Court Opinion

ID: 3018001
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:18:28.145921+00
Date Added: 2024-06-11T11:47:07.947909
License: Public Domain

United States Court of Appeals

                          FOR THE EIGHTH CIRCUIT

                              ___________

                              No. 96-2393
                              ___________

Beryl Davey, on behalf of herself      *
and others similarly situated,         *
                                       *
          Appellants,                  *
                                       *     Appeal from the United
     v.                                *     States District Court for
                                       *     the District of Nebraska.
City of Omaha,                         *
                                       *
          Appellee.                    *

                              ___________

                  Submitted: December 11, 1996

                       Filed: February 24, 1997
                              ___________

Before BOWMAN and HEANEY, Circuit Judges, and SMITH,* District
Judge.
                         ___________

SMITH, District Judge.

     Following a defendant’s verdict on Appellants’ claims under 42
U.S.C. § 1983, the District Court1 ruled for the defendant on

       The Honorable Ortrie D. Smith, United States District
Judge for the Western District of Missouri, sitting by
designation.

       The Honorable Thomas M. Shanahan, United States District
Judge for the District of Nebraska.
Appellants’ disparate impact and disparate treatment claims under
Title VII.    The present appeal involves only the District Court’s
rulings with respect to the disparate impact claims.2              For the
reasons set forth below, we affirm.

                               I.   BACKGROUND

      The Appellants are a class of 90 library employees employed by
the   City   of    Omaha,   Nebraska   (the    “City”).    For   collective
bargaining purposes, City employees are represented by a variety of
statutorily       created   labor   organizations;   the   Appellants   are
represented by the Civilian Management Professional and Technical
Employee Council (“CMPTEC”).           Contracts negotiated with CMPTEC
typically cover a three year span.            In the event of an impasse,
either the City or the bargaining unit may file a petition with the
Commission of Industrial Relations (“CIR”), which has exclusive
jurisdiction over wage disputes involving Nebraska municipalities.
In resolving such disputes, the CIR “must establish rates of pay
and benefits which are comparable to the prevalent wage rates paid
to workers performing the same jobs with employers comparable to
Omaha.”   Neb. Rev. Stat. § 48-818.        The CIR has issued guidelines
declaring that a city is comparable to Omaha if it is no more than
twice as large as Omaha and no less than half the size of Omaha.
The CIR has also issued guidelines to aid in determining whether

    Appellants have not appealed the jury verdict, nor have they
contested the District Court’s conclusion that the jury’s verdict
foreclosed a favorable ruling on their disparate treatment claim.
jobs from other cities are properly comparable to jobs performed in
Omaha.
     All   positions   are   grouped   into   classifications.       The
classifications relevant to this suit are those related to the
City’s libraries; specifically, the classifications of Librarian I,
Librarian II, Librarian III, Library Specialist, Fiscal Specialist,
Office Supervisor and Executive Secretary. Tr. at 76.3           In the
past, the City had negotiated across-the-board wage increases to be
applied to all classifications represented by CMPTEC.     However, in
1986 the City desired to update its job descriptions, institute
performance appraisals and a merit pay system, and develop a salary
structure with wages that insured fairness and equity both among
City employees and with respect to the outside market.     Tr. at 54-
55, 61, 695; Jt. App. at 23.   To this end, the City commissioned a
study to be performed by Hay Management Consultants (the “Hay
Study”).   Negotiations for the 1989-91 contract began in 1988.      The
City attempted to use the Hay Study as a basis for negotiations,
but its use was opposed by CMPTEC.     Tr. at 915-16.4   The focal

    The class certified by the District Court consisted of all
library employees affected by the wage scales at issue in this
suit. It should be noted that not all individuals holding the
classification of Fiscal Specialist, Office Supervisor and
Executive Secretary are library employees and hence are not
included in the class. It should also be noted that all
employees within these classifications were treated the same,
regardless of whether they worked in the library or elsewhere.

    The parties and the District Court agreed that the Hay
Study’s results were irrelevant to the disparate impact claim.
Jt. App. at 2-3. However, as discussed later in this opinion,
the reason the City commissioned and attempted to use the Hay
Study is relevant to the issues presented on appeal.

