Delbert KING, Plaintiff-Appellee,
and
Vernon Brickey, Plaintiff-Appellee, Cross-Appellant,
v.
GENERAL ELECTRIC COMPANY, Defendant-Appellant, Cross-Appellee.
Nos. 90-2583, 90-3038.
United States Court of Appeals,
Seventh Circuit.
Argued Jan. 6, 1992.
Decided March 30, 1992.
As Corrected April 22, 1992.
As Amended on Denial of Rehearing
and Rehearing En Banc
June 8, 1992.
George F. Galland, Jr. (argued), Davis, Miner, Barnhill & Galland, Chicago, Ill., Charles Barnhill, Jr., Davis, Miner, Barnhill & Galland, Madison, Wis., for Delbert King and Vernon Brickey.
Roy G. Davis (argued), Janet L. Jannusch, Keck, Mahin & Cate, Peoria, Ill., for defendant-appellant, cross-appellee.
Before BAUER, Chief Judge, CUDAHY and KANNE, Circuit Judges.
BAUER, Chief Judge.
In this appeal, we examine in detail trial procedures in two cases brought under the Age Discrimination and Employment Act, 29 U.S.C. §§ 621-634 (ADEA). We conclude that the district court erred in its management of these cases and reverse and remand for a new trial pursuant to the provisions of Circuit Rule 36.
A. Background
These cases arise from a reduction in force undertaken by General Electric (G.E.) at its Bloomington, Illinois manufacturing plant between 1982 and 1985. G.E. laid-off, demoted or transferred two hundred salaried-exempt, i.e., management and professional, workers pursuant to the reduction in force (RIF). Wilbur Hany and James Samsel, two employees fired in 1984, sued G.E. on behalf of themselves and others similarly situated in December 1985 ("the Hany suit"). As we discuss more fully below, when private employers are involved, ADEA provides this opt-in class action procedure that preempts the class-action procedure under Federal Rule of Civil Procedure 23(a). 29 U.S.C. § 626(b), (c), 216(b).
Ten other employees subjected to adverse action during the RIF joined the Hany suit as named plaintiffs. See Second Amended Complaint, Pleadings Vol. 1, Doc. 22. The Hany complaint alleged that during 1983 and 1984, G.E. discriminated against older G.E. employees on account of their age. Eleven plaintiffs alleged that they lost their jobs as a result of age discrimination, and the remaining plaintiff, Delbert King, alleged he was demoted for the same reason.
A second group of employees were fired in 1985. Donald Sobin and William Evelsizer filеd suit in 1986, Ronald Monkman filed suit in 1987 (the "Sobin suits" or the "Sobin plaintiffs"). These plaintiffs were represented by a single attorney, but elected to file their own, individual lawsuits. G.E. targeted Monkman for demotion or layoff in 1984. Because he was only 39 at that time, Monkman was not protected by the Act. He was not actually terminated until 1985, when he was 40, and thus is entitled to ADEA protection.
Sobin's suit was set for trial for June 8, 1987. On May 10, 1987, Sobin moved for a continuance until after the September trial on the Hany suit. Before the court ruled on the continuance,1 on June 9, 1987, Sobin moved to consolidate all three Sobin suits with the Hany suit under Federal Rule of Civil Procedure 42(a). In his motion, Sobin contended there was a common question of fact: whether there was a "pattern or practice of age discrimination" at G.E. Despite G.E.'s objections, the district court granted the motion. It ordered that the Hany аnd Sobin suits be consolidated to litigate the issue of whether G.E. engaged in a "pattern or practice" of age discrimination. See Order dated July 8, 1987, Vol. 2, Doc. 18.
The "pattern or practice" trial was held in January 1988. The Hany plaintiffs' expert testified that during 1983 and 1984, older employees were more likely to be hurt by the RIF than younger employees, and that the difference was statistically significant. When he controlled for the effect of performance and assignment, the expert still found that age was a statistically significant variable affecting the probability of an employee experiencing an adverse action during 1983 and 1984.
