The opinion of the court was delivered by: LASKER
This case presents the question of whether earlier litigation, brought by the Federal and state governments, and culminating in injunctive relief, bars a subsequent action against the same defendant by private plaintiffs who were among the beneficiaries of the earlier Federal and state actions. We conclude that, in the circumstances of this case, it does not.
Plaintiffs, four female employees of defendant, Macmillan Publishing Co., Inc. ("Macmillan"), bring this action on behalf of a purported class under Title VII of the Civil Rights Act of 1964 (42 U.S.C. Section 2000e et seq. ) ("Title VII"), alleging that Macmillan has maintained "employment policies, practices, customs, usages and attitudes which discriminate" on the basis of sex. (Third Amended Complaint, P18).
Macmillan moves for summary judgment pursuant to Fed.R.Civ.Pr. 56 on the grounds that a suit brought by the United States Department of Labor, under the Equal Pay Act provisions of the Fair Labor Standards Act, 29 U.S.C. § 206(d) ("Equal Pay Act"), and a suit by the New York Attorney General, under the New York Human Rights Law, N.Y.Exec.Law §§ 290 et seq. (McKinney), both of which alleged that Macmillan engaged in sex discrimination, bar this action as res judicata.
The first action was brought by the Secretary of Labor in 1974, alleging only that Macmillan violated the Equal Pay Act by "paying wages to female employees ... at rates less than the rates at which it pays wages to male employees ... for equal work." (Complaint, Ex. A to Affidavit of Melinda M. Sweet, in Support of Macmillan's Motion for Summary Judgment ("Sweet Affidavit")). The action concluded in a consent order and judgment, dated September 16, 1975, in which Macmillan consented to a permanent injunction against violation of the Equal Pay Act and to payment of back wages to two employees. (Consent Judgment, Ex. D to Sweet Affidavit).
The Department of Labor's action does not bar the instant action as res judicata because the scope of the earlier litigation, which precluded only discrimination on account of sex in wage rates, is far narrower than the complaint in this action, which extends to Macmillan's policies and practices with regard to recruitment, promotion, transfer, job classification, job assignment, training, provision of clerical services and office space, evaluation, and termination. (Third Amended Complaint PP18(a), (c), (e), (k), (p), (v)). Consequently, it cannot be argued that the Department of Labor action involved substantially the same cause of action as the one stated by plaintiffs, an essential element of res judicata. Herendeen v. Champion International Corp., 525 F.2d 130, 133 (2d Cir. 1975) ("For a judgment in a prior action to be a bar to reaching the merits in a subsequent action ... we (must) find the requisite measure of identity of the two causes of action.").
The res judicata effect of the action brought under the New York Human Rights Law raises a second essential element of the doctrine: whether the party alleged to be barred from proceeding in the second action was a party to the first action, or that party's "privy." Id. at 133 & n. 4. In order to answer the question, it is necessary to focus in some detail on the proceedings in the Human Rights action.
The action was commenced by a complaint filed before the New York State Division of Human Rights ("the Division"), an executive department of the State of New York, in September, 1974. The caption lists the "complainants" as "Louis J. Lefkowitz, Attorney General of the State of New York, on complaints of (forty-four individually named women, including plaintiffs herein) and other aggrieved parties." (Complaint, Ex. F to Sweet Affidavit). Paragraph three of the complaint states that "(t)he parties named in the above caption on whose behalf the Attorney General brings this complaint are employed ... by respondent." (Id. (emphasis added).) Plaintiff Meyer states that she "lent (her) name (to the complaint) for purposes of a complaining witness only, and not as a party," that the Division never served a copy of the complaint on her, and that she at no time intended to submit her claims to adjudication by the Division. (Affidavit of plaintiff June Meyer, Ex. A to Stein letter of October 5, 1981, PP 3, 6, 11 ("Meyer Affidavit 2").) Meyer also states that the Division denied her request to examine its files in the Macmillan case on the grounds that she was not a party. (Id. P 10.)
