Diehl v. Xerox Corp.

• Decision Date: 23 July 1996
• Docket Number: No. 93-CV-6207 to 93-CV-6220,93-CV-6222 and 93-CV-6253.,93-CV-6221T,93-CV-6207 to 93-CV-6220
• Citation: 933 F. Supp. 1157
• Parties: Ted DIEHL, et al., Plaintiffs, v. XEROX CORPORATION, Defendant. Edna TRUMBLE, Plaintiff, v. XEROX CORPORATION, Defendant.
• Court: U.S. District Court — Western District of New York

933 F. Supp. 1157

Ted DIEHL, et al., Plaintiffs, v. XEROX CORPORATION, Defendant.

Edna TRUMBLE, Plaintiff, v. XEROX CORPORATION, Defendant.

Nos. 93-CV-6207 to 93-CV-6220, 93-CV-6221T, 93-CV-6222 and 93-CV-6253.

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

July 23, 1996.

COPYRIGHT MATERIAL OMITTED

Donna Marianetti, Marianetti & Associates, Rochester, NY, for plaintiffs.

Margaret A. Clemens, Toni Anne Nichels, Eugene D. Ulterino, Nixon, Hargrave, Devans & Doyle L.L.P., Rochester, NY, Cecil J. North, III, Ivy Gail Thomas McKinney, Xerox Corporation, Stamford, CT, for defendant in 93-CV-6207.

Margaret A. Clemens, Toni Anne Nichels, Nixon, Hargrave, Devans & Doyle L.L.P., Rochester, NY, Ivy Gail Thomas McKinney, Xerox Corporation, Stamford, CT, for defendant in 93-CV-6221.

DECISION and ORDER

TELESCA, District Judge.

Plaintiffs, all former employees of Xerox Corporation ("Xerox") in the Information Management function of its United States Customer Operations and Corporate Strategic Services groups, bring these actions pursuant to Title VII of the Civil Rights Act, 42 U.S.C. § 2000e-2, et seq., the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621, et seq. and the New York State Human Rights Law, alleging that they were redeployed and dismissed from their positions on the basis of their ages and gender.

On February 1, 1996, defendant filed summary judgment motions seeking dismissal of plaintiffs' disparate impact and disparate treatment discrimination claims. Thereafter, plaintiffs voluntarily dismissed their disparate treatment claims and instead decided to proceed solely on the theory of disparate impact. The parties agreed to defer further briefing and decision on the summary judgment motions and certified the following question to this Court for decision as the fact-finder:

Did Xerox' redeployment and involuntary reduction-in-force policy as applied in the United States Customer Operations Group in March 1992 and in the Corporate Strategic Services Group in June 1992 disparately impact males employed in the Information Management subgroup of USCO and employees 40 years of age or older employed in the Information Management subgroup of USCO and CSS?

In order to determine whether Xerox' actions had a disparate impact upon plaintiffs on the basis of their age and gender, this Court conducted an evidentiary hearing on July 15 and 16, 1996, during which experts in the field of labor economics testified on behalf of plaintiffs and defendant. Xerox has also moved to strike plaintiffs' expert's testimony under the Supreme Court's decision in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993).

Pursuant to Federal Rule of Civil Procedure 52(c), the following constitutes this Court's findings of fact and conclusions of law.

FINDINGS OF FACT

I. Xerox' Redeployment and Dismissal Policy

A. United States Customer Operations Group

In the early 1990s, faced with a sluggish economy and a changing technological environment which demanded enhanced computer use and expertise, Xerox decided to reduce its workforce and upgrade the technical skills of its remaining employees in order to remain competitive during the recessionary economy. A primary target of this corporate reorganization was the United States Marketing Group ("USMG"), which is currently known as the United States Customer Operations ("USCO") group.¹ A voluntary reduction in force was implemented in late 1991 during which 385 USCO employees opted to leave Xerox. However, USCO still faced an employee surplus and a skills mix imbalance in some of its subgroups, including the Information Management ("IM") subgroup. Affidavit of Patricia Wallington, ¶ 3 ("Wallington Aff.").² Due to the rapidly changing computer technology, Xerox managers perceived that skill deficiencies had developed in USCO/IM to the point where it was necessary to upgrade the skills base in order to meet the changing needs of that division.