Plaintiffs also presented anecdotal evidence of discrimination. There was no statistical evidence supporting the Sobin plaintiffs' allegation that G.E. discriminated in 1985. Six plaintiffs, including Sobin, testified they were demоted or laid-off while G.E. continued to employ younger employees in their respective departments. Witnesses also testified that some G.E. managers made disparaging comments about older workers. The jury found that G.E. engaged in a pattern or practice of discrimination against employees over the age of 40 at the Bloomington plant. No dates appear on the jury verdict form. We assume, therefore, pursuant to the district court's instruction to the second jury, that the first jury found G.E. discriminated from 1982 until the end of the RIF in 1985.
G.E.'s motion for judgment notwithstanding the verdict was denied, and the district court held a scheduling conference to determine the course of the rest of the litigation. The court ruled that the burden of persuasion would shift to G.E. to show that its pattern or practice of discrimination was not responsible for the termination of each individual plaintiff. Because the district court believed trying all eleven individual claims together would be unwieldy, it divided the plaintiffs into groups for trial. The trial for the first group, Hany, Delbert King, Vernon Brickey, and Joseph Callahan, was set for June 1, 1989.
The district court subsequently issued an order resolving several pretrial motions. In response to a motion for clarification of that order, the court reversed its position on the burden of persuasion in the second set of trials. It announced that it would not shift the burden of persuasion to G.E.--the common result of a pattern or practice verdict against an employer. See, e.g., Teamsters v. United States,
The parties hotly contested the proper use of the first jury's verdict. The court determined that the second jury would be instructed of the first jury's finding at the outset. The first jury's "finding of fact" could be relied upon by the individual plaintiffs to establish their prima facie cases, and to show that the reasons given by G.E. for terminating the plaintiffs were mere pretexts for discrimination. See Order of May 10, 1985 at 5; Appellant's Supplemental Appendix ("S.A.") at 53. The instruction is set forth in full in the margin.2
The second jury returned a verdict in favor of Hany and King, and against Brickey.3 The jury also found that G.E. willfully violated the Act. The court ordered equitable relief (reinstatement) and King was awarded $34,806 in damages. Hany settled with G.E. after the judgment was entered. G.E. appeals the King verdict and damage award, the willfulness finding, as well as some of the court's procedural and evidentiary rulings. We shall discuss the factual background in more detail where necessary to our analysis.
B. Legal Framework
This court has considered ADEA actions in the context of a reduction in force ("RIF") in several cases. See Oxman v. WLS-TV,
The ADEA incorporates the enforcement provisions of the Fair Labor Standards Act, 29 U.S.C. § 216, by reference. See 29 U.S.C. § 626(d). Before commencing a civil action, a claimant must file a charge alleging unlawful discrimination with the Equal Employment Opportunity Commission ("EEOC"). 29 U.S.C. § 626(d). After filing the charge, the claimant must wait sixty days before filing suit. Id. The EEOC filing and waiting period is intended to give the EEOC an opportunity to investigate the alleged unlawful practice and seek to eliminate it informally through "conciliation, conference and persuasion." Id.
Once the administrative requirements have been satisfied, a claimant may bring a civil suit. The suit may be filed by "any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party...." 29 U.S.C. § 216(b). This procedure preempts the class action procedure under Federal Rule of Procedure 23. LaChapellе v. Owens-Illinois, Inc.,
A plaintiff in an age discrimination case may prove his claim in two ways. He may try to meet his burden head on by presenting direct or circumstantial evidence that age was the determining factor in his discharge. Or, the plaintiff may use the indirect, burden-shifting method of proof developed in Title VII cases originally outlined in McDonnell Douglas Corp. v. Green,
In order to establish a prima facie case in a reduction in force case under the McDonnell Douglas framework, the plaintiff must establish the following: (1) she was within the protected age group; (2) she was performing according to her employer's legitimate expectations, (3) she was terminated or demoted, and (4) others not in the protected class were treated more favorably. Oxman,
Once a prima facie case is established, the burden of production shifts to the defendant to provide some legitimate, non-discriminatory reason for the demotion or discharge. Once the defendant articulates a lawful reason for the discharge, the presumption of discrimination dissolves, and the burden of production shifts back to the plaintiff to show the employer's reasons are pretextual. Oxman,
Normally, at this stage of the proceedings, "after a full trial on the merits, we need not concern ourselves about the method of proof [the plaintiff] used. The only question for us is whether there was sufficient evidence for a reasonable jury to find that age was a determining factor in [the employer's] decision to fire [the plaintiff]." Brown v. M & M/Mars,
Title VII provides another enforcement mechanism that played a pivotal role in the resolution of the case below. This is the class-based "pattern or practice" trial. The term "pattern or practice" derives from § 707(a) of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-6(a). The section states:
When the EEOC has reasonable cause to believe that any person or group of persons is engaged in a pattern or practice of resistance to the full enjoyment of any rights secured by this subchapter, and that the pattern or practice is of such a nature and is intended to deny the full exercise of rights herein described, the EEOC may bring a civil action....
