Aliotta v. C. Bair

• Decision Date: 13 August 2010
• Docket Number: No. 09-5234.,09-5234.
• Citation: 614 F.3d 556
• Parties: Barbara ALIOTTA, et al., Appellants v. Sheila C. BAIR, Chairman, Federal Deposit Insurance Corporation, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

614 F.3d 556

Barbara ALIOTTA, et al., Appellants
v.
Sheila C. BAIR, Chairman, Federal Deposit Insurance Corporation, Appellee.

No. 09-5234.

United States Court of Appeals,District of Columbia Circuit.

Argued April 13, 2010.
Decided Aug. 13, 2010.

614 F.3d 557

COPYRIGHT MATERIAL OMITTED.

614 F.3d 558

Appeal from the United States District Court for the District of Columbia (No. 1:05-cv-02325-RMU).

Joshua N. Rose argued the cause for appellants. With him on the briefs were David L. Rose and Yuval Rubinstein.

Barbara R. Sarshik, Counsel, Federal Deposit Insurance Corporation, argued the cause for appellee. With her on the brief were Colleen J. Boles, Assistant General Counsel, Lawrence H. Richmond, Senior Counsel, and Jennifer M. Barozie, Senior Attorney. R. Craig Lawrence, Assistant U.S. Attorney, entered an appearance.

Before: SENTELLE, Chief Judge, GINSBURG and BROWN, Circuit Judges.

Opinion for the Court filed by Circuit Judge BROWN.

BROWN, Circuit Judge:

A group of former employees (class members or Aliotta plaintiffs) of the Federal Deposit Insurance Corporation (FDIC or the Agency) sued the Agency, alleging violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 633a. ¹ Specifically, class members claimed FDIC's management targeted older employees in a series of downsizings implemented between 1998 and 2005. The district court granted summary judgment on all claims in FDIC's favor, determining-after excluding the employees who accepted FDIC's buyout/early retirement offer from its statistical analysis-that the class members failed to produce evidence from which a jury could reasonably conclude that (1) FDIC intentionally treated older employees less favorably than younger employees, or (2) that a neutral employment practice fell more harshly on older employees and could not be justified by business necessity. We agree and affirm the judgment of the district court.

I

The FDIC is an independent federal agency that insures federal bank and savings and loan deposits. It also regulates state-chartered banks, establishes receiverships, and manages assets of failed banking institutions. FDIC's workload-

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especially the workload of the Division of Resolutions and Receiverships (DRR)-is highly correlated with the health of the banking industry: when bank failures increase, FDIC's workload increases; when bank failures decrease, FDIC's workload declines. See Aliotta v. Bair, 576 F.Supp.2d 113, 115-16 (D.D.C.2008).

On August 6, 2004, FDIC Chief Operating Officer John Bovenzi sent an e-mail to all FDIC employees entitled “Workforce Planning for the Future.” The memo outlined certain “preliminary conclusions” related to the “2005 planning and budget formulation process,” evaluating industry and technological trends, forecasting the need for greater agility and adaptability by the agency, and stated: “The FDIC of the future will be a smaller, more flexible agency.” Bovenzi explained that “all indicators point[ed] to a smaller FDIC with a somewhat different mix of skills in the future” and warned that some divisions and offices within the Agency might reduce overall staffing levels, while others might have “workload requirements or skill set[ ] imbalances that warrant filling selected vacancies.” Two weeks later, DRR Director Mitchell Glassman sent a follow-up memo to his division's employees confirming the Agency's view that changes in the banking industry, advances in technology, and workflow improvements had led to “declining workload and excess staff” and thus might require “difficult decisions ... regarding the size and structure of [the] division.” This communication was followed by a string of e-mails and memos implementing cross-training plans, voluntary rotational assignments, and other staffing changes, forecasting staff reductions of 500 to 600 positions, and predicting that an involuntary Reduction-in-Force (RIF) ² would still be required.

In a series of memos in October 2004, FDIC management informed staff it planned to reduce the DRR workforce by 53%, from 515 to 240 positions. Buyouts would be offered to all permanent DRR employees (with the exception of a small group of “Executive Management” employees), as well as to employees throughout the Agency on a more limited basis. The offer would include a cash payment equal to 50% of the employee's total annual salary, the ability to combine the buyout with regular or early retirement, and no restrictions on the employee's ability to seek employment in another federal agency. The buyout period would last from November 2004 to May 2, 2005. Director Glassman's memo also informed DRR employees they would have the opportunity to apply for crossover opportunities with the Division of Supervision and Consumer Protection (DSC) through the Agency's Corporate Employee Program (CEP). Lastly, Glassman explained that a RIF would be implemented during 2005 “to involuntarily separate any remaining surplus [DRR] employees.”