                                  3
point of these negotiations was benefits; wages were CMPTEC’s
secondary concern.        Tr. at 445-46; 799-800.         An impasse developed
over this issue, causing CMPTEC to file a petition with the CIR.
Tr. at 414-15, 430.
      In preparation for the hearing before the CIR, both the City
and CMPTEC retained experts to conduct the wage study required by
law and the CIR’s guidelines.         The City hired Robert Otteman, and
CMPTEC hired Gary Troutman.          Dr. Otteman surveyed the cities of
Akron, Tulsa, Colorado Springs, Des Moines, Milwaukee, Kansas City
(Missouri),     Wichita    and    Lincoln,   as    well    as   Douglas    County
(Nebraska), the University of Nebraska Medical Center and the State
of Nebraska.      Troutman studied the cities of Akron, Cincinnati,
Colorado Springs, Denver, Des Moines, Kansas City (Missouri),
Milwaukee, and Toledo.           Although the precise numbers vary, both
experts agreed that many of CMPTEC’s members (and all members of
the   class)    were   paid   more   than    their   counterparts     in   other
localities.5      Faced with this finding from both experts, CMPTEC
feared an unfavorable decision from the CIR and withdrew its
petition.      Tr. at 418-19, 421-22.
      As might be expected, the City was encouraged by the experts’
findings.      As the end of 1989 drew near with no contract with
CMPTEC, the City faced three options.             The first option was to do
nothing; if 1989 ended with no agreement, then the City would have
had no obligation to negotiate wages or benefits for that year.
Tr. at 422, 812-13, 899.         The second option was for the City to

    Although contested at trial, the accuracy of Otteman’s and
Troutman’s statistical methods and the conclusions drawn
therefrom have not been presented as an issue on appeal.

                                       4
file its own petition before the CIR with the expectation that the
CIR would order wages decreased for 1989.                  Tr. at 812-13, 899-900.
The viability of this option was based not only on the experts’
reports, but also upon the fact that, with respect to a different
bargaining unit (Local 251), the CIR had ordered a retroactive
decrease in wages.        Tr. at 813, 823-24.              The City’s final option
was to continue attempts to negotiate a contract covering 1989-91.
Tr. at 813, 900.      Ultimately, the City chose to combine options two
and three.    Tr. at 900-03.      The City filed its petition before the
CIR in late December 1989; however, an agreement with CMPTEC was
still preferred because of the obvious advantages certainty for the
ensuing two years would bring.              In addition, the City really did
not desire to enforce a retroactive wage decrease because of
concerns over fairness and morale; even when entitled to do so with
respect to Local 251, the City negotiated an alternative that did
not require the employees to actually pay money back to the City.
Tr. at 823-24.
     In     early    January     1990,          the    City   and   CMPTEC    resumed
negotiations.        Instead    of    the       across-the-board      wage   increase
instituted in past years, the City (through its Labor Relations
Director, Thomas Marfisi) proposed a series of four groupings, with
different    wage    increases    for       the       classifications    within   each
grouping.       Marfisi     began      by       observing     that,     despite   some
differences,        Otteman’s        and        Troutman’s      conclusions       were
substantially the same.         Tr. at 854.            Marfisi then used Otteman’s
findings to group the classifications into four categories, based
on   the degree to which Otteman concluded those classifications
were underpaid or overpaid when compared to the midpoint of the
maximum salaries of the other employers surveyed.                     Specifically,

