Estate of Pitre v. Western Electric Co. (719 F. Supp. 966, 1989)

MEMORANDUM AND ORDER

EARL E. O’CONNOR, Chief Judge.

This aged case comes before the court for a determination of damages. The plaintiff brought this action individually and on behalf of a class of women employees, alleging gender-based discrimination in violation of 42 U.S.C. § 2000e et seq. (Title VII). In an order dated August 9, 1983, (liability order) the court found that the defendant was liable to the plaintiff and the class. “Plaintiff” hereafter refers to the class as certified, which includes “all female employees of [the defendant] in positions ranging from grades M-10 through M-50 and in the position of section chief, who have been discriminated against in assignment, promotion, or downgrading, and who have been employed at defendant’s facilities in Merriam and Lenexa, Kansas, after December 11, 1974).” We addressed the issue of damages in orders dated December 14,1984, (damages order) and April 23, 1985, and a judgment was entered on June 20, 1985 (damages judgment). The defendant appealed our determination of liability, and both parties appealed the remedies as to the class. The Tenth Circuit affirmed our liability findings, but reversed and remanded the case for reconsideration of the remedy. Pitre v. Western Electric Co., 843 F.2d 1262, 1264 (10th Cir.1988). We directed the parties to attempt to reach an agreement as to the remedy in light of the circuit’s opinion, but they were unable to do so. Having received the parties’ proposed findings of fact and conclusions of law on the remedy issue, the court is prepared to rule.

Initially, we briefly examine our determination on liability, which was affirmed by the Tenth Circuit. Next, we focus on our earlier order on damages, and the Tenth Circuit’s reversal of that order. Finally, we tailor a new remedy in light of the circuit court’s opinion.

I. The Prior Opinions.

A. The Liability Order.

The defendant’s work force includes three types of employees: (1) hourly employees, which are blue-color workers, (2) salary-graded employees, which are white-color office employees classified in five grades from M-10 to M-50, and (3) management, the lowest grade of which is section chief. At issue in this case is the distribution of employees in grades M-10 through M-50 and in the section chief position.

Prior to the passage of Title VII in 1964, the defendant openly discriminated against women in terms of employment and advancement. In fact, the defendant’s treatment of women in the work force did not begin to improve until the late 1960’s and early 1970’s, and throughout the 1970’s, discrimination continued. In the early 1970’s, women who were salary-graded employees were clustered in the lower classification levels. As we stated in the liability order:

The net effect of the past discriminatory practices and the more recent fact that promotion decisions were being made by male section chiefs, resulted in more women remaining in the lower levels of the salary-graded employee plan. Specifically, distributions of males and females in the salary-graded universe and the management level at Merriam [ (one of the two facilities involved in this action)] on December 31, 1974, were as follows:

Males No. % .©

t — I

Asst. rH

Dept. Chief rH rH

Section Chief CO

M-50 Ñ

M-40 t-H rH

M-30 OO rH

M-20 05

M — 10 00 t-H

Liability Order at 21 (the table above is presented differently than was the table in the liability order, but the numbers are the same).

In 1975, the defendant reorganized management because of a decline in business, and some salary-graded employees were downgraded or laid off. The down-gradings disproportionately affected women in each M-level category. No salary-graded employees were promoted from June 1974 to June 1976. When promotions resumed, the defendant generally followed a policy of upgrading employees to their former M-level classifications in the order in which they were downgraded, but men did get some significant promotions ahead of women.

Given the evidence presented at trial, we concluded that

[t]he examples of preferential treatment of men over women were not merely isolated instances or “accidental in nature,” but were so pervasive throughout the Merriam and Lenexa facilities that the only rational conclusion to be reached is that defendant practiced sex discrimination with respect to salary-graded women.

Liability Order at 31. Specifically, we found that the defendant discriminated against the class with respect to (1) down-gradings and layoffs from December 11, 1974, through 1976, and (2) promotions since 1976. See Damages Order at 1. As stated above, the Tenth Circuit affirmed our liability determination.

B. The Damages Order.

After finding liability, we attempted to formulate an appropriate remedy. We recognized that the remedy should, “as nearly as possible, ‘recreate the conditions and relationships that would have been had there been no’ unlawful discrimination.” Teamsters v. United States, 431 U.S. 324, 371-72, 97 S.Ct. 1843, 1872-73, 52 L.Ed.2d 396 (1976) (quoting Franks v. Bowman Transportation Co., 424 U.S. 747, 769, 96 S.Ct. 1251, 1266, 47 L.Ed.2d 444 (1976)). However, we also noted that given the facts herein, a determination of the individuals who would have been promoted absent discrimination is impossible. Thus, we used a formula approach to determine back pay. Damages Order at 2-3.

First, we focused on the formula for back pay for promotions which women were wrongfully denied in a given year. We held that calculations of back pay for each level from M-20 to section chief should be made by multiplying the percentage of women in the promotion pool (those persons in the next lower M-level category) by the number of promotions (of men and women) to the level given that year, and then subtracting from this figure the number of promotions actually given to women in that year. The resulting figure is the number of women who were wrongfully denied promotions. Further, we stated that after the calculations for a given year are completed, the subsequent years’ figures should be determined using the fictional numbers of women that would be at each level had there been no discrimination. Damages Order at 4.

Second, we focused on a formula for back pay for downgradings and layoffs which resulted from discrimination. We determined that the percentage of women in the relevant pool (those persons in the M-level from which the downgrades or layoffs were made) should be multiplied by the number of downgrades or layoffs (of men and women) actually occurring in the relevant year. This figure should be subtracted from the number of women actually downgraded or laid off, with the resulting figure being the number of women who were wrongfully downgraded or laid off.

To determine back pay for wrongfully denied promotions or for wrongfully downgrades or layoffs, the court used the difference between (1) the average earnings of males in the higher M-level category and (2) the average earnings of females in the lower M-level category.

Third, the court examined the issue of front pay, stating that the defendant’s discrimination had resulted in a clustering of women at lower M-level categories, and that the “class will not be afforded complete relief unless the court grants front pay to the class to continue until women constitute an appropriate percentage of the employees at all levels, M-10 through section chief.” Damages Order at 6. We stated:

We could have gone back to 1965 (when Title VII became effective) and determined the number of promotions discriminatorily denied women between 1965 and 1974 (the starting date for back pay calculations). See Thompson v. Boyle, 499 F.Supp. 1147 (D.D.C.1980), modified sub nom. Thompson v. Sawyer, 678 F.2d 257 (D.C.Cir.1982) (citing Salone v. United States, 645 F.2d 875 (10th Cir.), cert. denied, 454 U.S. 894 [102 S.Ct. 390, 70 L.Ed.2d 208] (1981)). This method would have resulted in the number of women that should have been at each level by 1974 in the absence of discrimination. Because a greater number of women would have been at the higher levels, a greater back pay recovery for the class would result for the years 1974 through 1982. Id.

* * * * * *

In recognition of the inequity dicussed in Thomson [Thompson ] v. Sawyer, and in order to fully compensate the class, we have decided that front pay is appropriate in this case. It can be assumed that in the absence of discrimination, women would comprise approximately the same percentage at each level as that of the available workforce. Therefore, one would expect that in time women would represent at least fifty percent of each M level. It follows that front pay should continue until women comprise fifty percent of each M level and the Section Chief level. The defendants, therefore, will have a large degree of control over how long front pay continues, and this method will make up for the inequities inherent in a back pay formula that does not take into account the effects of past discrimination. We have chosen to allow front pay in this manner rather than calculating back pay by taking into account events occurring back to 1965.

This method better serves the purposes of Title VII. Front pay in this case will have the effect of moving women into the higher levels rather than merely compensating them for discrimination in the past. Back pay for only a few of those years of discrimination, without restoring women to their rightful places, would not fully compensate the plaintiff class.

Damages Order at 6-8 (emphasis added).

Fourth, we allowed prejudgment interest, and granted injunctive relief. Based on our findings in the damages order, the parties drafted and the court approved the damages judgement.

C. The Tenth Circuit’s Opinion.

The Tenth Circuit reversed and remanded, finding error in our remedy. Pitre, 843 F.2d at 1264. The circuit court found that a group remedy, determined by formula, was appropriate. Id. at 1275-76. It further found that our determination to grant back pay, front pay, and injunctive relief was proper. Id. at 1276. However, the circuit court found that our remedy failed in two manners to adequately consider the effects of past discrimination: First, we inadequately accounted for the lingering effects of past discrimination in determining the amount of back pay. Id. at 1278. Second, we insufficiently considered the effects of past discrimination in determining how to distribute the back pay award. Id. at 1279.

As to the amount of back pay, the Tenth Circuit described the cumulative effect of discrimination in the promotion process, stating that “[djenial of promotion to one grade affects the [employee’s] eligibility for later promotions to higher grades.” Id. at 1278 (quoting Segar v. Smith, 738 F.2d 1249, 1291 (D.C.Cir.1984), cert. denied, 471 U.S. 1115, 105 S.Ct. 2357, 86 L.Ed.2d 258 (1985)). The circuit court stated that we recognized this proposition, but that we had nonetheless failed to fully account for the cumulative effects of discrimination in our back pay award. See id. at 1278 (focusing on the above-quoted language from our damages order). The circuit court stated:

It is apparent from the quoted statements that the district court believed front pay would in part replace back pay. However, front pay is intended to compensate victims of discrimination for the continuing future effects of discrimination until the victim can be made whole____ Front pay is thus a supplement to back pay, not a substitute for it, particularly where as here the front pay is granted to only a limited number of employees.

Id. at 1278-79.

The Tenth Circuit also found that we inadequately considered past discrimination in our distribution of the back pay award. Id. at 1279. Essentially, the circuit court held that our focus in distributing back pay was too narrow. For example, we limited the distribution of back pay for discrimination in promotions from the M-40 grade to the M-50 grade to those women already in the M-40 grade. However, this limitation was improper, because absent discrimination, other women would have progressed to the M-40 level.

The Tenth Circuit concluded:

It is not our province to attempt to devise a remedy at this level. Rather, we remand to allow the district court to resolve these problems. On remand, the court is free to consider any method of determining the appropriate amount of back and front pay to which the class is entitled. Some courts have ordered parties to negotiate a suitable approach to determining back pay. Other courts have expressed a preference for group comparisons. For example, the salary of representative groups of women could be compared with groups of men of similar education and experience or length of service. The differences could be distributed pro rata among the members of the particular groups. By not using the women's current position in the company, the effects of past discrimination may be more fully incorporated into the formula. In principle, the district court’s method of calculating the promotions that should have gone to women with those that actually did go to women could again be used. The court, must, however, either attempt to account for the effect of past discrimination on the position of women at the beginning of the relevant period or explain why such consideration is unnecessary.

Id. (citations omitted).

II. The New Remedy.

Following the Tenth Circuit’s opinion, we directed the parties to attempt to reach an agreement as to the appropriate remedy. They were unable to do so, and we ordered them to file briefs addressing (1) the amount of back pay owed to the class, (2) the proper distribution of back pay to the class, and (3) the front pay owed to the class after reconsideration of the back pay issue.

A. The Amount of Back Pay.

The Tenth Circuit found that our back pay award failed to adequately account for the lingering effects of past discrimination which caused the plaintiff damages during the relevant period. The parties have submitted vastly different proposals as to how we may remedy this failure. The plaintiff proposes that the court

order defendant to pay to class members a sum equal to the difference between what women were proportionately entitled to receive and the amount they were paid.

* * # * # *

In the salaried grades, in other words, if women comprised 60% of the work force, they should have received 60% of all salaries paid. The back pay fund amount is arrived at by subtracting from this ideal figure the aggregate amount they were actually paid.

We find this approach unacceptable. At issue in this action are a finite number of identifiable decisions by the defendant regarding promotions and downgrades. We should focus these specific decisions and award the plaintiff damages when there is discrimination, rather than simply determining whether woman received a pro rata portion of all salaries paid.

The defendant proposes that our earlier back pay award sufficiently accounted for the effects of past discrimination and need not be altered. The defendant presents different analysis regarding promotions to section chief, the M-50 grade, and the M-40 grade. As to promotions to section chief, the defendant contends that the court should look separately at employees promoted from the M-50 grade and employees promoted from other grades. It asserts that women received an equitable share of the promotions of non-M-50 employees, and that women were wrongly denied only 0.68 of the section chief promotions that went to M-50 employees. As to promotions to the M-50 grade, the defendant argues that because our prior decision considered as promotions reclassifications and upgrades of employees who were previously downgraded, “the court greatly enlarged the backpay from what it would have been if the court had just focused on true vacancies during the liability period.” Further, the court’s decision not to give the defendant credit for over-promotions of women in 1979 and 1980 enlarged the back pay award. Thus, the defendant contends that the court need not adjust its award of back pay to account for past discrimination in promotions. As to promotions to the M-40 grade, the defendant asserts that the disparity between promotions of men and women before 1975 is statistically insignificant, making revision of the previous back award unnecessary.

Generally, we disagree with the defendant’s contention that no revision of our back pay award is warranted in light of the Tenth Circuit’s reversal of our earlier order. Further, we are not inclined to adopt a number of the defendant’s suggested changes from our earlier orders. For example, in determining back pay, we will continue to disregard the statistical over-promotions of women which occurred in some years for some grades. Additionally, we still consider as promotions reclassifications and upgrades of persons previously downgraded. Finally, we still believe that the appropriate pool for promotions to each grade consists of those employees in the next lower grade.

Because we find the damages proposals of both parites to be unacceptable, we must devise our own remedy to alleviate the flaws of our earlier back pay award. As stated above, we must “either attempt to account for the effect of past discrimination on the position of women at the beginning of the relevant period or explain why such consideration is unnecessary.” Pitre, 843 F.2d at 1279.

Our backpay award will again compare the promotions and downgrades that actually went to women to those that should have gone to women. The difference between the instant remedy and our prior award is the distribution of employees at the beginning of the relevant period. In our earlier award, we began our analysis using the defendant’s acutal work force on December 11, 1974. The instant award begins by developing a hypothetical work force which would have been in place at the end of 1974 if the defendant had not discriminated against women in promotions and downgrades between 1965 an 1974. Our calculations regarding this hypothetical work force are included in Table 1.

To devise the hypothetical 1974 work force, we must begin with the 1965 work force and track the promotions and downgrades which would have occurred absent discrimination. Unfortunately, the distribution of employees in 1965 is unknown; thus, it too must be surmised. We took a conglomerate of the 1973 and 1974 work forces to arrive at a hypothetical distribution for 1965. We then analyzed the promotions and downgrades for each grade in each year, and determined (based on the hypothetical percentage of women in the promotion or downgrade pool) the number which would have gone to women absent discrimination. This number is added to the previous year’s total of women in the grade, yielding the new total. This new total is divided by the total number of employees in the grade, yielding the new hypothetical percentage of women in the grade.

The actual 1974 work force had fewer employees than the hypothetical 1974 work force which we ascertained in Table 1. To reconcile our hypothetical findings with the actual number of employees, we multiplied the 1974 percentages of women found in Table 1 by the total number of employees in the actual 1974 work force. This yields the number of women that would be employed in each grade in 1974 absent discrimination. These calculations are included in Table 2.

Having determined the hypothetical 1974 work force, we can determine the back pay to which the plaintiff is entitled in much the same manner employed in the damages order and damages judgment. There is, however, one fundamental difference: Previously, we compared the actual promotions and downgrades during the relevant period to those which would have occurred if the defendant had not discriminated after 1974, whereas the instant order compares the actual numbers with those which would have resulted absent discrimination after 1965. In this manner, the instant order compensates the plaintiff for the lingering effect of previous discrimination which was felt by the plaintiff during the relevant period.

Table 3 includes calculations of the positions which women were wrongly denied during the relevant period. For each year, the number of promotions or downgrades of women which would have occurred absent discrimination is netted against the actual number of promotions or downgrades. The difference, if discriminatory, is listed. Table 3 also includes hypothetical work forces for each year in the relevant period; these work forces are determined in the same manner as those in Table l.

The following is a summary of the damages owed to the plaintiff for statistically excessive downgrades of women during the relevant period. The figures in the Number of Positions column are calculated in Table 3 (in that table, they are in the column labelled Difference (If Discriminatory)). The Average Monthly Earnings Difference is the average earnings difference between the women downgraded and the men left in the grade for the period in question. The calculations of these figures are shown and discribed in Table 4 and its explanation. The Average Downgrade Length indicates the average number of months that women were downgraded; Table 5 shows the calculations of these figures. The Recovery column indicates the amount to which the plaintiff is entitled. This amount is determined by multiplying the number of positions by the average earnings difference by the average downgrade length.

Grade Number of Positions Average Monthly Earnings Difference Average Downgrade Length (mos.) Recovery

42 $ 7,190 M-40 to 30 ^ H