McReynolds v. Sodexho Marriott Services, Inc.McReynolds v. Sodexho Marriott Services, Inc.
MEMORANDUM OPINION
BACKGROUND
This is а class action alleging race discrimination in employment under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e
et seq.
(“Title VII”), and 42 U.S.C. § 1981. Plaintiffs claim that defendant’s promotion practices throughout the company are discriminatory insofar as they relates to managerial
In
McReynolds v. Sodexho,
In its motion for summary judgment, defendant raises three main challenges to plaintiffs’ case. First, with respect to the disparate treatment claim, it contends that plaintiffs have failed to make a prima facie case of a pattern or practice of company-wide discrimination with respect to promotions. In this regard, Sodexho asserts that the only proper mode of analysis, as both a factual and legal matter, is to disaggregate to the “RVP” (Regional Vice President) level. Defendant therefore argues that plaintiffs’ aggregated statistics must be rejected because statistically significant results occurred in only 9 of 155
Second, defendant claims that even if plaintiffs have demonstrated a statistically significant disparity, it cannot be attributed to race. Defendant’s rebuttal consists of a double-barreled attack: (1) it offers its own multiple regression analysis by its statistical expert, Dr. Joan Haworth, to argue that any disparities in promotions are due to factors other than race; and (2) it argues that the analyses done by plaintiffs’ expert, Dr. Bernard Siskin, are inaccurate and lacking in probative value primarily because he failed to take account of the major variables of education and experience, which must, according to defendant, be controlled for both as a matter of law and fact. (Id.)
Third, defendant attacks plaintiffs’ disparate impact claim, arguing that plaintiffs have failed to identify a particular emplоyment practice that caused significant racial disparities in promotions. 3 (Id. at 3.)
Before addressing these three arguments, the Court will first review the governing principles of law regarding a disparate treatment claim (Section 1(A)). It will then address defendant’s arguments attacking the validity of plaintiffs’ statistical evidence in support of their prima facie case (Section 1(B)) and their anecdotal evidence (Section 1(C)). Next, it will consider the rebuttal evidence presented by defendant from its own expert, as well as its criticisms of plaintiffs’ statistician (Section 1(D)). Finally, the arguments relating to the disparate impact claim will be discussed. (Section II(A)-(D).)
ANALYSIS
I. Disparate Treatment Claim
A. Legal Principles
Plaintiffs’ disparate treatment claim, raised under both Title VII and § 1981, finds its genesis in the Supreme Court’s decision of
Int’l Bhd. of Teamsters v. United States,
To establish a prima facie pattern or practice case, “[t]he plaintiffs must, by statistical evidence, individual testimony, or a combination of the two, make a showing adequate to raise the inference that employment decisions were predicated on an illegal criterion.”
McKenzie v. Sawyer,
If plaintiffs satisfy their prima facie requirement, “[t]he burden [of production] then shifts to the employer to defeat the prima facie showing ... by demonstrating that [plaintiffs’] proof is either inaccurate or insignificant.”
Teamsters,
With these guiding principles in mind, the Court now turns to defendant’s arguments as to the statistical data relied on by plaintiffs to support their prima facie case.
B. Plaintiffs’ Prima Facie Showing Based on Statistical Evidence
1. Pools Analysis
The principal type of statistical analyses at issue with respect to plaintiffs’ prima facie case is referred to as a pools analysis.
4
This Circuit has held that a pools analysis, standing alone, that demonstrates a statistically significant adverse result for a protected class relative to what would be expected if discrimination were not in play, is sufficient circumstantial evidence to make out a prima facie pattern or practice Title VII claim.
Palmer,
Plaintiffs’ expert, Dr. Bernard Sis-kin, analyzed the data provided by Sodexho and identified highly-significant statistical disparities by race at the company-wide levеl. Using a pools analysis that did not control for unit, but that did consider division, Siskin found a i;aee effect during the class period of 5.3/4/ standard deviations, 5 which is far in excess of the 1.96 threshold. (See Pls.’ Ex. 160 [11/01 Siskin report] at ¶¶ 4, 6 & Table S-2). 6
Significantly, defendant’s expert also did a pools analysis that analyzed 7,018 promotions for the class period 7 and found a company-wide statistically significant disparity of 3.47 standard deviations. 8 (Def.’s Ex. 8 [10/01 Haworth report] at Table 18.)
To rebut this showing of a statistically significant disparity at the company-wide level, defendant argues that plaintiffs’ aggregation of the statistical evidence is, as a matter of fact and law, unsupportable, since the only proper approach is to analyze the data at the “RVP” level, and if the statistics are disaggregated to that level, only 9 of Sodexho’s approximately 155 RVPs (fewer than 6%) had statistically significant disparities in promotions of African Americans. (Def.’s Mot. at 5, citing Def. Ex. 7 [3/02 Haworth decl.] at ¶ 4
&
at 4; Def. Ex. 8 [10/01 Haworth report] at 56.)
See Cooper v. Fed. Reserve Bank of Richmond,
Given the parties’ starkly different approaches to the data, the Court must decide whether plaintiffs can sustain their burden of demonstrating a prima facie case based upon aggregated statistics. This dispute hinges on whether RVPs— Regional Vice Presidents — are, as defendant claims, Sodexho’s “principal decision-making units” that are “functionally and independently responsible for the vast majority of the promotion decisions at issue” (Def.’s Mot. at 2, 17), or whether, as plaintiffs contend, they have no operational significance, they do not function independently with separate promotion procedures, and they are nothing but a “hoax.” (Pls.’ Opp. at 10-13.)
Before the Court can take on the issue of whether disaggregation, as defendant suggests, or aggregation, as plaintiffs argue, should be the operative mode of analysis, it is necessary to grapple with the meaning of RVPs. As even defense counsel conceded at the hearing on this motion, the concept is “admittedly confusing,” since an RVP is not necessarily synonymous with a particular geographic location or region,
9
does not necessarily equate with a particular person who holds this title, and does not represent the actual decision-maker involved in promotions. (Tr. at 35-37, 56-58.) Also, while it appears undisputed that RVPs are an accounting code in the company’s MARRP-AY database, they do not otherwise appear in any corporate organizational chart or corporate documents describing Sodexho’s organizational structure.