                                            5
Group I consisted of those classifications that were 8% or more
above the maximum, Group II consisted of those classifications that
were less than 8% above the midpoint, Group III consisted of those
classifications that were between the midpoint and 7% below the
midpoint, and Group IV consisted of those classifications that were
more than 7% below the midpoint.             The lines separating the groups
were determined by utilizing natural breaks in the percentages.
Tr. at 671, 814-16.
     All members of the plaintiff class were among those within
Group I; thus, though they received a wage increase for the years
1989-91,       they    received      a   smaller      increase     than      those
classifications in the other three groups.             However, the grouping
process evidences a disparate impact on women: CMPTEC represents
250 men and 103 women, while the employees in Group I consisted of
79 men and 87 women.
     Eventually, CMPTEC agreed to Marfisi’s proposal.                     In July
1990, and over strenuous objection from members of the plaintiff
class,   the    City     Council    passed     an   ordinance    approving    the
groupings.     The Appellants filed the instant suit in January 1992,
alleging that passage of the ordinance violated their civil rights,
constituted intentional discrimination, and resulted in a disparate
impact on women.         The District Court concluded that the Civil
Rights Act of 1991 did not apply to this case, and therefore the
only claims submitted to the jury were those brought pursuant to 42
U.S.C. § 1983.        Following a jury verdict in the City’s favor, the
District Court determined the jury’s verdict was binding with
respect to the intentional discrimination claim, but not the
disparate impact claim.            After finding that the plaintiffs had
demonstrated a disparate impact on women, the District Court ruled

                                         6
in the City’s favor because the City had demonstrated a viable
business justification for its actions.      This appeal followed.

                          II.   DISCUSSION

         A.   Application of the Civil Rights Act of 1991

     The first issue that must be addressed is Appellants’ claim
that the Civil Rights Act of 1991 (the “Act”) applies to this case.
As this question is a legal issue involving statutory construction,
we must conduct a de novo review.     Loehrer v. McDonnell Douglas
Corp., 98 F.3d 1056, 1061 (8th Cir. 1996).           Our independent
consideration persuades us that § 105 of the Act does not apply
retroactively.
     Section 105, which is codified at 42 U.S.C. § 2000e-k(1)(A),
provides that
     An unlawful employment practice based on disparate impact is
     established . . . only if --

               (I) a complaining party demonstrates that a
          respondent uses a particular employment practice that
          causes a disparate impact on the basis of . . . sex
          . . . and the respondent fails to demonstrate that the
          challenged practice is job related for the position in
          question and consistent with business necessity; or

               (ii) the complaining party [demonstrates] an
          alternative employment practice and the respondent
          refuses to adopt such alternative employment practice.

                                  7
The Act was Congress’s response to a series of Supreme Court
decisions; among the decisions specified by Congress was Wards Cove
Packing Co. v. Atonio, 490 U.S. 642 (1989), and § 105 “is a direct
response to Wards Cove.”   Landgraf v. USI Film Products, 114 S. Ct.
1483, 1489 (1994).   In Wards Cove, the Supreme Court held that a
business   justification   was   a       practice   that   “serves,   in   a
significant way, the legitimate employment goals of the employer”
and further directed that “the employer carries the burden of
producing evidence of a business justification for his employment
practice [but that] the burden of persuasion . . . remains with the
disparate-impact plaintiff.”     Wards Cove, 490 U.S. at 659.
     In passing § 105, Congress intended to codify the standard
enunciated by the Supreme Court in Griggs v. Duke Power Co., 401
U.S. 424 (1971).     Although this is not an appropriate case to
detail all the differences between Griggs and Wards Cove, it is
appropriate to point out that there are significant differences
between the two.

     Under Wards Cove, after the plaintiff established a prima
     facie case of disparate impact, the defendant employer bore
     the burden of producing evidence of a legitimate business
     justification in defense of the challenged policy.        The
     burden of persuasion, however, remained on the plaintiff.
     Under the Griggs standard, the burden is on the defendant
     employer to prove both a "compelling need" for the challenged
     policy, and the lack of an effective alternative policy that
     would not produce a similar disparate impact.

Bradley v. Pizzaco of Nebraska, Inc., 7 F.3d 795, 797 (8th Cir.
1993); see also Houghton v. Sipco, Inc., 38 F.3d 953, 958 (8th Cir.
1994).

                                     8
       We must begin by examining the language of the Act itself
while keeping in mind that “there is no special reason to think
that   all    the   diverse   provisions   of   the   Act   must   be   treated
uniformly for such purposes.”        Landgraf, 114 S. Ct. at 1505.          In
presenting their text-based argument, Appellants rely upon § 402 of
the Act, which provides as follows:

       (a) Except as otherwise specifically provided, this Act and
       the amendments made by this Act shall take effect upon
       enactment.

       (b) Notwithstanding any other provision of this Act, nothing
       in this Act shall apply to any disparate impact case for which
       a complaint was filed before March 1, 1975, and for which an
       initial decision was rendered after October 30, 1983.

