|||U.S. Court of Appeals, Second Circuit
|||Docket No. 00-6077
|||260 F.3d 123, 2001.
50 Fed.R.Serv.3d 61, 156 Ed. Law Rep. 79
|||August 03, 2001
|||JOHN BRENNAN; JAMES G. AHEARN; KURT BRUNKHORST, INTERVENORS-APPELLANTS,
N.Y.C. BOARD OF EDUCATION; DEPARTMENT OF CITYWIDE ADMINISTRATIVE SERVICES; WILLIAM J. DIAMOND, PERSONNEL DIRECTOR, NEW YORK CITY DEPARTMENT OF PERSONNEL (IN HIS OFFICIAL CAPACITY); 115-13 120TH STREET, DEFENDANTS-APPELLEES,
UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE.
|||Michael E. Rosman, Center for Individual Rights, Washington, D.C. (George
W.C. McCarter, McCarter & Higgins, Shrewsbury, New Jersey, of counsel),
for Intervenors-Appellants. Alan Beckoff (Michael D. Hess, Corporation
Counsel of the City of New York, and Stephen J. McGrath, of counsel), New
York, New York, for Defendants-Appellees. Lisa Wilson Edwards, United States
Department of Justice, Civil Rights Division (Bill Lann Lee, Acting Assistant
Attorney General, and Dennis J. Dimsey, of counsel), Washington, D.C.,
|||Before: Cardamone, Winter, and Pooler, Circuit Judges.
|||The opinion of the court was delivered by: Winter, Circuit Judge
|||Argued: October 23, 2000
|||Appeal from the denial of a motion to intervene by the United States
District Court for the Eastern District of New York (Robert M. Levy, Magistrate
Judge). We hold that the proposed intervenors --white, male employees whose
employment status would be negatively affected by the terms of a race/ethnicity/gender-conscious
settlement agreement reached between the United States and the New York
City Board of Education -- have an interest cognizable under Fed. R. Civ.
P. 24(a)(2). We therefore vacate and remand for further proceedings.
|||John Brennan, James G. Ahearn, and Kurt Brunkhorst appeal from Magistrate
Judge Levy's denial of their motion to intervene as of right, pursuant
to Fed. R. Civ. P. 24(a)(2). See United States v. New York City Bd. of
Educ., 85 F. Supp. 2d 130, 154-56 (E.D.N.Y. 2000). The underlying action
was brought by the United States against the New York City Board of Education
and certain City officials (collectively "Board"). The complaint alleged
employment discrimination. The parties -- the government and the Board
-- reached a settlement agreement ("Agreement") and moved for a fairness
hearing and approval in the district court. The Agreement contained provisions
that conferred certain employment rights on a number of persons who are
African-American, Hispanic, Asian, or female. Appellants, white, male employees
of the Board, sought to intervene. They claimed that intervention was necessary
to protect their present employment status -- in particular, their seniority
rights. The district court denied the intervention motion on the ground
that appellants could not assert a cognizable interest under Rule 24(a)(2)
because they had presumptively obtained their employment status as a result
of discrimination, they had no property right in that status, and any adverse
effect of the Agreement was remote and speculative. See id. at 155-56.
We disagree and reverse.
|||In bringing the underlying action pursuant to Section 707(a) of Title
VII, 42 U.S.C. § 2000e-6(a), the government alleged a pattern and
practice of racial and gender discrimination by the Board in its hiring
and recruitment practices with respect to the positions of Custodian and
Custodian Engineer. These positions appear to have a hierarchical relationship,
with Custodian Engineer being the superior job. *fn1
Before one becomes a permanent Custodian or Custodian Engineer with seniority
rankings, one must serve what is essentially a probationary period as a
provisional Custodian or provisional Custodian Engineer.
|||The complaint alleged, inter alia, that the Board engaged in discrimination
by: (i) failing to recruit females and minorities on the same basis as
white males; (ii) failing to hire and promote minorities on the same basis
as whites; and (iii) using civil service exams --which determine the order
of hiring and promotion and, therefore, seniority -- that had a negative,
disparate impact on black and Hispanic applicants.
