Court Opinion

ID: 4924495
Source: CourtListenerOpinion
Date Created: 2021-09-22 21:00:32.911755+00
Date Added: 2024-06-11T08:14:14.526047
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
No. 20-1167

CHICAGO TEACHERS UNION, TERRI
FELLS, LILLIAN EDMONDS, and
JOSEPHINE PERRY, Individually and on
Behalf of all Similarly
Situated Persons,
                                               Plaintiffs-Appellants,

                                 v.

BOARD OF EDUCATION OF THE CITY OF
CHICAGO,
                                                Defendant-Appellee.

        Appeal from the United States District Court for the
          Northern District of Illinois, Eastern Division.
            No. 12 C 10338 — Jorge L. Alonso, Judge.

ARGUED SEPTEMBER 15, 2020 — DECIDED SEPTEMBER 22, 2021

   Before FLAUM, ROVNER, and WOOD, Circuit Judges.
2                                                    No. 20-1167

    ROVNER, Circuit Judge. Citing an alleged budget deficit, the
Board of Education of the City of Chicago (“the Board”) laid
off approximately 1,077 teachers and 393 paraprofessional
educators in the summer of 2011. The Chicago Teachers Union
and a class of teachers (collectively “CTU”) filed suit against
the Board alleging that the layoffs discriminated against
African American teachers and paraprofessionals in violation
of Title VII of the Civil Rights Acts of 1964 and the Civil Rights
Act of 1991, 42 U.S.C. §§ 2000e et seq. The district court granted
summary judgment in favor of the Board on the parties’ cross-
motions for summary judgment. CTU appeals, but we affirm.
                                  I.
    During the 2010-2011 school year, the Board concluded that
it would need to eliminate certain teaching and paraprofess-
ional positions for the upcoming 2011-2012 school year. This
conclusion was based on a significant projected budget deficit
for the upcoming 2011-2012 school year as well as declining
enrollment in a number of Chicago public schools. Senior
members of the Board met several times in May 2011 to
consider options for reducing the proposed budget deficit.
Ultimately, the Board instituted a series of spending
cuts—$107 million in Central Office spending, $27 million in
operations, and $86.7 million in program reductions.
    Most relevant here, however, was the Board’s decision to
close 1,077 teaching and 393 paraprofessional (1,470 total)
positions for the upcoming school year based on declining
enrollment at certain Chicago Public School (“CPS”) schools.
In the 2010-2011 school year, the Chicago school district was
divided into 29 geographic “Areas.” The majority of African
No. 20-1167                                                  3

American students attended schools corresponding
geographically to the south and west sides of Chicago, which
were also the schools with declining enrollment. Specifically,
in the decade leading up to the 2010-2011 school year, the
number of students enrolled in CPS schools dropped by 7.7%
overall—from 437,618 to 404,151—but the number of African
American students declined by 25.2%—from 224,494 to
168,020. These declining enrollment numbers loosely
correlated with census data showing that the population of
African Americans in the City of Chicago declined from
1,065,009 to 887,608 (16.7%) from 2000 to 2010.
    As it had in past years, the Board decided which positions
to eliminate and which CPS employees to lay off based on
projected enrollment numbers. The Board laid off faculty and
staff from three types of positions: 1) quota positions;
2) instructional or programmatic positions; and 3)
discretionary fund positions. Quota positions are allocated to
each school based on its student enrollment. Instructional or
programmatic positions, which covered specialized curriculum
such as bilingual education, were also staffed based on
projected enrollment. Finally, discretionary fund positions,
which were based on federal Title I appropriations and
supplemental general state aid appropriations from the Illinois
State Board of Education, were tied to the number of students
eligible for free or reduced lunch, a number that dropped with
declining enrollment.
   To reach its decisions about layoffs, the Board worked with
the Office of Management and Budget to determine which
quota positions would be eliminated per school using a
formula based on projected enrollment. Like the quota
4                                                   No. 20-1167

