Court Opinion

ID: 2963479
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:10:33.701636+00
Date Added: 2024-06-11T11:21:31.580847
License: Public Domain

USCA1 Opinion

	

          July 14, 1995
                                [Not for Publication]
                                [Not for Publication]

                            United States Court of Appeals
                            United States Court of Appeals
                                For the First Circuit
                                For the First Circuit
                                 ____________________

        No. 95-1046

                              RONALD E. GRAFFAM, ET AL.,

                               Plaintiffs, Appellants,

                                          v.

                             SCOTT PAPER COMPANY, ET AL.,

                                Defendants, Appellees.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                              FOR THE DISTRICT OF MAINE

                       [Hon. Gene Carter, U.S. District Judge]
                                          ___________________

                                 ____________________

                                        Before

                                Boudin, Circuit Judge,
                                        _____________
                            Coffin, Senior Circuit Judge,
                                    ____________________
                              and Stahl, Circuit Judge.
                                         _____________

                                 ____________________

            Gerald  F.  Petruccelli, with  whom  James  B.  Haddow, Daniel  W.
            _______________________              _________________  __________
        Bates, Francis M. Jackson, and Petruccelli & Martin, were on brief for
        _____  __________________      ____________________
        appellants.
            William  J.  Kayatta,  Jr.,  with whom  Catherine  R.  Connors, B.
            __________________________              ______________________  __
        Simeon  Goldstein,  and  Pierce,  Atwood,  Scribner,  Allen,  Smith  &
        _________________        _____________________________________________
        Lancaster, were on brief for appellees.
        _________

                                 ____________________

                                 ____________________

                      STAHL, Circuit Judge.   Following a nine-day  bench
                      STAHL, Circuit Judge.
                             _____________

            trial, the  district  court entered  judgment for  defendants

            Scott  Paper Company  and  S.D. Warren  Company (collectively

            "Warren") in  this age discrimination suit  brought by eleven

            former employees ("plaintiffs").  The plaintiffs alleged that

            the  selection procedures  ("selection  procedures") used  by

            Warren to  reduce by  twenty percent  the number of  salaried

            employees at its paper mill in Westbrook,  Maine, effected an

            illegal  disparate impact  on employees  over age fifty.   In

            awarding judgment  to Warren, the district  court found that,

            though the  selection procedures did indeed  have a disparate

            impact on  older-age employees, Warren had  made a sufficient

            showing that  the procedures were job  related and consistent

            with  business necessity.  Graffam v. Scott Paper Co., 870 F.
                                       _______    _______________

            Supp. 389, 399-404 (D. Me. 1994).  After a careful  review of

            the record, we affirm.

                                          I.
                                          I.
                                          __

                                      Background
                                      Background
                                      __________

                      In late 1990, Warren  concluded that it must reduce

            by twenty  percent its  salaried work force  of approximately

            471  employees  at  its  mill   in  Westbrook,  Maine.    The

            conclusion  was  dictated,  at  least in  part,  by  Warren's

            decision  to sell  the mill  and a  corresponding requirement

            that the  mill be made  more attractive to  potential buyers.

            Consequently,  Warren set about creating selection procedures

                                         -2-
                                          2

            for identifying which employees it would need to discharge in

            order to meet the desired force reduction goal.

                      In January  1991, a Mill  Leadership Team  ("MLT"),

            consisting  of  the  heads  of several  departments  and  the

            manager of the  Westbrook mill, met for  a number of  days to

            develop a plan for  achieving Warren's reduction goal.   As a

            result,  each department  identified  job  functions and  job

            positions that could be eliminated.  Department heads divided

            the  jobs  in  each  department  --  including  those  to  be

            eliminated --  into specific  job groups and  placed salaried

            employees subject  to the  downsizing  into the  newly-formed

            groups.       Positions    with    similar   functions    and

            responsibilities were grouped together so that employees with

            comparable  skills ultimately  would  be  rated against  each

            other.

                      At the same time, MLT members  collectively defined

            the selection procedures.  As  their starting point, the  MLT

            modified   procedures   previously   developed  by   Warren's

            corporate offices for  use in  an employee  downsizing.   MLT

            members reviewed drafts of these selection procedures, sought

            to  understand  and  clarify  the  assessment  criteria,  and

            discussed the applicability of  the criteria to the Westbrook

            mill.  After the revisions  were included, MLT members tested

            the new procedures by  conducting mock assessments of persons

                                         -3-
                                          3

            known  to the  MLT  members  but  who  were  not  subject  to

            discharge.  