Management's perceptions were confirmed through a skills assessment conducted by the consulting firm of Nolan, Norton and Company, which found, among other things, that the skills of USCO/IM employees were severely lacking in several critical areas important to the organization's future. Id. ¶ 4. Xerox claims that in order to address these concerns, it attempted to upgrade the skills of the USCO/IM workforce through training and by selectively hiring employees with critical skills, such as software engineering. However, in early 1992, the need to upgrade employees' skills and to meet budgetary constraints became acute and Xerox determined that 49 exempt employees in USCO/IM would be redeployed. Wallington Aff. ¶ 5. A skills and performance assessment was implemented separately for both managerial employees and exempt non-managers, referred to as individual contributors, to determine which of the USCO/IM employees would be selected for redeployment.

The managerial assessments were based on their last four Performance Appraisals (50%) and Role Model Manager Attributes (50%). The role model portion of the assessment was derived from an evaluation form filled out by the employee's immediate manager which assessed 19 managerial attributes. This assessment was then reviewed by a second level manager to ensure accuracy and fairness. The points accumulated from the Role Model Attributes assessment were then added to the Performance assessment and all managers were slotted on a matrix based upon the overall assessment point total and tenure. Selection for redeployment was made in a pre-specified cell order beginning with the lowest cell. According to Xerox, the longer an employee's tenure, the higher the employee measured on the matrix and the less vulnerable that employee was to being designated for redeployment.

Individual contributor assessments were based on the last four performance appraisals (50%) and a skills assessment (50%). The point total for the skills assessment was derived from a Critical Skills Evaluation form filled out by the employee's immediate manager. Again, a second level manager reviewed each assessment to ensure accuracy and fairness. The points accumulated from the Critical Skills Evaluation assessment was added to the performance appraisal points and all individual contributors were then slotted on a matrix based upon the overall assessment point total and tenure. As with managerial employees, selection for redeployment was made in a pre-specified cell order beginning with the lowest cell. Xerox claims that the longer an employee's tenure, the higher the employee placed on the matrix and the less vulnerable that employee was to being designated for redeployment.

Of those employees assessed, 49 exempt employees in USCO/IM were placed on a redeployment list effective March 2, 1992, including ten managers out of the 67 assessed and 39 individual contributors out of the more than 300 assessed. Those employees chosen for redeployment were given 60 days within which to locate new positions within Xerox or face involuntary termination. At the conclusion of the 60-day period, 17 of the 49 employees selected for redeployment had located new positions within Xerox and the remainder of the redeployed employees were dismissed. Of the 17 plaintiffs in this action, 16 were selected for redeployment in USCO and were dismissed after failing to find alternative employment at Xerox.

B. Corporate Strategic Services

Xerox' determined that the Corporate Strategic Services ("CSS") group also had the same technical deficiencies as USCO in its IM workforce. In 1992, CSS/IM provided computer support for Xerox' engineering, manufacturing and logistics operations. Affidavit of Patricia Cusick ¶ 3.³ However, due to changing information management technologies, CSS management determined that the skills base in its IM subgroup was outdated and inadequate to meet CSS' future goals and resource demands. Management's perception of IM's skills deficiencies were confirmed by an independent skills assessment conducted by Nolan, Norton and Company, a 1990 and 1991 corporate audit and various other internal assessments. Id.

As with USCO, CSS first attempted to upgrade the skills of its existing IM employees. However, it ultimately determined that it would have to redeploy 57 of its exempt workforce and embarked on a selection process. CSS' selection process differed slightly from USCO's and in June 1992, 57 CSS/IM employees were selected for redeployment out of 250 total employees assessed. Of the 17 plaintiffs in this action, only one plaintiff, Edna Trumble, was selected for redeployment in CSS. The remainder of plaintiffs were redeployed through USCO's selection process. Ms. Trumble was a Computer Operator who provided support for a mainframe computer system which was being phased out by CSS and is no longer in use at Xerox.

The CSS employees selected for redeployment were given 60 days within which to find alternative employment at Xerox. At the conclusion of that 60-day period, 36 of the 57 redeployed IM employees had obtained another position at Xerox. The remaining 21 employees, including plaintiff Trumble, were dismissed after failing to find alternative employment at Xerox.

II. Plaintiffs' Expert

In support of their claim that Xerox' redeployment and reduction-in-force policy disparately impacted male employees in USCO and employees 40 years of age or older in USCO and CSS, plaintiffs offered the testimony of labor economist Dr. Marjorie Honig, Chair of the Department of Economics at Hunter College, City University of New York. Dr. Honig was tendered and received as an expert in the field of labor economics without objection.

In conducting her analysis of Xerox' redeployment and reduction-in-force policy, Dr. Honig explained that Xerox employed a two-stage process which ultimately resulted in plaintiffs' dismissal from their positions: (1) USCO/IM and CSS/IM employees were selected for...