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Equal Employment Opportunity Commission v. UPS Ground Freight, Inc.

United States District Court, D. Kansas

November 1, 2018

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff,
v.
UPS GROUND FREIGHT, INC., d/b/a UPS FREIGHT, et al., Defendants.

          MEMORANDUM AND ORDER

          JULIE A. ROBINSON, CHIEF UNITED STATES DISTRICT JUDGE.

         Plaintiff Equal Employment Opportunity Commission (“EEOC”) filed this suit against Defendant UPS Ground Freight, Inc. (“UPS Freight”) to correct unlawful employment practices on the basis of disability in violation of the Americans with Disabilities Act (“ADA”). The Court granted EEOC's Motion for Judgment on the Pleadings on Count II, brought under Fed. R. Civ. P 12(c), and granted injunctive relief prohibiting continuation of the discriminatory practice and policy.[1] This matter is now before the Court on UPS Freight's Motion to Modify and/or Vacate the Court's Permanent Injunction and Motion in the Alternative to Stay the Permanent Injunction Pending Ratification and Appeal (Doc. 32). For the reasons explained in detail below, the Court grants in part UPS Freight's motion to modify the injunction and denies its request for a stay.

         I. Procedural and Factual Background

         The EEOC filed a two-count action to correct unlawful employment practices, alleging (1) UPS Freight violated the ADA by discriminating against Thomas Diebold on the basis of his disability (Count I); and (2) UPS Freight has a facially discriminatory policy against disabled drivers in its current 2013-2018 Collective Bargaining Agreement “CBA”) with Defendant Teamsters National UPS Freight Negotiating Committee (Count II). The focus of Count II is Article 21.2 and Article 21.3 of the CBA. UPS Freight filed an Answer admitting (1) the CBA attached as Exhibit A to the Amended Complaint is a true and correct copy;[2] (2) that UPS Freight, “pursuant to Article 21, Section 2(a), of the 2013-2018 CBA, provides non-CDL required (non-driving) work at the full rate (100%) of pay to drivers whose CDLs are suspended or revoked for non-medical reasons, including convictions for driving while intoxicated”;[3] and (3) UPS Freight, “pursuant to Article 21, Section 3(a) of the 2013-2018 CBA . . . provides fulltime or casual inside work at 90% of the rate of pay for the full-time classification of work being performed to drivers who are judged medically unqualified to drive.”[4]

         The EEOC moved for judgment on the pleadings under Fed.R.Civ.P. 12(c), arguing that UPS Freight's admissions were sufficient to prove the existence of a discriminatory policy and meet the EEOC's burden to make a prima facie case of discrimination. The Court agreed that UPS Freight's additional explanations regarding when Article 21.3(a) applies were immaterial, because there are no circumstances under which paying a disabled driver 90% of what others earn is legal under the ADA.[5] On July 27, 2018, the Court entered partial judgment on the pleadings on Count II as follows:

1. The CBA in dispute violates 42 U.S.C. § 12112 by discriminating against drivers with disabilities by (1) limiting, segregating, or classifying drivers because of disability adversely affecting the opportunities or status of disabled drivers and (2) using standards, criteria, or methods of administration that have the effect of discrimination on the basis of disability;
2. The CBA in dispute violates 42 U.S.C. § 12112(b)(2) by participating in a contractual relationship that expressly discriminates against medically disabled UPS Freight drivers.[6]

         The Court entered a permanent injunction that:

3. UPS Freight, its officers, agents, servants, employees, attorneys, and all persons in active concert or participation with it, are permanently enjoined from discriminating on the basis of disability in violation of 42 U.S.C. § 12112(a) by enforcing Article 21.3 as written;[7] and
4. UPS Freight and the Teamsters National UPS Freight Negotiating Committee are permanently enjoined from negotiating and ratifying terms of the next collective bargaining agreement which would discriminate on the basis of disability in violation of 42 U.S.C. § 12112(a).[8]

         On August 23, 2018, UPS Freight moved to modify and/or vacate the permanent injunction under Fed.R.Civ.P. 60(b)(5) or, in the alternative, to stay the permanent injunction pending ratification of the new CBA. UPS Freight represented that if the request was denied, it intended to appeal the Order to the Tenth Circuit Court of Appeals.[9] In its motion, UPS Freight stated the CBA had expired July 31, 2018, negotiations on a new CBA began in January 2018, and a tentative “hand shake” agreement was reached on July 12, 2018.[10] The tentative new CBA contains the following revised Article 21.3, which shows the language struck through from the prior CBA:

A driver who is judged medically unqualified to drive, but is considered physically fit and qualified to perform other inside jobs, will be afforded the opportunity to displace the least senior fulltime or casual inside employee at such work until he/she can return to his/her driving job. However, if the displacement of a full-time employee with a CDL would negatively affect the employer's operations, the medically disqualified driver may only displace a casual inside employee. “Red-circled” non-CDL cartage employees shall not be subject to displacement in this process. While performing the inside work, the driver will be paid ninety percent (90%) of the appropriate rate of pay for the full-time classification of work being performed. The Company shall attempt to provide eight (8) hours of work, if possible, out of available work.[11]

         The new CBA would retroactively apply for the period August 1, 2018 through July 31, 2023.[12]UPS Freight argued that the permanent injunction should be modified and/or vacated in light of the new tentative CBA that was in the process of ratification that included a modified Article 23.1, which eliminates the need for an injunction.

         The EEOC opposed UPS Freight's motion, and ultimately sought leave to file a sur-response to address new arguments raised in UPS Freight's reply brief claiming that the injunction should be vacated because it was an “obey the law” injunction and thus impermissible under Fed.R.Civ.P. 65(d).[13] After the EEOC advised in its proposed sur-response that it would not oppose narrowing the terms of the second part of the injunction, the Court suggested the parties endeavor to submit a proposed agreed order on UPS Freight's motion.[14] UPS Freight eventually indicated it was not willing to agree to anything less than vacation of the permanent injunction, however, and the Court granted the EEOC leave to file a sur-response. UPS Freight then clarified in its sur-reply that it was not open to modification, but instead was seeking elimination of the injunction, [15] and contemporaneously filed a Notice of Appeal of the Court's Order.[16]

         On October 17, 2018, UPS Freight was granted leave to file a supplemental brief.[17] UPS Freight informed the Court that the “hand shake” agreement on the new CBA was sent to the union membership for a vote the first week of October, but was voted down and not ratified by the union members-not UPS Freight or the Teamsters.[18] As a result of the failed vote, UPS Freight and the Teamsters will return to the bargaining table.[19] UPS Freight represents that it has no intention to change the proposed Article 21.3, which eliminates the 90% pay language, nor does UPS Freight expect the Teamsters to seek to amend the proposed Article 21.3.[20] UPS Freight further represents that since the time of the Court's Order imposing a permanent injunction against UPS Freight and the Teamsters, UPS Freight has not applied the 90% pay provision set out in Article 21.3 as it existed in the CBA that expired on July 31, 2018, and that it fully intends to continue this practice.[21]

         II. Discussion

         A. Rule 60(b)(5)

         A motion for relief from judgment under Fed. R. 60(b) is an extraordinary remedy and may be granted only in exceptional circumstances.[22] Such a motion may not be used as a substitute for direct appeal.[23] Rather, Rule 60(b)(5) permits a district court to modify or vacate a permanent injunction when “applying it prospectively is no longer equitable.”[24] “Rule 60(b)(5) may not be used to challenge the legal conclusions on which a prior judgment or order rests, but the Rule provides a means by which a party can ask a court to modify or vacate a judgment or order if ‘a significant change either in factual conditions or in law'” has occurred since the judgment and those changes warrant modification of the injunction or decree.[25] Changed factual circumstances may warrant modification when the injunction “proves to be unworkable because of unforeseen obstacles, ” the changed circumstances “make compliance with the [injunction] substantially more onerous, ” or when “enforcement of the [injunction] without modification would be detrimental to the public interest.”[26]

         Courts “should deny a party's request for modification . . . if it merely establishes that ‘it is no longer convenient [for the movant] to live with the terms'” of the injunction or consent decree.[27] “The party seeking relief bears the burden of establishing that changed circumstances warrant relief, . . . but once a party carries this burden, a court abuses its discretion ‘when it refuses to modify an injunction or consent decree in light of such changes.'”[28]

         UPS Freight initially cited two changed facts in support of its request for relief: (1) that subsequent to the Court's Order, UPS Freight and the Teamsters reached a tentative deal that modifies Article 23.1 to eliminate the 90% pay for medically disqualified drivers; and (2) the likely ratification of a modified Article 23.1. Taken together, UPS Freight argues, these changed facts render the permanent injunction no longer equitable. In its reply, however, UPS Freight argued that the injunction should be vacated because it is a prohibited “obey the law” mandate. Although the EEOC objected to this new argument as outside the factors the Court can consider in ruling on a Rule 60(b)(5) motion, it read UPS Freight's reply brief to mean it was open to the Court narrowing the injunction and proposed modifications of the second part of the injunction to narrow the scope and limit its application to drivers. As noted above, UPS Freight subsequently advised the Court that it was not open to modification of the injunction, but rather was requesting the Court vacate the injunction entirely.

