Clara Watson v. Fort Worth Bank & Trust , 798 F.2d 791 ( 1986 )

JOHNSON, Circuit Judge:

Plaintiff-appellant Clara Watson appeals from the district court’s judgment in favor of defendant-appellee Fort Worth Bank & Trust in Watson’s Title VII and Civil Rights action alleging discrimination on the basis of race. 42 U.S.C. § 2000e et seq; 42 U.S.C. § 1981. For the following reasons, this Court affirms the judgment of the district court in part, but vacates the district court’s judgment regarding the applicant class claims.

I. FACTS

Fort Worth Bank & Trust (“the Bank”) hired Watson in August of 1973. as a proof operator. The Bank promoted Watson to the position of teller trainee approximately two years later. After a two to three month training period, Watson became a teller in the Bank’s motor bank in January of 1976. Subsequently, the Bank transferred Watson to the Bank’s main lobby and later promoted Watson to the position of commercial teller on February 2, 1980.

Over the course of the next year, Watson unsuccessfully applied for four different promotions. First, in February of 1980, Watson unsuccessfully applied for promotion to the position of supervisor of tellers, which became vacant due to the resignation of assistant cashier Brian England. Watson; Richard Burt, a white male who was then the supervisor of the bookkeeping department; Gail Levitt, a white female who was then supervisor of motor bank tellers; and Pat Cullar, a white female who was then a commercial teller, all applied for the position. Gary Shipp, senior vice president and cashier at the Bank since 1977 and the person to whom the supervisor of tellers reported, selected Richard Burt as England’s replacement.¹ Second, Watson unsuccessfully applied for promotion to the position of motor bank teller supervisor. Watson, Pat Cullar, and four or five other persons applied for the position vacated by Gail Levitt. Pat Cullar received the promotion.² Third, Watson unsuccessfully applied a second time for the position of lobby teller supervisor when the Bank again promoted Burt. Watson, Cullar, Sylvia Hardin, a black female commercial teller, and Patsy Weatherly, a white female who was then supervisor of the proof department, all applied for the position. Burt chose Cullar. Fourth, as a result of Cullar’s second promotion, the position of motor bank teller, supervisor again became vacant, and Watson unsuccessfully applied for the position. Other applicants included Hardin and Kevin Brown, a white male teller in the motor bank. Based on Cullar’s recommendation, Burt selected Brown for the position.³

Watson took a leave of absence from work in January 1981 in order to undergo foot surgery. She applied for the last two described promotions while on sick leave. Watson did not return to work after January of 1981, and she subsequently resigned in August of 1981.

II. PROCEDURAL HISTORY

After exhausting her administrative remedies, Watson timely filed the instant suit on October 21,1981, alleging that the Bank discriminated against her and other similarly situated persons on the basis of race in violation of 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.⁴

After conducting an evidentiary hearing on the class certification issue, the district court certified a class consisting of “blacks who applied to or were employed by defendant on or after October 21, 1979 or who may submit employment applications to defendant in the future.” Subsequently, the district court decertified the broad class of employees and applicants because the district court concluded, in light of all the evidence at trial, that there was not “a common question of law or fact between the unsuccessful black applicants and those blacks employed by the Bank.” The district court then split the class into two distinct classes consisting of (1) black applicants and (2) black employees. The district court further found that the class of black employees did not meet the numerosity requirement of Rule 23(a) and decertified the employee class.

On the merits, the district court concluded first that although Watson demonstrated a prima facie case of discrimination, she failed to demonstrate that the Bank’s articulated reasons for failing to promote her were pretextual. The district court then addressed the claims of the applicant class holding that Watson’s statistical evidence failed to present a prima facie case of discrimination in hiring because the percentage of blacks in the Bank’s work force mirrored the percentage of blacks in Tar-rant County, Texas, and the Fort Worth metropolitan area, citing Hazelwood School District v. United States, 433 U.S. 299, 97 S.Ct. 2736, 53 L.Ed.2d 768 (1977).

