DocketNumber: 51117-9
Judges: Durham, Dolliver, Dore, Callow, Goodloe, Hamilton, Tern, Pearson, Utter, Brachtenbach
Filed Date: 11/21/1985
Status: Precedential
Modified Date: 11/16/2024
Pay 'n Save Corporation appeals from a judgment entered upon a jury verdict finding it liable, pursuant to RCW 49.60, for discriminating against Iris Shannon in employment because of her gender. Pay 'n Save Contends that the trial court erred by: (1) submitting Shannon's theory of disparate impact to the jury, (2) allowing Shannon to introduce statistical evidence at trial, (3) refusing to find that a juror's statements constituted misconduct requiring a new trial, and (4) awarding Shannon $40,267 in attorney fees. Alternatively, Pay 'n Save argues that even if the trial court was justified in submitting the disparate impact theory to the jury, it misstated the theory in its jury instructions. Shannon cross-appeals contending that the trial court erred by denying her the injunctive relief of
In 1966, Shannon began working as a receiving clerk for Ernst Hardware, a division of Pay 'n Save. Eight years later, she became the first woman promoted to the position of assistant manager at an Ernst store.
The standardized evaluation form used to evaluate Shannon was developed pursuant to a consent decree entered into by Pay 'n Save in 1976. The consent decree evolved out of litigation instituted by a class of female Pay 'n Save employees who claimed that Pay 'n Save's promotion policies discriminated against them in violation of Title VII of the Civil Rights Act of 1964. The decree required Pay 'n Save to develop formal criteria for promotion to the department head category. Accordingly, Pay 'n
Pay 'n Save, however, does not rely solely on the evaluation form in determining promotions to the store manager level. After the evaluation form stage, the store manager meets with a district and a division manager to discuss the evaluation. All district managers then confer, revise the store manager's evaluations, and from these revised evaluations, identify candidates for promotion.
In 1980, Iris Shannon filed the action that is the subject of this appeal, claiming that Pay 'n Save violated RCW 49.60
Although it did not employ an expert, Pay 'n Save introduced evidence that Shannon could not get along with subordinates, was dictatorial in her managerial style, and had to be suspended for a week in 1977 because of misconduct. In short, Pay 'n Save maintained that Shannon was not
The jury returned a verdict which awarded Shannon $20,000 in damages. The trial court then granted her $40,267 in attorney fees and $1,000 in punitive damages.
Both Pay 'n Save and Shannon made post-trial motions. Pay 'n Save moved for a new trial based upon juror misconduct. In Shannon's post-trial motion, she moved to amend her pleading to include the equitable relief of reinstatement. The trial court ordered Pay 'n Save to consider Shannon for promotion, but refused to order reinstatement. The court also denied Pay 'n Save's motion for a new trial. From the judgment entered by the trial court, Pay 'n Save appeals and Shannon cross-appeals.
Prior to evaluating Pay 'n Save's contentions on appeal, we first review some well established principles of employment discrimination law.
Two theories, "disparate impact" and "disparate treatment," are available to a plaintiff attempting to prove discrimination in employment pursuant to RCW 49.60. Fahn v. Cowlitz Cy., 93 Wn.2d 368, 378, 610 P.2d 857, 621 P.2d 1293 (1980); see also Furnco Constr. Corp. v. Waters, 438 U.S 567, 57 L. Ed. 2d 957, 98 S. Ct. 2943 (1978). "'Disparate treatment' ... is the most easily understood type of discrimination. The employer simply treats some people less favorably than others because of their race, color, religion, sex, or national origin." International Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n.15, 52 L. Ed. 2d 396, 97 S. Ct. 1843 (1977). To establish a prima facie case of employment discrimination under a "disparate treatment" theory, the plaintiff must show that: (1) he belongs to a protected class, (2) he applied and was qualified for a job for which the employer was seeking applicants, (3) he was rejected for the position, and (4) after his rejection the position remained open and the employer continued to seek qualified applicants. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973).
[T]he prima facie case "raises an inference of discrimination only because we presume these acts, if otherwise*727 unexplained, are more likely than not based on the consideration of impermissible factors."