positions, programmatic and instructional positions as well as
discretionary funds for positions were eliminated using
enrollment projections. Using 2011-2012 enrollment projections
provided by the Demographics Department, the Office of
Management and Budget created and disseminated a packet to
each principal explaining its budgeting process. Principals also
received a letter setting forth the number of quota,
instructional, and programmatic positions allowed as well as
the total discretionary funding allocated. If these numbers
required fewer positions than the previous year, the principal
then decided which positions to eliminate. This decision was
based on the principal’s own assessments as well as seniority
and certification criteria set forth in the collective bargaining
agreement (“CBA”).
    Before the 2011 layoffs, the Board employed approximately
27,240 Union members. Approximately 8,048 of these
employees were African American, or roughly 30%. Around
1,470 Union members received layoff notices, and over 600 of
those members were African American. Thus, although
African American teachers or paraprofessionals comprised
only 30% of total teachers or paraprofessionals, they made up
over 40% of those who received layoff notices. Many of these
individuals worked at the South and West side schools where
enrollment had declined most sharply.
    Under the CBA, teachers and staff receiving layoff notices
received full pay and benefits through August 31, 2011. Some
tenured teachers were transferred to the Reassigned Teachers
Pool, where they received full salary and benefits for ten
months while working as substitute teachers. Others were
offered lower-paying substitute positions on a day-to-day
No. 20-1167                                                    5

basis. Of the 630 African American individuals who received
layoff notices, 335 had found full-time positions with the Board
by September 1, 2011 and therefore suffered no loss of pay or
benefits. Another thirty-four voluntarily retired before
September 1, 2011.
    In December 2012, appellants filed suit against the Board,
alleging that the 2011 layoff decisions disparately impacted
African American teachers and staff in violation of Title VII of
the Civil Rights Act of 1964 and the Civil Rights Act of 1991.
42 U.S.C. § 2000e et seq. The individual plaintiffs, Terri Fells,
Lillian Edmonds, and Josephine Hamilton Perry, are African
Americans who were working as teachers in CPS schools when
they received layoff notices in the summer of 2011. In May
2015, the district court certified the class, which it ultimately
defined over the Board’s objection as follows:
       All African American persons employed as a
       tenured teacher or staff member, as defined by
       the collective bargaining agreement between the
       Chicago Teachers Union and the Board of
       Education of the City of Chicago, who received
       a layoff notice from the Board of Education
       pursuant to its “layoff policy in 2011.”
Dkt. 165, p. 2.
   The plaintiffs later amended their complaint to add a Title
VII disparate treatment claim against the Board. After
considerable back and forth, including the Board’s
unsuccessful attempt to add a counterclaim with its affirmative
defenses, the parties filed cross-motions for summary
6                                                    No. 20-1167

judgment along with Daubert motions to exclude the other
party’s expert testimony.
    The district court granted summary judgment in favor of
the Board, and denied as moot both the motion to exclude the
Board’s expert, Dr. David Blanchflower, and the motion to
exclude CTU’s expert, Dr. Jonathan Walker. Although the
parties disputed the admissibility of their respective experts’
reports and the question of whether there had been an adverse
employment action at all (after accounting for the class
members who ultimately suffered no loss of pay or benefits),
the district court dismissed these issues as unnecessary to the
outcome. Ultimately, the district court concluded that the class
had failed to rebut the Board’s legitimate business justification
for the layoffs. Specifically, the court assumed that the report
of CTU’s expert, Dr. Walker, showing a statistically significant
disparate impact on African American employees, was
admissible, and that the report submitted by the Board’s
expert, Dr. Blanchflower, drawing a different conclusion was
not. Nonetheless, the court concluded that the Board had
demonstrated that tying the layoffs to declining enrollment
was consistent with business necessity, and that CTU failed to
provide evidence that the Board could have accomplished the
same business objective in an equally efficient and less
discriminatory way.
    The court also relied on the business justification offered by
the Board to conclude that CTU’s disparate treatment claim
failed on the merits. The district court thus sidestepped an
argument between the parties as to whether the disparate
treatment claim had been exhausted, given that CTU had not
explicitly raised it in its Equal Employment Opportunity
No. 20-1167                                                       7

