Sixth Circuit Affirms Dismissal of Race Discrimination Claims Where Newly Hired Co-Workers Were Paid More and Had More Job Related Education and Experience

Last week, the Sixth Circuit affirmed an employer’s summary judgment on race discrimination claims challenging common pay and promotional practices. Woods v. FacilitySource LLC, No. 15-3138 (6^th Cir. 2-3-16).  The Court also clarified what constitutes a Charge of Discrimination.  In affirming dismissal of the claims, the Court found that it was not discriminatory for the employer to pay new hires – with higher and more job-related college education – more than long-time employees without a college education or with only a fine arts degree.   The Court also recognized that when an employer fails to post promotional openings for Senior Account Managers, a plaintiff need not prove that he applied for a promotion in order to challenge promotions that were given to those outside his protected class.  Nonetheless, the Court found that individuals with higher levels and/or more job-related education and prior job experience were more qualified for those promotions than the plaintiffs.  Finally, while the Court found that a plaintiff – who was the only African-American manager - identified inappropriate racial comments and racial insensitivity in the workplace, it was not severe or pervasive enough to constitute a hostile work environment.   

According to the Court’s opinion, one of the plaintiffs was the employer’s only African-American supervisor and the other plaintiff was his domestic partner who alleged that he was discriminated against because of his association with the other plaintiff.  They had been hired in 2005 at approximately $10/hour, had been promoted to the positions of Account Manager and were making approximately $42,000/year at the time that they filed their Charges.  Of the 26 other Account Managers, all but one was hired after them, 12 were hired after 2010 and most were paid significantly more than them, including 11 of the newly hired managers.   The employer defended the higher salaries paid to the other Account Managers on the basis that the market after 2010 was competitive and that they needed to increase the level of college education and prior management experience required for the positions and the starting salaries.  While the plaintiffs conceded the fairness of paying more for greater education and experience, they felt that their salaries should have been increased as well to reflect their greater seniority with the employer.   During pre-trial discovery, the employer discovered that one of the plaintiffs had made misrepresentations on his job application about having a high school diploma (which he lacked) and voluntarily leaving a job from which he was actually involuntarily terminated (when he had similarly lied on a job application).

Charge of Discrimination.  The plaintiffs sent notarized letters (signed under penalty of perjury) to the EEOC and OCRC and completed intake questionnaires, but never signed or dated official Charge of Discrimination forms.  Instead, they requested and received right-to-sue letters from the EEOC and filed suit.  The district court found that they exhausted their administrative remedies because, among other things, the EEOC treated their letters and questionnaires as Charges, but the EEOC filed an amicus brief indicating that this factor was irrelevant. The Court agreed that the EEOC’s treatment of the letters and questionnaires was irrelevant, but still found that the plaintiffs had exhausted their administrative remedies because the plaintiffs had filed Charges giving notice of their allegations and requesting the agencies to take action.

Pay Discrimination.  The employer conceded that the plaintiffs had alleged a prima facie case because they were paid less than all of their fellow Account Managers.  On appeal, the employer contended that the other Account Managers were more qualified than the plaintiffs and were paid more on account of a factor other than race.  In particular, the employer increased the starting salary for the position in 2010 to reflect increased requirements for college and job-related prior experience.  This resulted in virtually all of the new hires being paid more than most of the existing Account Managers, including plaintiffs.  The Court found this to be a non-discriminatory reason: The plaintiffs’

belief that seniority should have been given equal or greater weight than educational and experiential accomplishments does not mean that the defendants were guilty of wage discrimination simply because they viewed other criteria as more germane to their salary-determination decision.

As for the other Account Managers hired before 2010 who were also paid more than the plaintiffs, the Court found that they similarly possessed greater education (i.e., college degrees) and more relevant job experience than the plaintiffs.  One of the plaintiffs did not even have a high school degree and the other had a fine arts degree, unlike business, marketing or communications majors who had higher salaries.   In other words, the court found that a fine arts degree did not justify the same amount of salary paid to co-workers with a marketing degree or business classes:

Clearly, skills gained from such a [fine arts] degree were not as immediately transferrable to Lorenzo’s job at FacilitySource as were those from the degrees obtained and courses taken by other individuals in management and business related subjects.

Promotions.  The employer promoted a few Account Managers in to Senior Account Manager positions.  Even though the plaintiffs did not apply for these promotions, the Court found this was unnecessary in light of the employer’s failure to post the positions:

[I]n failure to promote cases a plaintiff does not have to establish that he applied for and was considered for the promotion when the employer does not notify its employees of the available promotion or does not provide a formal mechanism for expressing interest in the promotion. Instead, the company is held to a duty to consider all those who might reasonably be interested in a promotion were its availability made generally known.

Nonetheless, the plaintiffs could not prevail because one of them lacked the requisite college degree and the other was less qualified than the individuals ultimately promoted due to their more relevant college courses.