Texas Dep't of Comm'ty Affairs v. Burdine, 450 U.S. 248, 254, 67 L. Ed. 2d 207, 101 S. Ct. 1089 (1981) (quoting Furnco, 438 U.S. at 577).
Once the plaintiff establishes a prima facie case, the defendant must produce some evidence that the rejection of the plaintiff's application was due to a legitimate nondiscriminatory reason. Texas Dep't of Comm'ty Affairs v. Burdine, supra. The plaintiff then must be afforded the opportunity to show that the defendant's asserted justification was a mere pretext for discrimination. McDonnell Douglas Corp., 411 U.S. at 804. The plaintiff in a disparate treatment case retains the burden of proof throughout the trial. United States Postal Serv. Bd. of Governors v. Aikens, 460 U.S. 711, 75 L. Ed. 2d 403, 103 S. Ct. 1478 (1983). He succeeds in meeting this burden by showing that a discriminatory reason more likely than not motivated the employer. Aikens, at 716.
Unlike disparate treatment, the disparate impact theory enables a plaintiff to address the consequences of seemingly objective employment practices by allowing the plaintiff to prevail in an employment discrimination suit without establishing discriminatory motive. Griggs v. Duke Power Co., 401 U.S. 424, 432, 28 L. Ed. 2d 158, 91 S. Ct. 849 (1971). Thus, a disparate impact analysis requires a plaintiff to prove: (1) a facially neutral employment practice, (2) falls more harshly on a protected class. International Bhd. of Teamsters, 431 U.S. at 336. Once the plaintiff establishes the prima facie case, the burden shifts to the defendant to show that the challenged requirement has a "manifest relationship" to the position in question. Griggs, at 432. If the employer meets this burden, the plaintiff may still prevail by showing that other less discriminatory alternatives can equally serve the employer's legitimate business requirements. Albemarle Paper Co. v. Moody, 422 U.S. 405, 425, 45 L. Ed. 2d 280, 95 S. Ct. 2362 (1975); Fahn v. Cowlitz Cy., 93 Wn.2d 368, 380, 610 P.2d 857, 621 P.2d 1293 (1980).
In determining whether plaintiff has met her burden of proof of showing that defendant's promotional procedures disparately impact women Assistant Managers and favors male Assistant Managers for promotion to Store Manager, you are instructed that if the selection rate for women to Store Manager is less than four-fifths (4/5) or eighty percent (80%) of the rate for men, it is evidence that women are disparately impacted because of sex unless defendant can prove that promotional procedures are job related.
(Italics ours.)
This instruction is based on 29 C.P.R. § 1607.4(D) (1984), an Equal Employment Opportunity Commission (EEOC) Guideline common referred to as the "four-fifths rule." Although EEOC Guidelines are generally entitled to deference, we refuse to incorporate this rule as a substantive part of discrimination law in Washington for two independent reasons.
First, the presence of discrimination is ultimately a factual question. See Page v. U.S. Indus., Inc., 726 F.2d 1038, 1044 (5th Cir. 1984); Pullman-Standard v. Swint, 456 U.S. 273, 72 L. Ed. 2d 66, 102 S. Ct. 1781 (1982).
The right of trial by jury entitles every party to the judgment of the jury as to the ultimate facts upon which liability rests, and it is essential that the jury be left perfectly free to form and declare from the evidence their opinion upon the questions of fact.
(Italics ours.) Webb v. Seattle, 22 Wn.2d 596, 611, 157 P.2d 312, 158 A.L.R. 810 (1945). Instead of freeing the jury to determine whether discrimination exists, the four-fifths rule binds it to a rigid mechanistic formulation. In addition, the formulation itself has been criticized for having neither a substantive nor statistical basis. Cormier v. P.P.G. Indus., Inc., 519 F. Supp. 211, 255 (W.D. La. 1981), aff'd, 702 F.2d 567 (5th Cir. 1983). Indeed, the EEOC clearly states that the four-fifths rule is " not a legal definition of discrimina
Second, the four-fifths rule is also objectionable because it focuses the jury's attention on one specific type of statistical comparison. An instruction based on the rule, therefore, violates what
has, for some years, been the policy of our Washington system of jurisprudence, in regard to the instruction of juries, to avoid instructions which emphasize certain aspects of the case and which might subject the trial judge to the charge of commenting on the evidence . . .