Id. The Supreme Court has stated that "[t]he pattern or practice language in § 707(a) of Title VII was not intended as a term of art, and the words reflect only their usual meaning." Teamsters,
"[A] pattern or practice would be present only where the denial of rights consists of something more than an isolated, sporadic incident, but is repeated, routine, or of a generalized nature. There would be a pattern or practice if, for example, a number of companies or persons in the same industry or line of business discriminated, if a chain of hotels or restaurants practiced racial discrimination throughout all or a significant part of its system, or if a company repeatedly and regularly engaged in acts prohibited by the statute.... The point is that single, insignificant, isolated acts of discrimination by a single business would not justify a finding of a pattern or practice...."
110 Cong.Rec. 14270 (1964) (Statement of Senator Humphrey) (quotеd in Teamsters,
The Cooper Court explained this distinction, drawing upon its holding in General Telephone Co. of Southwest v. Falcon,
[T]o bridge that gap [the claimant] must prove much more than the validity of his own claim. Even though evidence that he was passed over for promotion when several less deserving whites were advanced may support the conclusion that respondent was denied the promotion because of his national origin, such evidence would not necessarily justify the additional inferences (1) that this discriminatory treatment is typical of petitioner's promotion practices, (2) that petitioner's promotion practices are motivated by a policy of ethnic discrimination that pervades petitioner's ... division, or (3) that this policy of ethnic discrimination is reflected in petitioner's other employment practices, such as being in the same way manifested in the promotion practices.
Cooper,
The Cooper Court further observed that "a class plaintiff's attempt to prove the existence of a companywide policy [ (i.e., a pattern or practice) ], or even a consistent practice within a given department, may fail even though discrimination against one or two individuals has been proved."
In order to prove that the employer has engaged in a pattern or practice of discrimination, then, the plaintiff must show that there is regular, purposeful, less-favorable treatment of a protected group. See, e.g., Teamsters,
plaintiffs in a pattern-or-practice government or class discrimination claim have the initial burden of showing that the unlawful discrimination was the employer's regular policy. A plaintiff must 'establish a prima facie case that such a [discriminatory] policy existed.' Teamsters,
EEOC v. Sears, Roebuck & Co.,
[In Franks, the class] alleged a broad-based policy of employment discrimination, upon proof of that allegation there were reasonable grounds to infer that individual hiring decisions were made in pursuit of the discriminatory policy and to require the employer to come forth with evidence dispelling that inference.45
Notes
45. The holding in Franks that proof of a discriminatory pattern and practice creates a rebuttable presumption in favor of individual relief is consistent with the mаnner in which presumptions are created generally. Presumptions shifting the burden of proof are often created to reflect judicial evaluations of probabilities and to conform with a party's superior access to the proof.
Teamsters,
In order to support the "judicial evaluation" (that it is more probable than not that an employer that routinely discriminates, discriminated against a particular individual), there must be significant evidence of the alleged routine. In Teamsters, for example, the government first presented statistical evidence showing grave disparities between the percentages of blacks in the population at large, those employed by the defendant, and those employed in particular positions.
