Beard v. Whitley County REMC

Citation840 F.2d 405
Decision Date27 January 1988
Docket NumberNo. 87-1620,87-1620
Parties45 Fair Empl.Prac.Cas. 1663, 45 Empl. Prac. Dec. P 37,812 Elaine K. BEARD, Jacquelyn Dalton, Diane Gawthrop, Marian Gregory, Melinda Kelly, Colleen A. Puckett, Patricia Raypole, Janice E. Rosenberger, and Donna J. Targgart, Plaintiffs-Appellants, v. WHITLEY COUNTY REMC, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)

David B. Keller, Baker & Daniels & Shoaff, Ft. Wayne, Ind., for plaintiffs-appellants.

Wayne O Adams, III, David J. Carr, Bingham, Summers Welsh & Spilman, Indianapolis, Ind., for defendant-appellee.

Before WOOD, COFFEY, and RIPPLE, Circuit Judges.

RIPPLE, Circuit Judge.

The appellants, employees of the appellee, alleged sex discrimination by the appellee based on one year's wage and benefits negotiations. These negotiations resulted in the appellants' receiving no annual increase in their wages, while other employees of the appellee did receive increases. The district court, after reviewing all the evidence on the record, concluded that there was no genuine issue of material fact. It therefore granted the appellee's motion for summary judgment. Because we agree that the appellants have failed to present a genuine issue of material fact, we affirm the judgment of the district court.

I Background
A. Procedural Posture

The appellants commenced this case by filing discrimination charges with the Equal Employment Opportunity Commission (EEOC) in May and June of 1985. The EEOC found no reasonable cause to credit the discrimination allegations. It issued a notice of right to sue and the appellants then brought this action in the United States District Court for the Northern District of Indiana. The appellee, Whitley County REMC (now Northeastern REMC) (the REMC), filed an answer in which it raised the defense that the complaint failed to state a claim upon which relief can be granted.

On November 20, 1986, the REMC filed a motion for summary judgment. In its motion, the REMC alleged that there was no genuine issue of material fact presented by the appellants with respect to their contention that the REMC unlawfully discriminated against them on the basis of their sex. The district court granted the REMC's motion for summary judgment in an order dated March 19, 1987. The appellants then filed a timely notice of appeal. Jurisdiction in the district court is based on 42 U.S.C. Sec. 2000e-5(f)(3). Jurisdiction in this court is based on 28 U.S.C. Sec. 1291.

B. Facts

The hourly work force at the REMC consists of two groups, the trades and crafts group (T & C) and the office and clerical group (O & C). These two groups predominantly, although not exclusively, are composed of male and female workers respectively. All appellants are members of the O & C group.

"[N]early all of the office and clerical jobs are entirely dissimilar from the trades and crafts jobs." Beard v. Whitley County REMC, 656 F.Supp. 1461, 1466 (N.D.Ind.1987). The type of work performed is different. The T & C group jobs primarily involve repair, maintenance or operation of the REMC's high voltage electrical lines and any related equipment and facilities. The O & C workers primarily perform secretarial and clerical tasks. The conditions under which the work is performed are also different. Many of the T & C group jobs require the employees to work outside and in close proximity to high voltage power lines and other safety hazards. In contrast, the O & C group employees work indoors and face no safety hazards. The REMC management, as well as the employees themselves, have referred to both the T & C group and the O & C group by different names. Sometimes, the T & C group was referred to as the "guys group," while the O & C group was referred to as the "girls group." One deposition also indicates that the T & C employees sometimes were called the "outside people," while the O & C group was referred to as the "inside people."

Historically, the two work forces have negotiated their own "group-wide" agreements concerning wage and benefits increases. Id. In preparation for these annual wage and benefits negotiations, the REMC relied on various wage surveys. The management of the REMC used these surveys to discern the compensation level of employees with similar jobs throughout the State of Indiana. These surveys included the Indiana state-wide REMC survey, the Indiana-Purdue-Fort Wayne survey for the city of Fort Wayne, the survey of wages paid by the Indiana and Michigan Electric Company, and possibly the National Rural Electric Cooperative Association, National Compensation Survey.