Hostile Work Environment.  The plaintiff was able to identify race-based comments and that clients were rarely introduced to him during walk-arounds unless they were also African-American or specifically requested to meet with him. “When directed toward or used to describe an African-American employee, especially the sole African-American employee in a management position, such comments and conduct must be considered both inappropriate and racially insensitive.”  However, the plaintiff never explained how this conduct was so offensive that it interfered with his work.   He was ultimately fired because of dishonesty on his job application, not because of his job performance.

 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Upholds Injunction Requiring Firefighter Promotions Based on Disparate Impact from Promotional Examination

Yesterday, the Sixth Circuit Court of Appeals found that a district court did not abuse its discretion in ordering the promotion of 18 white, minority and older plaintiffs to lieutenant and captain positions in the Akron fire department. Howe v. City of Akron, No. 11-3750 (6^th Cir. 7-22-13). The plaintiffs alleged that the 2004 promotional test caused a disparate impact in promotions among minorities and officers over the age of 40 seeking a promotion to lieutenant and among white officers seeking promotion to captain. Among the interesting conclusions in the opinion, the Court relieved the plaintiffs of the burden of establishing which part of the promotional test (i.e., written multiple-choice examination, interview, oral assessment, consideration of seniority level, and written work exercise or group exercise) or element of the promotional process constituted the specific employment practice being challenged as causing the disparate impact without having to show that the elements were incapable of separation. Second, the Court permitted the plaintiffs to prevail by showing there was a disparate impact in the rate of promotions even though there was no statistical disparity in the pass rate on the promotional test because the employees were promoted in rank order of their test scores. Third, the Court found that the trial court had not been required to instruct the jury about the "unusual employer" which engages in reverse discrimination because the employer failed to object during the charge conference and because this was a disparate impact (where motive is not an issue) instead of a disparate treatment case (where motive is an issue). Fourth, because, among other things, the City failed to suggest how to distinguish between worthy and unworthy plaintiffs, there was no abuse of discretion in ordering promotions even though the City had not budgeted for so many promotions and each of the plaintiffs only had a 29% chance of being promoted in the absence of discrimination. Fifth, a delay in promotions necessarily constitutes irreparable injuries to firefighters and back pay is not a sufficient remedy where the lack of experience from a non-promotion will adversely affect the plaintiffs in the next round of promotions. The Court also refused to consider harm to minority non-plaintiff employees who scored higher on the test and would be bypassed by the court-ordered promotions.

 According to the Court's opinion, the liability case was tried in 2008 to a jury, which found the City to have unlawfully discriminated against the 23 plaintiffs – 12 white captain candidates on the basis of race, 8 lieutenant candidates on the basis of age and 3 African-American lieutenant candidates on the basis of age and race. Although the Chief was permitted to interview candidates and select from among a ranked list of the top candidates for each promotion, he always selected the person with the highest test score. There was no statistical disparity in the pass rates on the exam, but there was a statistical disparity in the rate of promotions. Upon the commencement of the litigation, the City stopped making regular promotions off the list and, by July 2011, the Court concluded that there were 25 available vacancies in which to promote the successful plaintiffs and ordered the promotions of 18 plaintiffs. The City appealed the order. The Court also held a new trial on damages in November 2012 and indicated that it might reconsider the injunctive order to promote the plaintiffs. However, no final judgment has been rendered to date.

 In a Title VII case, the plaintiff-employee must make out a prima facie case wherein he identifies "a particular employment practice" that "caused a significant adverse effect on a protected group."

The City argues, citing Grant v. Metro. Gov't of Nashville and Davidson Cnty., 446 F. App'x 737 (6th Cir. 2011), that the district court erred as a matter of law by permitting Plaintiffs to identify the promotional process in its entirety as a specific employment practice without requiring Plaintiffs to first show that the elements of the process were incapable of separation. According to the City, the only employment practices identified by Plaintiffs were the promotional exams, which cannot be said to have had an adverse impact because comparing pass rates did not demonstrate disparate impact based on race or age.

The Court disagreed: "The challenged promotional process in this case is easily distinguishable from that in Grant. Here, the City promoted candidates in rank-order by score results (where the score was the sum of the candidate's exam score plus seniority)."
 