|||After discovery and negotiations, the government and the Board executed
the Agreement. In pertinent part, the Agreement required the Board to confer
permanent civil service status on forty-three provisional African-American,
Hispanic, Asian, and female Custodians and Custodian Engineers, and to
provide retroactive seniority to them and an additional eleven employees
(fifty-four in all) of similar backgrounds (collectively "Offerees").
|||The Agreement would benefit the Offerees in the following ways. The
salary of a Custodian or Custodian Engineer is discounted at various levels
during the first five years of an individual's employment. Retroactive
seniority would entitle an Offeree to a higher salary, i.e., a smaller
discount. Moreover, the larger the building in which a Custodian or Custodian
Engineer works, the higher the salary. As a result of a collective bargaining
agreement, transfers to larger buildings are based generally on a formula
that uses both seniority and performance ratings. In practice, 90% of actual
transfers are based on the transferee's seniority. Finally, permanent civil
service status benefits an Offeree by allowing him/her to bypass provisional
status in which the employee has no protected rights.
|||As claimed by appellants, the pertinent principal effects of the Agreement
on other employees appear to be two-fold. First, other Custodians or Custodian
Engineers will have less seniority relative to Offerees moved above them
and may therefore fail to obtain a desired transfer to a larger building.
Second, permanent Custodian Engineers have seniority rights whereas provisional
Custodian Engineers are probationary employees. *fn2
According permanent status as a Custodian Engineer to an Offeree may result
in the Offeree's displacing a provisional Custodian Engineer, who may return
to a permanent Custodian position.
|||The parties moved the district court to hold a fairness hearing at
which objections to the Agreement would be heard. See 42 U.S.C. §
2000e-2(n) (preventing challenge to employment practices implementing consent
judgment provided notice and opportunity to object are given). Various
employees, including appellants, filed objections to the proposed Agreement
on numerous grounds. Appellants, who were permanent Custodians and/or provisional
Custodian Engineers, also moved to intervene as of right, pursuant to Fed.
R. Civ. P. 24(a)(2), *fn3
on the ground that the Agreement was unconstitutional. They claimed that
the Agreement was impermissibly based on race, ethnicity, and gender and
would result in some or all of them losing their status as provisional
Custodian Engineers and/or their relative seniority rights as Custodians
and/or Custodian Engineers. The district judge referred the matter to Magistrate
Levy to conduct a fairness hearing, and the government and the Board then
consented to have the case referred to Magistrate Levy for all purposes,
pursuant to 28 U.S.C. § 636(c).
|||Magistrate Levy received expert declarations and held a fairness hearing,
at which employees of the Board who filed timely objections to the Agreement
had an opportunity to raise their concerns, while the government and the
Board presented arguments in favor of entry of the Agreement.
|||The district court found that the government had made a prima facie
showing on each of its discrimination claims; that the remedies proposed
in the Agreement were fair, reasonable, and legal; and that none of the
objections had sufficient merit to overcome the "presumption of validity"
that the district court accorded to the Agreement. 85 F. Supp. 2d at 157.
|||The district court also denied appellants' motion to intervene. It
reasoned that they had presumptively obtained their seniority rights as
a result of discrimination. It further concluded that appellants had no
legally protectable interest in their employment status or seniority rankings.
Specifically, the district court held that "a civil servant has no vested
property right in a particular position or appointment, and 'a person on
an eligibility list does not possess any mandated right to appointment
or any other legally protectible interest.'" 85 F. Supp. 2d at 155 (quoting
Kirkland v. New York State Dep't of Corr. Servs., 711 F.2d 1117, 1134 (2d
Cir. 1983) (internal quotation marks omitted)).
|||The district court further held that "[e]ven if the proposed intervenors
could assert some cognizable interest in their seniority rights, that interest
would be remote and speculative." Id. at 156. It based this conclusion
on the perceived unlikelihood that any of the fifty-four Offerees would
compete with any of the appellants for a transfer to a particular building
and obtain the transfer as a result of the retroactive seniority. For such
a result to occur, the court reasoned, several events would need to converge:
(i) one of the Offerees and one of the appellants would have to request
the same transfer; (ii) each would have to have the same job title (i.e.,
Custodian or Custodian Engineer); (iii) the performance ratings of the
Offeree and the appellant would have to be quite close; and (iv) the Offeree
and the appellant would have to hold the first and second spots, respectively,
on the transfer list for the particular building. The district court held,
therefore, that appellants' interest in their seniority rankings was not
"direct, substantial, and legally protectable," id. at 156 (internal quotation
marks omitted), denied appellants' motion to intervene, and approved the
|||This appeal followed.