Commission (EEOC) charge. The district court thus granted
summary judgment to the Board on all of CTU’s claims.
                                  II.
    CTU appeals, arguing that it has presented sufficient
evidence to withstand summary judgment on both its
disparate impact and disparate treatment claims. We review
the district court’s judgment on cross motions for summary
judgment de novo, drawing all reasonable inferences in favor
of “the party against whom the motion at issue was made.”
Woodring v. Jackson Cty. Ind., 986 F.3d 979, 984 (7th Cir. 2021)
(quotations and internal citation omitted). Summary judgment
is appropriate only when there are no genuine disputes of
material fact and the movant is entitled to judgment as a
matter of law. Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 256 (1986).
    The primary prohibition on discrimination in Title VII of
the Civil Rights Act of 1964 makes it unlawful for an employer
to fire or “otherwise to discriminate against any individual
with respect to his compensation, terms, conditions, or
privileges of employment” or “limit, segregate or classify his
employees or applicants for employment in any way which
would deprive or tend to deprive any individual of
employment opportunities” on account of race. 42 U.S.C.
§ 2000e(2)(a)(1)-(2). In addition to the express prohibition
against intentional discrimination in § 2000e(2), the Supreme
Court has long recognized that Title VII also prohibits “not
only overt discrimination but also practices that are fair in
form, but discriminatory in operation.” Griggs v. Duke Power
Co., 401 U.S. 424, 431 (1971); see also Ricci v. DeStefano, 557 U.S.
8                                                        No. 20-1167

557, 576–78 (2009) (recognizing prohibition on facially neutral
practices that discriminate in operation). This prohibition on
employment practices with a disparate impact was later
codified in the Civil Rights Act of 1991. 105 Stat. 1071 (codified
at 42 U.S.C. § 1981(a) et seq.); see also Ernst v. City of Chicago, 837
F.3d 788, 794 (7th Cir. 2016) (“Title VII prohibits employment
practices that have a disproportionately adverse impact on
employees with protected characteristics, even if the impact is
unintended.”).
    We begin with CTU’s disparate impact claim. A plaintiff
establishes a prima facie violation of the disparate impact
statute by demonstrating that an employer uses “a particular
employment practice that causes a disparate impact on the
basis of race, color, religion, sex, or national origin.” 42 U.S.C.
§ 2000e-2(k)(1)(A)(i). To meet this burden, plaintiffs must
produce evidence that an employment practice results in
“‘observed statistical disparities,’” as well as establish
causation with “‘statistical evidence of a kind and degree
sufficient to show that the practice in question has caused the
exclusion of applicants for jobs or promotions because of their
membership in a protected group.’” Puffer v. Allstate Ins. Co.,
675 F.3d 709, 717 (7th Cir. 2012) (quoting Watson v. Ft. Worth
Bank & Trust, 487 U.S. 977, 994 (1988)). A defendant must then
establish “that its method is job-related and consistent with
business necessity.” Price v. City of Chicago, 251 F.3d 656, 659
(7th Cir. 2001); see also Albermarle Paper Co. v. Moody, 422 U.S.
405 (1975); Griggs, 401 U.S. at 431. The burden then shifts back
to the plaintiff to show that the employer refused to use an
available yet equally valid and less discriminatory practice. See
Puffer, 675 F.3d at 717; 42 U.S.C. § 2000e-2(k)(1)(A)(ii).
No. 20-1167                                                    9

