Adames v. Mitsubishi Bank, Ltd.

• Decision Date: 11 September 1990
• Docket Number: No. CV-88-0721.,CV-88-0721.
• Citation: 751 F. Supp. 1548
• Parties: Oneida ADAMES et alia, Plaintiffs, v. The MITSUBISHI BANK, LTD., Defendant.
• Court: U.S. District Court — Eastern District of New York

751 F. Supp. 1548

Oneida ADAMES et alia, Plaintiffs, v. The MITSUBISHI BANK, LTD., Defendant.

No. CV-88-0721.

United States District Court, E.D. New York.

August 27, 1990.

As Amended September 11, 1990.

COPYRIGHT MATERIAL OMITTED

Hockert & Flamm, New York City, for plaintiffs.

Epstein Becker & Green, P.C., New York City, for defendant.

MEMORANDUM AND ORDER

SIFTON, District Judge.

This action was originally brought by the individual plaintiffs, Oneida Adames, Mirsada Krlic, Nancy Farinola, and Lisa Poggi, to redress alleged employment discrimination on the basis of race, descent, ancestry, and ethnic characteristics by the defendant, the Mitsubishi Bank, Ltd. (the "Bank"). Plaintiffs' original cause of action was based on 42 U.S.C. § 1981, with jurisdiction predicated upon 28 U.S.C. § 1343(4). On April 29, 1989, this Court granted in part and denied in part plaintiffs' motion for certification of a class under Federal Rules of Civil Procedure 23(a) and 23(b)(2) and (3) and certified a class limited to the Bank's New York branch, consisting of all employees "with a reasonable expectation of promotion or transfer." This matter is now before the Court on defendant's motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure.

Since the filing of the Bank's motion, plaintiffs have filed a first amended complaint which partially responds to some of defendant's arguments in favor of summary judgment. On October 6, 1989, plaintiffs also filed a separate action against the Bank alleging claims based on race and national origin discrimination under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. ("Title VII"), coupled with pendent claims of race and national origin discrimination under the New York State Human Rights Law.

The following facts are undisputed, except as noted or where they are described simply as being an allegation, claim or contention. They are primarily drawn from the affidavits and deposition transcripts presented by both sides. The Bank is a Japanese corporation with headquarters in Tokyo, Japan. In the United States, the Bank has branch offices in New York City and Chicago. Offices of the Bank in six other cities — Houston, Los Angeles, San Francisco, Columbus, Portland, Oregon, and Seattle — are referred to by the parties as "agency or representative offices" and apparently perform banking services of a more limited sort than those provided in New York and Chicago.

The Bank's United States branches, particularly in New York, engage in general commercial banking. The offices were initially established to assist the Bank's principal office in Japan to service Japanese corporations engaged in business in the United States. However, over the last ten years the Bank has also sought to provide loans to United States and other non-Japanese corporations. In order to ensure coordination worldwide of the Bank's lending standards, the Bank's head office is consulted regarding decisions whether to provide financing to companies that apply for loans in the Bank's United States offices.

The four named plaintiffs were hired by the Bank to work in its New York office. Three of the named plaintiffs are caucasian/American women; one, Oneida Adames, is of Hispanic/American origin. All four plaintiffs resigned their positions after March 1985, allegedly as a result of defendant's discriminatory practices.

Plaintiff Oneida Adames claims that she was hired to work as an analyst on October 1, 1982, but that her work was in fact that of an administrative assistant during the period of her employment. She claims she was denied promotional and transfer opportunities and that this denial prompted her resignation in July 1987. For her part, Nancy Farinola alleges that she was hired by the Bank on February 3, 1986, with the understanding that she would work as an analyst but instead worked as an administrative assistant. Because of alleged denials of promotional opportunities which she says she sought and was promised, she resigned in June 1987.

Mirsada Krlic claims to have been hired to work as an analyst in New York on August 4, 1986. Until her resignation in October 1987, she too says her work was that of an administrative assistant. During that period, she claims she was denied the promotional opportunities she requested. Finally, Lisa Poggi, employed by the Bank from September 4, 1984, until December 3, 1985, alleges that she was also hired as an analyst but was in fact employed as an administrative assistant. Although she indicated her desire for transfer or promotion, she claims she was denied such opportunities.