On appeal, Watson challenges the district court’s decertification of the broad class composed of both applicants and employees and further challenges the district court’s resolution of both her individual claim and the claims of the applicant class. For the following reasons, this Court affirms the judgment of the district court in part, but vacates the district court’s judgment regarding the applicant class claims, remanding solely for the district court to dismiss the applicant class claims without prejudice.

III. CLASS CERTIFICATION

A district court’s class certification order is reviewed under an abuse of discretion standard. Jenkins v. Raymark Industries, Inc., 782 F.2d 468, 472 (5th Cir.1986). Even after initial certification, a district court may determine that certification was improvidently granted, and a district court remains free to decertify, sub-classify or modify the class certification previously entered. Fed.R.Civ.P. 23(c)(1); General Telephone Company of the Southwest v. Falcon, 457 U.S. 147, 160, 102 S.Ct. 2364, 2372, 72 L.Ed.2d 740 (1982).

Prior to the Supreme Court’s decision in Falcon, this Court permitted a plaintiff alleging race discrimination to assert an “ ‘across the board’ attack on all unequal employment practices alleged to have been committed by the employer pursuant to a policy of racial discrimination.” 457 U.S. at 152; 102 S.Ct. at 2367. See, e.g., Johnson v. Georgia Highway Express, Inc., 417 F.2d 1122, 1124 (5th Cir.1969). In Falcon, the Supreme Court curtailed that practice holding that it was error for the district court in that case to certify a class of both applicants and employees because the district court erroneously presumed, without a specific presentation, that the requirements of Fed.R.Civ.P. 23 were met. “[W]e reiterate today that a Title VII class action, like any other class action, may only be certified if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied.” 457 U.S. at 161, 102 S.Ct. at 2372.⁵

Falcon, however, does not foreclose all classes composed of applicants and employees. 457 U.S. at 159 n. 15; 102 S.Ct. at 2371 n. 15.⁶ See, e.g., Vuyanich v. Republic National Bank, 723 F.2d 1195, 1199-1200, rehearing denied, 736 F.2d 160 (5th Cir.), cert. denied, — U.S.—, 105 S.Ct. 567, 83 L.Ed.2d 507 (1984); Richardson v. Byrd, 709 F.2d 1016, 1019-20 (5th Cir.), cert. denied, 464 U.S. 1009, 104 S.Ct. 527, 78 L.Ed.2d 270 (1983). The “entirely subjective decisionmaking process” articulated in Footnote 15 presents one factual situation in which a putative class might meet the requirements of Rule 23(a). Chief Justice Berger, in his concurring and dissenting opinion, suggests another: Rule 23(a) might be met upon a showing that “the same person or persons who made the challenged decisions were motivated by prejudice against [the protected class], and that this prejudice manifested itself in both the hiring decisions and the decisions not to promote [members of the class].” 457 U.S. at 162 & n., 102 S.Ct. at 2373 & n.

In the instant case, the district court relied on the Chief Justice’s opinion to certify a class composed of both applicants and employees. After the evidentiary hearing, the district court found that a single individual, Gary Shipp, was responsible for both hiring and promotion decisions. That fact, the district court reasoned, satisfied the commonality requirement for a class composed of both applicants and employees. After the trial on the merits, however, the district court concluded that Shipp’s role was more limited. The evidence at trial demonstrated that a limited group of white department supervisors made all hiring and promotion decisions, as well as employee evaluations used to compute compensation, and that upper management routinely approved those decisions. As a result, the district court concluded that Watson failed to show the existence of common questions between the applicants’ and employees’ claims because the same individual was not responsible for both hiring and promotion decisions.

Watson asserts the district court erred because the commonality requirement may be satisfied by a showing that the same persons make both types of decisions. Assuming, arguendo, that Watson is correct, this Court’s inquiry does not end with that conclusion. We cannot conclude that certification of a class of both employees and applicants is mandated merely because common questions exist.⁷ Rather, the other factors enunciated in Rule 23(a) also must be considered.

