Opinion ID: 501743
Heading Depth: 3
Heading Rank: 2

Heading: Adjusted Analyses

Text: 57 The EEOC's basic argument is that the district court's criticism of its applicant pool is superfluous. The EEOC contends that its regression analyses took into account differences in applicant interest and qualifications and still showed significant disparities between the expected and actual percentages of female commission sales hires. The district court found a myriad of flaws in these analyses, however, and thus determined that they could not be given any weight. 58 We briefly summarize the regression analyses. Siskin performed various multiple regression analyses to determine if the disparities between expected and actual female percentage of commission sales hires could be explained by differences in characteristics among male and female applicants. 22 He chose six factors that he believed might affect an applicant's chance of being hired: (1) job applied for; (2) age; (3) education; (4) job type experience; (5) product line experience; and (6) commission product sales experience. Siskin coded information on each of these characteristics (from the applications) for each person in the hired and nonhired sample groups, and grouped each characteristic into various categories. He then performed various multiple regression analyses designed to demonstrate that discrimination rather than any of the six characteristics accounted for disparities in hiring of female applicants. The EEOC relied for the most part on the results of two regression analyses. In a weighted logit regression analysis, the EEOC measured the impact of each independent variable (e.g., age) on the dependent variable of whether or not the person is hired, controlling for the impact of other independent variables. In the multivariate cross-classification, or multicell analysis, Siskin's model allowed all the variables to interact, as there was a separate cell for each possible combination of all the different values for all of the independent variables, or characteristics. As the district court explained, this method of analysis calculates the expected percent female by comparing the number of hires with any given combination of characteristics, with the number of female non-hires with that particular combinations [sic] of characteristics. Sears II, 628 F.Supp. at 1297. 59 As the district court noted, the logit and multivariate analyses reduced the disparities between expected and actual female commission sales hires. The logit analysis reduced the nationwide expected proportion of female commission sales hires for 1973 through 1980 from 61.1% to 49.5% for full-time and from 66.2% to 63.3% for part-time. The multivariate analysis reduced the expected percentage of female full-time hires nationwide for all years from 61.1% to 40.3% (later reduced to 37.2%), 23 and the disparity for part-time hires was reduced from 66.2% to 60.5%. The court also noted that the z values were below 3 for a number of years in various territories and that the EEOC had admitted that those disparities were not statistically significant, but also recognized the EEOC's claim that statistically significant disparities existed nationwide and by territory for several years in which the z value exceeded 3. 24 60 The EEOC conducted another multivariate analysis for full-time hires for each of ten product line groupings (e.g., home furnishings, appliances) separately on a nationwide basis for the years 1973 through 1975, and 1976 through 1980. The court noted that there were statistically significant disparities in several of the product line groupings. 25 The EEOC conducted a similar analysis for the part-time case, except that fourteen instead of ten product line groupings were used and the Midwestern Territory was analyzed separately from the combination of the other territories because of apparent differences in hiring patterns. 26 61 The district court's major criticism of the EEOC's regression analyses is that the six characteristics chosen by the EEOC's expert Siskin were simplified and inadequate to account for applicant differences in interest and qualifications. Sears II, 628 F.Supp. at 1302, 1305 n. 35a. The EEOC contends that these characteristics did indeed contemplate differences in interest and qualifications. The court first criticized the EEOC's choice of characteristics. The court found, and the EEOC does not challenge this, that the six factors chosen by Siskin were the result of his opinion as to what factors would be important for commission selling. The court further found it could give little weight to Siskin's opinion in this regard because Siskin is not an expert in labor economics, has no expertise in the area of retail sales, and has no direct knowledge of Sears. Id. at 1302. We must accord great deference to such credibility-based factual determinations. See Anderson v. City of Bessemer City, 470 U.S. 564, 575, 105 S.Ct. 1504, 1512, 84 L.Ed.2d 518 (1985). 