Williams v. Wells Fargo Bank, N.A.

Decision Date29 August 2018
Docket NumberNo. 16-4372,16-4372
Citation901 F.3d 1036
Parties Cara WILLIAMS ; Johnita Slaughter; Mandre Miller; James Collier; Teresa Jones; Chance Kenyon; Anthony Williams; Dwann Jones; Leroy Fields-Campbell; Barbara Hansen, individually and on behalf of a putative class of similarly situated individuals, Plaintiffs - Appellants v. WELLS FARGO BANK, N.A., Defendant - Appellee National Employment Law Project, Amicus on Behalf of Appellant(s)
CourtU.S. Court of Appeals — Eighth Circuit

Leonard Bates, Thomas Andrew Newkirk, NEWKIRK & ZWAGERMAN, Des Moines, IA, Laura L. Ho, James Paul Kan, GOLDSTEIN & BORGEN, Oakland, CA, for Plaintiffs - Appellants.

Gregory Paul Abrams, FAEGRE & BAKER, Chicago, IL, Susan Patricia Elgin, FAEGRE & BAKER, Des Moines, IA, John P. Mandler, FAEGRE & BAKER, Minneapolis, MN, for Defendant - Appellee.

Elizabeth Avery, NATIONAL EMPLOYMENT LAW PROJECT, Berkeley, CA for Amicus on Behalf of Appellant(s) National Employment Law Project.

Before SMITH, Chief Judge, MURPHY and COLLOTON, Circuit Judges.*

SMITH, Chief Judge.

The appellants are ten African Americans and Latinos who sued Wells Fargo Bank, N.A. ("Wells Fargo") on behalf of a putative class, alleging discriminatory employment practices in violation of Title VII and the Iowa Civil Rights Act. They seek reversal of the district court’s1 grant of summary judgment in favor of Wells Fargo. Specifically, the appellants argue that the court erred in concluding that they failed to establish a prima facie case of disparate impact. They also challenge the magistrate judge’s2 order granting in part and denying in part their Federal Rule of Civil Procedure 56(d) motion seeking additional time for discovery. We affirm.

I. Background

Federal law bars "any person who has been convicted of any criminal offense involving dishonesty or a breach of trust" from becoming or continuing as an employee of any institution insured by the Federal Deposit Insurance Corporation (FDIC). 12 U.S.C. § 1829(a)(1)(A). More commonly known as Section 19, the statute does not consider the age of the convictions when applying the employment bar. See Id. § 1829(2)(A). In other words, an individual with a one-month-old disqualifying conviction is equally barred from FDIC-institution employment as a person with a thirty-year-old conviction. Violations of Section 19 can result in daily fines of up to $1,000,000 per day, five years’ imprisonment, or both. Id. § 1829(b). Disqualified persons may apply for employment waivers with the FDIC. Banking institutions wishing to hire—or to continue to employ—Section 19-disqualified individuals also may sponsor waiver applications. No disqualified individual may begin or continue employment with the FDIC-insured institutions until after obtaining a waiver.

Wells Fargo is an FDIC-insured bank. Job applicants to Wells Fargo are required to answer whether they had a conviction of a crime involving dishonesty.3 Starting in 2010, Wells Fargo instituted a fingerprint-based background check for its current and potential employees. The background check returns all criminal convictions, regardless of the age of the crime. In 2012, Wells Fargo re-screened its entire Home Mortgage division. Wells Fargo asked its employees for authorization to re-screen and again asked the employees to answer whether they had convictions involving crimes of dishonesty. The bank then terminated the Home Mortgage employees verified to have Section 19 disqualifications. Wells Fargo did not inform the terminated employees of the availability of Section 19 waivers, and it did not offer to sponsor waivers for any individual. Between December 2011 and March 2013, Wells Fargo terminated at least 136 African Americans, 56 Latinos, and 28 white employees because of Section 19 disqualifications. Between February 2013 and November 2015, Wells Fargo also withdrew at least 1,350 conditional job offers to African Americans and Latinos and 354 non-minorities after the background check revealed these individuals had disqualifying convictions.

The appellants sued, alleging race-based employment discrimination under Title VII of the Civil Rights Act of 1964, as well as violations under the Iowa Civil Rights Act. They alleged that Wells Fargo’s policy of summarily terminating or withdrawing offers of employment to any individual with a Section 19 disqualification discriminated against them. Prior to merits discovery, Wells Fargo moved for summary judgment. The appellants filed a motion requesting additional time to conduct discovery under Federal Rule of Civil Procedure 56(d), and the magistrate judge partially granted and partially denied the motion. The district court then granted summary judgment to Wells Fargo, concluding that the appellants failed to establish a prima facie case under any theory of employment discrimination pursuant to either federal or state law.

II. Discussion

The appellants now contend that the district court erred in granting summary judgment to Wells Fargo, arguing that the district court misapplied disparate-impact law. Additionally, they challenge the magistrate judge’s ruling on their Rule 56(d) motion.

A. Title VII Disparate Impact

Ultimately, at issue in this case is whether the appellants had established a prima facie case of Title VII disparate impact, and if they had, whether Wells Fargo failed to show a business necessity defense. The appellants contend that Wells Fargo refused to adopt the alternative practices of giving advance notice of the need for a waiver, granting leave to seek a waiver, and providing direct sponsorship of a waiver. They argue that Wells Fargo sometimes took these steps, and that if the company had done so uniformly, then the alternative practice would have reduced the disparate impact caused by the summary exclusions. On this record, we disagree.

