652 F.2d 1176 (4th Cir. 1981), 79-1533, E.E.O.C. v. American Nat. Bank

Docket Nº:79-1533
Citation:652 F.2d 1176
Party Name:E.E.O.C. v. American Nat. Bank
Case Date:June 26, 1981
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit

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652 F.2d 1176 (4th Cir. 1981)







Nos. 79-1533, 79-1725.

United States Court of Appeals, Fourth Circuit.

June 26, 1981

Argued May 6, 1980.

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William H. Ng, EEOC, Washington, D.C. (Leroy D. Clark, Gen. Counsel, Joseph T. Eddins, Associate Gen. Counsel, Beatrice Rosenberg, Asst. Gen. Counsel, EEOC, Washington, D.C., on brief), for appellant.

Thomas J. Manley, Richmond, Va. (Paul M. Thompson, Jack W. Burtch, Jr., Hunton & Williams, Richmond, Va., on brief), for appellee.

Before BUTZNER, RUSSELL and PHILLIPS, Circuit Judges.


The Equal Employment Opportunity Commission (EEOC) instituted this action on a complaint charging that defendant American National Bank (ANB or Bank) had engaged in a pattern or practice of

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racially discriminatory hiring practices from 1969 to 1975, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. The district court found that the static work force statistics submitted by the EEOC revealed a continuous underrepresentation of blacks in defendant's work force during the relevant period, both generally and in the specific job categories of officials and managers and of office and clerical personnel, and therefore constituted prima facie proof of a pattern or practice of discrimination. It then held that prima facie case rebutted, however, by ANB's applicant flow data and a standard deviation analysis of the static work force statistics. The court then examined each of ANB's hiring practices that the EEOC had alleged to be discriminatory, and found them to be legitimate business practices and nondiscriminatory in effect, both separately and in combination. Additionally, the court evaluated 31 claimed examples of discrimination in specific hiring decisions, and found that none showed a denial of employment because of race. Concluding that the EEOC had therefore failed to prove a pattern or practice of discrimination, the court dismissed the suit. It then ruled that the EEOC had brought a frivolous claim and pursued it in bad faith, justifying an award of costs and attorneys' fees to defendant. In a later order, the court determined the amount of reasonable attorneys fees to be that submitted by ANB, in the amount of $106,084.75.

We agree with the district court's ruling that the EEOC's statistical proof made out a prima facie case of discrimination, but, with the exception of one employment category, we conclude that the court erred in holding that defendant's rebuttal evidence was sufficient to overcome the prima facie case. Because the proof of a pattern or practice of discrimination thus stands unrebutted as to all but the one category on a proper legal analysis of the total evidence, we reverse and remand for the determination of appropriate relief.


This case began with a charge of discrimination filed with the EEOC in 1969 by a rejected black applicant, Sandra Holland. Ms. Holland alleged that she had been refused employment at ANB's Suffolk branch. The EEOC conducted an investigation in 1970, and found that Ms. Holland's application at the Suffolk branch could not be located, though it did find an earlier application at the Portsmouth branch. The EEOC issued its formal "determination" in March 1974, finding reasonable cause to believe that ANB had engaged in discriminatory hiring practices. The determination discussed hiring figures only for ANB's Suffolk branch, and in a footnote rejected information about the hiring of blacks in ANB's Portsmouth branches as "irrelevant to employment at its Suffolk branch." App. 1523. Conciliation efforts were unsuccessful, and Ms. Holland was issued a right-to-sue notice in August 1974, but declined to file suit. The EEOC then instituted this action in January of 1976, charging a pattern or practice of discrimination in both the Suffolk and Portsmouth branches.

In August of 1976, the district court granted defendant's motion for summary judgment and dismissed the action for laches. This court vacated and remanded the case, in EEOC v. American National Bank, 574 F.2d 1173 (1978). Applying Occidental Life Insurance Co. v. EEOC, 432 U.S. 355, 97 S.Ct. 2447, 53 L.Ed.2d 402 (1977), we held the action not barred because no federal statute of limitations applied to suits by the EEOC once jurisdiction over the complaint is properly obtained, and noted that Congress did not intend state statutes of limitation to apply to such suits. Additionally, we held that the EEOC was entitled to bring suit on the broader pattern or practice allegation, founded on its reasonable cause determination and conciliation efforts. Any prejudice to the Bank resulting from the loss of evidence relating to Sandra Holland's charge did not affect its ability to defend the pattern or practice suit. 574 F.2d at 1175-76.

The case was tried over a four-day period in December 1978. The EEOC presented

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statistical evidence designed to show gross disparities between ANB's work force and the relevant labor pool of qualified blacks during the period charged. Further evidence was offered to prove ANB's use of subjective selection criteria and other discriminatory hiring practices. Finally, the EEOC presented 52 specific instances of black applicants who were allegedly not hired because of their race. (Thirty-one of these testified at trial).

The EEOC's statistical evidence, presented in the form of stipulated exhibits, compared on a static basis the racial composition of ANB's work force in its Suffolk and Portsmouth branches from 1968-75 to that of the general available work force in the relevant market areas. 1 It then compared the racial composition of specific job categories at both branches officials and managers, office and clerical workers, and service workers with the proportion of qualified blacks in the population, for each category. 2 The statistics revealed, as the district court found, that in the Suffolk branches there were no blacks employed as officers or managers during the eight-year period, though blacks comprised 8-10.9% of the qualified labor market. In its twenty clerical positions, ANB-Suffolk employed one black in the years 1970 and 1973, and two in 1971 and 1972. There were no blacks employed in this category during the other relevant years, as compared to a qualified labor market that was 10.3-22.5% black. In the seven ANB-Portsmouth branches, there were no black managers from 1968-1972, and one for each of the remaining three years. The qualified work force during this period was 4.8-6.9% black. In the office and clerical categories at Portsmouth, the Bank's work force was from 0 to 6.5% black from 1968-1974, and 9.3% in 1975, compared with a qualified work force that was 13.9-21.5% black. Only in the service worker category has the percentage of black bank employees been greater than the percentage of blacks in the available service worker force in the relevant labor market area. During the entire period, the service work force in both branches was at least 75%, and often 100% black.

The evidence as to the Bank's hiring procedures 3 was also stipulated by the parties. Applicants had to appear and submit an application form which would be retained on file and considered for vacancies for up to six months. The application form sought information on the individual's education, work experience, skills, references, desired position and salary, and relatives or friends at the Bank. Before 1973, applicants were required to take the Wonderlic Personnel

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test; until May 1975, a high school diploma was required for a clerical position. Application forms would be submitted to a designated employee; usually a different official would screen the applications and conduct interviews when a vacancy occurred. Until 1975, when the bank began maintaining records for determining compliance with affirmative action plans, no notation was made of the race of an applicant. There may have been clues, however, in their addresses and educational history.

Bank officials testified that when a vacancy developed, they would review the most recent applications first, and usually would not reach applications submitted more than 30 days previously. In a few cases, when they did not find a qualified applicant on file, they would advertise the vacancy. After reviewing applications, officials would select a few applicants to interview. There were no written job descriptions or criteria for hiring. The interviewers, all of whom were white, would evaluate the applicant's ability to communicate, maturity, personality, and physical appearance. The interviewer's decision to accept or reject an applicant was generally controlling. When ANB became particularly interested in hiring an applicant, prior employers were contacted, and character references were sometimes checked. Prior to 1975, ANB occasionally made retail credit checks on final applicants. Nearly half of the hires during this period had listed friends or relatives among bank employees.

As part of its nonstatistical evidence, the EEOC presented the testimony and written statements of 31 black applicants who had been rejected for positions at ANB. The EEOC stipulated that its case as to individual examples of discrimination would be limited to those 31 applicants who were able to testify. Twenty-one additional applicants were identified by the EEOC as having been discriminated against. Although these particular cases were not submitted to the court on the pattern or practice of discrimination issue, the court considered them in deciding the attorney's...

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