         UPS Freight does not address the first part of the injunction-the prohibition against “enforcing Article 23.1 [of the current 2013-2018 CBA] as written” until the new CBA is ratified. This part of the injunction expires by its own terms when the next CBA is ratified and the current Article 23.1 is no longer operational. Of course, ratification did not occur as anticipated the first week of October 2018, and UPS Freight does not estimate when another vote will be scheduled. While UPS Freight claims that it is now complying with this part of the injunction, the Court declines to vacate the injunction under these tentative circumstances and prior to ratification of the new CBA.

         UPS Freight's changed circumstances with respect to the second part of the injunction- which enjoins it “from negotiating and ratifying terms of the next [2018-2023 CBA] which would discriminate on the basis of disability in violation of 42 U.S.C. § 12112(a)”-are apparently no longer applicable in light of the recent unsuccessful vote and failure to ratify the “hand shake” agreement. Instead, the changed circumstances now involve a return to the bargaining table with what UPS Freight claims is an overly broad and vague injunction that does nothing more than command it to comply with Title VII. UPS Freight argues it is thus left to “aimlessly comply” with a prohibited “obey the law injunction, ” which in turn may hinder ratification of the new CBA.

         The Court is not convinced that the second part of the injunction is an “obey the law” injunction. This part of the injunction is specifically limited to negotiation of the new CBA and likewise expires upon ratification, and thus has a geographic and temporal limit.[29] Further, as the EEOC points out, that part of the injunction cites to the “general rule” for this subsection of the ADA, 42 U.S.C. § 12112(a). Although citing to § 12112 broadly in its declaratory judgment language, the Court quotes two non-general ADA requirements found at § 12112(b)(1) and (b)(3), as referenced by the EEOC in support of its motion for judgment on the pleadings. And, the language in the declaratory judgment clearly limited the violation to drivers.[30]

         As UPS Freight notes, however, the EEOC took the position in its response that this part of the injunction could extend to provisions in the CBA beyond Article 23.1 and the realm of this lawsuit that are purportedly discriminatory under the ADA “general rule” that UPS is now enjoined from negotiating and ratifying under the Court's Order.[31] But the EEOC retreats somewhat from that stance in its sur-response, suggesting the Court narrow the injunction from § 12112(a) to the more precise § 12112(b)(1) and (b)(3), as well as specifically limit it to drivers.

         If a party meets its burden of establishing a change in fact or circumstance that warrants modification of an injunction, the court should examine “whether the proposed modification is suitably tailored to the changed circumstance.”[32] Although UPS Freight argues the permanent injunction should be eliminated entirely, the Court agrees that the modification suggested by the EEOC is consistent with the language in the declaratory judgment, and is tailored to the changed circumstances that have evolved while this motion was pending. Accordingly, the Court modifies the second part of the injunction as follows:

UPS Freight and the Teamsters National UPS Freight Negotiating Committee are permanently enjoined from negotiating and ratifying terms of the next collective bargaining agreement which would discriminate on the basis of disability in violation of 42 U.S.C. § 12112(b)(1) and (b)(3), specifically (1) limiting, segregating, or classifying drivers because of disability adversely affecting the opportunities or status of disabled drivers and (2) using standards, criteria, or methods of administration that have the effect of discrimination against drivers on the basis of disability.

         This modification is particularly relevant in light of the failed vote requiring UPS Freight and the Teamsters to return to the bargaining table; the narrowed injunctive language will alleviate UPS Freight's concern about its application and ensure compliance when negotiating the new CBA.

         B. Rule 62(c)

         UPS Freight requests the Court stay its permanent injunction while this matter is appealed. Fed.R.Civ.P. 62(c) states, in relevant part: “While an appeal is pending from an interlocutory or final judgment that grants, dissolves, or denies an injunction, the court may suspend, modify, restore, or grant an injunction on terms for bond or other terms that secure the opposing party's rights.” Stay of an injunction should first be sought at the district court level.[33] In ruling of a Rule 62(c) motion, courts consider the four so-called Hilton factors:

(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceedings; and (4) where the public interest lies.[34]

         The Court addresses the factors in turn.

         1. Likelihood of ...


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