District Council 37, American Federation of State, County & Municipal Employees, AFL-CIO v. New York City Dept. of Parks and Recreation

• Decision Date: 14 May 1997
• Docket Number: D,No. 66,AFL-CIO,No. 96-7050,66,96-7050
• Parties: 73 Fair Empl.Prac.Cas. (BNA) 1666 DISTRICT COUNCIL 37, AMERICAN FEDERATION OF STATE, COUNTY & MUNICIPAL EMPLOYEES,; Joseph R. Zurlo; James Welsh; Charles J. Santarpia and Frank Desena, on behalf of themselves and all individuals similarly situated, Plaintiffs-Appellants, v. NEW YORK CITY DEPARTMENT OF PARKS AND RECREATION; The City of New York; New York City Department of Personnel, Defendants-Appellees. ocket
• Court: U.S. Court of Appeals — Second Circuit

Page 347

113 F.3d 347

73 Fair Empl.Prac.Cas. (BNA) 1666

DISTRICT COUNCIL 37, AMERICAN FEDERATION OF STATE, COUNTY &

MUNICIPAL EMPLOYEES, AFL-CIO; Joseph R. Zurlo; James

Welsh; Charles J. Santarpia and Frank Desena, on behalf of themselves and all individuals similarly situated, Plaintiffs-Appellants, v. NEW YORK CITY DEPARTMENT OF PARKS AND RECREATION; The City

of New York; New York City Department of

Personnel, Defendants-Appellees.

No. 66, Docket No. 96-7050.

United States Court of Appeals, Second Circuit.

Argued Oct. 23, 1996.

Decided May 14, 1997.

Debra L. Raskin, New York City (Ivan D. Smith, James D. Esseks, Vladeck, Waldman, Elias & Engelhard, of counsel), for Plaintiffs-Appellants.

Jane L. Gordon, Office of the Corporation Counsel, New York City (Paul A. Crotty, Corporation Counsel of the City of New York, Stephen J. McGrath, Office of the Corporation Counsel, of counsel), for Defendants-Appellees.

Before MESKILL, CALABRESI and CABRANES, Circuit Judges.

MESKILL, Circuit Judge:

Plaintiffs are a certified class of former New York City Parks Department employees who were laid off as a result of cuts to the Parks Department's budget. Plaintiffs sued in the United States District Court for the Southern District of New York, Schwartz, J., alleging, among other things, that the layoffs had a disparate impact on employees age 40 and older, in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-634. After a jury trial, the jury returned a verdict for defendants.

On appeal, plaintiffs request a new trial. Plaintiffs argue that under Connecticut v. Teal, 457 U.S. 440, 452-56, 102 S.Ct. 2525, 2533-36, 73 L.Ed.2d 130 (1982), the district court erred when it refused to instruct the jury that a nondiscriminatory "bottom line" was no defense to a disparate impact claim. We conclude that the jury instructions were adequate, and affirm.

BACKGROUND

From 1991 to 1992, the City of New York cut the Parks Department's annual budget from $176 million to $108 million. Because the Parks Department spent $160 million annually on salaries, it had to lay off a large number of employees.

Under New York law, the Parks Department could decide which of its job titles to cut and how many employees within those job titles to cut. However, once that decision was made, New York law determined which specific employees within a job title would be cut. Temporary employees within a job title had to be laid off before permanent employees. See N.Y.Civ.Serv.Law § 65(3) (McKinney After evaluating its needs, the Parks Department decided to lay off 1,585 of its 5,180 employees. The Parks Department laid off varying numbers of employees across its 128 job titles. Among the many cuts the Parks Department made, it entirely eliminated the job title "Laborer." ¹ Everyone employed as a Laborer was over the age of 40 and their average age was 57.

1983); Kerr v. Weisenberg, 65 A.D.2d 815, 817, 410 N.Y.S.2d 351, 353 (2d Dep't 1978), aff'd, 49 N.Y.2d 870, 427 N.Y.S.2d 935, 405 N.E.2d 179 (1980) (affirming for the reasons stated by the Appellate Division). Once all the temporary employees within a job title had been laid off, permanent employees within the job title had to be laid off in inverse order of seniority. N.Y.Civ.Serv.Law § 80(1) (McKinney 1983). Thus, determining which employees would be laid off involved a three-step process: first, the Parks Department decided which job titles to cut and how deeply to cut; second, the temporary employees within the selected titles were laid off; and third, permanent employees within the selected titles were laid off in inverse order of seniority.