                      The final assessment plan  allocated a total of 100

            points  to  seven criteria:    technical  job skills  (twenty

            points);  performance (ten  points); length  of  service (ten

            points);    leading-change     skills    (fifteen    points);

            interpersonal skills (fifteen  points); self management  (ten

            points);  and  versatility  (twenty  points).     The  skills

            included in the technical job skill criterion varied for each

            individual  job  group.    An individual  who  received  zero

            technical  skill points  would not  be  retained in  favor of

            another  employee   with  a  higher  technical  skill  rating

            regardless of which employee  had the higher respective total

            assessment score.  Every employee was awarded the maximum ten

            performance  points,  provided  that  the  employee  had  not

            received  counselling for unacceptable  job performance.  The

            common  criteria of  length  of service  and  leading-change,

            interpersonal,   self-management,   and  versatility   skills

            ("common criteria") were applied identically to all employees

            across all job groups. 

                      Once  the  MLT  finished ironing  out  the  revised

            assessment criteria, teams of at least three individuals were

            formed   to  evaluate  the   salaried  employees  subject  to

            downsizing.    Each  team  included  an  MLT  member who  had

            participated  in  developing   and  discussing  the   written

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                                          4

            criteria, and  at least one person  who possessed substantial

            first-hand   knowledge   regarding   the   skills   and  past

            performance of  each employee  assessed.  Every  assessor was

            provided a text explaining the assessment criteria and a list

            of  technical job  skills  applicable to  the particular  job

            group he or  she would  assess.   The teams  reached a  final

            consensus rating  for each  employee through  oral discussion

            and  group decision.    Following the  team assessments,  MLT

            members  met  to  review  the process.    Additionally,  each

            department head was required to present, explain, and justify

            the results of the selection process in his or her department

            to a corporate review team that included management personnel

            from the mill's corporate headquarters.

                      The downsizing process resulted in  the termination

            of thirty-nine  percent of  the salaried employees  age fifty

            years  and older  but only  nine percent  of  those employees

            under age fifty.   All of  the plaintiffs  in this case  were

            over age fifty when Warren discharged them as a result of the

            downsizing effort.  Following their discharge, the plaintiffs

            commenced  this action  in federal  district court,  alleging

            that  Warren had  discriminated  against them  on account  of

            their  age   in  violation  of  the   Age  Discrimination  in

            Employment Act  of 1967  ("ADEA"), 29  U.S.C.     621-34, and

            Maine state law.  At trial, plaintiffs, pursuing  their claim

            under a theory of disparate impact liability, maintained that

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                                          5

            the  selection  procedures,  though  neutral on  their  face,

            effected   a  substantial   disparate  impact   on  older-age

            employees.   Following a  nine-day bench trial,  the district

            court entered judgment for  Warren, from which the plaintiffs

            now appeal.

                                         II.
                                         II.
                                         ___

                                      Discussion
                                      Discussion
                                      __________

            A.  Standard of Review
            ______________________

                      We review  the  district court's  findings of  fact

            only for clear error.  See Fed. R. Civ. P. 52(a); Cumpiano v.
                                   ___                        ________

            Banco  Santander P.R.,  902 F.2d  148,  152 (1st  Cir. 1990).
            _____________________

            Clear error  exists when, after reviewing  the entire record,

            we  have a "strong, unyielding belief that a mistake has been

            made."  Cumpiano, 902  F.2d at 152; see also  Industrial Gen.
                    ________                    ___ ____  _______________

            Corp. v. Sequoia  Pac. Sys. Corp.,  44 F.3d 40, 43  (1st Cir.
            _____    ________________________

            1995).  If,  however, the district court premised its factual

            findings on an incorrect view of the law, we are not bound by

            the clearly erroneous standard.  E.g., Brown Daltas & Assocs.
                                             ____  ______________________

            v. General Accident Ins. Co., 48 F.3d 30, 36 (1st Cir. 1995).
               _________________________

            "[T]o the extent that findings  of fact can be shown to  have

            been predicated upon, or induced by, errors of law, they will

            be accorded diminished respect on appeal."  Dedham Water  Co.
                                                        _________________

            v.  Cumberland Farms Dairy, Inc., 972 F.2d 453, 457 (1st Cir.
                ____________________________

            1992).

