E.E.O.C. v. Dial Corp.

• Citation: 469 F.3d 735
• Decision Date: 17 November 2006
• Docket Number: No. 05-4311.,No. 05-4183.,05-4183.,05-4311.
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellee/Cross-Appellant, v. DIAL CORPORATION, Appellant/Cross-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

469 F.3d 735

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Appellee/Cross-Appellant, v. DIAL CORPORATION, Appellant/Cross-Appellee.

No. 05-4183.

No. 05-4311.

United States Court of Appeals, Eighth Circuit.

Submitted: September 25, 2006.

Filed: November 17, 2006.

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Susan R. Oxford, Equal Employment Opportunity Commission, argued, Washington, DC, for Appellee/Cross-Appellant.

Camille A. Olson, argued, Anne Duprey (on the brief), Seyfarth & Shaw, Chicago, IL, for Appellant/Cross-Appellee.

Before MURPHY, HANSEN, and RILEY, Circuit Judges.

MURPHY, Circuit Judge.

The Equal Employment Opportunity Commission (EEOC) brought this sex discrimination action against The Dial Corporation under Title VII of the Civil Rights Act of 1964 on behalf of a number of women who had applied for work but were not hired. A jury found that Dial had engaged in a pattern or practice of intentional discrimination against women and awarded compensatory damages, and the district court¹ concluded that Dial's use of a preemployment strength test had an unlawful disparate impact on female applicants and awarded back pay and benefits. Dial appeals from the denial of its motion for judgment as a matter of law and from the judgment. EEOC cross appeals the denial of back pay to one claimant. We remand one issue but otherwise affirm.

Dial is an international company with a plant located in Fort Madison, Iowa that produces canned meats. Entry level employees at the plant are assigned to the sausage packing area where workers daily lift and carry up to 18,000 pounds of sausage, walking the equivalent of four miles in the process. They are required to carry approximately 35 pounds of sausage at a time and must lift and load the sausage to heights between 30 and 60 inches above the floor. Employees who worked in the sausage packing area experienced a disproportionate number of injuries as compared to the rest of the workers in the plant.

Dial implemented several measures to reduce the injury rate starting in late 1996. These included an ergonomic job rotation, institution of a team approach, lowering the height of machines to decrease lifting pressure for the employees, and conducting periodic safety audits. In 2000 Dial also instituted a strength test used to evaluate potential employees, called the Work Tolerance Screen (WTS). In this test job applicants were asked to carry a 35 pound bar between two frames, approximately 30 and 60 inches off the floor, and to lift and load the bar onto these frames. The applicants were told to work at their "own pace" for seven minutes. An occupational therapist watched the process, documented how many lifts each applicant completed, and recorded her own comments about each candidate's performance. Starting in 2001, the plant nurse, Martha Lutenegger, also watched and documented the process. From the inception of the test, Lutenegger reviewed the test forms and had the ultimate hiring authority.

For many years women and men had worked together in the sausage packing area doing the same job. Forty six percent of the new hires were women in the three years before the WTS was introduced, but the number of women hires dropped to fifteen percent after the test was implemented. During this time period the test was the only change in the company's hiring practices. The percentage of women who passed the test decreased almost each year the test was given, with only eight percent of the women applicants passing in 2002. The overall percentage of women who passed was thirty eight percent while the men's passage rate was ninety seven percent. While overall injuries and strength related injuries among sausage workers declined consistently after 2000 when the test was implemented, the downward trend in injuries had begun in 1998 after the company had instituted measures to reduce injuries.

One of the first applicants to take the WTS was Paula Liles, who applied to Dial in January 2000 and was not hired even though the occupational therapist who administered her test told her she had passed. She filed a discrimination complaint with the Iowa Civil Rights Commission and EEOC in August 2000. On September 24, 2002, EEOC brought this action on behalf of Liles and fifty three other women who had applied to work at Dial and were denied employment after taking the WTS. Twenty four of these applicants had been unable to complete the test.

A jury trial was held in August 2004, and EEOC and Dial offered testimony by competing experts. EEOC presented an expert on industrial organization who testified that the WTS was significantly more difficult than the actual job workers performed at the plant. He explained that although workers did 1.25 lifts per minute on average and rested between lifts, applicants who took the WTS performed 6 lifts per minute on average, usually without any breaks. He also testified that in two of the three years before Dial had implemented the WTS, the women's injury rate had been lower than that of the male workers. EEOC's expert also analyzed the company's written evaluations of the applicants and testified that more men than women were given offers of employment even when they had received similar comments about their performance. EEOC also introduced evidence that the occupational nurse marked some women as failing despite their having completed the full seven minute test.

Dial presented an expert in work physiology, who testified that in his opinion the WTS effectively tested skills which were representative of the actual job, and an industrial and organizational psychologist, who testified that the WTS measured the requirements of the job and that the decrease in injuries could be attributed to the test. Dial also called plant nurse Martha Lutenegger who testified that although she and other Dial managers knew the WTS was screening out more women than men, the decrease in injuries warranted its continued use.

The jury was asked to decide whether Dial had engaged in a pattern or practice of intentional discrimination against female job applicants, the date on which any such discrimination began, and a question relating to damages. The jury returned its verdict on August 23, 2004. It found Dial had engaged in a pattern or practice of intentional discrimination beginning in April 2001. The jury awarded a total of $30,003 in compensatory damages to the nine claimants who testified at trial and declined to assess punitive damages. Dial moved for judgment as a matter of law, alleging there was insufficient evidence for a reasonable jury to have found intentional discrimination. The motion was denied on February 3, 2005, but the district court eliminated nominal damages awarded to two applicants who had been rejected before April 2001 (the date when Dial's intentional discrimination began according to the jury verdict).

Following the jury trial the parties submitted additional evidence and briefs relating to the disparate impact allegations. The district court ruled on these issues in sixteen pages of detailed findings of fact and conclusions of law issued on February 3, 2005. It found that the WTS had had a discriminatory effect, that Dial had not demonstrated that the WTS was a business necessity or shown either content or criterion validity, and that Dial had not effectively controlled for other variables which may have caused the decline in injuries, including other safety measures that Dial had implemented starting in 1996.

After the court issued its findings and conclusions, Dial offered employment to all of the claimants in the spring of 2005. Further discovery and submissions followed, as well as additional briefing. The district court found that the claimants who had been unable to complete the full seven minutes of the WTS were also entitled to relief and determined the amount of back pay and interest to which each applicant was entitled. Back pay was calculated from the date the district court found the applicants should have been hired up to the date of Dial's offer of employment, less any wages earned elsewhere during that period. Health care benefits were awarded in the amount Dial would have paid for premiums, minus any benefits the women had received in the meantime. The range of the back pay awarded to the individual applicants varied from a high of $120,236 to a low of $920, and the individual health benefits ranged from $30,385 to $882.

An additional issue was raised in respect to one of the women who had accepted Dial's reinstatement offer, Heather Wright-Bradley. She had a criminal record predating her initial application, which included a number of convictions and at least one felony. Dial dismissed her after learning about her criminal history in a background check done after her reinstatement. The district court held a telephone conference with the parties to address whether Wright-Bradley should receive back pay under the circumstances. Dial's general counsel stated that the company had a policy on background checks during the period when the WTS was given which would have uncovered her criminal record. The district court concluded that Dial would have terminated her on account of her criminal record had she been hired in 2000 and that she was therefore not entitled to back pay.

On appeal Dial challenges the district court's denial of its motion for judgment as a matter of law, arguing there was insufficient evidence for a jury to find intentional discrimination. Dial also attacks the district court's findings of disparate impact and claims it proved that the WTS was a business necessity because it drastically decreased the number of injuries in the sausage production area of the plant. It contends the district court should not have awarded any back pay to applicants who were not strong enough to complete the WTS, it should have used the company's tenure data to calculate back pay, and that no applicant should have been...