62 The court also determined that the EEOC presented no credible evidence to support Siskin's choice of the particular six factors as important to commission selling at Sears. Instead, the court found all the evidence offered at trial indicates ... that a number of important factors were not included in the EEOC's analysis. Sears II, 628 F.Supp. at 1302. The most critical factor intentionally excluded by EEOC according to the court was the applicant's interest in commission sales and in the product to be sold. Id. The EEOC contends on appeal that four of its characteristics, Job-Applied-For and the three experience variables (job type experience, product line experience, and commission product sales experience), were highly correlated with interest. It cites nothing, however, either on the record or outside the record, to support this statement. The case is thus unlike that of Bazemore v. Friday, 478 U.S. 385, 106 S.Ct. 3000, 3008, 92 L.Ed.2d 315 (1986), in which the Supreme Court noted that the type of independent variables used in plaintiffs' regression analyses were selected based on discovery testimony by one of defendants' officials that certain factors were determinative of the dependent variable salary. Although this rationale for choice of the independent variables did not preclude questioning of the comprehensiveness of these variables, see Bazemore, 106 S.Ct. at 3008-09, the Court rejected the court of appeals' conclusion that the analyses were unacceptable because they did not include all variables that might have an effect on salary--the Court stated that the analyses should be given some probative value. We think that the EEOC's failure to support its choice of variables in this case casts a shadow on the probative value of the regression analyses incorporating those variables. Furthermore, if those four variables were indeed highly correlated with interest, the EEOC still does not explain, satisfactorily, how the analyses incorporating those variables adequately controlled for interest. 63 Interest was not the only factor affecting an applicant's chance of being hired that the court found was not controlled for in the EEOC's regression analyses. The EEOC challenges the district court's conclusion that its regression analyses did not adequately adjust for differences in qualifications. As the district court found, the EEOC's Commission Sales Report itself demonstrated that, on average, female applicants in the 'sales' pool were younger, less educated, less likely to have commission sales experience, and less likely than male applicants to have prior work experience with the products sold on commission at Sears. Sears II, 628 F.Supp. at 1315. The EEOC counters that its experience variables took those differences into account. The EEOC's three experience variables would seem to account for differences in the experience aspect of qualifications. The court found that other characteristics, however, such as physical appearance, assertiveness, the ability to communicate, friendliness, and economic motivation, factors Sears managers had identified as desirable for commission salespersons, could be determined only from an interview, not from the written application. Id. at 1303. The court recognized that these characteristics are not easily quantified and this data would not be generally available from the application forms, but found that to the extent the EEOC's regression analyses did not incorporate these factors, they were entitled to less weight. We cannot say that this finding, going to the probative value rather than the relevancy of the regression analyses, is clearly erroneous. See Bazemore, 106 S.Ct. at 3008-09. 64 We believe the district court accorded its findings regarding the failure to include independent variables such as interest and aspects of qualifications in the regression analyses the proper evidentiary weight. The district court cited the Fourth Circuit case Bazemore v. Friday, 751 F.2d 662, 672 (4th Cir.1984), aff'd in part and rev'd in part, 478 U.S. 385, 106 S.Ct. 3000, 92 L.Ed.2d 315 (1986), for the principle that in a meaningful regression analysis, all independent variables that significantly affect the dependent variable should be included. The Supreme Court later reversed the Fourth Circuit on this issue, holding that the Court of Appeals erred in determining that a regression analysis was  'unacceptable'  because it did not include  'all measurable variables'  that could affect the dependent variable. Bazemore, 106 S.Ct. at 3009 (quoting opinion of court of appeals). The Court noted that the regression analysis accounted for the major factors and in that situation failure to include variables normally goes to probativeness, not admissibility. Id. The district court in this case did not make the Fourth Circuit's fatal mistake. It is clear from the district court's opinion that it did not determine that the EEOC's analyses were inadmissible or irrelevant because of the failure to include variables--instead, the court determined that the analyses were not probative because of the omissions. Although we do not believe the court found the regression analyses totally unacceptable, the court's criticisms of the analyses are so pervasive that the court may have believed that the regressions were what the Bazemore Court termed so incomplete as to be inadmissible as irrelevant, which would be an exception to the general rule established in Bazemore. 27 Bazemore, 106 S.Ct. at 3009 n. 10. 65 The district court's other criticisms of the regression analyses go to the coding of the factors the EEOC did include in the regressions. The court found that the coding of several factors was clearly inadequate to properly adjust for those factors. Sears II, 628 F.Supp. at 1303. The court noted that regarding the characteristic of prior job experience, the EEOC did not adjust for various forms of job experience. The court gave the example of the prior job experience of commission selling--women were more likely than men to have been cashiers on a commission-selling basis, and thus in actuality did not have experience in commission selling as it was done at Sears. The EEOC responds that its expert Siskin performed a multicell regression separating out all persons who had been cashiers with trivial impact on the results. 