The former Laborers sued the Parks Department, claiming that the Parks Department's decisions as to which job titles to cut and how deeply to cut resulted in a disparate treatment of and a disparate impact on employees age 40 and older, in violation of the ADEA. The disparate treatment claim has been abandoned and is not before us on this appeal. We therefore will examine only the disparate impact claim.

The case went to trial, and at trial each party offered an expert witness in the field of statistics. The experts agreed that as a result of the entire three-step layoff process, the Parks Department actually grew older. While 48 percent of the original Parks Department work force was age 40 or older, only 40 percent ² of those laid off were age 40 or older. In other words, of those employees who were laid off, employees age 40 and older were underrepresented.

Plaintiffs' expert testified that despite this bottom line result, the layoff process nevertheless had a disparate impact on employees age 40 and older. Plaintiffs' expert focused his attention on the first step in the layoff process, the Parks Department's decisions as to which job titles to cut and how deeply to cut, which was the only step the Parks Department had any control over.

Plaintiffs' expert used a computer to simulate nondiscriminatory layoffs. The computer randomly selected 1,585 employees (the number of employees actually laid off) of the 4,916 Parks Department employees who were at risk of being laid off--however, the computer would not necessarily lay off the employees it had selected. Instead, the computer would note how many employees were chosen from a job title, and would determine which specific employees to cut from that title using the temporary-employees-first rule and the seniority rule. Once the computer determined which Parks Department employees to lay off, the computer calculated the percentage of those employees that were age 40 or older. The computer then repeated the process 10,000 times, and at the end, calculated how many employees age 40 or older were laid off on average.

Based on this computer simulation, plaintiffs' expert concluded that if the Parks Department had randomly selected which job titles to cut and how deeply to cut, and the second and third steps in the layoff process were then used to determine who within the selected titles would be laid off, on average 32 percent of the workers laid off would have been age 40 or older. In contrast, 40 percent Plaintiffs' expert explained that the bottom line nevertheless favored employees age 40 and older because the second step, which required that temporary employees be laid off first, and the third step, which required that permanent employees be laid off in inverse order of seniority, both favored employees age 40 and older. The net effect of these three steps was that out of the employees laid off, those age 40 and older were underrepresented.

                of the workers actually laid off were age 40 or older. 3  Plaintiffs' expert testified that if layoffs were made without regard to age, the likelihood that 40 percent of those laid off would be age 40 or older was approximately 1 in 10,000.  Based on this analysis, he testified that titles which predominantly employed workers age 40 and older had been targeted for layoffs in the first step of the layoff process
                

To summarize, it was plaintiffs' position that although employees age 40 or older represented 48 percent of the work force but represented only 40 percent of those laid off, the layoffs nevertheless had a disparate impact on employees age 40 and older because only 32 percent of the employees laid off should have been age 40 or older.

The Parks Department attacked the data used by plaintiffs' expert. When the Parks Department hires a new employee, the employee sometimes starts as a temporary employee and later becomes a permanent employee. When conducting layoffs, the Parks Department uses the date the employee became a permanent employee to determine seniority. However, when the expert's computer was determining which employees within a title were the least senior and hence would be laid off, the computer used the employees' initial hire date to calculate seniority rather than the date the employee became a permanent employee. The Parks Department argued that this error could lead the computer to select the wrong person for layoff, and that therefore, the computer simulation was flawed.

Further, the Parks Department's expert also testified that the Parks Department did not target older job titles for layoffs in the first step of the layoff process. The Parks Department's expert computed the average age of the employees from each title and used statistical analysis to determine whether the titles with higher average employee ages were selected for more severe cuts. She concluded that there was no relationship between the average employee age of a title and whether the title was selected for severe cuts. In other words, she testified that titles which predominantly employed workers age 40 and older had not been targeted for layoffs in the first step of the layoff process.

After the close of testimony, plaintiffs asked the district court to instruct the jury as follows:

If you find that the defendants' decision as to which job titles to cut, and how deeply to cut within those titles, had a disparate impact on older workers, then I instruct you that it was no defense for the defendants to assert that older workers were under- or over-represented among those ultimately affected by the layoffs. In other words, I instruct you that the "bottom-line" results of the June 1991 reduction in force are not relevant to whether plaintiffs have shown disparate impact; your inquiry should focus on the employment practice identified by plaintiff.

The district court refused to give the requested instruction, and instead instructed the jury, in pertinent part, as follows:

As a first step in proving their claim under disparate impact theory, plaintiffs must show by a preponderance of the evidence that a specific or particular employment practice or decision had a significantly disparate impact on Parks Department employees who were aged 40 or older. Plaintiffs claim that the defendants' decisions as to which job titles to cut [and] how...