Opinion ID: 396206
Heading Depth: 2
Heading Rank: 2

Heading: Korn's liability

Text: 19 The district court concluded after stage two of the proceedings that Korn had successfully rebutted the prima facie case of liability established against it during stage one. The Commission asserts this as error as a matter of law, contending that any rebuttal of the prima facie case was proper only during stage one of the trial and that the district court misunderstood the functions of the remedial stage of a bifurcated trial. While recognizing that this case was not tried in the most orderly fashion, we nonetheless conclude that the district court properly allocated the burdens of proof. 20 In International Brotherhood of Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977), the Supreme Court looked at class action procedures for determining liability and relief: the bifurcated proceeding, it concluded, would be the normal means of making those determinations. At the initial stage, the question of liability, i. e., whether the employer had engaged in a pattern or practice of discriminatory conduct, is addressed. At that stage, the plaintiff 5 is not required to offer evidence that each person for whom it will ultimately seek relief was a victim of the employer's discriminatory policy, id. at 360, 97 S.Ct. at 1867, but must only establish a prima facie case that such a policy existed. The burden then shifts to the employer to rebut the prima facie case by showing that the plaintiff's proof is inaccurate or insignificant. Id. If it cannot do so, then the court may conclude that a systemic violation has occurred and the plaintiff is at that time entitled to an award of prospective relief, e. g., an injunction against further violations. If relief is sought for individual members of the class, however, the trial is not yet at an end, because a district court will normally have to conduct an additional proceeding to determine the scope of individual relief. At the remedial stage, the force of proof that the employer was guilty of a systemic violation does not dissipate, id. at 361, 97 S.Ct. at 1867, and indeed that proof 21 supports an inference that any particular employment decision, during the period in which the discriminatory policy was in force, was made in pursuit of that policy. The Government need only show that an alleged individual discriminatee unsuccessfully applied for a job and therefore was a potential victim of the proved discrimination.... (T)he burden then rests on the employer to demonstrate that the individual applicant was denied an employment opportunity for lawful reasons. Id. at 362, 97 S.Ct. at 1868 (footnote omitted). 22 It was not envisioned that the back pay proceeding would be uncomplicated: the district court is required to make individual determinations to decide which of the minority employees have been actual victims of the discrimination and it will then have to  'recreate the conditions and relationships that would have been'  in existence in the absence of unlawful discrimination, id. at 372, 97 S.Ct. at 1873, quoting Franks v. Bowman Transportation Co., 424 U.S. 747, 769, 96 S.Ct. 1251, 1266, 47 L.Ed.2d 444 (1976), a process which will necessarily involve a degree of approximation and imprecision. Id., see also White v. Carolina Paperboard Corp., 564 F.2d 1073, 1084 (4th Cir. 1977) (hypothetical employee must be constructed). 23 This circuit has recognized that the showing required by Teamsters of individual plaintiffs in their quest for damages is not unduly heavy. In Sledge v. J. P. Stevens & Co., Inc., 585 F.2d 625 (4th Cir. 1978), cert. denied, 440 U.S. 981, 99 S.Ct. 1789, 60 L.Ed.2d 241 (1979), the court's concern was that the named plaintiffs in the class action should not have had their claims dismissed without being given the benefit of the presumption of discrimination which attaches to individual claims after liability to the class is determined. That benefit means that 24 (a)ll an individual plaintiff must ... establish at the second or back pay stage of the trial is (a) his identity as one of the presumed discriminatees that he is black and that during the period in controversy he applied for employment and was not hired, or upon being hired was assigned to one of the low-paying jobs, and (b) any information requested of him to assist the court in determining the amount of the economic loss he suffered as a result. 585 F.2d at 637. 25 After the plaintiff has met this light burden, the burden shifts to the employer to demonstrate that he had a nondiscriminatory reason for making the challenged employment decision. The claimant must then prove that this stated reason is pretextual or he will be denied compensation. Id. 26 In this case, we note preliminarily that the district court's determination of class wide liability has never been challenged. Korn was apparently content to allow the Commission's statistical evidence to go uncontroverted. 