Other courts considering what evidence is necessary to show that an employer routinely and purposely discriminated have also required substantial proof of the practice. Thus, in Chisholm v. United States Postal Service,
Evaluating the sufficiency of the evidence supporting the claim is not the only difficult task faced by a reviewing court in аn ADEA case. One problem that arises when courts borrow procedures designed to enforce Title VII and apply them to ADEA cases is that the fit can be imprecise. Title VII cases are tried to a judge whereas ADEA cases are tried to a jury. Cf. Loeb v. Textron, Inc.,
ADEA has no parallel provision, but courts nevertheless have adopted the pattern-or-practice terminology and the shifting burden of persuasion to ADEA actions. EEOC v. Western Electric,
to show that Pabst's reduction in force explanation was merely a pretext for terminating older, higher salaried employees. In other words, [plaintiffs] attempted to show that their termination was part of a plan to cut costs by replacing older, higher salaried employees with inexperienced, younger employees who could be paid less.
Id. at 17. We must reiterate, however, that isolated, sporadic discrimination is not sufficient. Because of the seriousness of the charge, it is essential that plaintiffs adequately support allegations thаt an employer routinely engages in wide-spread discriminatory practices.
Finally, as we review the course of the proceedings below, we bear in mind the appropriate standard of review. In reviewing a jury's verdict, we determine whether there was evidence "sufficient for a reasonable jury to conclude that age was a determining factor" in the employer's decision to fire the plaintiff. Holzman v. JaymarRuby, Inc.,
One of the difficulties of adapting the Title VII pattern-or-practice framework to ADEA cases becomes evident when we compare standards of review. Because a judge tries Title VII cases, we review those verdicts under a clearly erroneous standard. Sears,
C. Analysis
Neither the McDonnell Douglas proof structure system, nor the pattern or practice terminology is talismanic designations. The McDonnell Douglas formula, though appropriate and workable, was not intended to be "rigid, mechanical, or ritualistic," nor the exclusive method for proving a claim of discrimination. Loeb v. Textron, Inc.,
In this case, the Hany plaintiffs brought an action on behalf of themselves and all others similarly situated. They alleged simply that beginning in January 1983, G.E. "began discriminating against older G.E. employees on account of their age." Complaint, Appellant's S.A. at 10. The Hany complaint went on to allege that G.E. gave employees false рerformance ratings, trumped up disciplinary charges against older employees, and terminated "many of its older employees while retaining younger employees whose performance and background were inferior to the older employees who were laid off or terminated." Id. at 11. The Hany complaint also alleged that G.E. applied its "lay off policies and practices" discriminatorily to older employees. Id. The complaint asserted that the violations were willful. Basically, then, the Hany plaintiffs asserted that G.E. pursued a policy of age discrimination in its reduction in force.
The Sobin plaintiffs, suing individually, complained that G.E. willfully violated ADEA by discharging them because of age. These discharges occurred in 1985. Sobin, Monkman, and Evelsizer did not allege any other facts or violations as to any other employees, to each other, or to older employees as a group. Despite this lack, their attorney (the three were represented by the same attorney) moved to consolidate the trials based upon an asserted common question of fact.
A district court's decision to consolidate cases is subject to review only for an abuse of discretion. See United States v. Knauer,
Even if the consolidation itself was not an abuse of discretion requiring reversal, we do not believe plaintiffs (particularly the Sobin plaintiffs) presented sufficient evidence to support the jury's finding that a company-wide pattern of discrimination existed at G.E. between 1982 and 1985. Certainly the Sobin plaintiffs, who were terminated in 1985, failed to present a sufficient evidentiary basis for the jury's finding that G.E. engaged in a pattern of discrimination in 1985. There was no statistical evidence supporting this claim. Although statistical evidence is not strictly required, in this case the Hany plaintiffs' evidence compares figures for 1983 and 1984 to figures from 1985 to show the significance of the age disparities in 1983 and 1984.
Further, almost all the anecdotal evidence cited by appellees concerns alleged individual discrimination occurring in 1983 and 1984. See Appellees' Br. at 6-9.4 Even if we were convinced that the evidence presented was sufficient to show a discriminatory practice in 1983 and 1984, this evidence provides scant support for the allegation that G.E. discriminated in 1985.