28 Although cashiers may not have been the best example of earlier job experience, we do not believe the court's emphasis on prior job experience was implausible on this record. The district court found other infirmities in the coding of the experience variables; namely, that Siskin did not code the amount of prior experience, interruptions in work history, or other relevant experience (the latter of which was on the application). These inadequacies in coding of the experience variables led the court to conclude that [b]ecause of the nature of these coding deficiencies, women are credited with greater amounts of experience at higher levels than they actually had. The effect of all these inadequacies is to inflate the percent of women the statistical models estimate should be hired. Id. at 1304. The EEOC responds to some, but not all of these criticisms, mainly relying on its argument that the court did not cite actual data to support the criticisms. We do not believe the court's criticisms of the coding of experience variables are clearly erroneous. 66 We agree with the EEOC that one of the district court's criticisms of the coding was misplaced. The court concluded that Siskin had not recoded the Job-Applied-For variable after discovering an error in the coding, and that there was thus an overestimation of the expected female proportion of commission sales hires. Siskin had, however, recorded the variable for the overlapping sample of twenty-nine stores and reported in court that there was no impact on the analysis. 67 The EEOC argues that none of the court's other criticisms of its regression analyses are of consequence. The district court found that by creating artificial national and territorial pools of applicants, without taking into account likely variations in the quality of applicants at individual stores or even whether openings actually existed at stores, the EEOC did not analyze the hiring situations actually confronted by Sears managers. Id. at 1316. The court thus accorded the statistical analyses less weight. We believe that on this record such a finding is plausible. 68 Based on the above findings, the district court determined that the z values both for the unadjusted comparisons of expected and actual female hires, and for the regression analyses, did not constitute statistically significant disparities. Regarding the unadjusted analysis, the court found that because the EEOC never controlled for interest or qualifications, there were no meaningful comparisons between actual and expected female hires and thus the z values prove[d] nothing. Id. The court also found that the EEOC's attempts to adjust for differences among applicants, mainly interest and qualifications, were woefully inadequate as discussed above, so that the EEOC did not achieve fair estimates of the expected female hires. In such a case, the court concluded, the z statistics connected with the comparison of actual and expected female hires have little value. Id. The court further credited Sears' incorporation of variances into calculation of the z statistics to account for the difference between the proportion of women in the nationwide pool and the proportion of women in each store pool. After taking into account the variances, the court noted, the z statistics were significantly lower, so that [f]or EEOC's nationwide multicell analysis of full time commission sales hires, z values exceed 3 in only two years. 29 Id. at 1317. The court then concluded that because these z values did not take into account differences in male and female interest in commission sales, an analysis incorporating those differences would not produce statistically significant disparities. 69 The EEOC challenges the above findings, arguing that its regression analyses did indeed show statistically significant disparities that satisfied its burden of proving discrimination as articulated by the Supreme Court in Bazemore, 106 S.Ct. at 3009: A plaintiff in a Title VII suit need not prove discrimination with scientific certainty; rather, his or her burden is to prove discrimination by a preponderance of the evidence. The Bazemore Court went on to note, however, that [w]hether, in fact, such a regression analysis does carry the plaintiffs' ultimate burden will depend in a given case on the factual context of each case in light of all the evidence presented by both the plaintiff and the defendant. Id. We have not as yet discussed all of the EEOC's evidence, but we need only briefly consider that other evidence because the EEOC's primary focus was its regression analyses and with one exception (the AIGs), the EEOC casts that evidence as supporting its regression analyses in allegedly showing hiring discrimination. We believe the district court's treatment of the EEOC's regression analyses was consistent with Bazemore --the court did not require the EEOC to show disparities with scientific certainty, but rather considered all the evidence in determining that it could not rely on the EEOC's purported disparities.