It seems clear that § 402(b) describes one case and one case only;
namely, Wards Cove.      See Landgraf, 114 S. Ct. at 1493.         Appellants
contend that by specifically exempting Wards Cove from the Act’s
application, and by declaring that, except as provided, the Act was
to take effect upon enactment, the Act must apply to all other
cases -- including this one.        The major flaw in this argument is
that the Supreme Court has explicitly rejected it -- twice.              Id. at
1494-96; Rivers v. Roadway Express, Inc., 114 S. Ct. 1510, 1514-15
(1994).      In rejecting this analysis with respect to § 102 of the
Act, the Landgraf Court noted that “[h]ad Congress wished § 402(a)
to have such a determinate meaning, it surely would have used
language comparable to its reference to the predecessor Title VII
damages provision in the 1990 legislation: that the new provisions
shall apply to all proceedings pending on or commenced after the
date of enactment of this Act,” 114 S. Ct. at 1494 (citation

                                      9
omitted).6    The Rivers Court, when presented with the same argument
with respect to retroactive application of § 101, noted that the
argument “is no more persuasive as to the application of § 101 to
preenactment conduct than as to that of § 102.” 114 S. Ct. at
1514.
     The above reasoning applies with equal force to § 105.      Had
Congress intended for § 105 to apply retroactively, it would have
said so clearly and directly: just like it did in Title VII.   Given
the important considerations involved in deciding to apply a
statute retroactively, we do not believe Congress would have
employed such tortured language to achieve this result.          See
Landgraf, 114 S. Ct. at 1495.
        Appellants acknowledge Landgraf’s holding, but contend it
should not apply in this case because it would render § 402(b)
meaningless.     However, as Landgraf explains, “[i]t is entirely
possible -- indeed, highly probable -- that, because it was unable
to resolve the retroactivity issue with the clarity of the 1990
legislation, Congress viewed the mater as an open issue to be
resolved by the Courts. . . . The only matters Congress did not
leave to the courts were set out with specificity in §§ 109(c) and
402(b).”     Landgraf, 114 S. Ct. at 1494-95 (emphasis in original).

    "In 1990, a comprehensive civil rights bill passed both
Houses of Congress.    Although similar to the 1991 Act in many
other respects, the 1990 bill differed in that it contained
language expressly calling for application of many of its
provisions, including the section providing for damages in cases
of intentional employment discrimination, to cases arising before
its (expected) enactment. The President vetoed the 1990
legislation, however, citing the bill's ‘unfair retroactivity
rules’ as one reason for his disapproval.” Landgraf, 114 S. Ct.
at 1491-92 (footnote omitted).

                                  10
Rejecting        Appellants’           argument     does       not   render     §     402(b)
meaningless.
        Having concluded that Congress did not specifically declare
that the Act is to apply retroactively, “we must consider whether
the new statute would have a true retroactive effect, i.e., 43 F.3d 357, 361 (8th Cir. 1994) (quoting Landgraf,
114   S.    Ct.       at    1505)   (footnote      omitted).         A    statute    is    not
retroactive merely because it applies to conduct that occurred
prior      to   the        statute’s    enactment;       “[t]he      conclusion      that    a
particular rule operates Landgraf, 114 S. Ct. at
1499.    Given the broad effect of § 105, it cannot be characterized
as    simply      a    procedural       change.          Generally       speaking,    §   105
reallocates and raises the burden of persuasion with respect to a
business        justification          defense     and    redefines       precisely       what
constitutes a valid business justification.                      It seems clear, then,
that application of § 105 would attach new legal consequences to
employment        decisions         made   prior    to    its    enactment,     rendering
impermissible certain acts that were previously permissible and
giving      employers         different     issues        to    consider     when     making
decisions.        We have no difficulty concluding that § 105 attaches
new consequences to prior conduct and significantly alters the

                                             11
legal terrain that employers must traverse.       Consequently, we hold
that § 105 does not apply retroactively.7