10
Thus, the
[We] relied on the RVP .code (number) because it consistently defines the specific portion of the corporate and financial reporting structure at Sodexho to which a unit has been assigned. For example, there are RVP areas defined in each division which separate the operations activities from the functional activities, such as human resources and finance. Some units are operations units and assigned to RVP numbers reflecting the operations activities in a particular reporting structure. Other units contain employees serving functional (or support) activities with RVP numbers contained in the MARRPAY database for those functional areas.
* * * * * *
The Vice President of a region may oversee a group of operational units or a group of functional units {e.g., human resources, strategy, etc.) within the division. In some cases, a Vice President oversees units that provide a particular product line, and another Vice President oversees units in the same geographic area which provide a different product line in the same division {e.g., facilities management for one RVP and food services for another RVP in the same division and possibly same geographic area).
(Id. at ¶¶ 3, 4.)
According to defendant, Haworth’s conclusion that RVPs reflect the functional and operational structure of the company is based on her interviews of five current Vice Presidents of Finance (see Def.’s Ex. 70 [5/04 Haworth decl.] at ¶ 3 n. 4), and therefore, the disaggregation of statistical analyses at the RVP level is factually supportable. To further bolster its argument for RVPs, defendant points to various tables prepared by Haworth that purport to prove that 80% of managers, both white and African American, who are promoted stay within their original RVP, and argues that given the absence of evidence that there is substantial mobility among RVPs, the only proper methodological approach is the one offered by Haworth. (See Def.’s Ex. 1 [7/03 Haworth report] at Tables 12-15 and 20.)
In response to defendant’s assertions that RVPs are factually supportable and thus are the only proper unit for purposes of a pools analysis, plaintiffs have offered more than enough contrаry evidence to raise a material issue of fact regarding the underlying premise of Ha-worth’s RVP analysis.
(See
Pls.’ Opp. at 9-13; Pls.’ Ex. 158 [5/04 Siskin decl.] at ¶¶ 5-18; Pls.’ Stmt of Disputed Facts ¶ 26; Pls.’ Rebuttal to Def.’s Stmt. of Facts ¶¶ 1-2.) For instance, Siskin also interviewed three former or current corporate employees, and their statements contradict the company’s position that RVPs reflect Sodexho’s functional and operational structure. (Pls.’ Ex. 158 [5/04 Siskin decl.] at ¶¶ 7-10.) Plaintiffs also note that two defense experts, when detailing defendant’s organizational structure in their reports, fail to even mention RVPs. (Pls.’ Ex. 164 [Bloom report] at ch. 2 (“Corporate History and Structure”); Def.’s Ex. 41 [Bier-
Similarly, with respect to the ostensible lack of mobility across RVPs, plaintiffs point to statistics that at least raise a factual issue as to this assertion. For instance, the actual promotion data demonstrates that those who were in fact promoted frequently move across RVP codes.
11
Moreover, it may be argued that Tables 12-15 of Haworth’s 7/03 report (Def.’s Ex. 1) provide little support for defendant’s argument regarding the usefulness of using RVPs to analyze the data, since these charts provide little, if any, information specifically about promotions.
12
By contrast, Table 20 does speak to the issue of promotional activity within a subgroup and shows that a similar percentage of African Americans and other employees did not move out of their division or RVP following a promotion. This statistic does not, however, mean that disaggregation at the RVP level is required, especially given plaintiffs’ contention that a similar subjective decision-making process pervades the entire company. For, as argued by plaintiffs, whether managers actually move from one divisiоn or RVP to another “is not material to a lawsuit in which plaintiffs allege both discrimination in promotions decisions and segregation. Because the promotion decisions may reflect the discrimination inherent in the promotion process at issue in this case, studying the resulting promotions may mask the discrimination and segregation that occurs at Sodexho.” (Pls.’ Rebuttal to Def.’s Stmt. of Facts ¶ 3, citing Pls.’ Ex. 160 [11/01 Siskin report] at ¶ 14.) Thus, as argued by plaintiffs, the relevant focus is
not
on whether people actually move, but whether candidates sought promotions outside their RVP or division. (Pls.’ Rebuttal to Def.’s Stmt. of Facts ¶ 3.) And, in this regard, plaintiffs point to the fact that Haworth’s data shows that under the posting system in effect from March 1997 to September 2000, 24.9% of all applicants bid for promotions in different divisions (31.9% of African American applicants bid for promotions in different divisions), and under the subsequent Career Center posting system from June 2000 to June 2001, 37.1% of all applicants bid for promotions in different divisions (38.5% of African American applicants bid for promotions in different divisions).
13
(Def.’s Ex. 1 [7/03 Haworth report] at Table 18.) Thus, as recognized in this Court’s certification decision, given the figures regarding the percentage of applicants who come from outside a division (which is obviously far larger than an
As this discussion reveals, whether RVPs have a functional or operational role within the company and whether they have any factual relevance to promotion decisions, is a hotly contested issue, and it therefore necessarily follows that whether the data should be aggregated or disaggregated is an issue properly left to the jury at trial. For “[w]hen, as here, the parties’ experts rely on conflicting sets of facts, it is not the role of the trial court to evaluate the correctness of facts underlying one expert’s testimony.”
Micro Chemical, Inc. v. Lextron, Inc.,
Proceeding from the notion that only 6% of the RVPs show statistically significant results, defendant argues that this case is comparable to the many decisions where even more impressive statistical disparities were rejected in the context of a class decertification or summary judgment motion. (See Def.’s Mot. at 12-15.) But the factual dispute relating to the validity of using RVPs precludes any such argument. Moreover, as recognized by this Circuit:
Because the fate of disparate treatment claims is heavily dependent on the setting, facts, and circumstances of the particular case, decisions in such cases have limited precedential value.
Valentino,
Even a cursory review of the cases relied on by defendant shows that courts that have found that plaintiffs’ pools or their statistics were not supportable made this finding based on the existence of units that are clearly operationally and functionally distinct (unlike defendant’s RVPs), such as certain manufacturing plants, see
Beck v. Boeing Co.,
In our view, [defendant’s attempt to break down the data by city or year or both] was an unfair and obvious attempt to disaggregate that data to the point where it was difficult to demonstrate statistical significance. By fragmenting the data into small sample groups, the statistical tests became less probative. Indeed, it became impossible in many instances, since even a record of hiring or promoting zero women would not yield statistically significant results.... Aggregating the data as the plaintiff did was a much more reasonable approach, since liability under Title VII depends on whether the EEOC demonstrated a “systemwide pattern or practice” of disparate treatment, rather than “the occurrence of isolated or ‘accidental’ or sporadic discriminatory acts. It had to establish ... [that] discrimination was the company’s standard operating procedure — the regular rather than the unusual practice.”
Capaci v. Katz & Besthoff, Inc.,
Moreover, if an expert isolates units or groups and runs separate analyses for them, such methodology may mask whether “the overall decision-making process” produces a discriminatory result, whereas analyzing an entire group will indicate whether the identified employment practice was the cause of the disparity.
Smith v. Xerox,
Pooling data is sometimes not only appropriate but necessary, since statistical significance becomes harder to attain as the sample size shrinks. See D. Baldus & J. Cole, Statistical Proof of Discrimination § 9.221, at 309 (1980) (“All other things being equal, the test statistic and level of significance rise as the sample size increases.”); Fisher, Multiple Regression in Legal Proceedings, 80 Colum. L.Rev. 702, 717 (1980) (“In smallsamples, t-statistics must be larger for a given significance level.”).
Coates v. Johnson & Johnson,
These words of caution are particularly appropriate in this case. As explained by Siskin (Pls.’ Ex. 158 [5/04 Siskin decl.] at ¶¶ 19-25), disaggregating data to the RVP level could mask the fact of discrimination because many of the RVPs are simply too small or have too few African Americans to yield any statistically significant results. 17 The validity of this argument is borne out by Haworth’s admission that “approximately 40% of all operating units at Sodex-ho are one person units and more than 60% of the operating units have two or fewer employees; [o]nly 25% of the units have four or more employees,” (Def.’s Ex. 1 [7/03 Haworth report] at xii; see also id. at 9 n. 7), as well as her recognition that “[ojbviously, this distribution of unit size does affect the number of units that might have an African-American salaried employеe when they are about 12% of the salaried exempt workforce during the time period at issue.” (Id. at xii.) It is also confirmed by Siskin who, when he repeated Haworth’s studies but restricted them to RVP codes in which promotions exist and in which African American promotions are possible, found that 73.7% (84 out of 114) of the RVP codes show a disparity (although not a statistically significant one) adverse to African Americans. (Pls.’ Ex. 158 [5/04 Siskin decl.] at ¶ 24.)
Finally, the Court is unwilling to accept defendant’s invitation to rule as a matter of law that plaintiffs cannot aggregate statistics on a company-wide basis based on the Fourth Circuit’s ruling in
Stastny v. Southern Bell Tel. & Tel. Co.,
[Defendant's view of the commonality test would preclude class certification in an action against any company that has decentralized its personnel practices. Sodexho contends that a class cannot be certified “without identifying any centrally unifying general policy of discrimination,” and that there can be no such policy when decision-making procedures are decentralized. This position would permit companies to escape Title VII class actions by minimizing the amount of control they exercise over individual managers. Such a holding would run afoul of the purpose of Title VII, which is “not to provide redress but to avoid harm,” by encouraging employers to adopt antidiscrimination policies and to educate their personnel on Title VII’s prohibitions.
For these same reasons, the Court rejects defendant’s argument that “unless the actual decision-making process is national, aggregation is impermissible irrespective of the potential labor pool.” (Def.’s Reply at 7.)
C. Plaintiffs’ Showing Based on Nonstatistical Evidence
In addition to evidence of statistical disparities between African Americans and whites with respect to promotions, plaintiffs rely on anecdotal evidence, as well as other evidence, to bolster their prima facie case. While such anecdotes bring “the cold numbers convincingly to life,”
Teamsters,
These declarations stand in stark contrast to numerous negative responses from top Sodexho officials to a 2001 email from defendant’s in-house counsel seeking “rating or ranking sheets” and “forms for interviewers to record interview notes or impressions.” (Pls.’ Ex. 116.) They are further rebutted by the findings of plaintiffs’ industrial psychologist expert, Dr. Erich Prien, who reported that most managers contacted had no such documеnts. (Pls.’ Ex. 163 at ¶ 14.) They also conflict with defense expert’s analysis of Sodexho’s internal data, which showed that only one quarter of Sodexho promotions were ever posted on the Marriott Center Management System (“MOMS”) or the subsequent Career Center system (Def.’s Ex. 1 [7/03 Haworth report] at ¶ 101), as well as with the company’s internal documentation of serious problems with its posting system. (See, e.g., Pls.’ Ex. 86 (Q & A’s from the First Open Forum, Sodexho Marriott Services Flash-The Integration at SDH13386 (Oct. 6, 1998) (Statement of Randy Harris, Senior V.P. for Human Resources)).) And, of course, they cannot be reconciled with the testimony of numerous company employees who assert that, during many years of employment at Sodexho, the promotions process they encountered was neither structured nor guided by documents or requirements imposed by some central office. (See, e.g., Pls.’ Ex. 98 [Cipollini decl.] at ¶¶ 5-6; see also Pls.’ Opp. at 6-9.)
But perhaps most tellingly, these declarations are contradicted by Sodexho’s own Rule 30(b)(6) witness on its promotion pro
[T]he hiring manager has complete discretion to decide whom to interview for each position. There are no company-rules or guidelines regarding the promotion process, and there are no requirements to take any notes during the interview process, to rank applicants, or to explain the selection. After a hiring manager makes his selection, he ‘would take that decision to whoever their boss was [and] say, hey, I’ve selected candidate A .... And then the district manager [puts] together an offer if that, indeed, was what it was.’ In short, So-dexho has ‘no company guidelines or fixed criteria or anything ... to follow in making those decisions.’
