MacPherson v. University of Montevallo, 89-7752

• Citation: 922 F.2d 766
• Decision Date: 30 January 1991
• Docket Number: No. 89-7752,89-7752
• Parties: 55 Fair Empl.Prac.Cas. 13, 55 Empl. Prac. Dec. P 40,539, 59 USLW 2502, 65 Ed. Law Rep. 68 Roderick MacPHERSON and Marvin Narz, Plaintiffs-Appellants, v. UNIVERSITY OF MONTEVALLO, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 766

922 F.2d 766

55 Fair Empl.Prac.Cas. 13, 55 Empl. Prac.

Dec. P 40,539,

59 USLW 2502, 65 Ed. Law Rep. 68

Roderick MacPHERSON and Marvin Narz, Plaintiffs-Appellants, v. UNIVERSITY OF MONTEVALLO, Defendant-Appellee.

No. 89-7752.

United States Court of Appeals Eleventh Circuit.

Jan. 30, 1991.

Joe R. Whatley, Jr., Franklin G. Shuler, Jr., Jeremiah A. Collins, Cooper, Mitch, Crawford, Kuykendall & Whatley, Birmingham, Ala., John M. West, Bredhoff & Kaiser, Washington, D.C., for plaintiffs-appellants.

Carl E. Johnson, Jr., Birmingham, Ala., for defendant-appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before EDMONDSON and BIRCH, Circuit Judges, and RE ^*, Chief Judge.

EDMONDSON, Circuit Judge:

Appellants Roderick S. MacPherson and Marvin J. Narz, plaintiffs below, appeal the district court's disposition of their age discrimination suit against the University of Montevallo (the "University") brought under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. Secs. 621 et seq. The complaint alleged that the University had discriminated against them with respect to their compensation because of their age, and sought damages, injunctive relief, and litigation costs and expenses, including attorney's fees. ¹ The case was tried before a jury; and at the close of plaintiffs' case, the district court directed a verdict for defendant on one of plaintiffs' theories, disparate impact. The jury returned a verdict for plaintiffs on the disparate treatment theory and awarded damages, but the district court entered judgment not withstanding the verdict (j.n.o.v.) for defendants and, in the alternative, granted defendant's motion for new trial. MacPherson and Narz appeal the directed verdict against them on the disparate impact theory and the grant of defendant's motion for j.n.o.v./new trial. We affirm the directed verdict for the University on the disparate impact theory. On the disparate treatment theory, we vacate j.n.o.v. for the University but affirm the district court's grant of new trial.

I. BACKGROUND

The University is a small state institution of higher education. The plaintiffs MacPherson and Narz are full-time associate professors of its College of Business. ² MacPherson--who was born in 1937 and has a doctorate in marketing--started teaching at the University in 1973 as an assistant professor, was tenured in 1978, and was promoted to associate professor in 1981. Narz--who was born in 1936, has an undergraduate degree in accounting, is a Certified Public Accountant, and has a J.D. degree--started teaching at the University in 1978 as an associate professor; he is a professor of business law but has also taught accounting and taxation. ³ With the exception of one professor hired after the start of this litigation, plaintiffs are the oldest faculty members of the College of Business. They are also the longest-serving members of the faculty. ⁴ Nevertheless, MacPherson and Narz are the lowest paid members of the College of Business faculty, with the exception of an assistant professor who holds only an MBA (which is not considered a terminal degree) and an assistant professor who was hired in 1988 and does not have a Ph.D.

In 1979, Dr. William Word was hired as the Dean of the College of Business with a mandate from the University to obtain accreditation for the College of Business by the American Assembly of Collegiate Schools of Business ("A.A.C.S.B."). ⁵ His evaluation of the College of Business led to the conclusion that, to obtain accreditation, the University would need--among other things--to hire doctorally qualified ⁶ professors in accounting, finance, and management. ⁷ Since his appointment as dean, Word has hired 25 new faculty members, 17 under the age of 40 and 8 over the age of 40, for the purpose of achieving accreditation. According to defendant, this was necessary to obtain a sufficient number of doctorally qualified professors in the various business school fields and to obtain professors who are researchers and publishers of articles. ⁸

A faculty member's compensation at the University is determined by the level of his beginning salary and raises realized through promotion, across-the-board increases, merit raises, and market adjustment increases. When additional funds become available for business school salaries (apart from promotion and market adjustment salary allotments), 70 per cent of the new money is distributed in across-the-board raises and 30 per cent is distributed in merit raises according to a formula based on the faculty member's annual evaluation score as compared to the average evaluation score in the College of Business. According to Dean Word, salary differentials based on merit raises are insignificant because the range of evaluation scores is not great. A faculty member's starting salary is based on a number of market-related variables which affect an applicant's desirability and, hence, the salary that universities are willing to offer the applicant. The main factor affecting a faculty member's initial salary is his field or discipline. After field or discipline, an applicant's research and publication records (and potential for additional publication) are the most important variables in determining his initial salary, in Dean Word's opinion.