            B.  Age Discrimination Claim
            ____________________________

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                                          6

                      The  plaintiffs  contend  that  Warren's  selection
                      

            procedures,  though neutral  on their  face, resulted  in the

            discharge   of  a   disproportionate   number  of   older-age

            employees.  The theory of disparate impact liability has  its

            roots in the Supreme Court's decision in Griggs v. Duke Power
                                                     ______    __________

            Co., 401 U.S. 424 (1971).  In Griggs, the Court held that the
            ___                           ______

            use  of  a  facially   neutral  objective  test  that  tended

            disproportionately  to  exclude  African-Americans  from  the

            employment  pool  but  did  not  measure skills  demonstrably

            related  to  job  performance  violated  Title  VII's   anti-

            discrimination  provisions.   In  the context  of Title  VII,

            Congress codified  the disparate  impact theory in  the Civil

            Rights Act of 1991.  See Pub. L. No. 102-166,   3, 105  Stat.
                                 ___

            1071  (1991) (listing  as  one of  its  purposes "to  confirm

            statutory authority and provide statutory  guidelines for the

            adjudication of disparate impact suits under title VII").

                      Congress, however, has  never explicitly  addressed

            the theory of disparate impact liability in the ADEA context.

            Moreover,  though  the  Supreme Court  has  acknowledged that

            "[t]here are  important similarities  between [Title  VII and

            the ADEA],  . . .   both in their aims --  the elimination of

            discrimination from the workplace -- and in their substantive

            provisions[,]" Lorillard  v. Pons, 434 U.S.  575, 584 (1978),
                           _________     ____

            it  has  nonetheless  "never  decided  whether  the disparate

            impact  theory of  liability  is available  under the  ADEA."

                                         -7-
                                          7

            Hazen Paper Co.  v. Biggins,  113 S. Ct.  1701, 1706  (1993).
            _______________     _______

            Similarly,   though   we   assumed   without   analysis   the

            applicability of  the theory in  Holt v. Gamewell  Corp., 797
                                             ____    _______________

            F.2d 36, 37 (1st Cir. 1986), we have never directly addressed

            the issue.  See also  Caron v. Scott Paper Co., 834  F. Supp.
                        ___ ____  _____    _______________

            33,  35-38  (D.  Me. 1993).    Again,  for  purposes of  this

            opinion, we assume arguendo that the district court correctly
                               ________

            held  that the ADEA  supports a claim  for age discrimination

            based on a disparate impact theory of liability.1  

                      As  applied in Title VII cases, to prove a claim of

            disparate  impact discrimination, a plaintiff must identify a

            facially neutral employment practice  or policy that causes a

            statistically  discernible  disparate impact  on  a protected

                                
            ____________________

            1.  Though admittedly addressing only  the issue of disparate
            treatment, the  Hazen Court arguably  cast some doubt  on the
                            _____
            viability of  a  disparate impact  claim  under the  ADEA  by
            holding  that  "[w]hen  the  employer's  decision  is  wholly
            motivated  by   factors  other  than  age,   the  problem  of
            inaccurate and stigmatizing stereotypes  disappears.  This is
            true even if the motivating factor is correlated with age . .
            .  ."   Hazen, 113  S.  Ct. at  1706.   Taking  note of  this
                    _____
            language, two of our sister circuits have recently questioned
            whether the  theory of disparate impact  liability applies to
            the ADEA.  See  DiBiase v. Smithkline Beecham Corp.,  48 F.3d
                       ___  _______    ________________________
            719, 732 (3d Cir. 1995) (plurality) ("[I]n the wake of Hazen,
                                                                   _____
            it is doubtful  that traditional disparate impact theory is a
            viable theory of liability under the ADEA."); EEOC v. Francis
                                                          ____    _______
            W. Parker  School,  41 F.3d  1073, 1076-78  (7th Cir.  1994),
            _________________
            cert. denied, 1995  U.S.L.W. 3887 (U.S.  June 19, 1995)  (No.
            _____ ______
            94-1558);  but see Houghton v. Sipco, Inc., 38 F.3d 953, 958-
                       ___ ___ ________    ___________
            59   (8th   Cir.   1994)  (assuming   without   analysis  the
            applicability of disparate impact  theory of liability to the
            ADEA).  See also Michael C. Sloan, Comment,  Disparate Impact
                    ___ ____                             ________________
            in  the  Age Discrimination  in  Employment  Act:   Will  the
            _____________________________________________________________
            Supreme Court Permit It?, 1995 Wis. L. Rev. 507 (1995).
            ________________________

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                                          8

            employee group.   See EEOC v.  Steamship Clerks Union,  Local
                              ___ ____     ______________________________

            1066, 48 F.3d 594, 601  (1st Cir. 1995).  Once  the plaintiff
            ____

            has  made  this  initial  showing, the  defendant  must  then

            attempt to debunk the sufficiency of the plaintiff's evidence

            or, in the alternative, show  that the challenged practice is

            either job related and  consistent with business necessity or

            that  it fits within a specific statutory exception.2  Id. at
                                                                   ___

            604.   If the employer  attempts to justify  its actions, the

            plaintiff may  seek to  cast doubt  on  the justification  by

            showing,  inter  alia,  an  alternate  practice  exists  that
                      _____  ____

            equally  protects the  employer's putative interest  but does

            not  disproportionately  burden  employees in  the  protected

            class.  Id.
                    ___

                      The  plaintiffs  contend  that  the  district court

            found  that   the  selection  procedures   merely  identified

            qualities important  for  employees to  possess  in  general.