McReynolds,
Given the inconsistencies in Sodexho’s оwn evidence, and in light of the substantial testimony offered by plaintiffs, the Court must, for summary judgment purposes, credit plaintiffs’ contention that So-dexho used a decentralized, subjective promotions process. The Supreme Court has made clear that “Title VII prohibits discriminatory employment
practices,
not an abstract policy of discrimination.”
Falcon,
Further, the cases defendant cites for the proposition that “excessive subjectivity” does not constitute a company-wide practice or policy,
see Grosz,
Appellant’s statistical Prima facie case is bolstered by the subjective and ad hoc nature of Appellee’s promotion decisions. No objective criteria were established to guide the promotion decisions of supervisors, branch chiefs and ad hoc promotion panels, who were predominantly male. This Court agrees with the Eighth Circuit Court of Appeals in Rogers v. International Paper Co., ... which stated:
Greater possibilities for abuse ... are inherent in subjective definitions of employment selection and promotion criteria. Yet they are not to be condemned as unlawful per se, for in all fairness to applicants and employers alike, decisions about hiring and promotion in supervisory and managerial jobs cannot realistically be made using objective standards alone. Thus, it is especially important for courts to be sensitive to possible bias in the hiring and promotion process arising from such subjective definition of employment criteria.
Appellee’s promotion procedures are highly suspect and must be closely scrutinized because of their capacity for masking unlawful bias. The “lack of meaningful standards to guide the promotion decision, whereby there is some assurance of objectivity ... encourage(s) and foster(s) discrimination.”
Davis,
For these reasons, the Court finds that plaintiffs have offered sufficient evidence to carry their burden of establishing a prima facie case of a pattern or practice discrimination claim under Title VII and § 1981. It will now turn to Sodexho’s rebuttal evidence.
D. Defendant’s Rebuttal Evidence
The burden having now shifted to defendant to rebut the inference of discrimination created by plaintiffs’ prima facie case, defendant follows the familiar pattern by arguing that its statistical evidence shows that explanations other than race account for the statistical disparity, and plaintiffs’ statistical evidence is fundamentally flawed because of their expert’s failure to properly control for variables that would show that there are nondiscriminatory reasons for the disparity.
1. The Law Regarding Multivariable Regression Analyses
In rebutting plaintiffs’ prima facie case, which is generally based on a pools analysis, defendants typically rely on a multivariable regression analysis, which is a wholly different statistical methodology.
23
A regression can account for more factоrs simultaneously than a pools analysis. Baldus & Cole § 8.022[1], at 247. Hence, regressions are better suited to consider “major variables,” which in turn may help to explain the decision-making process. The importance of including the major variables is clear; failure to do so may mask the true cause of a statistical disparity between races. “The mathematical technique measures the probability that the calculated disparity could occur randomly — but the analysis in no way validates the calculation of the disparity itself. If the tested disparity is based on erroneous assumptions or suffers from flaws in the underlying data, then standard deviation analysis is foredoomed to yield an equally faulty result.”
Maddox v. Claytor,
But what constitutes a major variable for purposes of any given analysis will vary depending on the facts and theory of the case.
Coward,
While the omission of variables from a regression analysis may render the analysis less probative than it otherwise might be, it can hardly be said, absent some other infirmity, that an analysis which accounts for the major factors must be considered unacceptable as evidence of discrimination. Normally, failure to include variables will affect the analysis’ probativeness, not its admissibility.
Bazemore,
Moreover, even if a regression contains the necessary major variables, it may nonetheless carry inadequate weight to make a party’s case, depending on the analysis’ underlying data, methodology and results.
See Koger,
But material questions of fact may complicate the determination of what constitutes a “major variable.”
Cf. Coward,
Defendant relies on Haworth’s regression analyses to argue that it has conclusively demonstrated nondiscriminatory explanations for perceived racial disparities so as to preclude any finding of a pattern or practice of discrimination.
24
(Def.’s Mot. at 22.) Her methodology can best be summarized by reference to defendant’s motion.
(See
Def.’s Mot. at 24-25 & n. 7-8.) According to defendant, Haworth gathered information from personnel folders, applications for posted positions and succession planning documents for a stratified sample of Sodexho employees randomly selected across division, salary, grade band ranges and race groups.
25
Her sample included approximately 4,000 of approximately 20,500 salaried exempt employees, of whom 3,800 were African American or white. (Def.’s Mot. at 25 & n. 7-8.) She then coded for education, considering highest level of education and field of study, and coded for job experience based on occupations defined by the Census Bureau, “capturing experience at all prior positions, as well as the nature of the industry of employment.”
(Id.
at n. 8.) Certification and licensing information was gathered, and Sodexho tenure was measured by distinguishing between seniority in salaried exempt and hourly employees.
(Id.)
With this information, she found, af
While this is admittedly an accurate statement of the law, it remains to be decided: (1) whether defendant’s analyses did “measure key variables,” or, as plaintiffs argue, they included “tainted” or unnecessary variables that are not required for a valid regression analysis and that the inclusion of these variables affected the results; and (2) whether plaintiffs’ regression analyses omitted key variables and that this omission renders their analyses either inadmissible under Daubert or insufficient to stave off summary judgment as argued by defendant. (Def.’s Mot. at 24.) The resolution of these two issues will determine whether defendant has successfully rebutted plaintiffs’ prima facie ease.
a. The Parties’ Use and Definition of Variables
Plaintiffs devote many pages to criticizing Haworth’s analyses (see Pls.’ Opp. at 31-33; Pls.’ Rebuttal to Def.’s Stmt. of Facts ¶¶ 20-29), and it may well be that there are a variety of arguments that would, at least, preclude the granting of summary judgment in defendant’s favor based on the flaws in her analyses. But as the Court has said, the weight to be accorded to the statistical findings of each party’s expert is an issue properly reserved for the factfinder at trial and not the Court on a motion for summary judgment.
That being said, the Court will explore the issue of variables to clarify the differences between the experts and the effect of these differences on their results. To do this, it is helpful to recall that for purposes of multiple regression analyses, only the “major variables” must be controlled for, but how they are defined is far from clear, since they depend on the facts and theory of the case.
Coward,
But relianсe on that presumption does not end the matter, since there remains a legitimate debate between the parties as to how “experience” should be defined and what other variables, if any, need be included. And the importance of this debate is clear, for what variables are included or excluded and how a variable is defined have a significant impact on whether the expert finds a statistically significant disparity.
With respect to the factor of “experience,” plaintiffs criticize Haworth for not effectively controlling for experience by failing to consider when a person gained the experience and how long they had that experience, and by failing to differentiate between current occupation and a job that someone had 20 years ago or a prior job that is of no relevance to their current Sodexho employment. Therefore, according to plaintiffs, Haworth, by not distinguishing between current occupation and past experience, over-emphasizes past experiences, improperly causing past experience and current occupation to have equal weight. Further, plaintiffs complain that Haworth does not properly control for current occupation and MRR because her analyses only consider employees’ bands and not their MRRs, and therefore, she includes employees for whom a new position would not be a promotion (but rather it might well be a demotion because it would entail a decrease in salary). (See Tr. at 89-93.) This flaw would also, in plaintiffs’ view, operate to deflate the percentage of African Americans available fоr any position, since African Americans are found' disproportionately at the lower levels of the bands and whites are found at the higher levels. (See id.; Pls.’ Opp. at 31-32; Pls.’ Rebuttal to Def.’s Stmt. of Facts ¶¶ 21, 24, 26.)
While it is difficult (but not necessary) to resolve whether these many criticisms have merit, Haworth did in fact re-run her regression analyses. She used both her definition of promotion, as well as Siskin’s, and she continued to include variables such as RVPs, licenses and certifications, memberships, industry experience and specific unit experiences,
27
but she attempted to modify her analysis to address plaintiffs’ criticisms regarding her failure to properly
While the figure plaintiffs cite from Haworth’s Table 4 may not satisfy the usual standard of 1.96, this Circuit recognizes that a showing of 1.89, which is in the “intermediate zone” (defined as standard deviations of 1.65 to 1.96), in conjunction with other relevant evidence, can be sufficient at least to create an issue of fact as to whether discrimination has been shown.
Palmer,
As the above demonstrates, how one defines a promotion оr how one reflects current occupation can affect the results of a regression analysis. But a similar effect can be demonstrated depending on whether one includes or excludes variables that by all accounts do not fit within the law’s definition of “major factors.” For instance, Haworth controls for RVP, which defendant concedes is not a major variable and need not be included (Tr. at 58-59), as well as licenses and certifications, industry experience, memberships, and “specific unit experiences.” Plaintiffs object to the inclusion of these variables as being unnecessary, contrary to good statistical practice, and as having the potential for skewing the study by masking the effect of race on promotions.
(See
Pls.’ Ex. 158 [5/04 Siskin decl.] at ¶¶ 39-41.) While the Court is not prepared to categorize all of these variables as “tainted”
(see
note 27 supra), there is at least a serious question whether RVPs are a legitimate explanatory factor to predict the probability of promotion, or whether they may be masking a discriminatory process, thus qualifying under
Valentino
as an “inappropriate” or “tainted” variable.
If these variables are eliminаted because they are unnecessary, “inappropriate,” or
While the Court’s analyses may well be oversimplified or insufficiently detailed, there can be no doubt that defendant’s regression analyses are insufficient to defeat plaintiffs’ prima facie case. For, as the above discussion demonstrates, the inclusion or exclusion of non-major variables and how one defines promotion, as well as past job experience and current occupation, can have a profound effect on whether a statistically significant race disparity is found. Furthermore, there is no validity to defendant’s argument that Sis-kin failed to control for the major variables (education and past experience), since at the end of the day, he did just that and he still found statistically significant results. 31 (See Pls.’ Ex. 158 [5/04 Siskin decl.] at ¶¶ 34, 44-48 and Tables 5-8.) While each side may well have valid criticisms of how the opposing expert executed various methodologies, these highly-credentialed statisticians have reached starkly different conclusions based on re-runs of each other’s multiple regression analyses, and the propriety of these different approaches cannot be resolved at the summary judgment stage because they involve issues of credibility and disputed issues of fact.
II. Disparate Impact Claim
Plaintiffs’ second claim alleges that class members have suffered a disparate impact on the basis of race as a result of “Sodex-ho’s entirely subjective decisionmaking process, the elements of which are not capable of separation for analysis.” (Compl. ¶ 27.) This claim arises under Title VII, 42 U.S.C. § 2000e-2(k)(1).
A. Legal Standards
Disparate impact claims, though related to disparate treatment claims, have
“ ‘[A]n important point of convergence’ between disparate treatment and disparate impact claims exists in class actions such as this one. Because both ... claims ‘are attacks on the systemic results of employment practices ... proof of each claim will involve a showing of disparity between the minority and majority groups in an employer’s workforce.’ ”
Moore v. Summers,
Suits alleging subjective practices that result in disparate effects may proceed in order to counter the “unfairness in permitting an employer to perpetuate discriminatory effects by relying for discriminatory results on the individual biases of its managers.”
Mozee,
B. Plaintiffs’ Prima Facie Case
In its motion, defendant argues that plaintiffs cannot satisfy their burden to show a prima facie case because they have failed to identify a specific selection process or criterion that causes a disparate impact on African Americans, and that even if they can show such a practice, they have not satisfied their statistical burden of showing the practice caused a disparate impact. (Def.’s Mot. at 38-44). For many of the reasons already discussed with respect to plaintiffs’ disparate treatment claim, defendant is mistaken.
First, as previously explained, plaintiffs have proffered sufficient evidence at least to create an issue of fact as to whether Sodexho employs an entirely subjective de-cisionmaking process in awarding promotions that adversely impacts African American managers. While defendant obviously has cited evidence that rebuts plaintiffs’ showing, it is not possible for the Court to agree that plaintiffs have “virtually no evidence in support of their disparate impact claim.” (Def.’s Mot. at 39). 32 (See, e.g., Pls.’ Stmt. of Disputed Facts ¶¶ 4, 6, 29, and Pls.’ Rebuttal to Def.’s Stmt. of Facts ¶¶ 20, 31-41.)
Having reviewed the wealth of evidenсe before it, the Court is more than satisfied that plaintiffs have presented sufficient evidence that the elements of defendant’s decision-making process are not capable of separation for analysis, and this process is subjective and discretionary. Given this conclusion, there is substantial support in the law to justify plaintiffs’ claim.
See, e.g., Watson,
Finally, defendant argues that plaintiffs have not submitted sufficient evidence of causation. While defendant devotes its time to attacking plaintiffs’ industrial psy-
CONCLUSION
In sum, there are substantial questions of fact as to almost all material issues, and any conclusion regarding the probativeness of the testimony of the two experts who have appeared in this case (as well as many of the other well-known Title VII class actions that have been brought across the country) depends largely on underlying factual disputes and questions of credibility. Having carefully reviewed the parties’ pleadings and their arguments at the hearing on this motion, as well as the voluminous record in this case, the Court finds that defendant’s motion for summary judgment must be denied except that plaintiffs’ § 1981 disparate impact claim is dismissed with prejudice. It will therefore be for the jury to determine whether plaintiffs can sustain their ultimate burden of showing company-wide discrimination based on a theory of subjective, decentralized decision-making with respect to promotions of managers at So-dexho.
Notes
. The certified class consists
of all African-Americans who are or were salaried employees of Sodexho [] at any time from March [27], 1998, to [July 1, 2001], and who have held or sought to obtain (1) an upper-level managerial, supervisory, or professional position (above-the-unit or comparable level of responsibility) [for which a promotion decision was made before June 23, 2001] or (2) a job that would lead to such a position, and who have been, or continue to be, or may in the future be adversely impacted by Sodexho’s racially discriminatory policies and practices affecting promotions or advancement.
Id. at 433 (as modified by the Court’s Order dated January 14, 2003).
. The Court previously denied defendant's motion to decertify the class, except that it reserved judgment on Sodexho’s arguments regarding commonality and typicality. See McReynolds v. Sodexho, No. 01-510 (D.D.C. May 27, 2004). Defendant's argument in its motion to decertify the class — that faulty statistical evidence offered by plaintiff's expert, Dr. Bernard Siskin, violates Daubert-is addressed in the Court’s Memorandum Opinion, also issued this date, denying defendant's Daubert motion. The other remaining argument in the motion to decertify — that the class members' claims are not sufficiently common to or typical of the class because statistically significant adverse effects appear in only 9 of 155 RVPs — is addressed in this Memorandum Opinion. The Court will therefore not issue any further opinions with respect to the decertification motion.
. Defendant correctly argues that plaintiffs cannot bring a dispаrate impact claim under 42 U.S.C. § 1981, since purposeful discrimination is required under § 1981.
See General Bldg. Contractors Ass’n, Inc. v. Pennsylvania,
. The use of multiple regression analysis, used by experts for both sides, becomes relevant with respect to defendant’s rebuttal case. (See Section 1(D) infra.)
. Siskin analyzed the data for a given month, and considered as “similarly situated” all employees in the same grade or band, occupation code (which he adjusted for Market Reference Rate ("MRR”) differences), and division as the promoted employee prior to promotion. (Pls.’ Ex. 160 [11/01 Siskin report] at ¶ 4.) He ran his analysis for both the class period (March 1998 to June 2001), as well as January 1995 to June 2001. As noted, the former yielded a 5.34 standard deviation disparity, whereas the latter resulted in a disparity of 8.87.
(Id.
at Table S-2.) His analysis involved 4,276 promotions for the class period, whereas he analyzed 10,002 promotions for the 1995-2001 time period.
See also McReynolds,
.
Siskin's pools analysis shows lower levels of race-based disparities at the upper echelons of Sodexho. (Pls.’ Ex. 159 [10/01 Siskin report] at Table 9.) However, as Siskin explains, "the expected number of promotions to the highest level jobs will be very low if African American managers cannot even reach the positions that
lead to
those highest level jobs. Thus, ... [t]he results for the highest job levels should not be reviewed in isolation.”
(Id.
at ¶ 32.) This identification of a mid-level bottleneck is in accord with trends previously identified by this Circuit. ”[I]t is quite plausible that a discriminatory attitude about [African Americans] and their potential for further advancement might affect promotions only at a mid-level step,” because the lower level barrier to promotions could mean that those who were able tо overcome it may "have demonstrated such superior skill and aptitude that they would encounter less resistance to advancement in upper level positions.”
Palmer,
. Plaintiffs strongly object to defendant’s definition of promotion on the grounds that it is inconsistent with the company’s own definition of a promotion, which requires that a candidate change jobs. (See Pls.’ Ex. 105 at 8.) According to plaintiffs, Haworth’s overly-broad definition overstates the number of African American promotions because it includes lateral moves that are not really promotions, as well as pay increases that resulted from external factors, like an increase in the Market Reference Rate ("MRR”). Her definition produces approximately 2,000 additional promotions during the class period, and according to plaintiffs, this overstates the number of African American promotions in particular because the broadest bands (75, 76 and 77) are in the lower levels where African Americans have been disproportionately stuck due to Sodexho's racially discriminatory promotion process. (See Pls.' Rebuttal to Def.’s Stmt of Facts ¶ 2.) This disputed issue of fact (see Def.’s Mot. at 8, 28; Def. Ex. 12 [10/03 Haworth report] at 3-7) has a direct effect on both the pools analyses of the parties, as well as their multiple regression analysis. (See Section 1(D) infra.) However, for purposes of this motion, it is proper (as defendant appears to have agreed (see 12/3/04 Hearing Tr. [“Tr.”] at 65)) for the Court to apply Siskin’s definition.
. Siskin also re-ran his pools analysis using Haworth's definition of promotion and found
. Defendant often compounds the confusion by using the terms RVP and region synonymously. However, it is readily apparent that, regardless of whether RVPs are indeed a functional unit within Sodexho, they bear lit-tie correlation with the 54 geographic regions that exist within Sodexho. The Court, therefore, will refer to RVPs and not to regions. (See Pls.’ Opp. at 11 ("Some RVPs consist of a single employee in one office and other RVPs have over 150 employees working in 25 states in every section of the country. The same geographic location can also be in four or five different RVPs.") (citations omitted); Def.’s Reply at 10 (conceding that "RVP areas are not necessarily geographically contiguous and may overlap one another in a geographic sense”).)
. In fact, the only organizational chart reflecting RVPs that defendant has provided to the Court was included in Def. Ex. 2 at the motions hearing and is entitled "Sodexho Or
. Of 4,276 promotions during the class period that Siskin studied, 1,446 (or 34%) resulted in a change in the promoted employee’s RVP code. (Pls.' Ex. 158 [5/04 Siskin decl.] at ¶ 17.) By contrast, Haworth found a smaller percentage given her more expansive definition of what constitutes a promotion. (Id. at ¶ 17 n. 15; see also note 8 supra.)
. Thesе tables show the percentage of African Americans and the percentage of other employees who remained in a division, RVP, district or unit during the class period. It is impossible to determine whether the people who remained were not promoted or whether they were promoted and stayed. Likewise, the employees who left may not have left with a promotion. Hence, these tables do not show the promotion rate within the subgroup, nor do they provide any useful information regarding where a person went in the event of a promotion. In fact, it is even unclear from the tables if the figures reflect attrition in the subgroup for reasons unrelated to a promotion.
. Siskin reported a similar figure, finding that 28% of all bidders for open positions came from outside the division. (Pls.’ Ex. 160 [11/01 Siskin report] at ¶ 12 n. 8.) Plaintiffs also buttress their argument with testimony from plaintiffs and corporate employees who attest to the fact that managers often apply for and move across divisions and geographic regions. (See record citations in Pls.’ Rebuttal to Def.'s Stmt. of Facts ¶ 3 at 36-37.)
. Similarly, to the extent that defendant may be taking issue with Siskin’s failure to account for minimum objective qualifications in his pools analysis (as opposed to his multiple regression analysis) (see note 26 infra), the Court notes that the weighted feeder pool analysis of Sodexho’s own expert also failed to account for what defendant now appears to contend are minimum objective qualifica tions — i.e., education and experience. (See Def.'s Ex. 8 [10/01 Haworth report] at Table 18.)
Moreover, although at the prima facie stage, minimum objective qualifications must be accounted for in constructing a pool,
Davis,
Applying these principles to the case at hand, it is a disputed issue of fact whether
.
AMOCO
is particularly irrelevant, since the court was not evaluating any statistical evidence, but only anecdotal evidence.
. Of course, as noted in
McReynolds,
. According to Siskin, there were so few promotion decisions in 125 of the 163 RVP codes identified by Haworth in her March 2002 declaration that no matter what promotion decisions were made, these 125 RVP areas could not show statistically significant adverse results. (Id. at ¶ 22.)
. While the analysis at p. 279 of
Statsny
has rarely been cited, the Court is aware that the Honorable James Robertson of this Court has relied on it in recent decisions.
See Garcia v. Veneman,
. Arguably
Stastny
has no applicability here, since plaintiffs' theory is that there was a centralized decision at Sodexho to allow its managers unfettered discretion in making promotion decisions.
See Caridad v. Metro-North Commuter R.R.,
. It also bears noting that the legal authority cited by defendant for the proposition that plaintiffs must "demonstrate a clear nexus between their anecdotes and their pattern-or-practice claim'' (Def.'s Mot. at 19) is inappo-site. The court in
Mooney v. Aramco Services Co.,
. For instance, Sodexho’s chief EEO officer told the Senior Vice President for Human Resources "there, was a serious need to get more African Americans in above-the-unit jobs,” and discussed "the lack of minority representation” with other senior executives. (Pls.’ Ex. 78 [Watkis dep.] at 114, 142-43.) The EEO officer told other officials "since the day [he] started with the company” there needed to be more African-Americans in above-the-unit jobs.
(Id.
at 115). According to him, Sodexho's deficiencies included "[v]ery few minorities and women in district manager and large-account general manager positions” and the "[l]ack of minority and female representation in key sales roles.” (Pls.' Ex. 147 at SDX49624.) Consistent with this testimony, Sodexho’s internal "utilization analyses” show that African Americans’ share of above-the-unit positions actually fell during the class period. In 1998, whites were four times as likely as African Americans to hold such a job; by 2000, the ratio was five to one.
(See
Pls.’ Exs. 150, 153, 78 at 145-46.) And while these types of statistics may be subject to criticism
(see McReynolds,
. In addition to the above utilization figures, plaintiffs have bolstered their statistical case with evidence of segregated accounts at So-dexho. For instance, in Siskin's segregation analysis, he found that 5.2% of black managers report to black district managers, while only 2.2% of white managers report to a black district manager. (Pls.’ Ex. 161 [6/03 Siskin
. "Multiple regressiоn analysis is a statistical tool commonly used by social scientists to determine the influence that various independent, predetermined factors (so-called ‘independent variables') have on an observed phenomenon (the so-called ‘dependent variable'). In disparate treatment cases involving claims of [race] discrimination, plaintiffs typically use multiple regression analysis to isolate the influence of [race] on employment decisions relating to a particular job or job benefit .... The first step in such a regression analysis is to specify all of the possible 'legitimate' (i.e., nondiscriminatory) factors that are likely to significantly affect the dependent variable and which could account for disparities in the treatment of [employees of different races]. By identifying those legitimate criteria that affect the decision making process, individual plaintiffs can make predictions about what job or job benefits similarly situated employees should ideally receive, and then can measure the difference between the
predicted
treatment and the
actual
treatment of those employees. If there is a disparity between the predicted and actual outcomes for [minority] employees, plaintiffs in a disparate treatment case can argue that the net 'residual' difference represents the unlawful effect of discriminatory animus on the allocation of jobs or job benefits.”
Ottaviani v. State University of New York,
. To bolster its rebuttal, defendant also relies on various other types of evidence, including statistics showing that African American representation is higher in four of Sodexho’s six divisions than "the relevant labor market African American availability.” (Def.’s Mot. at 30.) Predictably, plaintiffs resрond that these statistics are meaningless, since the relevant comparison in a promotions case is not the external labor market, but the internal availability. (See Pls.' Rebuttal to Def.’s Stmt. of Facts ¶ 6 and citations therein.) Thus, in response plaintiffs offer their own underutili-zation figures (see note 21 supra), as well as anecdotal evidence regarding underrepresen-tation of African Americans in managerial positions. (See Pls.' Rebuttal to Def.’s Stmt. of Facts ¶ 6.)
Defendant also points to Haworth's two analyses of Sodexho’s job posting systems to argue that, when analyzed separately, neither the earlier MCMS system nor the later Career Center program, shows a statistically significant difference in the number of promotions between African Americans and whites. (Def.’s Mot. at 32 (citing Def. Ex. 8 [10/01 Haworth report]; Def. Ex. 1 [7/03 Haworth report]; and Def. Ex. 12 [10/03 Haworth report] ).) Plaintiffs counterattack by challenging that there is no factual basis for analyzing the two systems separately, since they operated in a similar fashion, and when analyzed together, Siskin found a shortfall of 2.21 standard deviations. (See Pls.’ Rebuttal to Def.'s Stmt. of Facts ¶¶ 42-43 (citing Pls.’ Ex. 157 [2/02 Siskin decl.].))
Suffice it to say that the above is merely illustrative of the substantial issues of fact upon which Sodexho relies in its rebuttal, and discussion of further examples would be superfluous.
. Plaintiffs challenge her methodology because Haworth's team was only able to code data for an employee where the résumé affirmatively listed a trait, such as a higher degree or experience in a given field. (Pls.' Opp. at 38 n. 27.) Thus, an employee with a certain kind of experience or education, who did not happen to put such information on the re-sumé that was submitted to Sodexho, would not be accurately accоunted for. Plaintiffs liken the resulting data and corresponding experience and education factors to the type of "nonsense” referred to in
Valentino,
where a “special degree" factor was coded for only if an employee indicated a specialty on a personnel form. In the Circuit's view, the result was too arbitrary for inclusion as a factor in the analysis, since, for instance, "[a] college history major who put 'history’ on the form would be recorded as holding a 'special degree' while one who did not fill in his or her major would not be recorded as a 'special degree’ holder.”
. Plaintiffs argue that major variables are the same as "minimum objective qualifications,” as defined in
Davis,
and since they claim that defendant did not consider factors such as education and experience when making promotion decisions, they should not be considered in a regression analysis. (Pls.' Opp. at 37;
see also
note 14
supra.)
This argument is overbroad and confuses the law. While plaintiffs' contention may be correct at the prima facie stage, it does not apply to regression analyses used thereafter, which seek to identify other factors that could cause the disparity initially identified. Therefore,
. Siskin argues in his 5/04 declaration at ¶¶ 39-43 (Pls.’ Ex. 158) that the addition of аt least some of these variables is improper and that they should be deleted as "tainted” variables, because they "inexplicably reduce[] a person’s chances of getting a promotion.” (Pls.' Opp. at 33.) However, just because some variables indicate a negative effect on promotion relative to the qualifications of the average would-be promotee does not necessarily make them suspect in and of themselves. (Def.’s Reply at 25 n. 15.) Therefore, it is not imperative that they be removed, as Siskin suggests. (Pls.’ Ex. 158 at ¶ 41; Def.’s Ex. 70 [5/17/04 Haworth decl.] at ¶ 6 (discussing the danger of introducing specification bias by removing supposedly collinear variables).) On the other hand, factors such as prison experience or the possession of various licenses or memberships do not qualify as major variables that must be included in a regression analysis.
. For instance, even if no factor except the definition of promotion is changed, Ha-worth’s promotion definition yields 6,984 promotions and a race effect of 1.06 standard deviations, whereas Siskin's definition yields 5,116 promotions and a race effect of 1.89. (See Def.'s Ex. 46 at Table 4.) Similarly, when Haworth uses Siskin's approach to current occupation and his number of promotions, her estimated race effect changes from 0.90 to 1.89 standard deviations. (Id.)
. Not surprisingly, Haworth asserts in response to these results that “[i]f we choose to include division as the decision-making structure, rather than the RVP area in the Ha-worth model estimated in my July 2003 Report, there is still no statistically significant race effect.” (Def.'s Ex. 70 [5/17/04 Haworth decl. at ¶ 5 n. 6.]) But since she provides absolutely no further explanation or documentation in support of this assertion, the Court can hardly reject Siskin's tables as having no probative value. (See also Tr. at 58-59, 135.)
. Admittedly, Haworth criticizes Siskin's work for adding some variables and omitting others and for doing more than just replacing RVP code with division code (see Def.’s Ex. 70 [5/17/04 Haworth decl.] at ¶ 10), but these criticisms again create issues of fact that do not result in the exclusion of Siskin's analy-ses.
. While defendant argues that Siskin failed to re-run Haworth’s analyses properly, because he did not fully control for past experience, it does admit that he controlled for education and, at least in part, for past experience. (See Tr. 69-70.)
. Even defendant concedes that plaintiffs’ industrial psychologist, Dr. Prien, does provide such evidence, but it dismisses his report as lacking any “hard evidence to support his position.” (Id. at 39.)
. The only cases from this jurisdiction that defendant cites,
Koger,