Laudermilk v. Carpenter, 78 Wn.2d 92, 100, 457 P.2d 1004, 469 P.2d 547 (1969). Accordingly, we conclude that the trial court erred by giving instruction 17.
Pay 'n Save also contends that the trial court misstated the law of disparate impact in jury instruction 18.
The first part of the Lorillard test requires an employer to do more than establish a direct correlation between the test and job performance. The employer must show that the test is necessary to his business. Thus, if the results of the test do not create a sexually and racially balanced work force, the employer must not utilize the test unless it significantly affects a core purpose of the business.
In Contreras v. Los Angeles, 656 F.2d 1267 (9th Cir. 1981), the court refused to place such a stringent burden on an employer. The court reasoned that " [discriminatory preference for any group, minority or majority, is precisely and only what Congress [in enacting Title VII] has proscribed." Contreras, at 1278 (quoting Griggs v. Duke Power Co., 401 U.S. 424, 431, 28 L. Ed. 2d 158, 91 S. Ct. 849 (1971)). The court held that if an employer can demonstrate by professionally accepted methods that the employment or hiring practice accurately predicts or significantly correlates with a candidate's job performance, the employer has established a business necessity defense. Contreras, at 1280. To require more of an employer would go beyond prohibiting discriminatory preference and would impose an affirmative duty to hire a balanced work force if an objective standard for evaluation is used. Contreras, at 1278. The Ninth Circuit found that the imposition of such a duty is not consistent with either congressional intent in passing, or Supreme Court cases in construing, Title VII. Contreras, at 1279-80.
Furthermore, the Lorillard instruction has an additional flaw. The instruction apparently requires an employer to prove, in establishing his business necessity defense, that no less discriminatory alternatives to his present policies exist. The Supreme Court, however, has clearly indicated that the burden of proving less discriminatory alternatives falls on the plaintiff once the defendant establishes his defense. Albemarle Paper Co. v. Moody, 422 U.S. 405, 45 L. Ed. 2d 280, 95 S. Ct. 2362 (1975).
We, therefore, hold that to establish a business necessity defense an employer must prove by professionally accepted measures that the hiring or promotion test utilized accurately predicts or significantly correlates with the fundamental requirements of job performance. The burden then shifts to the plaintiff to show that other less discriminatory alternatives equally serve the employer's legitimate business requirements. Because instruction 18 misstated the burden an employer must meet and misallocated the burden of proof, the trial court erred by giving it.
Having concluded that the inaccurate statements of law contained in instructions 17 and 18 are dispositive of this appeal, we proceed to address only those issues that must be resolved to provide guidance to the trial court upon retrial.
Pay 'n Save contends that not only did the trial court misstate the theory of disparate impact, but the court erred by even presenting the theory to the jury. Pay 'n Save argues that because their evaluation process involves subjective appraisals of employee performance, the process cannot be considered a facially neutral practice. Thus, Pay
Pay 'n Save's employee evaluation process does call for the employee's immediate supervisor to make subjective judgments regarding the employee's performance. This process can be distinguished from the typical disparate impact case which involves a facially objective evaluation process. See, e.g., Griggs v. Duke Power Co., supra (intelligence tests); Albemarle Paper Co. v. Moody, supra (intelligence tests and high school diplomas); Dothard v. Rawlinson, 433 U.S. 321, 53 L. Ed. 2d 786, 97 S. Ct. 2720 (1977) (minimum height requirement). Nonetheless, a plaintiff is not precluded from proving a case of disparate impact simply because a portion of an employee evaluation process involves subjective judgments. Federal courts have consistently stated that either disparate impact or treatment may be applicable to the same set of facts. See, e.g., Page v. U.S. Indus., Inc., 726 F.2d 1038, 1045 (5th Cir. 1984); International Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n.15, 52 L. Ed. 2d 396, 97 S. Ct. 1843 (1977). The federal courts, however, do not agree on whether a solely subjective evaluation process can be analyzed under the disparate impact model. Not only are the circuit courts divided, but cases within circuit courts come to opposite conclusions. Compare Walls v. Mississippi Dep't of Pub. Welfare, 730 F.2d 306, 321 (5th Cir. 1984) and Heagney v. UW, 642 F.2d 1157, 1163 (9th Cir. 1981) (subjective hiring criteria cannot be analyzed as a facially neutral practice) with Page, at 1046 and Hung Ping Wang v. Hoffman, 694 F.2d 1146 (9th Cir. 1982) (subjective criteria analyzed as a facially neutral practice). Those courts that allow a disparate impact theory to be applied to a subjective evaluation process reason that the theory can be applied whenever a plaintiff attacks a generalized employment policy. See, e.g., Peters v. Lieuallen, 693 F.2d 966, 969 (9th Cir. 1982). We disagree with this approach.