                   B.   Disparate Impact Analysis

     The employment decision attacked by the Appellants is the
City’s decision to place all classifications within the four
groupings; Appellants have specifically declared that this, not the
decisions regarding the amount of raise to award on an annual
basis, is the practice they challenge.         The District Court found
that the groupings had a disparate impact on women, and the City
has not appealed that determination.
     Once a plaintiff has demonstrated that an employment practice
has a disparate impact, the employer is called upon to offer a
business justification for the practice.            “This phase of the
disparate-impact   case     contains     two   components:   first,      a
consideration of the justifications an employer offers for his use
of these practices; and second, the availability of alternative
practices   to   achieve    the   same   business    ends,   with   less
[discriminatory] impact.”    Wards Cove, 490 U.S. at 658.      A valid

    As an alternative argument, Appellants contend that the
City’s violation was continuing in nature, thereby permitting
retroactive application of § 105 under the facts of this case.
We disagree for two reasons. “We are not familiar with any
Eighth Circuit law where the concept of continuing violation,
ordinarily associated with statutes of limitations issues, has
been employed to overcome a non-retroactivity rule.” Caviness v.
Nucor-Yamato Steel Co., No. 95-3482, slip op. at 8 n.1 (8th Cir.
Jan. 29, 1997). We went on to opine that applying the continuing
violation doctrine in this manner would violate Landgraf. Id.
We are now bound by our decision in Caviness.

                                  12
business justification describes a business practice that “serves,
in a significant way, the legitimate employment goals of the
employer.”        Id. At 659.   An insubstantial justification will not
suffice, but an employer need not demonstrate that the practice is
essential    or     indispensable.     Id.     Even   if   the    employer    can
demonstrate a valid business justification, the plaintiff still has
the opportunity to persuade the fact finder that alternative
practices would have equally satisfied the employer’s interests
without creating a disparate impact.           “Of course, any alternative
practices which respondents offer up in this respect must be
equally effective as [the employer’s] chosen . . . procedures in
achieving [their] legitimate goals.”           Id. at 661.       In determining
whether proffered alternatives are equally effective, the fact
finder may consider factors such as efficiency, cost, or other
burdens associated with the alternative.           Id.
      Our    review of the record demonstrates that the District
Court’s findings were not clearly erroneous.8              The District Court
found that the City’s goal was to create a fair and equitable
manner for implementing wage increases for CMPTEC’s members.                 This
purpose was described in other portions of the record as a desire
to   reach    a    fair   and   equitable    settlement    with    the   union.
Appellants do not deny that this is a valid business justification,
but rather claim that adoption of the groupings was not motivated

    Appellants suggest that the issue of business justification
is a mixed issue of law and fact and is subject to a de novo
review. We disagree. Wards Cove suggests that the employer must
“persuade the trier of fact” to succeed with the defense, Wards
Cove, 490 U.S. at 660, and we have previously treated the issue
as one of fact. Bradley, 7 F.3d at 798; see also Melendez v.
Illinois Bell Tele. Co., 79 F.3d 661, 670 (7th Cir. 1996).

                                      13
by this goal.   Appellants contend that the evidence demonstrates
that the City’s goal was simply to negotiate a contract, but the
record belies this contention.           The City had no obligation to
negotiate 1989's wages, and were in a good position to present a
successful petition to the CIR.          As things turned out, the City
desired to negotiate a contract for 1989-91 if possible, but the
record does not demonstrate this to be the sole reason for the
groupings that were eventually adopted.         As far back as 1986 the
City was interested in insuring equity in pay, with equity measured
not only internally but also in comparison to what other cities
were paying their employees.         This is why the Hay Study was
commissioned, and this is why the City tried to use the Hay Study
during the initial round of negotiations.            The testimony of Tom
Marfisi describing his reasons for making the proposal that was
eventually adopted more than adequately supports the District
Court’s   findings   that   the   groupings   were    adopted   to   promote
fairness and equity.
     Appellants also attack the District Court’s finding that the
evidence supported the groupings that were adopted and that the
groupings promoted the interest of fairness and equity.          Relying on
Christensen v. Iowa, 563 F.2d 353 (8th Cir. 1977), Appellants
contend the studies conducted by Otteman and Troutman were flawed
because they examined wages in an artificial market defined by
Nebraska statutes and CIR regulations as opposed to wages in the
market in which Omaha competes for library employees.           Christensen
does suggest that wage decisions may be based upon the realities of
the market in which the employer must compete for workers.              563
F.2d at 354, 356.    However, we disagree with Appellants’ contention
that the City’s decision was based on studies of irrelevant