Thus, assuming a common question was presented in the instant case, e.g., whether the same limited group of white supervisors discriminated in both hiring and promotions, that common question was not in fact a central feature in the actual proof presented at trial. The applicant class claims relied primarily on applicant flow statistics. In contrast, the proof asserted in support of the promotions claims focused on statistical evidence of the Bank’s treatment of black individuals in the employee evaluation process, promotions process, compensation process and other employment practices. Consequently, the actual proof presented demonstrates that Watson’s promotion claim was not typical of the applicant class claims, and she was not an adequate class representative.⁸

This Court concludes that it was not an abuse of discretion for the district court to decertify the class because, as a practical matter, the “maintenance of [Watson’s] action as a class action did not advance ‘the efficiency and economy of litigation which is a principal purpose of the procedure.’ ”⁹ Falcon, 457 U.S. at 159, 102 S.Ct. at 2371 (quoting American Pipe & Construction Co. v. Utah, 414 U.S. 538, 553, 94 S.Ct. 756, 766, 38 L.Ed.2d 713 (1974)). As the actual proof at trial demonstrated, the hiring and promotion claims might well have been tried separately, id., and it was not an abuse of discretion to so proceed.¹⁰

IV. WATSON’S INDIVIDUAL CLAIM OF DISCRIMINATION

The district court analyzed Watson’s individual claim of discrimination under the test enunciated in Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981), and McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). Under this test, the district court ultimately concluded that Watson was not the victim of racial discrimination.

As an initial matter, Watson asserts that the district court erred in not applying disparate impact analysis to her claims of discrimination in promotion.¹¹ Contrary to Watson’s position on appeal, this Court’s recent precedent establishes that a Title VII challenge to an allegedly discretionary promotion system is properly analyzed under the disparate treatment model rather than the disparate impact model. See, e.g., Lewis v. NLRB, 750 F.2d 1266, 1271 & n. 3 (5th Cir.1985); Carroll v. Sears, Roebuck & Company, 708 F.2d 183, 188 (5th Cir.1983); Carpenter v. Stephen F. Austin State University, 706 F.2d 608, 620 (5th Cir.1983); Pouncy v. Prudential Insurance Co., 668 F.2d 795, 800 (5th Cir. 1982).¹² Having decided to decertify the class, the district court then properly treated Watson’s claim as an individual disparate treatment claim, and the court correctly analyzed this claim under the Green model.

Both Watson and the dissent urge that we analyze this case under a different model. Given our approval of the district court’s decision to decertify the class, however, this suggestion is unavailing.

This is not to say, however, that the plethora of statistics which Watson introduced at trial, and upon which the dissent so heavily relies, are irrelevant in an individual disparate treatment case. Not only may the statistics be relevant at the initial stage of the litigation in establishing a prima facie case of discrimination,¹³ but they are "also relevant at the third stage of analysis when the plaintiff is attempting to prove that the reasons proffered by the defendant for its action are either unworthy of credence or mere pretexts for discrimination. See, e.g., Green, 411 U.S. at 804-05, 93 S.Ct. at 1825. In this case, the district court did not decide to decertify the class until after the trial had been completed and all the statistical evidence had been introduced. Much of the evidence, of course, was related primarily to the plaintiff’s class claims. Even once the class claims dropped from the suit, however, the data retained relevance to the plaintiffs individual claim since it continued to bear on the veracity of the defendant’s explanations for its promotion decisions.¹⁴

After hearing all the evidence, including the statistical evidence, the district court concluded that the reasons offered by the Bank were not pretextual. We judge this holding under the clearly erroneous standard. Pullman-Standard v. Swint, 456 U.S. 273, 102 S.Ct. 1781, 72 L.Ed.2d 66 (1982). We conclude that the district court’s finding that the Bank’s explanations for its action were not pretexts for discrimination is not clearly erroneous. The district court’s finding will not be set aside unless this Court on the entire evidence is left with the “definite and firm conviction that a mistake has been committed.” United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed.2d 746 (1948). “Where there are two permissible views of the evidence, the fact-finder’s choice between them cannot be clearly erroneous.” Anderson v. City of Bessemer City, 470 U.S. 564, 105 S.Ct. 1504, 1512, 84 L.Ed.2d 518 (1985).