II. STANDARDS OF REVIEW

The standard of review we employ in reviewing the district court's disposition of a motion for directed verdict or for j.n.o.v. is the same as that used by the district court to determine whether to grant either motion. District and appellate courts should consider all of the evidence in the light most favorable to the nonmoving party and with all reasonable inferences drawn in favor of the nonmover. Verbraeken v. Westinghouse Elec. Corp., 881 F.2d 1041, 1044-45 (11th Cir.1989) (quoting Boeing Co. v. Shipman, 411 F.2d 365, 374-75 (5th Cir.1969)). If the facts and inferences are so strong that the court believes that reasonable persons in the exercise of impartial judgment could not arrive at a contrary verdict, the district court properly grants a directed verdict or j.n.o.v. Id. at 1045. If, however, the evidence is such that "reasonable and fairminded men in the exercise of impartial judgment might reach different conclusions," it is improper for the district court to grant a directed verdict or j.n.o.v. Id.

Motions for new trial are within the sound discretion of the district court. McDonough Power Equip., Inc. v. Greenwood, 464 U.S. 548, 556, 104 S.Ct. 845, 850, 78 L.Ed.2d 663 (1984). Thus, an appellate court employs the abuse of discretion standard to review the district court's ruling on a motion for a new trial. Verbraeken, 881 F.2d at 1049. As we stated in Rosenfield v. Wellington Leisure Products, Inc., this standard "recognizes the deference that is due the trial court's first-hand experience of the witnesses, their demeanor, and a context of the trial." 827 F.2d 1493, 1498 (11th Cir.1987). But we have also recognized that "we should more strictly scrutinize orders which grant new trials, where the basis for the order is that the verdict is against the weight of the evidence (as opposed to situations where there is new evidence, for example)." Id. (emphasis in original). The concern is that "the [trial] judge does not simply substitute his judgment for that of the jury, thus depriving the litigants of their right to trial by jury." Id.

III. DISCUSSION

A. The Disparate Impact Theory

Appellants' disparate impact theory of discrimination is that the University's alleged practice of paying market rates of salary to new faculty hires, but not paying the market rate to incumbent professors, has a disparate impact on older people because they tend to be the faculty members who have been at the University the longest. They contend that, because the University had not carried its burden of producing evidence of a business justification for this alleged practice, the district court erred in granting a directed verdict at the conclusion of plaintiffs' evidence.

Under disparate impact theory, discrimination can be established by proving that a facially neutral employment practice, which is unjustified by a legitimate business goal of the employer, has a disproportionately adverse impact on the members of a protected group. Wards Cove Packing Co., Inc. v. Atonio, 490 U.S. 642, 655-56, 109 S.Ct. 2115, 2124, 104 L.Ed.2d 733 (1989). It was developed "as a form of pretext analysis to handle specific employment practices not obviously job-related." Spaulding v. University of Washington, 740 F.2d 686, 707 (9th Cir.1984).

To make a prima facie case under the disparate impact theory, a plaintiff must isolate and identify "the specific employment practices that are allegedly responsible for any observed statistical disparities." Wards Cove, 490 U.S. at 656, 109 S.Ct. at 2124 (quoting Watson v. Fort Worth Bank & Trust Co., 487 U.S. 977, 994, 108 S.Ct. 2777, 2788, 101 L.Ed.2d 827 (1988)). The Supreme Court has said that causation is an important part of the disparate impact prima facie case: "a plaintiff must demonstrate that it is the application of a specific or particular employment practice that has created the disparate impact under attack." Id. at 657, 109 S.Ct. at 2124. For a plaintiff to show that there is an imbalance is not enough. Id. at 657, 109 S.Ct. at 2124.

Once a plaintiff has established a prima facie case of disparate impact, the burden shifts to the employer to produce evidence to justify its use of the challenged practice. ⁹ When considering the employer's justification, "the dispositive issue is whether a challenged practice serves, in a significant way, the legitimate employment goals of the employer." Wards Cove, 490 U.S. at 659, 109 S.Ct. at 2125-26. An insubstantial justification will not suffice in this analysis, but "there is no requirement that the challenged practice be 'essential' or 'indispensable' to the employer's...