|||"We review the denial of . . . the motion for intervention as of right
under Fed. R. Civ. P. 24(a) . . . for abuse of discretion." New York News,
Inc. v. Kheel, 972 F.2d 482, 485 (2d Cir. 1992); accord United States v.
Glens Falls Newspapers, Inc., 160 F.3d 853, 854 (2d Cir. 1998) ("We have
jurisdiction of an appeal from an order which denies intervention. Our
review invokes the abuse of discretion standard." (internal citations omitted)).
"Errors of law or fact may constitute such abuse." SG Cowen Sec. Corp.
v. Messih, 224 F.3d 79, 81 (2d Cir. 2000).
|||To intervene as of right, a movant must: "(1) timely file an application,
(2) show an interest in the action, (3) demonstrate that the interest may
be impaired by the disposition of the action, and (4) show that the interest
is not protected adequately by the parties to the action." Kheel, 972 F.2d
at 485. The timeliness of appellants' motion to intervene is not questioned.
|||Turning to the nature of appellants' interest in the underlying action,
we have stated that, for an interest to be cognizable under Rule 24(a)(2),
it must be "direct, substantial, and legally protectable." Washington Elec.
Coop., Inc. v. Massachusetts Mun. Wholesale Elec. Co., 922 F.2d 92, 97
(2d Cir. 1990); accord Donaldson v. United States, 400 U.S. 517, 531 (1971)
(requiring "significantly protectable interest"), superceded by statute
on other grounds as stated in United States v. New York Tel. Co., 644 F.2d
953, 956 (2d Cir. 1981); Kheel, 972 F.2d at 486; Restor-A-Dent Dental Labs.,
Inc. v. Certified Alloy Prods., Inc., 725 F.2d 871, 874 (2d Cir. 1984)
("[S]uch an interest must be direct, as opposed to remote or contingent.").
"An interest that is remote from the subject matter of the proceeding,
or that is contingent upon the occurrence of a sequence of events before
it becomes colorable, will not satisfy the rule." Washington Elec., 922
F.2d at 97.
|||Appellants assert that they have a cognizable interest both in their
status as provisional Custodian Engineers and in their contractual seniority
rights as Custodians and Custodian Engineers. Because permanent Custodian
Engineers have seniority over provisional Custodian Engineers, the former
may replace the latter at any time. Appellants claim that, on the one hand,
were they to be replaced as Custodian Engineers and returned to their positions
as Custodians, they would have reduced seniority relative to the Custodian
Offerees as a result of the Agreement. On the other hand, if they remained
provisional Custodian Engineers and achieved permanent status in that position,
they would have less seniority than the Offerees who became permanent Custodian
Engineers with retroactive seniority.
|||As noted, the district court held that appellants' interests were not
cognizable under Rule 24(a)(2) because: (i) their seniority rights and
employment status relative to the Offerees had presumptively been obtained
as a result of illegal discrimination; (ii) they had no property or other
legally protectable interest in their status as provisional Custodian Engineers
or seniority as Custodians; and (iii) their interest in their seniority
rights was too remote and speculative to support intervention under Rule
24(a)(2). We disagree and address each rationale in turn.
|||With regard to whether appellants lack a cognizable interest in their
employment status and seniority rights because these benefits were presumptively
obtained as the result of discriminatory practices, we believe that the
district court's ruling put the cart before the horse. As we have stated,
|||[E]xcept for allegations frivolous on their face, an application to
intervene cannot be resolved by reference to the ultimate merits of the
claims which the intervenor wishes to assert following intervention, but
rather turns on whether the applicant has demonstrated that its application
is timely, that it has an interest in the subject of the action, that disposition
of the action might as a practical matter impair its interest, and that
representation by existing parties would not adequately protect that interest.