Watson challenges the district court’s ultimate finding of no discrimination on three specific grounds: (1) that the district court erroneously relied on the Bank’s subjectively administered performance evaluations, which Watson asserts were proven to be racially biased, (2) that the district court erroneously relied on a reason not articulated by the Bank for its failure to promote her, and (3) that the district court erroneously considered a series of articulated qualifications for promotion which were inconsistent, contradictory, and therefore incredible.

The district court specifically credited the Bank’s assertion that it promoted Burt and Cullar rather than Watson because in all three instances Watson had less experience or supervisory experience than the individual chosen for promotion. Although the district court noted that Burt received excellent performance evaluations and that Cullar’s and Watson’s ratings were comparable, the district court clearly placed primary emphasis on Burt’s and Cullar’s experience in finding no discrimination and little emphasis on the employee evaluations. This Court cannot say that the district court’s ultimate finding was clearly erroneous.

This Court is more troubled by the Bank’s promotion of Brown because Brown clearly had less experience than Watson. The district court noted that Cullar highly recommended Brown for the promotion, relying on his performance as a teller and as her assistant. In addition, the Bank relied on Brown’s experience supervising temporary employees at Six Flags Over Texas! Finally, the district court noted that Watson was on sick leave when the position became vacant and Brown, in contrast, was available immediately. The Bank, however, failed to urge this last reason as a basis for its failure to promote Watson. Disregarding this basis for upholding the district court’s decision, the record nevertheless still supports “two permissible views of the evidence.” Specifically, even though the reasons articulated for Brown’s promotion are somewhat inconsistent with the Bank’s articulated reasons for Burt’s and Cullar’s promotions, the district court clearly credited the Bank’s explanation. We do not find any inconsistency to be so striking as to make the Bank’s proffered reasons incredible. Consequently, this Court holds that the finding regarding the Brown promotion is not clearly erroneous.

V. THE APPLICANT CLASS CLAIMS

After concluding that Watson was not an adequate representative of the applicant class because her promotion claims were not typical of the applicant claims, the district court nevertheless chose to address the merits of the applicant • claims. The district court found that Watson failed to present a prima facie case of race discrimination in hiring because the percentage of blacks in the Bank’s work force mirrored the percentage of blacks in the population of Tarrant County and the Fort Worth metropolitan area.

Rather than address the correctness of the district court’s reliance on population figures rather than applicant flow data, and we note parenthetically our grave concerns with the district court’s approach, see Payne, 673 F.2d at 823-24, this Court vacates the judgment of the district court as it relates to the applicant class claims. The case is remanded to the district court to dismiss the applicant claims without prejudice. We note the unfair prejudice that might flow from a determination of the class claims when both the district court and this Court have held that the named plaintiff is not a proper class representative. Vuyanich, 723 F.2d at 1200; Wheeler v. City of Columbus, 703 F.2d 853, 855 (5th Cir.1983). See also Goodman v. Lukens Steel Co., 777 F.2d 113, 125 (3d Cir. 1986).¹⁵

VI. CONCLUSION

This Court finds no abuse of discretion in the district court’s class decertification decision. In addition, this Court affirms the district court’s conclusion that Watson was not the victim of racial discrimination. Finally, this Court vacates the district court’s judgment as it relates to the applicant class claims and remands the case to the district court to dismiss those applicant class claims without prejudice. The judgment of the district court is

AFFIRMED IN PART, VACATED IN PART, AND REMANDED.

1 . The Bank hired Burt in May of 1976 as a part time motor bank teller. At the time, Burt was a full time student. Burt became a full time employee in January of 1977, working first in the general ledger department for one year, then as a credit analyst for six months, and finally as supervisor of the bookkeeping department from 1979 until his promotion to supervisor of tellers. Burt obtained a bachelor’s degree in banking and finance in May of 1980.