All four named plaintiffs have submitted affidavits alleging discrimination by the Bank. Affidavits of other employees supporting plaintiffs' contentions have also been submitted. All of the affiants claim knowledge of other individuals similarly situated who have been adversely affected by discrimination practiced by the Bank. The affiants also claim to know of no member of their class who achieved a transfer or promotion during the period of the affiants' employment.

According to defendant, the Bank's head office regularly assigns executive and managerial employees from the head office in Japan to overseas offices throughout the world on assignments of limited duration. Due to the temporary nature of their assignments, these individuals are referred to as "rotating staff." Defendant states that salaries paid to rotating staff are determined by the Bank's head office and include compensation for costs associated with living and working in a foreign country. The individuals hired locally by the Bank's offices are referred to as "local" or non-rotating staff. The Bank contends that it hires local staff for both managerial and clerical positions. However, it does not permit local staff to transfer between offices in the United States.

Plaintiffs challenge this practice, which they term the Bank's "dual staff system." Plaintiffs' theory is that, under the guise of its rotating staff system, Mitsubishi in fact practices intentional racial discrimination against persons of non-Oriental ancestry and origin and that these discriminatory practices are not justified by any business necessity or legitimate preference for Japanese citizens. Plaintiffs also contend that the system has resulted in "disparate impact upon and constitutes disparate treatment of, all non-Japanese persons employed by the Bank's local staff in its various U.S. Offices."

Plaintiffs have asserted that as of September 30, 1988, only 20 officer positions were allocated to local staff, as compared to 55 officer positions allocated to the rotating staff. Of the twenty officers among the local staff, plaintiffs assert that only one has involved a position higher than the first level of assistant manager. Moreover, of the top 19 positions, 18 were held by the Japanese rotating staff. While defendant has not disputed these numbers, it contends that no specific positions are allocated to the rotating staff and that theoretically a local staff member could become a general manager, the highest post at a branch office.

Plaintiffs assert that the "overhang effect" created by the large rotating staff has significantly impeded the ability of local staff at all levels to achieve promotions or salary increases. In support of this contention, plaintiffs have submitted the affidavits of Bruce McGillivray and Robert Grillo, both of whom worked in the Bank's corporate finance department between 1983 and 1988, McGillivray as a manager and commercial loan officer, Grillo as a loan administrator and then assistant manager. Despite regular requests and satisfactory performance evaluations, McGillivray never received a promotion. For his part, Grillo states that while he was promoted once he was passed over on many occasions in which openings for which he was fully qualified were filled by a Japanese employee who was less qualified. During the same period, every Japanese employee in the corporate finance department received at least one promotion, transfer or job upgrade. An exhibit submitted by plaintiffs indicates that each of the fifty-five rotating officials in the New York City branch during the period 1985 through 1987 received one or more promotions or transfers. Both affiants also recount instances of unequal treatment and responsibility between Japanese and non-Japanese personnel holding the same positions and state that, since their careers were impeded by racial and ethnic bias, they were compelled to resign.

Plaintiffs Farinola and Krlic claim further that, when they protested their lack of advancement to the Bank's management, they were informed that promotional opportunities and advancement were reserved for Japanese personnel. Plaintiffs further state that they were told that it was Bank policy not to provide tuition reimbursement for business courses to American employees because they would leave the Bank after acquiring the skills. Farinola and Krlic also complain that "the work environment, being totally controlled by Japanese managers, was infected with frequent racial remarks asserting the lack of ability, loyalty and commitment of non-Japanese personnel."

The Bank defends its use of the rotating staff as legitimate and necessary for business purposes. Defendant asserts that, because the Bank's head office is consulted with respect to loan applications processed by the U.S. branches (both to ensure worldwide coordination and the employment of proven lending standards), it is important that significant numbers of Bank personnel be acquainted with the banking practices, laws, and customs of Japan, as well as those of the United States. According to the affidavit of Hisao Yokoyama, Chief Manager of the Bank's General Affairs Department, because of the need to service Japanese companies and coordinate the Bank's international financing transactions, "knowledge of...