United States Court of Appeals For the First Circuit

No. 04-1630

MARCOS MERCADO AND SUZANNE HEBERT-JOMP,

Plaintiffs, Appellants,

v.

THE RITZ-CARLTON SAN JUAN HOTEL, SPA & CASINO,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Jay A. Garcia-Gregory, U.S. District Judge]

Before

Torruella, Circuit Judge, Coffin, Senior Circuit Judge, and Lipez, Circuit Judge.

Godwin Aldarondo-Girald for appellants. James W. McCartney with whom Cancio, Nadal, Rivera & Díaz was on brief for appellee.

May 31, 2005 COFFIN, Senior Circuit Judge. Appellants Marcos Mercado and

Suzanne Hebert-Jomp claim that they experienced unlawful

discrimination while working at the Ritz-Carlton San Juan Hotel,

Spa & Casino ("Ritz-Carlton"), and they brought suit under Title

VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a)(1), and

similar Puerto Rico laws. To sue under Title VII, individuals must

have filed a charge with the Equal Employment Opportunity

Commission ("EEOC") within a specified time after the alleged

unlawful practices occurred. See id. § 2000e-5(e)(1). Appellants

did not file their charges within the statutory period, and the

district court dismissed their claims on that ground. On appeal,

appellants assert that the court erred in refusing to give them the

benefit of equitable tolling. As we shall explain, we conclude

that appellants are entitled to factual development of their

tolling claim, and we therefore vacate the dismissals and remand

for further proceedings.

I. Background

This suit was filed by appellants and a co-worker, Sandra

Megwinoff, each of whom alleged different instances of

discriminatory conduct on the part of their Ritz-Carlton

supervisors. Appellant Mercado claimed discrimination on the basis

of national origin; appellants Hebert and Megwinoff both alleged

sexual harassment, as well as gender and national origin

discrimination; Megwinoff additionally asserted age discrimination.

-2- All three employees, who began working at the hotel in 1997,

claimed that their unlawful treatment and "unsustainable working

conditions" forced them to resign from their jobs in 1999.1 The

three employees met with an attorney on November 11, 1999, and

filed charges with the EEOC on December 14, 1999.

It is undisputed that Mercado's and Hebert's filings were

untimely. Under Title VII, they were required to file charges with

the EEOC within 300 days after the allegedly unlawful practice, see

42 U.S.C. § 2000e-5(e)(1),2 and the most generous calculation of

the trigger date renders Mercado's filing 32 days late and Hebert's

23 days late.3 The EEOC, without making either a determination on

the merits or a finding on timeliness, issued all three plaintiffs

right-to-sue letters. They filed their joint suit in March 2003,

1 Mercado and Hebert resigned in January 1999; Megwinoff resigned on November 1, 1999. 2 Because Puerto Rico is a so-called "deferral jurisdiction," the 300-day period, rather than a shorter 180-day filing period, is applicable. See Lebron-Rios v. U.S. Marshal Serv.,

, 11 n.5 (1st Cir. 2003); Bonilla v. Muebles J.J. Alvarez, Inc.,

, 278 n.4 (1st Cir. 1999). 3 For purposes of this appeal, Ritz-Carlton accepts the effective dates of appellants' terminations as the trigger dates for the statutory filing period: January 15, 1999, for Mercado, and January 24, 1999, for Hebert. Ritz-Carlton has noted, however, that the dates of their resignation letters, rather than the effective date of the resignations, arguably should be considered the starting point, in which case the filings would be even more untimely. We offer no view on the appropriate start date, assuming for purposes of this appeal, as did Ritz-Carlton, that the actual resignation dates are the applicable ones.

-3- and Ritz-Carlton subsequently filed a motion seeking dismissal of

Mercado's and Hebert's claims based on their untimely EEOC charges.

In their opposition to the dismissal motion, appellants

contended first that the timeliness defense was waived because it

had not been raised before the EEOC. In addition, they claimed

that Ritz-Carlton was barred from asserting timeliness as a defense

because the hotel failed to comply with EEOC regulations requiring

employers to post notices advising employees of their legal rights

relating to employment discrimination. See 42 U.S.C. § 2000e-

10(a).4 Invoking the doctrine of equitable tolling, appellants

claimed that the filing period did not begin to run until they

received notice of their rights when they met with an attorney.