As we noted in EEOC v. Sears, Roebuck & Co.,
Moreover, the statistical evidence itself was not overwhelming even for the years analyzed. "Although statistics are useful, they are not magical. The finder of fact must always consider the extent to which the statistical evidence reasonably supports an inference of discrimination." Howard Eglit and Martin Malin, 3 Age Discrimination § 17.65 at 17-208 (1989).
The usefulness of statistical evidence, of course, depends on the surrounding facts in any particular case. Teamsters,
Straight percentage comparisons which show the relative representation of a group in two populations alone may not be statistically significant. See Moultrie,
Regardless of our view of the statistical evidence provided by the Hany plaintiffs, they have failed to provide the amount of anecdotal evidence claimants in other cases have supplied to support a finding of a pattern or practice of discrimination. As we noted above, more than forty examples of individual discrimination were provided in Teamsters,
The district court had an opportunity to cut its losses when G.E. moved for judgment notwithstanding the verdict. "A judgment n.o.v. is properly granted where the evidence presented, combined with all reasonable inferences that may be drawn from it, is insufficient ... when viewed in the light most favorable to the non-moving party." Graefenhain v. Pabst Brewing Co.,
We also are forced to note that the district court compounded the problems in this litigation when it failed to accord the jury's verdict the proper weight. Once the government or a class of individual plaintiffs has demonstrated that a pattern or practice of discrimination exists, they establish a presumption that individual class members have been discriminated against. Franks v. Bowman,
Although the district court initially applied the proper shift in the burden, it reversed its position on the effect of the first jury's verdict between the trials. In response to a motion for clarification, it determined that the plaintiffs would have to start afresh in the individual trials, and establish a classic McDonnell Douglas prima facie case under Oxman. It mistakenly held that "[p]laintiffs must establish a prima facie case and setout [sic] the elements." Order of May 10, 1989, at 4, Appellant's App. at 62.
Because the first jury verdict cannot stand, we do not believe the second jury's verdict can be salvaged either. Because the first verdict was not adequately supported, the plaintiffs were not entitled to the instruction based upon the first jury's finding. Arguably, the verdict in G.E.'s favor against Brickey could stand despite the problems with the litigation because he lost despite receiving the undeserved instruction. Nevertheless, both trials were fraught with difficulties, and we are not comfortable with this thumbnail determination of the relative equities. Therefore, we reverse both verdicts and remand the cases for new trials.
Consolidation of cases to determine common factual questions does not merge the suits or change the rights of the parties. See Miller v. United States Postal Serv.,
REVERSED AND REMANDED.
CUDAHY, Circuit Judge, dissenting:
If there was any error in this trial, it favored the defendant, not the plaintiffs. As the majority concedes, once the plaintiffs proved to the satisfaction of the first jury that a pattern and practice of age discrimination existed at the Bloomington plant, General Electric should have shouldered the burden to show that the plaintiffs were not victims of its discriminatory policy. Franks v. Bowman Transportation Co.,
GE fired all of the plaintiffs before us in 1984 (so 1985 is a non-issue). As to the period when these plaintiffs were dropped from the rolls, there was evidence that the manager of the plant said that changes would have to be made, especially with the older employees, because they were set in their ways and not ready to take on new things. Tr. Vol. 7 at 152. He repeated similar statements from the witness stand.1 One of his deputies was more blunt: "We're going to get rid of these old farts and get some new blood in here." Id. at 143. Much of the rest of the anecdotal evidence had the same damning character.
The majority never comes to grips with the case the plaintiffs presented. This is not a case in which the jury was called upon to infer a pattern or practice from a number of isolated instances of discrimination. Instead, the plaintiffs presented direct evidence that the policy-makers of the company decided to lay off older workers as a matter of policy. They backed their case with strong statistical evidence--evidence that the majority criticizes only for its fаilure to include a period after the plaintiffs were fired. I am at a loss to see why the finer points of the McDonnell-Douglas analysis are of much relevance when the jury could smell the smoke from the recently fired gun.