The action was terminated by an "Order after Stipulation," dated March 30, 1976, signed by the Commissioner of the Division, with copies to the Attorney General and the attorneys for Macmillan. (Ex. J to Sweet Affidavit). The Order states that "a conciliation agreement had been proposed and signed by the parties" (Id. p. 1) and that their agreement "is made the Order of the Commissioner." (Id. p. 9.) The caption of the Order contains the name of the Attorney General as the only complainant. Plaintiff Meyer states that the Division never served her with a copy of either the proposed conciliation agreement or the Order (Meyer Affidavit, 2, PP 7, 8) and that, upon information and belief, none of the other plaintiffs in the instant action were served with these papers. (Id. P 9.) Upon hearing of the proposed conciliation agreement, plaintiffs wrote a letter to the Attorney General which demonstrated not only that they did not approve his actions, but that they affirmatively disapproved them. The letter, dated February 4, 1976, states, inter alia, that "(t)he proposed agreement is inadequate, and we are writing to make sure no endorsement of it be ascribed to us." (Letter of Macmillan Women's Group, Ex. A to Plaintiffs' Response to Defendant's Motion for Summary Judgment.)
Macmillan argues that the presence of plaintiffs' names on the complaint, which plaintiffs consented to, and the complaint's characterization of plaintiffs as parties, is the beginning and end of the question whether plaintiffs were parties to the proceeding. In addition, Macmillan claims that it relied on its understanding that plaintiffs would be bound by the conciliation in agreeing to its terms.
Whether plaintiffs were parties to the Division proceedings is, of course, a matter of state law, and the New York Human Rights Law, while it does not speak to the precise question, is illuminating. Section 297(2) requires the Division to serve a copy of complaints filed before it "upon ... all persons it deems to be necessary ... parties." Section 297(3)(b) provides that if "the respondent and the division agree upon conciliation terms the division shall serve upon the complainant a copy of the proposed conciliation agreement," and, in addition that the complainant is given fifteen days to object to the conciliation agreement. With few exceptions, the division is required to hold a hearing on any complaints received. Finally, Section 297(3)(d) requires the Division to serve copies of the "order embodying (the) agreement upon all parties to the proceeding" if a conciliation agreement is entered into (emphasis added).
While the statute does not address the legal consequences of the Division's failure to serve copies of the complaint, proposed conciliation and order upon the parties, two points are clear. First, the statute entitles parties to certain protections, the most important being the right to object to the conciliation agreement and to have a hearing on the objections, which, according to plaintiff's uncontested affidavits, never occurred or was even offered. Second, the Division's failure to serve plaintiffs with copies of the complaint, the proposed conciliation agreement and the order, or to afford plaintiffs a hearing on any objections they might have had to the conciliation agreement, strongly indicates that the Division, which may be presumed to act in accordance with the requirements of state law, did not consider plaintiffs to be parties to the proceedings before it. This point is reinforced by the Division's refusal to allow plaintiff Meyer access to its records in the case which she requested during the course of her preparation of the instant action. (Meyer Affidavit 2, P 10)
Moreover, it is particularly significant that Arnold Fleischer, the Assistant Attorney General who was in charge of the state action, states in an affidavit submitted in opposition to the motion that the women "named in the caption of that complaint were not parties to the proceeding before the Division," and that plaintiffs "did not have the rights of parties" but rather "were complaining witnesses to the Attorney General." (Affidavit of Arnold Fleischer, Ex. C to Stein letter of October 5, 1981.) Fleischer's affidavit belies Macmillan's argument that he represented plaintiffs in the state proceeding. The fact that neither the Division nor Fleischer perceived plaintiffs as parties to the proceedings and consequently did not provide them with the protections they would have been accorded either as parties to the Division proceeding or as clients of Mr. Fleischer weighs heavily against a finding that they were parties.
Furthermore, plaintiffs' actions were consistent with their contention that they did not intend to be parties. They had retained their own attorney during the period of the proceedings (Meyer Affidavit 2, P 5); their attorney had filed a complaint with the EEOC (Ex. 1 to Sweet Affidavit); and they wrote a strong letter of ...