We review grants of summary judgment de novo. Torgerson v. City of Rochester , 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc) (citation omitted). "Summary judgment is proper ‘if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.’ " Id. (quoting Fed. R. Civ. P. 56(c)(2) ). We view facts in the light most favorable to the nonmoving party, and we make no determinations of credibility; nor do we weigh the evidence or draw inferences, as those functions belong to the jury. Id. (citations omitted). However, "[m]ere allegations, unsupported by specific facts or evidence beyond the nonmoving party’s own conclusions, are insuf ficient to withstand a motion for summary judgment." Menz v. New Holland N. Am., Inc. , 507 F.3d 1107, 1110 (8th Cir. 2007) (quoting Thomas v. Corwin , 483 F.3d 516, 527 (8th Cir. 2007) ). We may affirm "on any basis supported by the record." Id. (citation omitted).

Under Title VII,

an unlawful disparate impact is established under that statute "only if," as relevant here, "a complaining party demonstrates that a respondent uses a particular employment practice that causes a disparate impact on the basis of race ... and the respondent fails to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity."

Bennett v. Nucor Corp. , 656 F.3d 802, 817 (8th Cir. 2011) (ellipsis in original) (quoting 42 U.S.C. § 2000e-2(k)(1)(A)(i) ). To satisfy the elements of a prima facie disparate impact claim, plaintiffs must demonstrate: "(1) an identifiable, facially-neutral personnel policy or practice; (2) a disparate effect on members of a protected class; and (3) a causal connection between the two." Mems v. City of St. Paul , 224 F.3d 735, 740 (8th Cir. 2000) (citing Watson v. Fort Worth Bank & Trust , 487 U.S. 977, 994, 108 S.Ct. 2777, 101 L.Ed.2d 827 (1988) ), abrogated on other grounds , Torgerson , 643 F.3d at 1059.

The appellants claim that the district court erroneously concluded that they failed to establish a prima facie case of disparate impact. They assert that they presented sufficient statistical evidence to show the disparity between white and non-white Wells Fargo employees and potential employees and that Wells Fargo failed to show a business necessity. We disagree.

Once the complaining party shows that a particular employment practice or policy creates a disparate impact on a protected group, the employer carries the burden of demonstrating a business necessity to avoid violating Title VII. See Bennett , 656 F.3d at 817 (citing 42 U.S.C. § 2000e-2(k)(1)(A)(i) ); see also Mozee v. Am. Commercial Marine Serv. Co. , 940 F.2d 1036, 1049 (7th Cir. 1991) ("[A]n employment practice that results in a disparate effect on a protected group might still survive Title VII if it is sufficiently job-related to constitute a business necessity." (citations omitted) ). If the employer meets "its burden of producing evidence that its employment practices are based on legitimate business reasons, the plaintiff must ‘show that other tests or selection devices, without a similarly undesirable racial effect, would also serve the employer’s legitimate interest in efficient and trustworthy workmanship.’ " Watson , 487 U.S. at 998, 108 S.Ct. 2777 (quoting Albemarle Paper Co. v. Moody , 422 U.S. 405, 425, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975) ).

Here, African-American and Latino employees were terminated (or potential employees were not hired) at rates at least twice those of non-minorities. But even assuming that the disparate impact was caused by Wells Fargo’s policy of uniformly applying Section 19, the district court correctly recognized that the bank’s "sound business decision was to terminate regardless of race or age or ethnicity." Op. at 1039. Non-compliance with Section 19 could place Wells Fargo at risk of daily fines of $1 million. Further, "any bank or other financial institution wisely would prefer for...

To continue reading

Request your trial
10 cases
  • U.S. Equal Emp't Opportunity Comm'n v. Stan Koch & Sons Trucking, Inc.
    • United States
    • U.S. District Court — District of Minnesota
    • 30 Agosto 2021
    ...must be prima facie evidence that the business practice had a significant impact on a protected group. See Williams v. Wells Fargo Bank, N.A. , 901 F.3d 1036, 1040 (8th Cir. 2018). The plaintiff bears the burden of making this showing. Id. This is typically done with statistical evidence th......
  • Hallmark Specialty Ins. Co. v. Phx. C&D Recycling, Inc.
    • United States
    • U.S. District Court — Southern District of Iowa
    • 22 Enero 2020
    ...facts are insufficient to raise an issue for trial and need not be accepted by the court. See, e.g., Williams v. Wells Fargo Bank, N.A. , 901 F.3d 1036, 1039 (8th Cir. 2018). ...
  • Chen-Oster v. Goldman, Sachs & Co.
    • United States
    • U.S. District Court — Southern District of New York
    • 17 Marzo 2022
    ...its burden of showing business necessity before addressing the less discriminatory alternative issue. Williams v. Wells Fargo Bank, N.A., 901 F.3d 1036, 1040-42 (8th Cir. 2018). Finally, Smith arose under the Age Discrimination in Employment Act (“ADEA”). Smith v. City of Des Moines, 99 F.3......
  • Gill v. City of St. Peters
    • United States
    • Missouri Court of Appeals
    • 1 Marzo 2022
    ...neutral employment practice that has a significant adverse impact on members of a protected class.6 See, e.g. , Williams v. Wells Fargo Bank , 901 F.3d 1036, 1040 (8th Cir. 2018) (identifying elements of prima facie federal disparate impact claim as "(1) an identifiable, facially-neutral pe......
  • Request a trial to view additional results
1 books & journal articles
  • Review Proceedings
    • United States
    • Georgetown Law Journal No. 110-Annual Review, August 2022
    • 1 Agosto 2022
    ...waived because defendant failed to timely object to magistrate’s f‌indings and recommendation); Williams v. Wells Fargo Bank, N.A., 901 F.3d 1036, 1042 (8th Cir. 2018) (claim waived because defendant failed to timely object to magistrate’s order); U.S. v. Torres, 987 F.3d 983, 899 (10th Cir......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT