Green v. USX Corp. (843 F.2d 1511, 1988)

OPINION OF THE COURT

A. LEON HIGGINBOTHAM, Jr., Circuit Judge.

This appeal and cross-appeal arise from the district court’s decision in an employment discrimination class action that was brought under 42 U.S.C. §§ 2000e et. seq. (1982) (“Title VII”), and 42 U.S.C. § 1981 (1982) (“§ 1981”). The named plaintiff-appellants, Elbert G. Green and Robert Dan-ley, brought that action on behalf of the class of black persons (“the class”), who had unsuccessfully sought employment in the Production and Maintenance (“P & M”) Department of the Fairless Hills, Pennsylvania plant of the United States Steel Corporation (“USX”).

The class appeals the district court’s denial of recovery to its members under the disparate treatment theory of discrimination. Additionally, the class asserts that the measure of damages that the district court awarded was inadequate.

On its cross-appeal, USX contends that the district court erred by its determination that it was liable to the class under the disparate impact theory of discrimination. It also alleges error in the district court’s certification of the plaintiff class, and in the ultimate relief that the district court granted.

We have considered each of these contentions, and will affirm the decisions of the district court in significant part. Specifically, we will affirm the district court’s findings regarding USX’s liability for unlawful discrimination under disparate impact analysis, in violation of Title VII. We will also affirm the district court’s certification of the plaintiff class and its award of injunctive relief. Further, we conclude that the district court’s decision included a finding of liability against USX regarding applicants for summer positions, and that this finding was not clearly erroneous. Therefore, we will affirm the district court’s award of damages to summer employees.

The district court erred, however, in its conclusion that the class failed to establish a prima facie case of discrimination under Title VII. The district court misconstrued the applicable standard established by the Supreme Court regarding intent in this type of discrimination suit, and therefore its conclusion of law that the class failed to make a prima facie showing of disparate treatment was in error. Accordingly, we will reverse that part of the district court’s decision that found in favor of USX on the issue of liability under disparate treatment analysis.

Our finding of liability on this theory does not affect the damage award made by the district court. In our view, the district court exercised sound judgment in its adjudication of principal damages that resulted from USX's discriminatory hiring during the class period, and its decision need not be disturbed on the basis of our finding that an additional theory supports USX’s liability. We will reverse on different grounds, however, the conclusions that the district court reached regarding prejudgment interest and front pay. As to these issues, the rationale that the district court employed to support its findings was erroneous.

Accordingly, we will affirm the damage award in part, vacate in part and remand for proceedings consistent with this opinion.

I. FACTS

The factual basis giving rise to these appeals is essentially uncontroverted. Class member Elbert Green, a black man, unsuccessfully applied for employment as a laborer in the P & M Department of USX on April 11, 1973. Following the rejection of his application, he timely filed a charge of race discrimination with the Equal Employment Opportunity Commission (“EEOC”). Upon receipt from the EEOC of a notice of the right to sue. Green initiated this action and alleged violations of both Title VII and § 1981.

A. The Hiring Process

The focus of the class’s challenge was upon the manner by which new P & M laborers were selected. The P & M department was the largest at USX and accounted for almost the entire percentage of initial hiring into the USX Corporation. See Green v. United States Steel Corp., 570 F.Supp. 254, 257 (E.D.Pa.1983) (Findings of Fact ¶ 15) (P & M hiring constituted 95% of new hires). The stated criteria for employment in P & M unskilled positions were minimal. USX required only that potential P & M employees be eighteen years old, pass a physical examination and be sufficiently literate to read safety signs. Id. (Findings of Fact ¶ 17). USX’s view of the requirements for P & M jobs reflected its intent that the criteria not be highly selective. The district court found that USX, in newspaper advertisements for P & M laborers, stated that “no experience was necessary” and that the only requirement was “common sense and a desire to work.” Id. at 258 (Findings of Fact 1118). Any training or instruction necessary to the performance of the jobs was provided by USX on the job.

Prospective P & M laborers were required to complete written applications in which they listed basic background information regarding their educations, prior work experiences and physical conditions. Applicants were also requested to list the names of any relatives who were current or previous USX employees. USX evaluated each of these factors and used them in the decision whether to employ. USX collected these applications on a continuing basis and recorded them in a file known as the Job Application Log (“JAL”). Particular information from each applicant’s file, including his or her name, race and sex was placed on the JAL. It appears that the applicants for summer employment were separated from other applicants and entered into a different JAL.