The rationale underlying the development of the disparate impact model provides the basis for our resolution of
The establishment of a prima facie case of disparate impact is a question of proof. Thus, on retrial if Shannon can demonstrate that she is attacking features of an evaluation process that do not turn on discretionary decisions, she is entitled to a disparate impact instruction.
Pay 'n Save also argues that even if it utilizes objective criteria in its promotional policies, it should nonetheless be immune from a disparate impact claim. Pay 'n Save concedes that Shannon can argue that she, personally, was discriminated against because of her gender, but maintains that she should be precluded from arguing that Pay 'n Save policies discriminate against women generally. Pay 'n Save argues that because its employment policy was developed pursuant to a court approved consent decree, the policy should not be subject to attack. Thus, Pay 'n Save reasons that because its policy cannot be attacked, only a disparate treatment theory is applicable. We disagree.
Only those policies of Pay 'n Save that were actually
This Decree fully and finally determines all issues raised in this consolidated action. The Company's undertakings and commitments in this Decree settle and satisfy all claims of sex discrimination in recruitment, hiring, training, assignment, transfer, promotion, job classification, termination, pay, benefits and/or terms and claims for damages, back-pay, punitive damages, benefits, injunctive, declaratory or other relief for past or present sex discrimination against named plaintiffs and members of the class. This Decree binds named plaintiffs and class members, other than those who have filed formal requests for exclusion pursuant to the court's Order of November 17, 1975.
However, the remedial provisions of the decree were not as inclusive as the above language would indicate. These provisions were narrowly tailored to address the underre-presentation of women in the department head category only. Paragraph 19 of the decree provides, in pertinent part:
In connection with the Ernst-Malmo Division the Company will substantially increase its efforts to place qualified female personnel in department head managerial positions, but in no event shall the Company make to qualified females job offers as described herein at a percentage less than 20% of all department head managerial positions (lumber, hardware, sporting goods and nursery department heads) made in the first year following the entry of this decree, 30% of such offers in the second year and 40% in the third, fourth and fifth years.
(Italics ours.) Thus, when read as a whole, the consent decree actually addressed discriminatory practices only at this one level, and Shannon can challenge Pay 'n Save's policies of promotion to other positions.
Pay 'n Save next contends that not only did the trial court err in its presentation of the disparate impact theory
The Stieler court held that when an individual plaintiff presents a disparate treatment theory, he cannot establish a prima facie case with statistics — the plaintiff must show he was qualified for the position he sought. Stieler, at 74. Here, Shannon did not attempt to substitute statistical evidence for an element of a prima facie case of disparate treatment. Instead, she introduced statistical evidence to prove that Pay 'n Save's assertion that it refused to promote her for legitimate nondiscriminatory reasons was a mere pretext for discrimination. It is settled law in the federal courts that in a disparate treatment case "[statistics showing a general pattern of discrimination are probative on the question of whether the reasons given for a particular action are pretextual." Bauer v. Bailar, 647 F.2d 1037, 1045 (10th Cir. 1981); see also Talley v. United States Postal Serv., 720 F.2d 505, 507 (8th Cir. 1983), cert. denied, 466 U.S. 952, 80 L. Ed. 2d 541, 104 S. Ct. 2155 (1984); McDonnell Douglas Corp. v. Green, 411 U.S. 792, 805, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973). Stieler does not prohibit the use of statistics in this context, and we agree with the federal courts that statistics are relevant to show that an employer's asserted justification for not hiring or promoting the plaintiff is a facade for discrimination.
