. The court also quashed the plaintiffs’ citation because there was no evidence that the county had in its possession any of the sheriff’s assets.7 The county appealed the court’s decision and the Seventh Circuit (Carver I) reversed and remanded with instructions to determine the county’s standing to attack the consent decree.8 After remand and subsequent appeal to the Seventh Circuit, the court certified the question to the Illinois Supreme Court of “whether…Illinois law requires counties to pay judgments entered against a sheriff’s office in an official capacity.” The Supreme Court held that the sheriff’s office (not the sheriff individually) is the proper defendant, that the sheriff has the authority to settle claims against the sheriff’s office, and that the county is required to pay under state law any judgment entered in accordance with the settlement agreement.9 The decision rested on the fact that the county had prior notice of the proceedings because it was an original party; the Court refrained from deciding what would happen if the county did not have prior notice.10 The Seventh Circuit concluded from the Illinois Supreme Court’s opinion, that for the purposes of the Title VII claims against the sheriff’s office, the county is an indispensable party to the litigation, and must pay the plaintiff the amount agreed upon in the settlement agreement.11 he framework established by the Illinois Supreme Court and the Seventh Circuit requires parties in Title VII cases to determine the proper governmental defendant under federal and state law, which parties may settle and ultimately pay under state law, and that all indispensable parties have an opportunity to settle pursuant federal procedural rules.12 The following sections more specifically address the legal issues that underlie the Carver decisions. III. The Proper Government Entities
to Include in Settlement Talks
The court in Carver II held that the sheriff’s office was a “local public entity” under Section 9-102 and therefore was a proper entity to be involved in settlement talks.15 But to reach this conclusion, the court had to first explain why Section 9-102 was the controlling statute,16 and then why the sheriff’s office itself was a “local public entity.”17 The Illinois Supreme Court concluded that Section 9-102 of the Tort Immunity Act is the controlling statute in Illinois governing settlement talks with government entities for the purpose of Title VII.18 First, the court notes that Title VII claims are “by necessity, an official-capacity action because only an ‘employer’ may be held liable for discrimination which violates Title VII’s provisions.”19 The court cites Williams v. Banning, 20 where the Seventh Circuit, in applying this rule, rejected the plaintiff’s argument that her supervisor in a construction company should be held individually liable under Title VII. In Williams, the court analogizes the definition of “employer” under Title VII to the definition of employer under the Americans with Disabilities Act (“ADA”), where the Seventh Circuit had previously determined that Congress intended liability under the ADA to only apply to the employer, not the agents of the employer as well. The underlying reasoning is that because Congress restricts the application of Title VII to employers with fifteen or more employees, it is reasonable to infer that Congress did not intend liability under Title VII to apply to small entities or to individuals.21 Because Title VII only applies to “official-capacity” type claims, the court in Carver II then concluded that Section 9-102 of the Tort Immunity Act was the only applicable state statute governing settlement agreements with government entities involving Title VII claims.22 The court rejects the notion that because Section 5-100223 of the Counties Code requires the county to indemnify the sheriff or sheriff’s deputies for judgments recovered against him or her, the county is necessarily liable in Title VII cases. The court notes the language in the statute referring to “the sheriff” and to claims “against him or her” indicate Section 5-1002 was only meant to apply to cases where the sheriff if sued individually.24 Section 9-102, however, refers to “the local public entity” and therefore applied to cases where the public entity itself is being sued.25 The court then proceeded to answer the next obvious question, whether the sheriff’s office is considered a public entity under Section 9-102.26 For the purposes of the Tort Immunity Act, Section 1-206 defines a “local public entity” to include, among others, a county and municipality.27 Section 1-206 also has a “catch all” clause as it also applies to “all other local government bodies” not already listed. One issue in Carver II was whether the sheriff’s office was a “local public entity” under Section 1-206. If so, the sheriff could settle the Title VII claim in his official capacity under Section 9-102. If not, the settlement agreement entered into would be invalid. The sheriff’s office is not specifically listed under Section 1-206, therefore, if the sheriff’s office was to be included it must fall under the “all other local government bodies” clause. The court held that the sheriff’s office is a “local public entity” under the Tort Immunity Act. The court’s reasoning provides a legal framework for future Title VII plaintiffs and government defendants in Illinois. Citing Franklin v. Zaruba,28 the Carver II court concludes that the sheriff’s office is a “local public entity” for the purposes of the Tort Immunity Act.29 Franklin was a Seventh Circuit, Section 1983, case where the plaintiffs sued the Sheriff of DuPage County in his official capacity for alleged Constitutional violations that occurred while the plaintiff was in custody of the sheriff’s office following an arrest. The Franklin court was asked to determine the question of whether the sheriff was an agent of the state or the county for purposes of respondeat superior liability. The court held that in Illinois, the sheriff was not an agent of either the state or the county, but an agent of the county sheriff’s office itself, an independently-elected office, which is not subject to the control of the county in most respects.30 For the Franklin court, the controlling factors were the constitutional nature of the office31 and the ability to make policy decisions for the sheriff’s office.32 The fact the sheriff’s office was not a taxing authority and depended on the county for funding was not a controlling factor for the purposes of Section 1-206.33 Those parties seeking to enter into settlement agreements, therefore, must be aware that Title VII claims are official capacity claims, and that Section 9-102 of the Tort Immunity Act provides the source of law for government entities to both engage in settlement talks and to enter into settlement agreements. In most cases, the government entity will be a specifically listed entity under Section 1-206. Municipalities, counties, and school districts, for example, are all subject to the Tort Immunity Act. For government