Opinion ID: 1202334
Heading Depth: 5
Heading Rank: 1

Heading: Significant Proof of a Corporate Policy of Discrimination

Text: Plaintiffs presented four categories of evidence: (1) facts supporting the existence of company-wide policies and practices; (2) expert opinions supporting the existence of company-wide policies and practices; and (3) expert statistical evidence of class-wide gender disparities attributable to discrimination; and (4) anecdotal evidence from class members around the country of discriminatory attitudes held or tolerated by management. See Dukes I, 222 F.R.D. at 145. Wal-Mart contends that this evidence is not sufficient to raise an inference of discrimination.
Plaintiffs presented evidence of: (1) uniform personnel and management structure across stores; (2) Wal-Mart headquarters's extensive oversight of store operations, company-wide policies governing pay and promotion decisions, and a strong, centralized corporate culture; (3) consistent gender-related disparities in every domestic region of the company. Such evidence supports Plaintiffs' contention that Wal-Mart operates a highly centralized company that promotes policies common to all stores and maintains a single system of oversight. Wal-Mart does not challenge this evidence.
Plaintiffs presented evidence from Dr. William Bielby, a sociologist, to interpret and explain the facts that suggest that Wal-Mart has and promotes a strong corporate culture  a culture that may include gender stereotyping. Dr. Bielby based his opinion on, among other things, Wal-Mart managers' deposition testimony; organizational charts; correspondence, memos, reports, and presentations relating to personnel policy and practice, diversity, and equal employment opportunity issues; documents describing the culture and history of the company; and a large body of social science research on organizational policy and practice and on workplace bias. Dr. Bielby testified that by employing a social framework analysis, [3] he examined the distinctive features of Wal-Mart's policies and practices and evaluated them against what social science shows to be factors that create and sustain bias and those that minimize bias. In Dr. Bielby's opinion, social science research demonstrates that gender stereotypes are especially likely to influence personnel decisions when they are based on subjective factors, because substantial decision-maker discretion tends to allow people to `seek out and retain stereotyping-confirming information and ignore or minimize information that defies stereotypes.' Dukes I, 222 F.R.D. at 154. Dr. Bielby concluded: (1) that Wal-Mart's centralized coordination, reinforced by a strong organizational culture, sustains uniformity in personnel policy and practice; (2) that there are significant deficiencies in Wal-Mart's equal employment policies and practices; and (3) that Wal-Mart's personnel policies and practices make pay and promotion decisions vulnerable to gender bias. See id. Wal-Mart challenges Dr. Bielby's third conclusion as vague and imprecise because he concluded that Wal-Mart is vulnerable to bias or gender stereotyping but failed to identify a specific discriminatory policy at Wal-Mart. Specifically, Wal-Mart contends that Dr. Bielby's testimony does not meet the standards for expert testimony set forth in Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharm., Inc. ( Daubert I ), 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), which held that a trial court must act as a gatekeeper in determining whether to admit or exclude expert evidence. Wal-Mart made an identical argument to the district court and the district court properly rejected it. Wal-Mart did not (and does not) challenge Dr. Bielby's methodology or contend that his findings lack relevance because they do[ ] not relate to any issue in the case, Daubert, 509 U.S. at 591, 113 S.Ct. 2786, but challenges only whether certain inferences can be persuasively drawn from his data. Because Daubert does not require a court to admit or exclude evidence based on its persuasiveness, but rather, requires a court to admit or exclude evidence based on its scientific reliability and relevance, id. at 587-90, 113 S.Ct. 2786 (evidence is relevant if it has `any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence' (citing Fed.R.Evid. 401), and relevance standard is a liberal one), testing Dr. Bielby's testimony for  Daubert reliability would not have addressed Wal-Mart's objections. It would have simply revealed what Wal-Mart itself has admitted and courts have long accepted: that properly analyzed social science data, like that offered by Dr. Bielby, may add probative value to plaintiffs' class action claims. See Price Waterhouse v. Hopkins, 490 U.S. 228, 235-36, 255, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989) (considering similar evidence offered by expert social psychologist). Accordingly, Wal-Mart's contention that the district court was required to subject Dr. Bielby's testimony to the Daubert test, simply because the conclusion he reached seemed unpersuasive absent certain corroborating evidence, is misplaced. See Daubert, 509 U.S. at 595, 113 S.Ct. 2786 (The focus, of course, must be solely on principles and methodology, not on the conclusions that they generate.). While a jury may ultimately agree with Wal-Mart that, in the absence of a specific discriminatory policy promulgated by Wal-Mart, it is hard to believe, based solely on Dr. Bielby's social science analysis, that Wal-Mart engaged in actual gender discrimination, that question must be left to the merits stage of the litigation. At the class certification stage, it is enough that Dr. Bielby presented properly-analyzed, scientifically reliable evidence tending to show that a common question of fact  i.e., Does Wal-Mart's policy of decentralized, subjective employment decision making operate to discriminate against female employees?  exists with respect to all members of the class. [4] This he did and, thus, we find no error in the district court's acceptance of Dr. Bielby's evidence to support its finding of commonality.