USX employment supervisors periodically reviewed new applications and denoted certain ones (e.g., those in which the applicant had listed a relative at USX) for special consideration. Applications marked in this way were given preference over the other applications and moved immediately into the “ready file.” Applicants in the ready file were scheduled for interviews. Green, 570 F.Supp. at 259 (Findings of Fact 1127). Applications that were not immediately marked as ready were placed into a general application file, and the applicants were categorized according to factors such as race, sex and prior military experience. By this categorization, USX attempted to identify applicants who were in “protected classes” according to EEOC guidelines, for later reference when moving applications from the general file to the ready file. Clerks who maintained the JAL and ready files were instructed to “maintain a good mix” of applicants in the ready file. USX’s personnel supervisor testified that he had instructed clerks that 20-30% of those persons ultimately interviewed should be minorities. Id. (Findings of Fact II31).

Hiring was prompted by requests for additional personnel submitted by USX’s various department heads. When such a request was made, the personnel clerks selected a number of the applicants from the ready file that they believed would yield the requested number of new employees. These applicants were then invited to interview. The interview process was twofold. First, the applicant was interviewed by someone from the personnel department, and then by the foreman of the particular department that had requested additional personnel. The department foreman, however, had authority automatically to reject or accept the applicant after the interview. USX policy required that records of these interviews be kept, and that each decision to reject an applicant be accompanied by an explication of the rationale for the decision. These requirements were largely ignored, however, and few records were actually made. Green, 570 F.Supp. at 261 (Findings of Fact ¶ 50). Moreover, the interview sheets that were completed for unsuccessful applicants were ultimately destroyed by USX. Id. (same).

None of USX’s personnel or foremen interviewers were given any formal instruction regarding the evaluation of candidates or the implementation of employment criteria. Green, 570 F.Supp. at 260 (Findings of Fact ¶¶ 37, 39). Also, there was no minimum education or work experience requirement for persons hired to do personnel interviews. USX presented evidence that showed that it gave its interviewers only broad guidelines on which to base their determinations. On this point, the district court found that,

[w]hen making hiring decisions, ... interviewers evaluated applicants using the following criteria; education; work experience; attitude; initiative; personality; ability to take directions; alertness; intelligence; physical fitness (that is, physical restrictions); ability to communicate; military experience or training; vocational training; ability to meet work schedules; prior criminal record; familiarity with industrial or factory work; interest; prior employment history at Fairless Works; personal references; citizenship or alien status; having a relative in the [USX] work force; and age.

Id. (Findings of Fact ¶ 39).

The district court noted that the majority of these criteria were evaluated in a wholly subjective fashion. Regarding those criteria that were susceptible to objective measurement, “such as education and work experience, [USX] employed no uniform system in assessing one applicant’s qualifications vis-a-vis another’s.” Green, 570 F.Supp. at 260 (Findings of Fact ¶ 39). Significantly, at no point did USX ever validate the hiring criteria that it used, nor did it ever ascertain whether those criteria were job-related. The district court found that, “contrary to the requirements of its own personnel policies, [USX] maintained no system to determine whether its subjective hiring criteria were being fairly and nondiscriminatorily applied to all applicants.” Id. (Findings of Fact ¶ 44).

B. Evidence Regarding The Disparity

The class argued that the hiring system utilized by USX had a demonstrably adverse impact on black applicants and, further, that USX was aware of this impact and intentionally refused to alter the system to avoid the discrimination that resulted from its use. The class alleged, therefore, that USX was liable to the class under the “disparate impact” theory of discrimination established by the Supreme Court in Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 848, 28 L.Ed.2d 158 (1971), Albemarle Paper Co. v. Moody, 422 U.S. 405, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975), and International Bhd. of Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977) (“Teamsters”), and also under the “disparate treatment” theory as established by the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973).

In support of its disparate treatment claim, the class presented statistical evidence of the disparity between whites and blacks in the USX hiring practice that was generated by a study completed by statistics expert, Dr. Samuel Litwin. Using information derived from USX’s applicant and employment records, and from the Affirmative Action Quarterly Reports (“AAQR’s”) filed by USX. Dr. Litwin determined that, between 1971 and 1982, 49,-585 applications for P & M positions were received by USX. Of those applicants, 12,-857 (25.9%) were black. Green, 570 F.Supp. at 262 (Findings of Fact ¶ 57). This data was analyzed for each year of the class period:

TOTAL BLACK

APPLICATIONS APPLICATIONS %BLACK YEAR

1971 (July-Dee) rH CO