entities not specifically listed in Section 1-206, the parties must first look to the nature of the office, and whether the entity is charged with the ability to formulate employment policies. IV. Authority to Settle Although the court in Carver II did not explicitly indicate which body of law would govern, the Seventh Circuit had previously concluded that state law will govern questions regarding the authority to settle Title VII cases.36 The Seventh Circuit in Morgan v. South Bend Community School Corp, discussed the applicability of state law in resolving who has authority to settle Title VII claims. In Morgan, a black school principal, who was fired from his position, filed an employment discrimination suit under Title VII against the South Bend Community School Corporation in Indiana. He entered into an oral settlement agreement for reinstatement with his superintendent, and the school district attorney, without the approval of the school board.37 The plaintiff asked the court to formulate a federal common law rule that would permit oral settlement agreements based on apparent agency principles in Title VII cases. The court rejected his request, and applied the law of Indiana which permits only the school board to consent to the reinstatement of an employee. The court reasoned that applying state law to settlement agreements would not interfere with the federal interest in encouraging settlements in Title VII cases because having written agreements, as opposed to oral agreements, actually facilitate the settlement process by allowing parties to be confident in the terms agreed upon.38 Thus, the Morgan decision requires that parties look to the relevant state law in determining who has actual authority to settle Title VII cases.39 In Illinois, Section 9-102 empowers the “governing body or person vested by law or ordinance with authority to make over-all policy decisions for such entity” to enter into a settlement agreement on behalf of the government entity.40 Besides the sheriff’s office, where the Carver II court concluded the duly elected sheriff is the person vested by law with the authority to settle, other units of government are frequently defendants in Title VII claims. Municipalities are an example of such a unit. The governing body for Illinois non-home-rule municipalities, according to Section 4-5-2 of the Municipal Code, is the city council.41 Section 4-5-2 grants the city council the ability to stipulate by ordinance the powers and duties of officers and employees. One such power frequently found in ordinances is the ability of an officer to compromise claims against the municipality.42 Problems can arise, however, when a municipal officer settles an agreement without the explicit grant of authority to do so from the city council. In City of Belleville v. Ill. Frat. Order of Police Labor Council, 43 for example, the court held that an amendment to a labor contract negotiated between the labor union and the mayor of the City of Belleville was invalid because the mayor did not have authority from the city council to enter into such an agreement. In reaching its holding, the Belleville court distinguished the facts from the case of City of Burbank v. Ill. State Labor Relations Board, 44 where the court held that a settlement agreement entered into by the city’s mayor without council approval was valid. The Belleville court noted that in Burbank the council was aware and even participated in the mayor’s negotiations with the union, and complied with the terms of the agreement following the settlement.45 The facts in Belleville indicate that the council had no knowledge of the negotiations, nor did the council ever comply with the terms settled on by the mayor.46 Although Belleville and Burbank are distinguishable, both courts require at least an explicit or implicit grant of authority from the city council to effectuate a valid agreement. Ultimately, parties settling a Title VII claim against a governmental entity in Illinois must look to state law to determine who will have the authority to enter into a binding settlement agreement. Whether the government entity is the sheriff’s office, school district, municipality, or any other unit of local government, a settlement agreement entered into by an individual with no authority under state law to do so, will not result in a valid settlement agreement. V. Indispensable Parties The Seventh Circuit did not elaborate on the indispensable party analysis, but the court appears to accept the reasoning exemplified in the United States Supreme Court case of Martin v. Wilks.50 The Court in Martin, a Title VII disparate impact case, held that white firefighters who would have been impacted by an earlier consent decree between the City of Birmingham, Alabama and black employees should have been joined under Rule 19 of the Federal Rules of Civil Procedure as necessary or indispensable parties.51 The Court reasoned that compulsory joinder under Rule 19, not intervention under Rules 24(a) and (b), was the better mechanism for protecting the rights of interested third parties. The original plaintiffs and defendants would know better the nature and scope of the lawsuit than a third party that may or may not know of the pending litigation, and the original plaintiffs and defendants should therefore bear the burden of bringing the third parties into the litigation.52 Although Congress afterwards partially overruled Wilks,53 the congressional prohibition on challenging Title VII consent decrees in disparate impact cases is very narrow, leaving the Wilks holding very much alive in cases of intentional discrimination. 54 The Seventh Circuit in Carver III, therefore, makes it clear that a local government entity that is financially obligated to pay a settlement is an indispensable party to the litigation.55 The financially obligated governmental entity must be joined as a named defendant, and given the opportunity to participate in settlement talks.56 The Seventh Circuit apparently agreed with LaSalle County’s concern that allowing settlement talks to proceed, without the participation of the entity that is required to pay, will open the door to collusion. Although neither governmental entity will necessarily be able to assert control over the other governmental entity, the rationale appears to be that allowing the third party to be present will deter any collusive tendencies on the part of the other parties, while allowing the party responsible for paying to assert its own rights in case. VI. Conclusion 1 Title VII of the 1964 Civil Rights
Act prohibits employers from discriminating against an individual
with respect to compensation, terms, conditions, or privileges of
employment because of such individual’s race, color, religion,
sex or national origin. 42 U.S.C. 2000e-2(a)(1). Marcus J. Zarlengo is a 3rd year law student at Northern Illinois University, College of Law and a law clerk for the firm of Ottosen, Trevarthen, Britz, Kelly & Cooper, Ltd. He earned a B.A. in Economics from the University of Colorado at Denver in 2000. |
