Unpublished Disposition, 935 F.2d 274 (9th Cir. 1989)

MEMORANDUM^* 

This is the fourth time that these parties have been before this court following the settlement of a class action which the appellant, Rosemary Ficalora, initiated against the appellee, Lockheed. The suit was brought under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2000e et seq. It claimed a pattern of employment discrimination on the basis of sex that disproportionately excluded women from salaried positions.

In the first appeal, we considered paragraph 16 of the consent decree which described a release by the appellant of all claims against Lockheed in consideration of the payment to her of $5,000 and an agreement on her part that she would never seek employment with Lockheed. We held that the appellant raised serious challenges to the fairness of such an agreement and remanded for findings concerning possible retaliatory motives on the part of Lockheed and for consideration of possible conflicts of interest between the appellant and her counsel who also represented the class. See Ficalora v. Lockheed California Co., 751 F.2d 995 (9th Cir. 1985).

The district court on remand took the position that the special provisions applicable to the appellant were irrelevant by virtue of her refusal to sign the special release, concluded that appellant be treated like all other members of the class and that under the terms of the consent decree, "Ms. Ficalora is eligible for rehire to the same extent as any other class member." See Ficalora v. Lockheed California Co., No. CV 82-6001 (C.D. Cal. May 14, 1985). The district court concluded this was a fair settlement of her claims, and upon Ficalora's second appeal, the same panel that decided the first appeal affirmed. As of that date, December 16, 1986, it appeared both to this court and the district court, as well as to Ficalora, that there was no reason why Lockheed would refuse to consider the appellant for employment on the same basis as it considered all the other members of the class.

This was, however, an inaccurate perception. Throughout the year 1967, appellant sought employment with Lockheed and it continually refused to hire her, although Lockheed fulfilled the terms of the consent decree by hiring other members of the class to fill target positions. Ficalora instituted new proceedings intended to show that Lockheed's refusals were in violation of the decree.

In opposition to her motion, Lockheed produced for the first time a document reflecting that at the time of her original layoff in 1981, appellant had been given such a low rating as to production and conduct that she was ineligible for rehire.

Ficalora appealed to this court for the third time following the district court's denial of her motion on grounds of standing. When that appeal came to this panel, it was apparent to this panel that if the document accurately portrayed appellant's work history as of 1981, then appellant received nothing by virtue of the class action settlement. We said that if Lockheed was entitled to rely on that document, then it had been futile for Ficalora to submit applications at any time after November 20, 1981. "For her any rights secured by the consent decree were illusory." Ficalora v. Lockheed, No. 88-5578 (9th Cir. Feb. 15, 1989).

We remanded for the district court to consider whether the document in question may have been fabricated at a later date, whether Lockheed had violated any duty to disclose it, and to fashion appropriate relief.

On remand, the district court found that the document had not been fabricated nor improperly concealed, and denied any relief. Recognizing that appellant had in fact received nothing as a result of the settlement negotiated by counsel on her behalf as representative of the class, and acknowledging at least implicitly that her claims would have been handled differently had the appellant been aware of the existence of the document, the district court laid the blame at the door of the appellant's former counsel who never requested the document in discovery.

We now consider the appellant's fourth appeal. In doing so, we are mindful of the fact that we are viewing the operation of a settlement agreement, and that the merits of any underlying discrimination claim arising out of the 1981 layoff are not before us, as they were not properly before the district court. We are also mindful that the class action settlement agreement is subject to special court scrutiny. See Fed. R. Civ. P. 23(e); Ficalora, 751 F.2d at 996.

We have no reason to second guess the district court's factual findings on fabrication and concealment, but we disagree with its legal conclusion that appellant's sole recourse in connection with the illusory settlement is a suit against her former counsel. It is clear that had this court, or indeed had the district court, known of the existence of an employment record that barred any possibility of future employment by Lockheed, it would not have approved the illusory settlement which purported to make her eligible for rehire on the same basis as other members of the class. While it is true, as Lockheed points out, that the company never represented that she or any other member of the class was qualified for any particular job, she had no reason to assume that she was disqualified for all jobs. Nor did this court.

As a result of the improvident course of settlement of this class action, Ficalora has not received the $5,000 which Lockheed agreed to pay her for renouncing her claims to employment by Lockheed, a payment which she turned down because of what was then to her a sensible understanding that she had a reasonable opportunity for employment and career advancement with Lockheed. She then spent at least a year, following our 1986 affirmance of the district court's approval of the decree, in what is now known to her and to us to have been futile applications for such employment, efforts which supplanted any effort to seek employment elsewhere.

It would therefore be inconsistent with the remedial aims of Title VII, see, e.g., Albemarle Paper Co. v. Moody, 422 U.S. 405, 416-22 (1975), and with the role courts should play in connection with settlement of class claims under Rule 23, for us to conclude in this case that the appellant should go without the $5,000 benefit negotiated on her behalf and without any opportunity for long-term employment on a priority basis which she, as representative of the class, obtained for others. It is appropriate for this court to order a remedy to rectify the adverse and unforeseen consequences of a settlement approved without knowledge that the appellant was for all intents and purposes disqualified from any future employment by the defendant. Lockheed has effectively acknowledged she is entitled to $5,000. We conclude she is entitled to compensation for the year wasted in futile applications as well.

We therefore REVERSE the order of the district court and REMAND for entry of an order awarding the appellant the sum of $5,000, and an additional sum representing the amount that appellant would have earned during the year 1987 at salary grade 4, plus interest as of the date of original approval of the district court of the consent decree.

IT IS SO ORDERED.