            They  argue that such  a finding  is equivalent  to measuring

            "the  person in  the abstract"  and not  the "person  for the

            job,"  Griggs, 401 U.S. at 436, and, therefore, is inadequate
                   ______

            to establish an  affirmative defense to a claim  of disparate

                                
            ____________________

            2.  The ADEA provides that an  employer may take an otherwise
            prohibited employment  action if the action  is predicated on
            "reasonable factors other than age."  29 U.S.C.    623(f)(1).
            The plaintiffs  contend that, in  the context of  a disparate
            impact claim, this defense is equivalent to Title VII's "job-
            related/business-necessity"  defense.     Cf.  29  C.F.R.    
                                                      ___
            1625.7(d)  (interpreting the  "reasonable  factor other  than
            age"  defense as  limited only  to  factors justifiable  as a
            "business necessity").

                                         -9-
                                          9

            impact discrimination.  The plaintiffs argue further that the

            district court erred by failing to inquire whether Warren had

            established that the selection procedures identified specific

            job  behaviors  that significantly  correlated  to successful

            performance of the specific jobs  in question.  They maintain

            that,  if  the  correct  standard  were  to  be applied,  the

            evidence is  insufficient to  support a  finding in favor  of

            Warren.  We disagree.

                      Our review  of  the district  court's  careful  and

            extensive opinion  satisfies us that it  did supportably find

            that  Warren's selection  procedures measured skills  and job

            behaviors necessary  for, and significantly  correlated with,

            successful performance of  the jobs in  question.  The  court

            found  that  the  common   criteria  used  in  the  selection

            procedures  identified  necessary  technical  and  managerial

            skills "important  to all  the rated jobs  at the mill."   To

            support this  finding, the court pointed  to Warren's expert,

            Dr.  Richard  S.  Barrett,  a  consultant  in  the  field  of

            industrial psychology, who testified  at some length that the

            common  criteria   described   job  behaviors   required   in

            managerial  and technical  jobs in  a manufacturing  facility

            such as the  Westbrook mill.   In addition,  the court  noted

            that three department heads at the mill, who had participated

            in  designing  and  implementing  the  selection  procedures,

            testified  that  the   common  criteria  fairly   represented

                                         -10-
                                          10

            important  skills  needed  to   perform  the  jobs  in  their

            departments.   The  court also  relied  on the  testimony  of

            Warren's  Human  Resource  Director,  Gary  Parafinczuk,  who

            explained, inter alia, that,  prior to the downsizing, Warren
                       _____ ____

            had devoted  money and resources to  teaching and encouraging

            the very skills assessed by the common criteria.  

                      The district court also noted that the testimony of

            the various department  heads established that the  technical

            skills  portion of the  selection procedures  (which differed

            for  each job  group) identified  important skills  needed to

            perform the specific  jobs in  each job group.   Finally,  in

            discrediting  the testimony  of the  plaintiff's  expert, Dr.

            James Mahoney, in  favor of Dr.  Barrett, the district  court

            expressly  rejected  the  plaintiff's  contention   that  the

            selection procedures were not consistently  predictive of, or

            significantly  correlated with, the  necessary skills for the

            successful performance of the specific jobs in question.

                      Notwithstanding   the   district  court's   careful

            analysis, the plaintiffs contend that, because Warren applied

            the  same common criteria in equal weights to every job group

            assessed, the selection procedures could not possibly measure

            job   skills   significantly   correlated   with   successful

            performance of any specific job.  We are not  convinced:  The

            fact  that the skills identified by  the common criteria were

            important in  many managerial and technical  mill jobs simply

                                         -11-
                                          11

            does not compel a  finding that the skills were  unrelated to

            the particular  jobs at  issue.  Furthermore,  the plaintiffs

            totally  disregard the  fact  that the  technical skills  and

            performance  criteria  directly   measured  each   employee's

            specific  job performance  skills and  that,  although Warren

            applied the  common criteria to all  employees, the employees

            were rated and ranked only within their specific job group by

            persons familiar with  individual employees and group  needs.

