Opinion ID: 764161
Heading Depth: 3
Heading Rank: 2

Heading: Disparate Impact Liability

Text: 24 The defendants argue that the district court erred in finding that the union's facially neutral policies had a disparate impact upon the plaintiffs, in violation of Title VII of the Civil Rights Act of 1964. The challenged practices are: (1) Local 496's working-in-the-calling rule; and (2) its practice of referring only union members for employment. The district court found that the plaintiffs presented statistical evidence sufficient to establish a prima facie case of disparate impact discrimination. The district court also determined that the defendants produced no job-related business justification for the policies engendering the disparate impact. We review a district court's finding of disparate impact discrimination for clear error. See Atlas Paper, 868 F.2d at 1493. 25 It is now well-settled that Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., proscribes both overt discrimination as well as practices that are fair in form but discriminatory in operation. Griggs v. Duke Power Co., 401 U.S. 424, 431, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971). The plaintiff's burden in a Title VII disparate impact case is to prove that a particular employment practice has caused a significant adverse effect on a protected group. See Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 657, 109 S.Ct. 2115, 104 L.Ed.2d 733 (1989); Scales, 925 F.2d at 908 (citing Watson v. Fort Worth Bank & Trust Co., 487 U.S. 977, 108 S.Ct. 2777, 101 L.Ed.2d 827 (1988)). Once the plaintiff establishes the adverse effect, the burden shifts to the employer to produce evidence that the challenged practice is a business necessity. See Wards Cove, 490 U.S. at 659. 26 Here, the defendants' principal argument is that the testimony of plaintiffs' expert, Brian Pendleton, Ph.D., was based on an overly broad labor pool and that as a result the district court erred in crediting his evidence over that of defense expert, Beth Martin, Ph.D. Dr. Pendleton based his statistics on a labor pool comprised of Lake, Ashtabula, Cuyahoga and Geauga Counties. The experts agreed that 93.5% of Local 496's membership came from these four counties. Dr. Pendleton's calculations led him to conclude that the percentage of African Americans in Local 496, approximately 5%, was two standard deviations lower than the percentage of African Americans in the four-county labor pool. Dr. Martin, on the other hand, based her statistics on a labor pool comprised only of the people employed in Lake County, where Perry is located. She narrowed her labor pool to this population based on her reasoning that Local 496's jurisdiction is limited to people employed in Lake County, regardless of their county of residence. Dr. Martin then determined that the percentage of African Americans in the relevant labor pool in Lake County and the number of black members of Local 496 both equaled 5%. Relying on this statistic, Dr. Martin reasoned that Local 496's African-American membership mirrored the African-American population in the relevant labor market and, on this basis, concluded that the union's policies had no disparate impact on the plaintiffs. 27 The district court found that the labor pool upon which Dr. Pendleton based his conclusion was overly broad, while Dr. Martin's was overly narrow. The district court nevertheless concluded that the statistical disparities were sufficient to establish a prima facie case of disparate impact discrimination. The district court reasoned that the union's membership and referral policies, characterized by the facially neutral working-in-the-calling rule and the policy of referring only union members for employment, even if applied in a non-discriminatory fashion ... simply works to reinforce past patterns of discrimination. 28 We agree. As an initial matter, we note that despite whatever reservations the district court may have had with Dr. Pendleton's report, its determination of the four-county area as the correct labor pool was not clearly erroneous. The evidence in the record indicates that Perry paid extremely high wages for relatively low-skill positions. Therefore, applicants were exceedingly willing to commute from throughout the area to Perry. As the district court stated, then, the gross disparity between the percentage of blacks in the membership of Local 496 and the four-county area certainly supports a prima facie case. Moreover, we recognize that plaintiffs who present a statistical analysis of some challenged practice need not rule out all other variables to prevail. See United States v. City of Warren, 138 F.3d 1083, 1094 (6th Cir.1998) (citation omitted); see also Bazemore v. Friday, 478 U.S. 385, 400, 106 S.Ct. 3000, 92 L.Ed.2d 315 (1986) (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 fact that Local 496 maintained policies that limited the union's membership to people who were employed in Lake County, whose workforce was 99% white, necessarily had a disparate impact on unemployed African Americans seeking membership in, or employment referrals from, the union. Put differently, the overwhelming majority of workers eligible for union membership were white, in large measure because the union's own discriminatory practices prevented African Americans from obtaining employment in Lake County; Local 496's membership reflected this demographic, resulting in the de facto exclusion of African Americans from union membership. See Ingram v. Madison Square Garden, 709 F.2d 807, 810-11 (2d Cir.1983) (affirming district court's finding that union's referral policies violated Title VII based on a combination of a few statistics and evidence that behavior of union personnel discouraged plaintiffs from seeking employment); see also Gibson v. Local 40, Supercargoes and Checkers of the Int'l Longshoremen's and Warehousemen's Union, et al., 543 F.2d 1259, 1268 (9th Cir.1976) (stating that union's preference in referring relatives of union members when membership was overwhelmingly white had disparate impact in violation of Title VII even if defendants' nepotism was without discriminatory intent). 29 Once a plaintiff establishes that a particular practice has engendered a significant adverse effect, the defendant must produce evidence that the challenged practice is a business necessity. See Wards Cove, 490 U.S. at 659; Warren, 138 F.3d at 1091-92. Again, the defendants argue that their membership and referral policies, particularly the working-in-the-calling rule, were implemented to protect union members from competing for available positions with an influx of unemployed applicants. The district court correctly determined that this explanation does not justify the discriminatory effects of the challenged practices. Because, as explained above, Local 496 is the sole source of referrals for Perry and, in theory, it offered membership only to people employed in Lake County, its own practices served to reinforce the discriminatory impact on African Americans seeking employment at Perry, first by excluding them from union membership and then by refusing to refer them for jobs because they are non-members. Such a business justification, which buttresses established forms of discrimination, cannot withstand a Title VII challenge. See United States v. Bethlehem Steel Corp., 446 F.2d 652, 659 (2d Cir.1971) (holding that employer's facially neutral practices which perpetuated effects of employer's prior discrimination violated Title VII); see also Warren, 138 F.3d at 1094 (stating that defendant employer should not escape liability because it maintained two discriminatory practices which operated concurrently to exclude black applicants); Gibson, 543 F.2d at 1267 (invalidating practice that operated to freeze the status quo of the defendant's discriminatory employment practices). 30 Based on the evidence in the record, the district court correctly concluded that the plaintiffs established a prima facie disparate impact claim, and the defendants' proffered justification was pretext for discrimination. We therefore affirm the district court's finding of liability with regard to the plaintiffs' disparate impact claim.