2 . Both Watson and Cullar were commercial tellers when the position of motor bank teller supervisor became vacant. Watson had six and one-half years’ experience with the Bank while Cullar had worked for the Bank for only two and one-half years. Cullar, however, had almost eighteen years of experience in banking at another bank, with more than sixteen years of experience in the teller areas. Cullar and Watson scored comparably on the Bank’s 104 point job performance evaluation: Watson scored 70 and Cullar scored 72.

3 . The Bank hired Brown as a part time teller in October of 1979. He became a full time teller in May of 1980 and served as Cullar’s assistant for six months. His previous experience included seven months as a sales person at a department store and approximately four years’ experience at Six Flags Over Texas, which included some work supervising teenage seasonal employees.

4 . In this Circuit, specific consideration of an alternate claim under § 1981 is necessary only if its violation is made out on grounds different from those available under Title VII. Watson does not assert such differences, and the elements of a substantive claim of employment discrimination under § 1981 parallel the elements of a Title VII claim. Page v. U.S. Industries, Inc., 726 F.2d 1038, 1041 n. 2 (5th Cir. 1984); see Rivera v. City of Wichita Falls, 665 F.2d 531, 534 n. 4 (5th Cir.1982).

5 . Federal Rule of Civil Procedure 23(a) provides:

One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

Courts commonly refer to these criteria as the requirements of numerosity, commonality, typicality, and adequacy of representation.

In addition, a class action must meet one of the provisions of Rule 23(b). In this case, the district court certified the class as a Rule 23(b)(2) class finding that "the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby milking appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole[.]” Fed.R.Civ.P. 23(b)(2).

6 . In footnote 15, the Supreme Court stated:

Significant proof that an employer operated under a general policy of discrimination conceivably could justify a class of both applicants and employees if the discrimination manifested itself in hiring and promotion practices in the same general fashion, such as through entirely subjective decisionmaking processes.

7 . The issue in the instant case is not whether it was correct for the district court to initially certify a broad class of both applicants and employees or whether this Court would have affirmed that certification on appeal. This Court expressly declines to address the question whether a class of applicants and employees would have been permissible under the facts of this case. Rather, the sole question presented is whether the facts of this case mandate a class of both applicants and employees. This Court concludes that the facts of the instant case do not mandate such class treatment.

8 . As the Supreme Court noted in Falcon, the commonality, typicality, and adequacy of representation requirements of Rule 23(a) tend to merge. All focus on whether a class action is an economical method of adjudicating the claims and whether the plaintiff’s claims and class claims are "so interrelated that the interests of the class members will be fairly and adequately protected in their absence.” 457 U.S. at 157 & n. 13; 102 S.Ct. at 2370 & n. 13. In holding that typicality cannot be presumed absent a specific showing identifying common questions of law or fact, the Supreme Court focused on the evidentiary approaches necessary to sustain the individual as compared to the class claims. 457 U.S. at 159, 102 S.Ct. at 2371. See also Lilly v. Harris-Teeter Supermarket, 720 F.2d 326, 334 (4th Cir.1983), cert. denied, 466 U.S. 951, 104 S.Ct. 2154, 80 L.Ed.2d 539 (1984) (although claims of individual and class wide discriminatory termination overlapped on several important pieces of proof with claims of discrimination in promotions, the district court properly denied broad class certification because promotions claims raised significant issues of proof separate from those evidentiary issues implicated by the termination claims).

9 . Contrary to the assertion of the dissent, this Court does not hold that the actual proof on behalf of the applicant and employee claims must be identical in order to maintain a class action composed of both applicant and employee claims. Rather, we hold only that a class action should advance the efficiency and economy of the litigation and the complete failure of the actual proof to overlap to any significant degree leads this Court to conclude that it was not an abuse of discretion to separately try the employee and applicant claims

10 . Although Watson raises the point only in her reply brief, this Court concludes that the district court did not abuse its discretion in determining that the employee class failed to meet the numerosity requirement of Rule 23(a).