    Neither party takes issue with the district court’s
assumption that plaintiffs made a prima facie case of disparate
impact with the evidence that African American individuals
comprised approximately 30% of Union members at the time
of the layoffs but made up just over 40% of Union members
receiving layoff notices. Nor do they challenge the court’s
finding that the Board’s decision to tie layoffs to declining
enrollment in schools was legitimate, job-related, and
consistent with business necessity.
    Thus, the sole disputed issue on appeal regarding the
disparate impact claim is whether CTU met its burden of
establishing that the Board had an equally efficient and less
discriminatory way to conduct the 2011 layoffs. In the district
court, CTU offered several alternatives it asserted the Board
could have pursued: (1) transferring class members to open
positions; (2) conducting an adverse impact analysis preceding
the layoffs; (3) avoiding the use of enrollment projections to
determine layoffs; or (4) using other sources of funding instead
of laying off employees. On appeal, CTU reasserts its claim
that class members could have been transferred instead of
receiving layoff notices, and also argues that the district court
erred by failing to consider all of its proposed alternatives
together instead of each one in isolation.
    To support its assertion that the Board could have avoided
layoffs by transferring employees to open positions, CTU uses
the Board’s own evidence from the district court. The Board
argued in opposition to summary judgment that after taking
into account that over half of the teachers receiving layoff
notices had no loss of pay and benefits and had secured
equivalent jobs by September 1, 2011, CTU could not
10                                                    No. 20-1167

demonstrate that a statistically significant number of African
American employees had suffered an adverse employment
action. The district court, however, assumed for purposes of
summary judgment that the layoff notices themselves
constituted an adverse employment action, and the Board has
not challenged that assumption on appeal. But CTU now seizes
on the Board’s evidence that many of the employees quickly
found comparable jobs to advance its claim that the Board
could have avoided the discriminatory effect of the layoff
notices by transferring employees to what were clearly—as the
Board’s evidence itself demonstrates—available positions.
    However, beyond noting the existence of open positions for
which laid off employees were qualified, CTU does little to
meet its burden that its proposed alternative was “available,
equally valid and less discriminatory.” See Allen v. City of
Chicago, 351 F.3d 306, 312 (7th Cir. 2003). Contrary to CTU’s
assertion, the mere fact that over half of the employees were
ultimately able to move into other open positions does little to
satisfy its burden “to demonstrate a viable alternative and give
the employer an opportunity to adopt it.” Id. at 313 (citing 42
U.S.C. § 2000e-2(k)(1)(A)).
    CTU’s failure to provide any concrete detail as to how such
a transfer plan would have operated is compounded by two
additional reasons the Board identifies. First, the Illinois School
Code places hiring discretion with principals, not the Board.
On this point, both parties cite to 105 ILCS 5/34-8.1, which
provides in relevant part that vacant positions “shall be filled
by appointment made by the principal in accordance with
procedures established and provided by the Board.” (Emphasis
added.) The Board points out that by statute, vacancies must
No. 20-1167                                                     11

be filled “by the principal.” CTU responds by focusing on the
language vesting ultimate authority with the Board to establish
and provide procedures for filling vacant positions. Given the
Board’s final authority over hiring procedures, CTU may be
correct that the Illinois code does not forbid the kind of transfer
arrangement they now propose. It does, however, clearly vest
hiring authority with school principals and not the Board itself.
Without more evidence as to how the Board could have simply
overridden the existing system, CTU has failed to carry its
burden of demonstrating a “viable” alternative that the Board
refused to adopt. See Adams v. City of Chicago, 469 F.3d 609, 616
(7th Cir. 2006). Given this, CTU’s claim that the Illinois School
Code encourages discrimination if it bars the Board from
unilaterally transferring employees goes nowhere. As the
Board recognizes, the statute’s designation of hiring discretion
to principals neither promotes discrimination nor bears any
relationship to the Board’s decision to tie layoffs to declining
enrollment, which it has already shown to be based on a
legitimate business necessity.
    The transfer alternative proposed by CTU is also not
consistent with the CBA, which sets forth procedures for
handling teacher and paraprofessional layoffs and
reassignments when there is a “drop in enrollment.”
Specifically, the portions of the CBA dealing with drops in
enrollment and reassigned teachers in the teachers’ pool both
confirm that school principals retain decisionmaking authority
over permanent hiring within their schools. The CBA thus
reinforces the Illinois School Code with language that both the
Union and the Board agreed to specifying that tenured teachers
in the reassigned teachers’ pool could be transferred to an
12                                                    No. 20-1167

