Capaci v. Katz & Besthoff, Inc.

• Citation: 711 F.2d 647
• Decision Date: 08 August 1983
• Docket Number: No. 82-3228,82-3228
• Parties: 32 Fair Empl.Prac.Cas. (BNA) 961, 32 Empl. Prac. Dec. P 33,769, 13 Fed. R. Evid. Serv. 1815 Andra A. CAPACI, Plaintiff-Appellant Cross-Appellee, v. KATZ & BESTHOFF, INC., Defendant-Appellee Cross-Appellant, Equal Employment Opportunity Commission, Intervenor-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 647

711 F.2d 647

32 Fair Empl.Prac.Cas. (BNA) 961,

32 Empl. Prac. Dec. P 33,769,

13 Fed. R. Evid. Serv. 1815

Andra A. CAPACI, Plaintiff-Appellant Cross-Appellee, v. KATZ & BESTHOFF, INC., Defendant-Appellee Cross-Appellant, Equal Employment Opportunity Commission, Intervenor-Appellant.

No. 82-3228.

United States Court of Appeals, Fifth Circuit.

Aug. 8, 1983.

Harris & Kahn, Dona S. Kahn, Philadelphia, Pa., for Capaci.

Sandra G. Bryan, E.E.O.C., Jeffrey C. Bannon, Washington, D.C., for E.E.O.C.

Montgomery, Barnett, Brown & Read, Daniel Lund, James B. Irwin, New Orleans, La., for defendant-appellee cross-appellant.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before BROWN, REAVLEY and RANDALL, Circuit Judges.

REAVLEY, Circuit Judge:

Andra A. Capaci and the Equal Employment Opportunity Commission (EEOC) brought this Title VII sex discrimination suit against Katz & Besthoff, Inc. (K & B), a drugstore company based in New Orleans. With the exception of one minor aspect of Capaci's individual disparate treatment case, the district court held for the defendant company after a bench trial. 525 F.Supp. 317 (E.D.La.1981). Numerous issues are raised on appeal, the most important of which concern the use and abuse of statistical techniques by the parties in the trial below. We hold that the district court was clearly erroneous in finding that the defendant had not discriminated against women in hiring manager trainees from 1965 through 1972. In all other respects we affirm.

I. CLASS CLAIMS

This suit began when Andra Capaci, then a pharmacist with K & B, filed a class action complaint under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., alleging gender discrimination by her employer. The EEOC intervened, alleging that the defendant had failed to promote and hire females into management positions on the same basis as males.

K & B operates a chain of drugstores in New Orleans and several other towns and cities in Louisiana, Mississippi and Alabama. Managers at the stores fall into four categories: manager, assistant manager, relief manager and manager trainee. In those stores where the manager is not a pharmacist, a chief pharmacist is appointed to supervise the pharmacy department. On appeal as at trial, the case centers on the employment practices of K & B with respect to manager trainees and pharmacists.

A. Statistical Evidence.

The EEOC relied primarily on a statistical case presented through exhibits and the testimony of its expert witness, Dr. Gastwirth. K & B countered with testimony of its expert, Dr. Cranny. On appeal, the statistical methods used by the experts, rather than their raw data, are the major concern.

1. Manager Trainees

Manager trainees are hired both internally from the ranks of existing employees and externally from the civilian labor market. The only objective qualification is a high school diploma.

In our view the most important single fact presented to the district court is this: From July 1965, the effective date of Title VII, to January 1, 1973, the date just prior to Capaci's filing of discrimination charges, K & B hired or promoted 267 individuals to the position of manager trainee, of which 267 were male. The days of testimony that followed were consumed in part in determining whether or not this fact could be said to constitute statistically significant evidence of discrimination.

