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Walters v. Metropolitan Educational Enterprises, Inc.

Supreme Court of the United States
136 L. Ed. 2d 644, 519 U.S. 202, 1997 U.S. LEXIS 462 (1997)
ELI5:

Rule of Law:

For the purpose of meeting Title VII's 15-employee jurisdictional threshold, an employer 'has' an employee if they maintain an employment relationship with that individual for each working day of a week, regardless of whether the employee is physically at work or receiving compensation on any particular day.


Facts:

  • Darlene Walters was an employee of Metropolitan Educational Enterprises, Inc.
  • In 1990, Walters filed a sex discrimination charge with the Equal Employment Opportunity Commission (EEOC) alleging Metropolitan failed to promote her.
  • Shortly after she filed the charge, Metropolitan fired her.
  • Metropolitan's standard workweek was Monday through Friday.
  • During most of 1990, Metropolitan had between 15 and 17 employees on its payroll each week.
  • However, in only nine weeks of that year was the company actually compensating 15 or more employees on each working day.
  • This discrepancy was because two part-time hourly employees consistently skipped one working day each week without pay.

Procedural Posture:

  • The Equal Employment Opportunity Commission (EEOC) filed suit against Metropolitan Educational Enterprises, Inc. in the U.S. District Court for the Northern District of Illinois for unlawful retaliation.
  • Darlene Walters intervened as a plaintiff in the lawsuit.
  • Metropolitan filed a motion to dismiss for lack of subject-matter jurisdiction, claiming it did not employ the requisite 15 employees for Title VII coverage.
  • The District Court granted Metropolitan's motion to dismiss.
  • The EEOC and Walters, as appellants, appealed the dismissal to the U.S. Court of Appeals for the Seventh Circuit.
  • The Seventh Circuit affirmed the District Court's judgment, holding that employees only count on days they are actually compensated.
  • The U.S. Supreme Court granted a writ of certiorari to review the decision of the Seventh Circuit.

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Issue:

For the purpose of determining whether an employer meets Title VII's 15-employee threshold, does counting employees based on the existence of an employment relationship (the 'payroll method') satisfy the statutory requirement that an employer 'has' an employee 'for each working day'?


Opinions:

Majority - Justice Scalia

Yes. The 'payroll method,' which counts individuals who have an employment relationship with the employer for each working day, is the correct standard for determining if an employer meets the 15-employee threshold under Title VII. The Court reasoned that the plain language of the statute, which asks how many employees an employer 'has,' supports this interpretation. In common parlance, an employer 'has' an employee if an employment relationship exists, which is most readily evidenced by the person's presence on the company payroll. This method avoids turning the jurisdictional determination into a complex and burdensome factual inquiry into daily attendance and compensation records. The Court rejected the argument that the phrase 'for each working day' was superfluous under this reading, explaining that it serves to clarify that employees who start or end their employment mid-week are not counted for the full week, thus resolving a potential ambiguity.



Analysis:

This decision established a uniform, national standard for counting employees under Title VII, resolving a split among the circuit courts. By adopting the straightforward 'payroll method,' the Court simplified the jurisdictional inquiry for Title VII claims, making it less costly and time-consuming for both plaintiffs and defendants. The ruling likely expanded Title VII's coverage to more small businesses, particularly those with numerous part-time employees, as employers can no longer evade coverage simply because not all employees work on every single day of the week.

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