                                    14
markets.    We do not base this decision on the simple fact that the
decision was based on analysis of the markets described in Nebraska
statutes and CIR regulations, but rather because evidence in the
record supports the conclusion that the markets studied by Otteman
and Troutman are, in fact, the markets that Omaha competes in when
hiring library employees.    Tr. at 543-44, 564-66, 585, 717-18, 730-
31.
      Finally, Appellants dispute the District Court’s declaration
that they failed to introduce evidence demonstrating the existence
of a viable alternative.      Appellants concede that they did not
address this issue in their post-trial brief, but contend that they
nonetheless    presented   evidence   of   three   viable   alternatives.
However, Appellants were not merely silent in their           post-trial
brief; Appellants advised the District Court that “an alternative
option is not relevant in this case because no business necessity
has been demonstrated by Defendant.”       Davey v. City of Omaha, No.
8:CV92-00046, slip op. at 23 (D. Neb. Apr. 15, 1996) (quotation
omitted).     By telling the District Court that it did not need to
discuss alternative options, Appellants abandoned the issue and
cannot raise it on appeal.    Kramer v. Kemna, 21 F.3d 305, 308 (8th
Cir. 1994) (“Failure to give the district court a first opportunity
to decid[e] the merits of an argument constitutes a waiver of that
argument.”).
      Even if Appellants had properly presented the issue to the
District Court for consideration, we do not believe the outcome of
this case would be different.    The first alternative, an across the
board increase equally applied to all CMPTEC members, is not viable
within the meaning of Wards Cove because it does not promote the
City’s goal of moving wages closer to those paid in comparable

                                  15
cities.   The second alternative, implementation of the Hay Study’s
recommendations, is curious in light of testimony from one of the
Plaintiffs that the recommendations would have an “adverse impact”
on library employees.      Tr. at 82.    Furthermore, although the Hay
Study did conclude that there was less “internal equity” with
respect to library positions, the Hay Study reached the same
conclusion as did Otteman and Troutman         in concluding that library
employees were paid above employees with similar duties in other
cities.   Tr. at 711.     Appellant has not pointed to any portion of
the record that demonstrates that the Hay Study would have both (1)
had a less disparate impact and (2) equally satisfied the City’s
goals when compared to the plan that was adopted.         Cf. Wards Cove,
490 U.S. at 660 (burden of persuasion with respect to viability of
alternatives   rests      with   plaintiff).        Finally,   Appellants
surrendered the opportunity to rely on the Hay Study when they
represented to the District Court that “the Hay Study is irrelevant
to Plaintiffs’ disparate impact claim and . . . that the plaintiffs
[sic] have never claimed that the Hay Study supports [the disparate
impact] part of their case.”      Jt. App. at 3.
     Appellants’ third and final suggested alternative was for the
City to divide the groupings in different manners or utilize a
different   number   of   groupings.     The    record   demonstrates   the
groupings were made by listing the various job classifications in
order of the degree to which their wages were over or above the
average median wages from other cities, and the lines were drawn in
natural breaks in those percentages.           Appellants speculate that
alternative groupings would have been as or more effective at
achieving the City’s goal of external equity; however, as with the
other proffered alternatives, they have failed to identify any

                                    16
evidence demonstrating that equally viable alternatives would have
been equally effective in achieving the City’s goals.

                          III.   CONCLUSION

     For the foregoing reasons, the judgment in favor of the City
is AFFIRMED.

HEANEY, Circuit Judge, concurring and dissenting.
     I concur in Section B of the majority’s opinion for the
reasons stated therein.   I disagree, however, with the majority’s
conclusion that Section 105 of the Civil Rights Act of 1991 is not
retroactive.   Assuming retroactivity, I nonetheless believe that
the librarians’ claim under the Civil Rights Act fails for the same
reasons they did not succeed under Section 1983.

     A true copy.

          Attest:

               CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

                                  17