Dr. Gastwirth performed some rather sophisticated statistical tests for discrimination. He first determined a relevant labor market with which he could compare the proportion of females in management. Using 1970 census data, he looked to all managers in Louisiana and refined the comparison further by looking to experienced wholesale and retail managers, general merchandise retail managers, and department and sales managers. He made further refinements by looking to the census data for these categories in three separate geographic locations--New Orleans, Baton Rouge, and the remainder of the state--and weighting the figures by the number of stores in each region. He then took the "lower bound" of these geographical weightings to be conservative, ¹ and excluded those trainees hired outside of Louisiana. He also looked to managers earning less than $7,000 in 1969, on the assumption that those earning more would not be interested in the manager trainee position paying between $5,980 and $6,500 at that time. In short, he arrived at a number of comparable Using this data, Gastwirth computed the probability that K & B's selections could have been made in an unbiased or random manner. Regardless of which "referent" group was used, for the period 1965-1972 the probability calculated was consistently far less than one in a billion. ² Indeed, the highest probability of unbiased hiring was 5.367 X 10 ^-20, less than one in a billion billions.

                segments of the labor force, which ranged from 16% to 29% female.   With all of the manager categories, these percentage figures were conservative, since, as even Dr. Cranny admitted on cross-examination, they underestimated present female availability by reflecting past discriminatory employment decisions
                

Gastwirth performed comparable tests for manager trainees hired from 1973 through 1977, a period between the filing of the charge and the trial. During this period some female manager trainees were hired, but the vast majority of trainees chosen were male. The results of the tests, though considerably less dramatic than those for the 1965-1972 period, consistently showed the probability of such disparate hiring occurring by chance to be less than one in 10,000.

The EEOC also relied on "applicant flow" data, that is, data on the number of men and women hired compared with the number who actually applied for the job. Only applications from July 1976 through 1977 were made available through discovery. This information indicated that 19.2% of the applicants for manager trainee were female, within the 16%-29% range Gastwirth predicted using census data. However, women made up only 9.2% of those chosen. Sixteen percent of the female applicants were successful, compared with 37% of the males. Using a chi-square test, Gastwirth determined that the probability of such hiring occurring by chance was less than one in a thousand. ³ K & B attacked the EEOC statistical case in four ways. It argued that: (1) the government failed to consider that women might not want the job and through "self-selection" would not apply; (2) Dr. Gastwirth failed to make various refinements in the census data necessary to make accurate comparisons; (3) the statistical tests looked only to external hiring of manager trainees and failed to consider internal promotions; (4) tests using data broken down by year and geographic location showed vastly reduced or no statistical significance. We find these objections less than convincing.

Certainly there is some merit to the self-selection argument. The district court found that "[t]he job requires the manager trainee to unload supply trucks, to put up stock, straighten up the store, and the work schedule includes night work, weekend and holiday work." 525 F.Supp. at 325. The court credited the testimony of Dr. Cranny, an industrial psychologist and labor economist, that such job conditions "would substantially retard females from applying as compared to males." Id. Several witnesses also testified that females had selected themselves out of the manager trainee job or applicant pool. This testimony emphasized in particular the unwillingness of women to work the hours required of manager trainees.

Despite this evidence, and deferring completely to the trial judge in weighing the credibility of these witnesses, we have great trouble accepting self-selection as an explanation for the complete absence of women in the manager trainee program for the seven and one-half year period preceding the discrimination charge. There is no reason to believe that the female witnesses called were representative of all women in the labor market or employed by the defendant. By looking to other merchandising, wholesale and retail, and department and sales managers, Gastwirth's statistical tests were already corrected for self-selection to some extent, since all managers face hours and responsibilities that would not appeal to some women. Gastwirth testified that an applicant pool that was even 2% female would still have led to a finding of statistical significance for the 1965-1972 period. The applicant flow data indicated that 19.2% of manager trainee applicants were female, within the range found for other managers, and inconsistent with a theory of total self-selection. The defendant's witnesses also made clear that non-management and non-professional employees, 79% of whom are women, also have weekend and night duties and perform physical labor. Dr. Cranny stated that management trainees and assistant managers "do much of the same work as the rest of the people in the organization do."

K & B maintains that the census data used by Gastwirth was not sufficiently "refined" to make his tests meaningful. The district court found that "Dr. Gastwirth admitted that his groups include part time employees and the self employed, some of whom are not potential applicants for the manager trainee position, and that no data was available to him to make the refinements," and that "[a]ll of the [Gastwirth comparison] groups included data on businesses not comparable to the K & B operation, such as boutiques and dress shops." 525 F.Supp. at 325, 328.

The use of census data is an appropriate method of demonstrating discrimination. Hazelwood School District v. United States, 433 U.S. 299, 97 S.Ct. 2736, 53 L.Ed.2d 768 (1977). The defendant would require refinements beyond that available in published statistics. A perfect statistical model is not required. Phillips v. Joint Legislative Committee, 637 F.2d 1014, 1025 (5th...