Pay 'n Save next contends that the trial court erred by admitting statistical evidence of discrimination prior to 1976. Pay 'n Save contends that any discrimination prior to that year was remedied by the consent decree. The trial court agreed with Pay 'n Save's position, but admitted the evidence for illustrative purpose only. The court allowed Shannon to introduce the statistics to illustrate her theory that after 1976 Pay 'n Save simply elevated the plateau
Pay 'n Save maintains that evidence of discrimination prior to the consent decree is inadmissible because it is equivalent to evidence of discrimination prior to the passage of Title VII. Even if this contention is correct, the trial court did not err in admitting the evidence for illustrative purposes. Although it has no present legal consequences,
a discriminatory act which occurred before the statute was passed . . . may constitute relevant background evidence in a proceeding in which the status of a current practice is at issue . . .
United Air Lines, Inc. v. Evans, 431 U.S. 553, 558, 52 L. Ed. 2d 571, 97 S. Ct. 1885 (1977). Here, the trial court refused to admit the statistics to support a finding that Pay 'n Save discriminated prior to 1976. It did allow the statistics to be admitted solely for background purposes to support a claim that Pay 'n Save presently discriminated. In so ruling, the trial court acted properly.
Because the resolution of the other assignments of error raised by Pay 'n Save are neither necessary to the disposition of this appeal nor needed to provide guidance to the trial court on retrial, we do not address them here. We must, however, address one issue raised by Shannon on cross appeal. Shannon contends that the trial court erred by finding that expert witness fees were not a "cost of suit" under RCW 49.60.030(2). We disagree. Washington courts have long held that "costs" under RCW 4.84.030 do not include compensation paid to the expert witness in excess of ordinary witness fees. See 2 L. Orland, Wash. Prac., Trial Practice § 422 (3d ed. 1972); Nelson v. Industrial Ins. Dep't, 104 Wash. 204, 176 P. 15 (1918). There is no dispositive distinction between "costs" as used in RCW 4.84.030 and "cost of suit" as used in RCW 49.60.030(2). Accordingly, a plaintiff cannot recover expert witness fees in excess of compensation paid to an ordinary witness.
Because the four-fifths rule and the business necessity defense instructions misstated the law of disparate impact,
The assistant manager position is the second tier in Ernst's 5-tier management structure. The entry level management position is department head. Assistant managers oversee department heads and are, in turn, supervised by store managers. Store managers are supervised by district managers who are accountable to the highest tier of the management structure, division managers.
RCW 49.60.030 provides in pertinent part:
"(1) The right to be free from discrimination because of race, creed, color, national origin, sex, or the presence of any sensory, mental, or physical handicap is recognized as and declared to be a civil right. This right shall include, but not be limited to:
" (a) The right to obtain and hold employment without discrimination . . .
" (2) Any person deeming himself injured by any act in violation of this chapter shall have a civil action in a court of competent jurisdiction to enjoin further violations, to recover the actual damages sustained by him, or both, together with the cost of suit including a reasonable attorney's fees or any other remedy authorized by this chapter or the United States Civil Rights Act of 1964 ..."
The contested portion of instruction 18 states:
"The test is not merely whether there exists a business purpose for adhering to a challenged practice. The test is whether there exists an overriding legitimate business purpose such that the practice is necessary to the safe and efficient operation of the business. The challenged procedure must effectively carry out the business purpose it is alleged to serve, and there must be no acceptable alternative policies or practices which would better accomplish the business purpose advanced, or accomplish it equally well with a lesser differential of sexual impact."