Oneida Indian Nation v. New York, 732 F.2d 261, 265 (2d Cir. 1984) (internal
|||Thus, while the presumption of validity of a settlement agreement may
shift the burden of showing invalidity to non-party objectors, it carries
no weight in the determination of whether an interest is sufficient for
intervention under Rule 24(a). See generally Kirkland, 711 F.2d at 1126-28.
The sufficiency of an interest entitles the intervenor to contest the merits
of his/her claim based on that interest. An interest that is otherwise
sufficient under Rule 24(a)(2) does not become insufficient because the
court deems the claim to be legally or factually weak. In the present case,
it is precisely the existence or non-existence of prior discrimination
and its relationship to appellants' present status that they want to contest
by intervening as parties. The merits can, therefore, be resolved only
after appellants have an opportunity for discovery and the presentation
of evidence as a party to the action. *fn4
|||We turn now to appellees' argument that denial of intervention was
proper because of appellants' lack of a property or other legally protectable
interest in their employment status. Initially, we address this claim with
respect to appellants' status as provisional Custodian Engineers and thereafter
discuss it in the context of their seniority rights. Under New York law,
appellants have no property or other protectable legal interest in their
status as provisional Custodian Engineers. See Meyers v. City of New York,
622 N.Y.S.2d 529, 532 (2d Dep't 1995) ("It is well settled that a probationary
employee, unlike a permanent employee, has no property rights in his position
. . . ."); see also York v. McGuire, 63 N.Y.2d 760, 761 (1984). However,
Rule 24(a)(2) "does not require that the intervenor prove a property right,
whether in the constitutional or any other sense." United States v. City
of Chicago, 870 F.2d 1256, 1260 (7th Cir. 1989). Indeed, New York Public
Interest Research Group, Inc. v. Regents of the University of the State
of New York, 516 F.2d 350, 351-52 (2d Cir. 1975) (per curiam), held that
the Pharmaceutical Society of the State of New York, Inc. and three individual
pharmacists had standing to intervene as of right in an action challenging
the legality of a regulation prohibiting advertising the price of prescription
drugs, even though the interest asserted --the economic interest of pharmacists
in sustaining the regulation --clearly did not constitute a property right.
|||Rule 24(a)(2) requires not a property interest but, rather, "an interest
relating to the property or transaction which is the subject of the action."
Appellants have such an interest in the Agreement. Appellants are asserting
claims that are the mirror image of the claims asserted by the government.
The government alleges that race/ethnicity/gender discrimination prevented
the Offerees from obtaining positions as permanent Custodians and Custodian
Engineers and that the remedy provided by the Agreement merely restores
them to positions they would have held but for such discrimination. Appellants
claim the race/ethnicity/gender-conscious remedy is not justified by any
demonstrated past discrimination and that their loss of relative seniority
as a result of the Agreement is itself impermissible discrimination.
|||The claims asserted by the government and appellants, therefore, are
based on identical legal theories, the difference between them being entirely
in the issue of whether the remedy restores circumstances that would have
existed but for discrimination or is itself discrimination. Whether appellants
or the Offerees have a property right in the position of provisional Custodian
Engineer simply has nothing to do with that issue from either point of
view. While it is the case that a provisional Custodian Engineer might
not be entitled to procedural due process in a termination proceeding based
on poor performance because of a lack of a property interest, see Meyers,
622 N.Y.S.2d at 532, an adverse employment action based on race, ethnicity,
or gender is clearly illegal. To hold otherwise would require civil rights
plaintiffs generally to show a property interest in the position in question.
We note that we have held in the past that, where a proposed intervenor's
interests are otherwise unrepresented in an action, the standard for intervention
is no more burdensome than the standing requirement, see United States
Postal Serv. v. Brennan, 579 F.2d 188, 190 (2d Cir. 1978), and that appellants'
interest in the underlying action and the Agreement is for purposes of
standing identical to that of the Offerees.
|||The preceding discussion is of course equally applicable to appellants'
seniority rights as both Custodians and Custodian Engineers, but we note
also that seniority rights are for many purposes legally cognizable rights.