It is well-established that commonality may be established by raising an inference of class-wide discrimination through the use of statistical analysis. See Caridad, 191 F.3d at 292, overruled on other grounds by In re IPO, 471 F.3d at 39-42; see also Stastny v. S. Bell Tel. & Tel. Co., 628 F.2d 267, 278 (4th Cir.1980) (recognizing that statistical data showing comparable disparities experienced by protected employees may raise an inference of a policy or practice of discrimination). Dr. Richard Drogin, Plaintiffs' statistician, analyzed data at a regional level. He ran separate regression analyses for each of the forty-one regions [5] containing Wal-Mart stores. [6] He concluded that there are statistically significant disparities between men and women at Wal-Mart in terms of compensation and promotions, that these disparities are wide-spread across regions, and that they can be explained only by gender discrimination. Dukes I, 222 F.R.D. at 154. Dr. Marc Bendick, Plaintiffs' labor economics expert, conducted a bench-marking study comparing Wal-Mart with twenty of its competitors and concluded that Wal-Mart promotes a smaller percentage of women than its competitors. [7] See id. Wal-Mart challenges Dr. Drogin's findings and faults his decision to conduct his research on the regional level, rather than analyze the data store-by-store. However, the proper test of whether workforce statistics should be viewed at the macro (regional) or micro (store or sub-store) level depends largely on the similarity of the employment practices and the interchange of employees at the various facilities. See Kirkland v. New York State Dept. of Corr. Servs., 520 F.2d 420, 425 (2d Cir.1975) (recognizing that the focus of analysis depends on nature of defendant's employment practices); 2 Barbara Lindemann & Paul Grossman, Employment Discrimination Law 1598, 1723 (3d ed.1996). Here, Dr. Drogin explained that a store-by-store analysis would not capture: (1) the effect of district, regional, and company-wide control over Wal-Mart's uniform compensation policies and procedures; (2) the dissemination of Wal-Mart's uniform compensation policies and procedures resulting from the frequent movement of store managers; or (3) Wal-Mart's strong corporate culture. Because Dr. Drogin provided a reasonable explanation for conducting his research at the regional level, the district court did not abuse its discretion when it credited Dr. Drogin's analysis and concluded that his analysis supported Plaintiffs' contention that Wal-Mart's corporate structure and policies led to a pattern or practice of discrimination. Wal-Mart also contends that the district court erred by not finding Wal-Mart's statistical evidence more probative than Plaintiffs' evidence because, according to Wal-Mart, its analysis was conducted store-by-store. However, contrary to Wal-Mart's characterization of its analysis, its research was not conducted at the individual store level. Dr. Joan Haworth, Wal-Mart's expert, did not conduct a store-by-store analysis; instead she reviewed data at the sub-store level by comparing departments to analyze the pay differential between male and female hourly employees. [8] Moreover, our job on this appeal is to determine whether the district court abused its discretion in finding that, based on all the evidence presented, there existed common questions of fact sufficient to justify class certification. See Armstrong, 275 F.3d at 867; Free Speech Coalition, 408 F.3d at 618. Our job is not to re-examine the relative probativeness of the commonality evidence ourselves. Thus, even if we were to find, based on an independent review of the record, that Wal-Mart's statistical evidence was more persuasive than Plaintiffs'  which we do not, in any event  this alone would not allow us to find that the district court improperly relied on Dr. Drogin's testimony as a valid component of its commonality analysis or that the district court erred in its ultimate conclusion that the commonality prerequisite was satisfied. Because the district court reasonably concluded that Dr. Drogin's regional analysis was probative and based on well-established scientific principles, because Wal-Mart provided little or no proper legal or factual challenge to it, [9] and because the district court was within its discretion when it found that Dr. Haworth's evidence  which was stricken for failing to satisfy the standards of Federal Rules of Evidence 702 and 703 [10]  did not undermine or contradict Dr. Drogin's evidence (as Wal-Mart insisted), the district court did not abuse its discretion when it relied on Dr. Drogin's use and interpretation of statistical data as a valid component of its commonality analysis.
Circumstantial and anecdotal evidence of discrimination is commonly used in Title VII pattern and practice cases to bolster statistical proof by bringing the cold numbers convincingly to life. Int'l Bhd. of Teamsters v. United States, 431 U.S. 324, 339, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977); see also Rudebusch, 313 F.3d at 517. Wal-Mart contends that the district court erred by concluding that the anecdotal evidence, presented by Plaintiffs in the form of 120 declarations, supported a finding of commonality. [11] Wal-Mart maintains that the declarations depict a handful of widely divergent events that cannot be deemed probative or representative of discrimination in pay or management-track promotions. In their declarations, the potential class members testified to being paid less than similarly situated men, being denied or delayed in receiving promotions in a disproportionate manner when compared with similarly situated men, working in an atmosphere with a strong corporate culture of discrimination, and being subjected to various individual sexist acts. The district court credited this evidence. Wal-Mart contends that the district court erred because the 120 declarations cannot sufficiently represent a class of 1.5 million. However, we find no authority requiring or even suggesting that a plaintiff class submit a statistically significant number of declarations for such evidence to have any value. Further, the district court did not state that this anecdotal evidence provided sufficient proof to establish commonality by itself, but rather noted that such evidence provides support for Plaintiffs' contention that commonality is present. See Dukes I, 222 F.R.D. at 166 (This anecdotal evidence, in combination with the other evidence previously discussed, further supports an inference that [Wal-Mart's] policies and procedures have the effect of discriminating against Plaintiffs in a common manner.). Because the declarations raise an inference of common discriminatory experiences and are consistent with Plaintiffs' statistical evidence, the district court did not abuse its discretion when it credited Plaintiffs' anecdotal evidence.