interim position for up to 60 days but that the principal had the
final authority as to whether such teachers could become
permanent employees. CTU’s failure to explain how its
proposed transfer solution could be enacted consistent with the
CBA is yet another reason CTU has failed to meet its burden to
demonstrate an existing, viable alternative to the Board’s
enrollment-based layoffs.
    CTU also suggests for the first time on appeal that the
district court erred by failing to consider all of its proposed less
discriminatory alternatives together. Not only did CTU fail to
develop this argument in the district court, here again it
provides no detail as to how the Board would have enacted
such a combination of ideas. As described above, CTU also
claims that in addition to transferring employees to other open
positions, the Board could have (1) conducted an adverse
impact analysis before moving forward with layoffs; (2) relied
on factors other than enrollment to select employees for layoff;
and (3) relied on “other sources” of funding or revenue to
avoid layoffs altogether. But for each proposed alternative,
CTU falls far short of providing the sort of detail necessary to
meet its burden of establishing an alternative to the Board’s
system: it fails to spell out what factors other than enrollment
should have been used; fails to explain precisely how the Board
could have accessed “other sources” of funding or how that
funding would have allowed it to keep teaching positions open
in schools with declining enrollments; and fails to identify how
conducting an adverse impact study would obviate the need
to base layoffs on declining enrollment. Thus, the district court
correctly concluded that CTU did not carry its burden of
establishing an equally valid, less discriminatory alternative
No. 20-1167                                                     13

the Board could have used in lieu of layoffs based on
enrollment numbers.
    That leaves only CTU’s disparate treatment claim. To
survive a motion for summary judgment on a Title VII claim of
discriminatory discharge on account of race, the plaintiff must
produce evidence to support a reasonable inference that the
plaintiff’s race (or other forbidden factor) caused the adverse
employment action. See, e.g., Ortiz v. Werner Enters., Inc., 834
F.3d 760, 765 (7th Cir. 2016). The Board first renews its claim
that CTU failed to properly exhaust its administrative remedies
by failing to explicitly bring its disparate treatment claim in its
EEOC charge, which referred only to its disparate impact
claim. See Ajayi v. Aramark Bus. Servs., Inc., 336 F.3d 520, 527
(7th Cir. 2003) (reiterating that Title VII plaintiff may bring
only those claims that were included in or “within the scope
of” the EEOC charge). The CTU responds by arguing that the
Board waived this argument by failing to raise it until it moved
for summary judgment. We need not resolve the parties’
dispute over exhaustion and waiver however, because CTU
has failed to put forth any evidence of intentional
discrimination on the part of the Board.
    CTU asserts that it has sufficient evidence to survive
summary judgment on its disparate treatment claim because
it has shown that (1) the adverse impact of the layoffs on
African American employees was statistically significant, and
(2) the Board knew the layoffs would primarily impact African
Americans. Although helpful in establishing its disparate
impact claim, the fact that CTU has shown that layoffs
disparately impacted African Americans in a statistically
significant way does not reasonably lead to the inference that
14                                                No. 20-1167

the Board intentionally discriminated. CTU points to nothing
in the record undermining the Board’s evidence that its layoff
decisions were based on declining enrollment, not any
intention to discriminate. Likewise, CTU fails to explain what
evidence establishes that the Board knew in advance that the
layoffs would disproportionately impact African American
teachers and paraprofessionals.
    What’s more, CTU never explains how such knowledge,
even if proven, would demonstrate that the Board intended to
discriminate. In short, none of CTU’s evidence undermines the
conclusion that the Board used a race-neutral, bureaucratic
mechanism to adjust staffing in Chicago public schools to meet
the needs of declining enrollment and potential budget
shortfalls. CTU has also failed to produce evidence that would
allow a reasonable juror to conclude that the Board’s layoffs
were a pretext for discrimination or that the Board acted with
an intent to discriminate. Summary judgment was thus
appropriate for the Board on the CTU’s disparate treatment
claim as well as its disparate impact claim.
                               III.
   For the foregoing reasons, we AFFIRM the district court’s
grant of summary judgment in all respects.