"Seniority is a contractual right, and a competitive seniority system establishes
a hierarchy of such rights according to which various employment benefits
are distributed." Lorance v. AT & T Techs., Inc., 490 U.S. 900, 905
(1989) (internal quotation marks, citations, emphasis, and alterations
omitted), superceded by statute on other grounds as stated in Landgraf
v. USI Film Prods., 511 U.S. 244, 251 (1994). Appellants, therefore, have
"an interest relating to the [Agreement]."
|||Finally, we turn to the district court's conclusion that, even if appellants
could assert an interest in seniority rights that otherwise would be cognizable
under Rule 24(a)(2), it would be too "remote and speculative" to permit
intervention as of right, chiefly because of the alleged unlikelihood of
a confluence of events resulting in the foreclosure of an appellant by
an Offeree for a building transfer. 85 F. Supp. 2d at 156. We again disagree.
|||We agree with the caselaw in numerous other circuits holding that the
kind of interest asserted by appellants here is cognizable under Rule 24(a)(2).
See, e.g., United States v. City of Hialeah, 140 F.3d 968, 982 (11th Cir.
1998) ("[T]he retroactive seniority provision's threat to the objectors'
competitive seniority benefits prevented entry of the consent decree. The
objectors were not required to prove with certainty that particular employees
would lose contractual benefits."); Edwards v. City of Houston, 78 F.3d
983, 1004 (5th Cir. 1996) (en banc) (holding interest in equal access to
promotion system and promotion opportunities justifies intervention); Thomas
v. Bakery, Confectionery & Tobacco Workers Int'l Union, 982 F.2d 1215,
1220 (8th Cir. 1992) ("The Metz employees' seniority rights were not in
issue [during the liability phase of the trial]. . . . The intervenors
had a substantial interest in the remedy phase of the trial, however, since
a decision to reinstate the plaintiffs, dove-tail them with the Metz employees,
or end-tail the Metz employees would substantially affect their rights.");
Dawson v. Pastrick, 600 F.2d 70, 75 (7th Cir. 1979) ("The union in this
case was allowed to intervene to protect the interests of majority firefighters
in their promotional seniority rights. . . . Although . . . no majority
fireman has as yet been denied a promotion because of the court's decree,
the remedy granted makes such an event a distinct possibility."); Stallworth
v. Monsanto Co., 558 F.2d 257, 268-69 (5th Cir. 1977) (holding that if,
on remand, it was shown that employees had contractual relationship that
covered seniority rights, interest requirement of Fed. R. Civ. P. 24(a)(2)
would be satisfied). But cf. Dilks v. Aloha Airlines, Inc., 642 F.2d 1155,
1157 (9th Cir. 1981) (per curiam).
|||There is good reason for the existence of this body of caselaw. The
district court focused solely on the question of whether any appellant
would lose a building transfer directly to one of the Offerees. That is
not the proper focus, however, because the exercise of seniority rights
has a domino effect. If an Offeree obtains a desirable transfer, all comparable
employees with more seniority than an appellant but less than that of the
Offeree may seek transfers at the next level of desirability, thereby foreclosing
the particular appellant. The effects of the loss of relative seniority
are not easily forecast and may not even be perceived as they happen. To
take an alphabetical example, if employee Z is moved up to just above employee
A, then the effects of that move on employee T will turn on the preferences
of employees A through S. Where transfers among buildings are concerned,
size (and therefore salary) will be important in determining whether an
employee will exercise seniority to seek a transfer, but some employees
will also be motivated by other factors, such as location. If employee
Z secures a transfer, a chain reaction will begin with various openings
and transfers occurring based on a variety of decisions by A through S.
After all is played out, employee T may well find it impossible to reconstruct
what transfer might have been available to him/her but for the moving-up
of employee Z.
|||An appellant's loss of a desirable transfer need not be directly to
an Offeree, therefore, for the loss to be the result of the Agreement.
That being the case, the effects of a loss of relative seniority rights
should not be regarded as too speculative and remote to justify intervention *fn5
save, perhaps, in a case where a concrete effect on an employee is impossible.