6 Particularly when, as here, the statistical proof is buttressed by evidence that employment decisions are based upon the subjective opinions of white management and supervisors, the district court is entitled to adopt the inference of discrimination against the class arising from the plaintiff's prima facie case. See, e. g., Sledge v. J. P. Stevens & Co., Inc., 585 F.2d 625 (4th Cir. 1978); Barnett v. W. T. Grant Co., 518 F.2d 543 (4th Cir. 1975). 27 Rather, the attack in this case is on the district court's holding after stage two that Korn's evidence on the issue of damages rebutted the prima facie case of liability made out by the Commission at stage one. Although at first glance this might appear to be an erroneous application of the principle set out in Teamsters that efforts to rebut a prima facie case of class liability are to be made during stage one we conclude that the district court was guilty of no more than utilizing rather loose terminology. Other language in the district court's opinion indicates that its actual conclusion was that the rebuttal was evidence properly offered at stage two to justify assignment decisions in individual cases: the prima facie case of liability, i. e., the presumption of discrimination to which class members are entitled, and not the class wide liability, was rebutted in specific cases by testimony and other evidence credited by the court showing that discrete job decisions were made for lawful reasons. In all but twenty-six cases in which Korn admitted that it could offer no legitimate reason for assigning the black to a lower category than his white counterpart, the district court concluded that Korn had met its burden. 28 We agree with the district court. The evidentiary basis of its conclusion was Korn's Exhibit 27, which showed all hirings and assignments and the reasons therefor from November 1, 1970, through December 31, 1978; Exhibit 28, which was derived from Exhibit 27; and the testimony of Ronnie Hudson, Korn's general manager. Exhibit 27 depicted the race, name, date of application, date of hire, date of termination, job placement upon initial hire, related experience, ability to read and write, height and weight, production experience and other comments. Hudson testified that he used the information in this exhibit to match up black and white analogs: if the black was hired into a lower category than a white hired at or about the same time, then he attempted to establish an objective, justifiable reason for the disparity, relying on guidelines that he understood had been established in court. 7 Exhibit 28 listed the twenty-six blacks who had been hired into lower categories than their white counterparts for reasons Hudson testified he could not identify; it also contained Korn's estimate of back pay called for in each case. The Commission cross-examined Hudson extensively about the compilation and content of the exhibits, making use of the supporting personnel files which Korn had in the courtroom. It did not, however, offer evidence in rebuttal. 29 Our reading of the transcript and a review of Exhibit 27 convince us that the district court acted in accordance with the standards set out in Teamsters and Sledge : it awarded relief to those individuals with respect to whom Korn could not rebut the inference of discrimination, and it refused to award relief in those cases in which it was satisfied that Korn had rebutted the inference. 30 In all candor, we think the Commission protests too much that the district court's limitation of back pay to twenty-six employees was erroneous. The record indicates that the Commission was clearly not interested in participating in a case-by-case determination of damages but instead proposed what the district court accurately characterized as an absurd theory of class damages: this theory apparently contemplated a lump sum award to the group to be distributed in some unascertained fashion among the affected blacks. 8 31 Furthermore, although the Commission makes much of the trial court's reliance on the exhibit which Korn itself had compiled, it should be noted that the Commission was particularly unhelpful to the court in this regard. Although Korn made its employment records available, the Commission never utilized those records or sought in any way to prove that Korn's stated reasons for assigning blacks to particular categories were pretextual although they had ample time in which to do so. In short, although Korn articulate(d) some legitimate, nondiscriminatory reason for all except twenty-six of its assignment decisions, McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973), the Commission chose not to attempt to prove that the reasons offered were not Korn's true reasons. According to prevailing standards of proof, the trial court was entitled to limit relief to the twenty-six individuals with regard to whom Korn did not meet its burden.