The district court rejected appellants' arguments and

concluded that it lacked jurisdiction to consider the merits of

their claims because of the late EEOC filings. The court reasoned

that the equitable tolling doctrine may be utilized only when there

is "active misleading" on the part of the employer, and it held

that Ritz-Carlton's failure to post the mandatory notices was

insufficient to satisfy that standard. The court implicitly

4 Section 2000e-10 provides, in pertinent part, that an employer "shall post . . . in conspicuous places upon its premises . . . a notice to be prepared or approved by the [EEOC] setting forth excerpts from or, summaries of, the pertinent provisions of this subchapter and information pertinent to the filing of a complaint." See also

(a) ("Such notice must be posted in prominent and accessible places where notices to employees, applicants and members are customarily maintained.").

-4- rejected appellants' argument that Ritz-Carlton had waived the

timeliness issue by failing to raise it with the EEOC, noting that

the agency's issuance of right-to-sue letters did not insulate the

filing defect from independent evaluation by the court.

On appeal, Mercado and Hebert reiterate both their waiver and

equitable tolling arguments. We first briefly address the

threshold question of waiver, along with Ritz-Carlton's contention

that the appeal is premature, and then turn to the equitable

tolling doctrine.

II. Discussion

A. Waiver

Appellants contend that Ritz-Carlton waived the timeliness

defense by failing to bring the issue to the attention of the EEOC;

they claim it was raised for the first time in Ritz-Carlton's

motion for partial dismissal in the district court. Appellants are

wrong both legally and factually.

First, appellants offer no support for their assertion that

the failure to initially raise the defense before the EEOC was

fatal, given that the EEOC did not reach a decision on the merits.

Both of their cited cases involve instances in which parties

belatedly sought to rely in court on procedural flaws that had not

been raised in earlier administrative proceedings that reached

substantive outcomes. See United States v. L.A. Tucker Truck

Lines,

(1952); Ester v. Principi,

-5- (7th Cir. 2001). In Ester, the Seventh Circuit held that an agency

waives a timeliness defense in a subsequent lawsuit if it decides

the merits of a complaint, but noted the court's adherence to "the

well-settled rule that agencies do not waive a timeliness defense

merely by accepting and investigating a discrimination complaint."

at 1072 n.1 (citing Fifth, Ninth and D.C. Circuit cases); see

also Belgrave v. Pena,

(2d Cir. 2001); cf. Bruce

v. U.S. Dep't of Justice,

(2d Cir. 2002)

(concluding that timeliness defense was waived where a government

agency made "an express determination that [a complaint] was timely

based on a specific factual finding"). We find that principle to

be applicable here, where the EEOC issued right-to-sue letters

without reaching the merits of appellants' claims.

Nor did appellee belatedly raise the claim in the district

court. In its answer to appellants' complaint, Ritz-Carlton

asserted as its initial affirmative defense that "[t]he claims

alleged in the plaintiffs' complaint are partially and/or totally

barred by the applicable statute of limitations and/or

jurisdictional time frames." Although conclusory, this assertion

adequately identified the issue. The subsequent motion for partial

dismissal elaborated on the untimeliness defense by setting out the

argument that Mercado and Hebert exceeded the 300-day statutory

period for filing a charge with the EEOC. Thus, contrary to

appellants' contention, the issue was raised by Ritz-Carlton at its

-6- first opportunity in the litigation and it was thus fully

preserved.

B. Rule 54(b)

Ritz-Carlton, meanwhile, seeks dismissal of the appeal as

premature. It argues that no final, appealable judgment has been

rendered because the district court has not yet resolved the case

of their co-plaintiff, Megwinoff. Although the district court

certified the judgments with respect to Mercado and Hebert as final

under Fed. R. Civ. P. 54(b), finding that there is "no just reason

for delay," see, e.g., Quinn v. Boston,

(1st Cir.

2003), Ritz-Carlton claims the court erred in doing so. The hotel

maintains that the equities counsel against a "piecemeal appeal."

The district court did not explain its Rule 54(b) decision,

but we think it sufficiently apparent why it acted as it did.5 If

the court's ruling dismissing Mercado's and Hebert's claims proved

to be incorrect, the most efficient course of action would be for

all three employees' claims to proceed together. Although their

individual factual contentions and theories vary, the same general

environment is at issue and at least some witnesses would be

expected to testify on each case. By certifying the judgments

5 We do not condone the lack of explicit findings and the reasoning underlying the court's certification, see Quinn v. Boston,

(1st Cir. 2003); Spiegel v. Trustees of Tufts Coll.,

(1st Cir. 1988), but conclude that this is a case in which the circumstances plainly support an appeal from the partial judgment. See Quinn,

.