11 . A plaintiff may bring a Title VII action under either the disparate treatment theory or disparate impact theory of recovery. Under the disparate treatment theory, a class must prove the existence of a pattern and practice of discrimination. International Brotherhood of Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977). A disparate treatment theory requires proof of discriminatory intent, which must be established by either direct or circumstantial evidence. In contrast, the disparate impact theory does not require proof of discriminatory intent. Rather, the plaintiff must show that a facially neutr.al employment practice has the result of producing a significantly adverse impact on one race. Id.; Dothard v. Rawlinson, 433 U.S. 321, 329, 97 S.Ct. 2720, 2726, 53 L.Ed.2d 786 (1977); Walls v. Mississippi State Department of Public Welfare, 730 F.2d 306, 315, 321-22 (5th Cir.1984); Page, 726 F.2d at 1045.

12 . See also Walls, 730 F.2d at 321-22; Vuyanich, 723 F.2d at 1201-02; Pegues v. Mississippi State Employment Service, 699 F.2d 760, 765 (5th Cir.), cert. denied, 464 U.S. 991, 104 S.Ct. 482, 78 L.Ed.2d 679 (1983); Payne v. Travenol Laboratories, Inc., 673 F.2d 798, 817 (5th Cir.), cert. denied, 459 U.S. 1038, 103 S.Ct. 451, 74 L.Ed.2d 605 (1982).

But see Page, 726 F.2d at 1046 (district court did not err in evaluating subjective promotional system under disparate impact model). Watson relies heavily on Page for the proposition that disparate impact analysis is appropriate in the instant case. As stated by this Court in Carpenter, ‘Were this a case of first impression in this court, we would likewise have concluded that the other [challenged practices] ... fell clearly under the disparate impact model, ... since they ‘limit, segregate, or classify1 employees in a manner that 'would deprive or tend to deprive any individual of employment opportunities ...’ because of race____" 706 F.2d at 620. Nevertheless, this is not a case of first impression, and this Court is constrained by Pouncy and its progeny to apply disparate treatment analysis to Watson’s claims.

13 . Other courts have held that an individual Title VII plaintiff may establish a prima facie case of racial discrimination by the use of statistics alone. See, e.g., Davis v. Califano, 613 F.2d 957, 962 (D.C.Cir.1980) (‘‘[S]tatistical evidence may establish a prima fade case of employment discrimination in an individual case.”); Reed v. Lockheed Aircraft Corp., 613 F.2d 757, 762 (9th Cir.1980) (following Davis ); Chrisner v. Complete Auto Transit, Inc., 645 F.2d 1251, 1259 & n. 7 (6th Cir.1981) (following Davis). Cf. Carmichael v. Birmingham Saw Works, 738 F.2d 1126, 1131 (11th Cir.1984) ("Statistics can be relevant and important in an individual case____ But statistics alone cannot make a case of individual disparate treatment.”). We need not decide this issue since Watson established a prima facie case under Green without relying exclusively on statistical data. Moreover, statistics are indisputably relevant in an individual Title VII case at the third stage of the litigation: when the plaintiff attempts to establish pretext. See, e.g., Green, 411 U.S. at 804-05, 93 S.Ct. at 1825. Thus, in this case, the statistical data which Watson presented remained pertinent even though the class was eventually decertified. There is no indication in the record, nor is there any suggestion — either by Watson or the dissent — that the district court neglected to consider the statistical evidence presented by Watson in terms of evaluating the credibility of the Bank’s proffered explanations for its promotion decisions.

14 . We should also point out that, given our instructions infra in Part V, the statistical evidence might also be relevant in any class action brought in the future by the class of applicants.

15 . As did the district court, this Court notes that equity requires that no black applicant within the relevant time period be barred from filing suit alleging individual claims or class claims as a result of reliance on the pending class action. Accordingly, the district court may enter any orders on remand it deems necessary to protect the claims of black applicant class members.