            Moreover,   we  seriously  doubt   that  Warren   would  have

            previously committed  money and resources  to developing  the

            skills measured  by  the common  criteria  if they  were  not

            directly related to successful job performance.  In addition,

            the employees' own expert  admitted on cross-examination that

            one way to assess the validity of the selection procedures as

            a  tool   for  measuring  skills  directly   related  to  job

            performance  would  be  to  examine  whether   a  statistical

            correlation existed  between earlier promotions  at the  mill

            and the  assessment scores.  Subsequently,  Dr. James Medoff,

            an expert  in labor statistics retained  by Warren, testified

            that,  when he reviewed the data supplied by Warren, he found

            a strong correlation between those two factors.

                      In  sum,  we believe  that, in  determining whether

            Warren had  sufficiently justified  its use of  the selection

            procedures,  the district  court  supportably found  that the

                                         -12-
                                          12

            procedures  measured skills  necessary  for,  and  correlated

            with, successful performance of the jobs in question.3   

                      We also believe that the record adequately supports

            the  district court's finding that Warren's implementation of

            the  selection procedures  assured  that  they  would  fairly

            identify the  employees who  most fully possessed  the skills

            and  abilities needed  for  successful job  performance.   In

            making this finding the court relied in part on Dr. Barrett's

            assessment of  Warren's efforts.  Barrett  testified that the

                                
            ____________________

            3.  Furthermore,  we do not think, on the facts of this case,
            that the  law necessarily required Warren  to offer empirical
            studies to validate the  selection procedures as job related.
            Such  a  requirement  would  place a  substantial  burden  on
            employers, like  Warren, already forced by economic necessity
            to reduce the  size of their  work force.   See generally  29
                                                        ___ _________
            C.F.R.    1607 (EEOC  guidelines outlining  empirical methods
            for validating  selection procedures in  Title VII  context).
            Employers, however,  are not  required,  "even when defending
            standardized   or  objective   tests,  to   introduce  formal
            `validation studies' showing that particular criteria predict
            actual on-the-job performance."   Watson v. Fort Worth Bank &
                                              ______    _________________
            Trust, 487 U.S. 977, 999 (1988) (plurality); cf. id. at 1006-
            _____                                        ___ ___
            7 (Blackmun, Brennan, Marshall,  JJ., concurring) ("While . .
            . formal validation  techniques .  . . may  sometimes not  be
            effective  in measuring  the  job-relatedness of  subjective-
            selection processes,  a variety of methods  are available for
            establishing the link  between these selection processes  and
            job  performance, just  as they  are  for objective-selection
            devices." (footnote omitted)); Albemarle Paper Co.  v. Moody,
                                           ___________________     _____
            422  U.S. 405, 449 (1975)  (Blackmun, J., concurring).  Here,
            the selection procedures are  not objective tests employed to
            screen potential job applicants, but instead are more akin to
            subjective evaluations directly measuring actual abilities of
            known employees.  Moreover, there is no evidence in this case
            that  the procedures  were used  to "freeze"  the effects  of
            prior intentional  age  discrimination.   See Albemarle,  422
                                                      ___ _________
            U.S.  at 427 ("The question of job relatedness must be viewed
            in  the context of the  plant's operation and  the history of
            the testing program.").    

                                         -13-
                                          13

            team  format  for  rating  each employee,  calling  for  open

            discussion and justification of each assessment and consensus

            decision-making, enhanced  the quality of  the rating system.

            The court  also pointed  out  that all  raters who  testified

            stated that  they understood  the criteria  and how  to apply

            them.   Furthermore,  the  court noted  that the  post-rating

            review sessions,  at which each department  head was required

            to justify his or her decisions, further  assured the quality

            and fairness of the assessments.  We have reviewed the record

            and  find that  it adequately  and convincingly  supports the

            district  court's  conclusions.    Accordingly,  the district

            court's findings are not clearly erroneous.4

                                         III.
                                         III.
                                         ____

                                      Conclusion
                                      Conclusion
                                      __________

                      For  the  foregoing reasons,  the  judgment  of the

            district court is affirmed.       

                                
            ____________________

            4.  Warren  additionally contends that the plaintiffs' appeal
            should  fail  because, inter  alia,  they  improperly used  a
                                   _____  ____
            subgroup  (employees  age  fifty  years  and  older)  of  the
            protected class (employees age forty years  and older) as the
            basis for their disparate  impact claim.  Because we  find no
            error in  the district  court's factual findings,  we do  not
            reach this argument. 

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