Elsewhere the majority opinion seems to contradict itself by saying that the 1985 Sobin evidence was weak as to pattern and practice. Maj. op. at 626. But the majority opinion later criticizes consolidation of the Sobin plaintiffs on the ground that the 1983-84 conclusion was significantly aided by the presumably non-probative 1985 material. Maj. op. at 627. It seems to me that this period-by-period analysis has all been waived, since the defendant failed to ask for any special verdicts as to specific periods. Actually, the only real error the majority opinion can ascribe to the consolidation of the cases is that the Sobin plaintiffs failed to allege a pattern or practice. But there is no rule that prescribes how discrimination must be proved. International Bhd. of Teamsters v. United States,
These plaintiffs have presented a strong case, bolstered by direct evidence and sustained by two juries. Some of the procedure may have been unorthodox, but, as I have noted, this has been to the benefit of the defendant. I therefore respectfully dissent.
We assume there was no ruling since no decision on the motion appears in the record
The following instruction was delivered by the court at the beginning of the second trial:
This is an age discrimination lawsuit arising out of a number of reductions in workforce instituted by General Electric Company at its Bloomington, Illinois, plant between 1982 and 1985. The Plaintiffs are thirteen General Electric emplоyees and ex-employees whose jobs were adversely affected by the reductions in force. Each Plaintiff claims that he was demoted or discharged because of unlawful age discrimination. General Electric denies this, and asserts that each Plaintiff was demoted or terminated because of reasons other than age.
Because of the large number of Plaintiffs in this case and the complex issues involved, the Court has taken certain steps to simplify the trial. One thing the Court has done is to divide the Plaintiffs into small groups for trial. The trial you will hear in the following days only concerns the claims of Plaintiffs Wilbur Hany, Vernon Brickey, and Delbert King. The remaining Plaintiffs' claims will be tried before a different jury.
Another step the Court has taken is to resolve a question of fact common to all 13 Plaintiffs. All Plaintiffs have claimed, in support of their individual lawsuits, that Generаl Electric engaged in an overall pattern or practice of age discrimination at the Bloomington plant. The Court has already held a three-week trial, before another jury, with all 13 Plaintiffs on the question of 'pattern or practice'. Both sides presented evidence during that trial. The previous jury returned a verdict finding that General Electric had engaged in a pattern or practice of age discrimination during the Bloomington reductions in force as a standard operating procedure--the regular rather than the unusual practice.
That verdict constitutes a fact, among many other facts, available for use by each Plaintiff in bringing his individual lawsuit. It is now the job of this jury, you ladies and gentlemen, to decide if each of these three Plaintiffs in this trial was individually discriminated against on account of age. The prior verdict is just one оf many facts which you will consider in deciding this case.
I will give you further instructions to help you in your task at the end of the trial, before you retire for your deliberations.
Order of June 9, 1989, Appellant's S.A. at 73-75.
Callahan's case was settled before trial
This may not be entirely surprising because only Hany plaintiffs--King and Brickey--are parties to this appeal. Nevertheless, our review of the record of the first trial shows only Sobin testified to support the 1985 allegations. Even if other evidence was presented, we do not believe the jury's verdict was adequately supported
A chi-square analysis evaluates the disparity between the expected and observed frequency of a certain outcome. For example, suppose that of the individuals terminated at a given time, a greater percentage of them are within the protected age class. We want to determine whether the disparity in termination rates сan be attributed to chance, or whether the disparity is so large, that some factor other than chance probably influence the selection of individuals terminated. See Walter Connolly, Jr., David Peterson, Michael Connolly, Use of Statistics in Employment Opportunity Litigation § 10.05 (1991). A Chi-square test will determine whether the chance or other factors influenced the outcome. Id. The test is not without its difficulties, however, and a court presented with such statistical evidence should be careful to evaluate the process by which the results were obtained. Id. Unfortunately, we were not provided with a detailed explanation of the statistical analysis
"[W]e had a lot of people who had been around a lot of years, who had gotten into some bad habits, who had forgotten the sense of urgency, had forgotten customers, were really tied into and many on a treadmill doing the same thing over and over and over every day. It had gotten old. They had lost interest. They had other priorities...." Tr. Vol. 11 at 1158