The City next argued that it was an error to allow Plaintiffs to demonstrate an adverse effect from the examination by applying the "four-fifths rule" to the rate of promotions instead of to the exam pass rates. (This rule provides that "[a] selection rate for any race, sex, or ethnic group which is less than four-fifths . . . of the rate for the group with the highest rate" be "generally . . . regarded . . . as evidence of adverse impact." 29 C.F.R. § 1607.4 (D)). "Because we agree with the district court that the promotional process in this case constitutes a specific employment practice, we must also agree that the outcomes of that practice—promotion rates—are the proper metric for determining "adverse effect" or lack thereof." The City did not dispute that application of the rule showed a disparate impact in the promotion rates of minorities and older employees to the lieutenant position. While the City argued that the rule should have been applied to the pass-fail ratios from the examination, the plaintiffs successfully argued that this would be inappropriate where the applicants are promoted based on their test score. The Court refused to follow its prior unpublished decision in United Black Firefighters Ass'n v. City of Akron, 81 F.3d 161, at *2 (6th Cir. 1996) where it noted that the "District Court properly looked to the examination pass rate for black candidates, not the number of actual promotions . . . ."). Moreover, the Court found that the City's use of the "rule of three" (where the top three candidates were considered for each promotion) did not make a difference here where the Chief always promoted the candidate with the top score.
 
The City also disputed that there was any unlawful disparate impact based on race in the captain promotions. It challenged the trial court's refusal to instruct the jury that the plaintiffs must prove that the City was the "unusual employer" that engaged in reverse discrimination. However, the Court found that this objection was waived by not raising it during the charge conference even though it had raised this argument at the summary judgment stage. Moreover, the Court explained that it has had misgivings about the "unusual employer" rule and had never applied it in a disparate impact case where motive – unlike in disparate treatment cases – is irrelevant.
 
While the Court was sympathetic to the City's argument that not all of the plaintiffs would have been promoted in the absence of discrimination, all of them had proven a likelihood to prevail on the merits. 
 

Assuming, for argument's sake, that the City correctly estimates that the average candidate in this case would have only a 29% chance of promotion, there is no way for the district court to give each candidate 29% of a promotion while waiting for a final judgment. Additionally, the City has provided no basis on which to distinguish between worthy and unworthy Plaintiffs.

Given that Plaintiffs have demonstrated a substantial likelihood of success on the merits as to liability and there is no way to provide a partial injunctive remedy, there is a sufficient likelihood of success as to individual promotions to warrant a preliminary injunction.

The Court also rejected the City's argument that the plaintiffs had failed to show irreparable injury because of a possible award of back pay. "Among other things, the district court noted that, without promotions, Plaintiffs will be unable to gain experience and unable to seek the next rank during the following round of testing." Moreover, "this Court has previously found that promotion delays constitute irreparable injury for firefighters."

 The Court also rejected the City's argument that 10 minority non-plaintiff officers would be harmed by promoting 8 older, white plaintiffs officers ahead of them because the City failed to explain whether the 10 non-plaintiffs would be promoted in the absence of the Court's order and because the City failed to prove that the harm would be caused from the Court's order rather than its own inaction in halting all promotions during the pendency of the litigation.

 NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

 

When Failing to Preserve Employment Records Constitutes a Separate Claim for Spoilation of Evidence.

Last month, the Ohio Court of Appeals ruled that an employer’s failure to preserve evidence of its hiring/promotion process (including rating sheets, job applications, interview notes, etc.) which began less than two years before the initiation of litigation could give the disappointed plaintiff a separate claim for spoliation of evidence. This was particularly true when the employer was a government entity required by the Ohio Public Records laws to preserve such records for a longer period than required of private sector employers. Mitchell v. Lemmie, 2007-Ohio-5757 (10/24/07).

In that case, the plaintiff was, without explanation, denied a promotion to divisional manager even though he had the recommendations of his superiors in mid-1999 and even after he was the only remaining candidate from the short list recommended to the city manager in late 1999. After he was passed over twice for the promotion, he ultimately retired and then filed suit in December 2001 within two years of the denial of the promotion after an African-American female with arguably lesser qualifications was hired for the position in a non-competitive process. The original lawsuit was voluntarily dismissed by the plaintiff in early 2004 and then refiled in April 2004 with discovery requests. In these and later discovery requests, he sought information about all of the candidates which had applied and been considered for the position through four different searches to fill the position. He also sought information about the City Manager’s computer outlook calendar. However, the employer denied that these records had been preserved.

The plaintiff pursued many motions to compel discovery and pointed out that the employer had maintained the same sort of records for another job search conducted during the same time period, but claimed that it could not find the relevant documentation involving the position he had sought. The employer contended that it had produced all relevant documentation, but then produced new evidence only a week before trial that contradicted prior deposition testimony by a witness. When the employer failed to produce the requested documents, the plaintiff moved to amend his complaint to add a claim for spoliation of evidence (since the missing evidence could support his claims of discrimination).

Ohio recognizes a claim for spoliation of evidence, which is based on statutory and common laws prohibiting willful or negligent destruction of evidence. The employer argued that it had no duty to maintain any of the requested documents after filling the divisional manager position. However, a duty arises once litigation becomes probable or has actually been initiated. (In addition, various employment statutes require the preservation of these types of records for one to two years after they are created and/or the position is filled). Fatal for the defendant employer’s explanation is the fact that its explanation was not consistent with Ohio’s public records laws.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with an attorney.