-7- against Mercado and Hebert as final and allowing this court to

review the discrete legal issue underlying them without delay, the

district court was maximizing the potential for the most

expeditious resolution of the entire case. We see no error in this

approach.

We thus turn to the substance of the appeal.

C. Equitable Tolling

Appellants contend that their late filing of charges with the

EEOC should be forgiven under the doctrine of equitable tolling

because of Ritz-Carlton's failure to post statutorily mandated

notices of their employment rights.6 As noted earlier, the

district court rejected this excuse. The court relied on a line of

precedent describing equitable tolling as a narrow doctrine

"reserved for exceptional cases," see Chico-Velez v. Roche Prods.,

Inc.,

(1st Cir. 1998), and permitted "only where

the employer has actively misled the employee," Thomas v. Eastman

Kodak Co.,

(1st Cir. 1999).

6 The filing requirement is mandatory but not jurisdictional and, like a statute of limitations, is subject to equitable exceptions. Zipes v. Trans World Airlines, Inc.,

(1982); Jorge v. Rumsfeld,

(1st Cir. 2005); Bonilla,

. Ritz-Carlton has acknowledged that, as a consequence of that precedent, its motion to dismiss the Title VII claims for lack of subject-matter jurisdiction under Fed. R. Civ. P. 12(b)(1) is more properly considered a motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6). Accordingly, we treat it as such.

-8- The district court correctly identified "[t]he baseline rule

. . . that time limitations are important in discrimination cases,

and that federal courts therefore should employ equitable tolling

sparingly," Bonilla v. Muebles J.J. Alvarez, Inc.,

(1st Cir. 1999); see also Nat'l R.R. Passenger Corp. v. Morgan,

(2002). After careful review of the case law,

however, we conclude the court erred in utilizing the "actively

misled" standard in the context of a failure-to-post claim.

While an employer's affirmative misconduct provides one

rationale for extending the filing period, we have recognized that

an employer's violation of the EEOC posting requirement may provide

a second basis for an extended filing period "where the employee

had no other actual or constructive knowledge of [the] complaint

procedures," Earnhardt v. Commonwealth of Puerto Rico,

(1st Cir. 1982).7 In Earnhardt, we first discussed plaintiff's

contention that his employer's silence in the face of inquiries

prevented him from learning that his discharge stemmed from

discrimination, resulting in his untimely EEOC filing. See 691

7 Although a number of the cases we cite for this proposition involved the ADEA, rather than Title VII, we have held repeatedly that "the ADEA and Title VII 'stand[] in pari passu' and that 'judicial precedents interpreting one such statute [are] instructive in decisions involving [the other],'" Camacho v. P.R. Ports Auth.,

, 578 n.5 (1st Cir. 2004) (quoting Serapion v. Martinez,

(1st Cir. 1997)); see also Earnhardt v. Commonwealth of Puerto Rico,

(1st Cir. 1982) ("[C]ourts often accept ADEA precedents as persuasive interpretations of similar provisions appearing in Title VII."). We continue that approach here.

-9- F.2d at 71-72. We rejected this basis for tolling because

"equitable modification is appropriate only where the employer

actively misled the employee concerning the reasons for the

discharge."

. We then separately addressed plaintiff's

argument that the failure to post statutory notice excused his

untimely filing and remanded for inquiry into the facts concerning,

inter alia, the plaintiff's knowledge. We thus treated the

employer's violation of the posting duty as a possible alternative

path to equitable tolling, an approach we adopted again in

subsequent cases. See Kale v. Combined Ins. Co. of Am.,

(1st Cir. 1988) (where an employee's ignorance of his

statutory rights "is caused . . . by failure of that employer to

conspicuously post the informational EEOC notices . . . , there may

be a valid claim for equitable tolling"); Cano v. U.S. Postal

Serv.,

, 222-23 & n.5 (1st Cir. 1985) (per curiam).8

8 Ritz-Carlton attempts to blur the distinction between the two different bases for equitable tolling by quoting, out of context, our statement in Thomas v. Eastman Kodak Co.,

(1st Cir. 1999), that "First Circuit law permits equitable tolling only where the employer has actively misled the employee." Viewed in context, it is clear that the "active misleading" requirement applies when the employee invokes equitable tolling based on lack of knowledge of the reasons for the adverse action – and not when the employer effectively has prevented the plaintiff from learning of his legal rights by failing to post the required notice. In asserting the First Circuit standard, Thomas relied on two earlier cases involving claims that employees lacked knowledge of the employer's discriminatory motivation. See Jensen v. Frank,

(1st Cir. 1990) (plaintiff could only qualify for equitable tolling if he could demonstrate "not only that he had no reason to be aware of his employer's improper motivation when the putative violation occurred, but also that the employer actively

-10- Many other courts similarly view lack of notice as adequate

justification for equitable tolling. See, e.g., Baldwin County

Welcome Ctr. v. Brown,

(1984) (rejecting

equitable tolling because "[t]his is not a case in which a claimant

has received inadequate notice" or where "affirmative misconduct on

the part of a defendant lulled the plaintiff into inaction"); EEOC

v. Ky. State Police Dep't,

(6th Cir. 1996) ("If

an employer fails to comply with § 627 by not posting the required

ADEA notices, 'the charge-filing period will not begin to run until

the employee either retains an attorney or acquires actual

knowledge of his rights under the ADEA.'"); Unterreiner v.

Volkswagen of Am.,

(7th Cir. 1993) ("Under some

circumstances, a company's failure to post a notice of employees'

rights under the ADEA may toll the statute of limitations.");

Callowhill v. Allen-Sherman-Hoff Co.,

(3rd Cir.

1987) ("[A]n employer's neglect to post the notice . . . will toll

the running of the period for filing the administrative charges, at

least until the 'aggrieved person seeks out an attorney or acquires

actual knowledge of his rights under the [ADEA]'"); English v.

misled him and that he relied on the (mis)conduct to his detriment"); Mack v. Great Atl. & Pac. Tea Co.,

(1st Cir. 1989) (no equitable tolling because no active deception in company's failure to post job openings). In short, our case law reflects two distinct lines of cases applying two distinct standards to two distinct bases for equitable tolling. As we explain infra, the failure to post notice of legal rights triggers a "totality of the circumstances" kind of review.

-11- Pabst Brewing Co.,

, 1049 (4th Cir. 1987) ("If an

employer violates the posting requirement, the charging period is

tolled until the plaintiff 'acquires actual knowledge of his rights

or retains an attorney.'"); but see Wilkerson v. Siegfried Ins.

Agency,

, 347 (10th Cir. 1982) (stating that failure to

post EEOC notices will not toll absent employer's "intent to

actively mislead the plaintiff").

Here, where appellants have asserted that no informational

notices were posted and that they had no knowledge of their legal

rights until informed by their attorney,9 they have met the

threshold requirements for avoiding dismissal of their Title VII

suit. See Kale,

("If . . . the employee has no

knowledge of his rights and his ignorance is due to misleading

conduct by the defendant or failure of the defendant to post the

9 We note that appellants made these assertions not in their complaint but in sworn statements submitted in response to Ritz- Carlton's motion for partial dismissal, and we further note that the district court referred to the failure-to-post allegation in its decision. Although a court's consideration of materials outside the pleadings typically converts a motion to dismiss into one for summary judgment, see Fed. R. Civ. P. 12(b); Greene v. Rhode Island,

(1st Cir. 2005), an affirmative defense may be adjudicated on a motion to dismiss for failure to state a claim "'[i]n an appropriate case,'" Greene,

(quoting In re Colonial Mortgage Bankers Corp.,

(1st Cir. 2003)). We need not dwell on whether the district court properly looked beyond the pleadings in this case. The bottom line is that the court made a legal error in viewing "active misleading" as a prerequisite to equitable tolling and, as we shall discuss, factual issues pertinent to the tolling question thus remain. Judgment of dismissal, however framed, was therefore premature.

-12- required EEOC notices, then an initial case for equitable tolling

has been made.") (emphasis added). The viability of their claims

beyond that preliminary stage will depend, however, upon facts that

have yet to be developed.

Courts generally weigh five factors when considering whether

to allow equitable tolling in a particular case: "'(1) lack of

actual notice of the filing requirement; (2) lack of constructive

knowledge of the filing requirement; (3) diligence in pursuing

one's rights; (4) absence of prejudice to the defendant; and (5) a

plaintiff's reasonableness in remaining ignorant of the [filing]

requirement.'" Kelley v. N.L.R.B.,

(1st Cir.

1996) (quoting Kale,

). These factors are not

exhaustive, however; "[i]t is in the nature of equity to entertain

case-specific factors that may counsel in favor of tolling." Kale,

n.9.

The factual inquiry in this case thus must begin with an

examination of whether – despite their assertion of ignorance –

appellants had either actual or constructive knowledge of their

Title VII rights within the meaning of our case law. Actual

knowledge does not mean specific awareness of the 300-day statutory

filing period; rather, actual knowledge occurs when an employee

becomes generally aware that he possesses a legal right to be free

from the type of discrimination he has alleged. Kale,

("Once an employee is 'generally aware of his legal right to

-13- obtain redress for that wrong . . . , he possesses sufficient

knowledge to enable him to vindicate his rights[,] if he so

desires.'") (quoting McClinton v. Ala. By-Products Corp.,

(11th Cir. 1984)).10 Constructive knowledge, meanwhile,

would be presumed if the employer had complied with its statutory

obligation to post the EEOC notices in conspicuous locations, and

it also is presumed when an employee has retained an attorney – in

both instances, regardless of whether the plaintiff in fact is

aware of his rights.

Factual development may well show that appellants possessed

sufficient knowledge to entitle Ritz-Carlton to summary judgment.

10 We elaborated in Kale as follows:

[E]quitable tolling is not properly invoked where a plaintiff alleges mere ignorance of a specific provision contained in a statute. Instead, ignorance in the context of equitable tolling under the ADEA, means ignorance of the unlawfulness of the defendant's conduct that is proscribed by the statute. Equity only requires that a plaintiff be aware that a statute has been passed that protects workers against age discrimination. It does not require that he know of all the filing periods and technicalities contained in the law. . . . Thus, a plaintiff who is aware of his ADEA rights but unaware of the filing deadlines cannot, without more, invoke the doctrine of equitable tolling.

. See also, e.g., Schroeder v. Copley Newspaper,

(7th Cir. 1989) ("The information [plaintiff] needed to know before filing a charge was straightforward: that it was unlawful to discriminate on the basis of age, and that he was required to file a charge with the EEOC to pursue a discrimination claim."); Clark v. Resistoflex Co.,

(5th Cir. 1988) (plaintiff need only have general knowledge of his ADEA rights "'or the means of obtaining such knowledge'") (quoting McClinton,

).

-14- Ritz-Carlton argued below that the required notices had been

posted, a factual assertion that the district court could not

credit in the context of a motion to dismiss. In addition,

appellants admit receiving Ritz-Carlton's "Ladies & Gentlemen's

Handbook," which they say contains a "general 'Equal Employment

Standard' and a 'Sexual Harassment Policy.'" If the handbook

advises employees that they have a right under Title VII to seek

redress in the event of gender or national origin discrimination,

appellants may be deemed to have notice sufficient to foreclose

equitable tolling. Their sworn statements also refer to complaints

they lodged with the hotel about discriminatory treatment. These

complaints may or may not reflect knowledge of their statutory

rights; if the handbook simply advised about company policy without

reference to the availability of legal redress, for example, these

internal complaints may signal neither actual nor constructive

knowledge of their Title VII rights.11

The next point of inquiry – appellants' diligence in pursuing

their rights – also needs factual development. Appellants did not

consult with an attorney until nearly ten months after leaving

their jobs. Appellants suggest that they were unaware for those

months that they had a right to seek redress for discrimination;

11 We note that the complaint specifically alleges that Hebert spoke to her supervisor about "the illegality of his discriminatory conduct," but the significance of this allegation needs to be assessed in context.

-15- whether their eventual visit to an attorney was prompted by new

information or reflected long-standing general awareness of a

potential claim is also relevant. Appellants met with the attorney

one day before the 300 days had run for Mercado and ten days before

it had run for Jomp, but their charges were not filed with the EEOC

until 33 days later. Did this reflect diligence under the

circumstances? See, e.g., Callowhill,

(noting that plaintiffs promptly filed charges after retaining

counsel; longest time lapse was eleven days).

These questions and others bearing on the appropriateness of

equitable relief, including possible prejudice to the defendants

and appellants' reasonableness in remaining ignorant of the 300-day

filing period, must be considered before a judgment may be made on

appellants' request for tolling. Moreover, in evaluating

appellants' claims, the district court may need to address the

unresolved issue of the start date for the filing period, a

question outside the scope of this appeal. See supra note 3. We

have given no consideration to that question and intimate no view

as to its outcome or, for that matter, its relevancy in the

particular context of this case.

-16- We therefore vacate the dismissal of appellants' claims and

remand the case for further proceedings consistent with this

opinion.12

Vacated and remanded.

12 At oral argument, appellants' attorney argued that his clients were "actively misled" by Ritz-Carlton based on facts unrelated to the failure to post notice. That view was not argued in appellants' brief, and it therefore is not before us. See, e.g., Sullivan v. Neiman Marcus Group, Inc.,

, 114 n.1 (1st Cir. 2004) (issues not raised in an opening brief on appeal are waived).

-17-