Traditionally, the separate negotiations of the two work forces have produced different wage and benefits packages. According to the district court, these differences primarily have been a product of three factors: "(1) the separate collective bargaining format; (2) the differences in the functions and responsibilities of the two groups; and (3) the differences in employee preferences in the two groups. In some years, the T & C group negotiated larger percentage wage increases than the O & C group. In other years, the O & C group negotiated larger wage increases." Id. (citation omitted).

In preparation for the negotiations concerning the 1985 wage increases, the REMC's general manager, Elmer Stocker, obtained wage surveys for the various T & C and O & C job classifications. Id. at 1467. These surveys evidenced an imbalance in the wages being paid to the T & C and O & C employees. Compared to other employees in the municipal electric industry, the REMC was underpaying the T & C group and overpaying the O & C group. Mr. Stocker then notified the REMC board of directors of the wage imbalance. Relying on Mr. Stocker's analysis, the board of directors authorized him to grant the O & C group a wage increase of 0 to 6%.

During the negotiations for the 1985 wage and benefits package, Mr. Stocker allegedly stated to O & C representatives Elaine Beard and Colleen Puckett that the O & C group would get "a big, fat, red zero" for their 1985 wage increase. Mr. Stocker also stated that the O & C group would not be getting a wage increase because of the wage survey's indication that the employees were overpaid. The REMC negotiated a total package increase of 6% for the T & C group. The O & C group had demanded a raise equal to that received by the T & C group. Ultimately, however, the REMC granted the O & C group no wage or benefits increase for 1985.

II District Court Opinion

The district court held that there were no genuine issues of material fact to bar the REMC's motion for summary judgment. In reaching its holding, the court analyzed the appellants' case separately under two theories: disparate impact and disparate treatment.

In dismissing the disparate impact claim, the district court first noted that the plaintiffs had failed to identify "a facially neutral employment practice so that the defendant can respond by offering proof of job relatedness or business necessity." Id. at 1468 (citing Pouncy v. Prudential Ins. Co. of America, 668 F.2d 795, 801 (5th Cir.1982)). Rather, held the court, the decision not to give a wage increase to the O & C group "was a single decision; it was not a policy or practice." Id. at 1469. The court also noted that Mr. Stocker's decision was based on the various wage surveys conducted in the industry. The court concluded that the REMC's reliance on the market to set its wage rates "is 'not the sort of "policy" at which disparate impact analysis is aimed.' " Id. 1

The district court then considered the appellants' disparate treatment claim. The court began by noting that the employees in the T & C group and the employees in the O & C group have entirely dissimilar jobs. Id. at 1471. The court then acknowledged that, in Washington County v. Gunther, 452 U.S. 161, 101 S.Ct. 2242, 68 L.Ed.2d 751 (1981), "the Supreme Court held that a plaintiff may state a claim of sex-based compensation discrimination under Title VII without proving that he or she is performing a job substantially equal to that held by a member of the opposite sex." Beard, 656 F.Supp. at 1471 (emphasis in original). Yet, continued the district court, while the plaintiffs need not show that the jobs under comparison are substantially equal, they must show that the jobs do have "some degree of similarity." Id. at 1472. Similarity was important, said the district court, in order to permit the employer to attempt to rebut the prima facie case by "offer[ing] some legitimate non-discriminatory explanation." Id. at 1473. As a result, the court ruled that the appellants had not made out a prima facie case. Id. The district court went on to articulate a second rationale for granting the REMC summary judgment on the disparate treatment claim. The district court reasoned that, assuming arguendo a prima facie case, the REMC presented a legitimate, nondiscriminatory reason for giving the T & C group, and not the O & C group, a raise in 1985. The court found that the REMC's purpose--to correct an imbalance in the respective salaries o the T & C and O & C groups, as evidenced by the various wage surveys--was a valid justification. Id. Moreover, it found that this justification was not a pretext. Therefore, the district court granted the REMC's motion for summary judgment. Id. at 1474.

III Discussion
A. Disparate Impact

A disparate impact claim challenges "employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity." International Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n. 15, 97 S.Ct. 1843, 1854 n. 15, 52 L.Ed.2d 396 (1977).

Although the district court extensively addressed a disparate impact analysis, the REMC contends that such a claim is not properly before us on appeal. With respect to the 1985 wage freeze, although the...

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