More than 575 FDIC employees applied for and accepted the buyout. 132 were DRR employees. Another 73 DRR employees transferred to other FDIC divisions. Moreover, as planned, in April 2005, Glassman announced the RIF would go forward and would be effective September 3, 2005. Glassman informed DRR employees that, “while the outcome of the RIF [was] not known, [his] notice [was] intended to alert [them] to the possibility [they] could be impacted through the RIF process.” As of June 30, 2005, 312 permanent DRR employees were subject to the RIF. 56.1% of them were over age 50. Those employees who had resigned or retired before June 2005 in connection with

614 F.3d 560

the buyout program were not considered in the RIF process. 63 DRR employees were selected for involuntary termination and received RIF Notices terminating their employment, effective September 3, 2005. ³ FDIC terminated 53 of those 63 employees; 7 retired in lieu of separation; and 3 voluntarily resigned after receiving a specific RIF Notice. 233 DRR employees remained after the RIF.

In fall and winter 2005-06, the employees filed notices with the Equal Employment Opportunity Commission (EEOC). Am. Compl. ¶ 4, Aliotta v. Gruenberg, No. 05-02325 (D.D.C. Feb. 8, 2006) (Am.Compl.); see 29 U.S.C. § 633a(d). On December 5, 2005, they filed their complaint in the district court alleging FDIC violated 29 U.S.C. § 633a, the portion of the ADEA applicable to federal employers. See 29 U.S.C. § 633a(c). On July 25, 2006, the district court granted the employees' motion for class certification, defining the class as “[f]ormer or present employees of FDIC's Division of Resolution and Receiverships who were born on a date on or before September 30, 1955 and who, as a result of the 2005 RIF, either accepted a buyout or reduction in grade, or were terminated from their positions in the DRR.” Aliotta v. Gruenberg, 237 F.R.D. 4, 13 (D.D.C.2006).

The parties filed cross-motions for summary judgment in the district court and submitted expert reports providing statistical analyses to support their positions. Analyzing only the 53 involuntary separations, 7 retirements in lieu of involuntary separation, and 3 resignations in lieu of involuntary separation, FDIC's expert, industrial and organizational psychologist Dr. P.R. Jeanneret, found the average age of the 63 DRR employees affected by the 2005 RIF was 48.28 years. Def.'s Mot. Summ. J., Ex. 27 at 6 (Jeanneret Report). Only 42.9% of the RIF'd employees were above the age of 50. Def.'s Mot. Summ. J., Ex. 27-1 at 20 (filed Feb. 26, 2008) (Jeanneret Rebuttal). On December 31, 2004 (before the RIF), 59.1% of permanent DRR employees were above the age of 50; on September 17, 2005 (after the RIF), the percentage of above-50 employees had increased slightly to 59.6%. Jeanneret Report at 17.

In contradistinction to Dr. Jeanneret's statistical analysis, class members' expert, Dr. Lance Seberhagen, included in his calculation of the “RIF-related” impact all employees affected by both the 2004-05 buyouts and the 2005 RIF. Def.'s Mot. Summ. J., Ex. 28 (Seberhagen Report). Dr. Seberhagen identified a set of “RIF-related separation codes” he believed captured the group of employees harmed. Id. at 3. The group included the codes assigned to voluntary retirements, early retirements, retirements and resignations in lieu of involuntary separation, resignations, terminations of term appointments, and involuntary terminations. Id. at 3, 17 tbl.20. Using those codes, he found that permanent DRR employees above the age of 50 were separated at 139.8% the rate of under-50 DRR employees. Id. at 5.

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Rejecting Dr. Seberhagen's analysis, the district court granted FDIC's motion for summary judgment and denied class members' motion for partial summary judgment. Aliotta, 576 F.Supp.2d at 115. The court concluded that because employees who accepted FDIC's buyout offers did so voluntarily, the Agency's buyout program was not an “adverse employment action” and thus could not be considered as part of the employees' prima facie discrimination case. Id. at 120-24. Analyzing only the 2005 RIF, the court held class members had failed to adequately rebut FDIC's proffered nondiscriminatory justifications for the RIF. Id. at 124-28. The court concluded both the disparate treatment and disparate impact claims failed. Class members filed a motion to alter or amend the judgment, which the district court denied. Aliotta v. Bair, 623 F.Supp.2d 73, 75-76 (D.D.C.2009). This appeal followed.

II

Before proceeding to the merits, we first address FDIC's assertion class members waived their right to challenge the district court's failure to analyze their claims under the appropriate “pattern or practice” framework. FDIC insists class members never claimed before the district court FDIC engaged in a pattern or practice of discrimination. FDIC Br. at 22. We conclude class members alleged a pattern or practice claim in their complaint but may nonetheless have failed to...