That is clearly not the case here.
|||Similarly, appellants' interest in the diminution of their seniority
rights is not "remote" from the subject matter of this action and would
not "inject collateral issues." Kheel, 972 F.2d at 486 (internal quotation
marks omitted). Here, the loss of appellants' relative seniority rights
-- ineluctably the result of the proposed Agreement -- is central, rather
than collateral, to the Agreement.
|||Appellants have thus satisfied the second requirement for intervention
under Rule 24(a)(2). For the same reasons, appellants have also adequately
"demonstrate[d] that the interest may be impaired by the disposition of
the action," Kheel, 972 F.2d at 485, the third requirement.
|||With regard to the last requirement of Rule 24(a)(2) -- a showing "that
the interest is not protected adequately by the parties to the action,"
Kheel, 972 F.2d at 485 -- the Board argues that its presence as a party
adequately represented appellants' interests. We disagree. The test here
is not whether the Board did well on behalf of appellants --an inquiry
that would require exploration of the merits -- but whether the Board's
interests were so similar to those of appellants that adequacy of representation
was assured. See Washington Elec., 922 F.2d at 98. We find no such congruence
of interests here. In litigation such as the present case, an employer
may have an interest in defending its hiring and other practices or in
retaining certain incumbents in their jobs. However, it may have an equally
strong or stronger interest in bringing such litigation to an end by settlements
involving the displacement of employees who are not parties to the action.
The employer may, in short, behave like a stakeholder rather than an advocate.
Indeed, in the present case it appears that the entire burden of the settlement
-- there is no back pay award to the Offerees -- is upon individuals like
|||Appellants are, therefore, to be granted intervention. They should
be accorded discovery and other rights with regard to their claim that
any impairment by the Agreement of their interests in their positions as
provisional Custodian Engineers and in their seniority rights as Custodians
and Custodian Engineers would constitute impermissible discrimination rather
than a proper restorative remedy based on past discrimination against the
|||Appellants also ask us to exercise discretionary jurisdiction and rule
on the merits of the Agreement, rather than remand the case to the district
court. See Kaplan v. Rand, 192 F.3d 60, 67 (2d Cir. 1999) ("Although the
general rule is that only a party of record may appeal a judgment, a nonparty
may appeal when the nonparty has an interest that is affected by the trial
court's judgment" (internal quotation marks omitted)). We think such a
course would be ill-advised.
|||Appellants have argued convincingly that they were denied the opportunity
to develop a record that would have permitted a full and appropriate ruling
on the fairness and constitutionality of the Agreement. Given the heavily
factual nature of these issues, we believe that the best course is to remand
the case to allow for a full development of the record.
|||We therefore vacate the order denying the motion to intervene and approving
the Agreement and remand with instructions to the district court to permit
appellants to intervene.
The record is unclear as to whether there is some formal or informal progression
from a Custodian position to a Custodian Engineer position. This issue
is not dispositive at this stage of the proceedings and can be clarified
It is unclear from the record whether provisional Custodian Engineers also
have seniority rights. In any event, probationary employees would always
have less seniority than permanent employees.
"Upon timely application anyone shall be permitted to intervene in an action
. . . when the applicant claims an interest relating to the property or
transaction which is the subject of the action and the applicant is so
situated that the disposition of the action may as a practical matter impair
or impede the applicant's ability to protect that interest, unless the
applicant's interest is adequately represented by existing parties." Fed.
R. Civ. P. 24(a)(2).
As noted, in approving the settlement, the Magistrate Judge relied upon
evidentiary submissions, including two expert declarations that it described
as not only unrebutted but also unchallenged. However, appellants have
had no opportunity to take discovery, including the depositions of the
experts. We also note that at least one reason the declarations were unrebutted
and unchallenged was that they were served some weeks after objections
were due and only days before the fairness hearing. In fact, one declaration
was sent to the court via Federal Express only two days before the hearing.
In response to a question at oral argument, counsel for the government
argued that if an appellant were in the future to lose a desired transfer,
that appellant might challenge the legality of the Agreement at that time.
In a post- argument letter, the government withdrew from that position.