E.E.O.C. v. Federal Reserve Bank of Richmond

Citation698 F.2d 633
Decision Date11 January 1983
Docket Number82-1259,Nos. 81-1536,s. 81-1536
Parties30 Fair Empl.Prac.Cas. 1137, 30 Empl. Prac. Dec. P 33,269, 12 Fed. R. Evid. Serv. 279 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION; Sylvia Cooper; Constance Russell; Helen Moore and Elmore Hannah, Jr., Appellees, v. FEDERAL RESERVE BANK OF RICHMOND, Appellant. Phyllis BAXTER; Brenda Gilliam; Glenda Knotts; Alfred Harrison and Sherri McCorkle, Appellees, v. FEDERAL RESERVE BANK OF RICHMOND, Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)

George R. Hodges, Charlotte, N.C. (Robert D. Dearborn, Moore & Van Allen, Charlotte, N.C., on brief), for appellant; Colleen M. O'Connor (Michael J. Connolly, Gen. Counsel, Philip B. Sklover, Associate Gen. Counsel, Vella M. Fink, Asst. Gen. Counsel, Washington, D.C., on brief).

J. LeVonne Chambers, John T. Nockleby, Charlotte, N.C. (Chambers, Ferguson, Watt, Wallas, Adkins & Fuller, P.A., Charlotte, N.C., on brief), for appellees.

Before RUSSELL, WIDENER and HALL, Circuit Judges.

DONALD RUSSELL, Circuit Judge:

This is an action initially begun by the Equal Employment Opportunity Commission [EEOC] against the defendant Federal Reserve Bank of Richmond. The defendant, chartered under the Federal Reserve Act, 1 operates a branch in Charlotte, North Carolina, which provides (1) services to the member banks and the public in the Charlotte area in check collection, adjustment, and provision of cash and securities and (2) services to the United States Treasury and governmental agencies in handling savings bonds and government securities, including food stamp activities. In performing these functions, the bank distributed its various employees, numbering from 350 to 450 in the period 1974-78, largely of a clerical or managerial type, among 16 departments. The job ratings of its employees ranged from pay grade 3 to pay grade 16, with an ungraded officer group of about 8. New employees were generally assigned to pay grades 3 or 4 and assignments among departments were based on "educational background and prior work experience." All employees were evaluated annually on a scale of 1 (unsatisfactory) to 5 (exceptional). Since 1973, the branch had generally posted notices of vacancies by advertising in Southern Accent, a news circular prepared by and distributed to bank employees. Employees were invited to indicate their interest in any posted vacancy. Promotions were generally made within the work force.

In its complaint the EEOC charged the defendant with engaging in racially discriminatory practices and policies in failure to promote blacks at its Charlotte, North Carolina, branch in violation of Section 703(a) of Title VII, 42 U.S.C. Sec. 2000e. After the commencement of the action, four former or present employees of the defendant at the Charlotte branch petitioned to intervene in order to assert under Sec. 1981, 42 U.S.C., and Title VII individual and class claims of racial and sex discrimination "in promotions, wages, job assignments and terms and conditions of employment" on behalf "of all blacks and females who worked for the defendant at any time since July 2, 1965." The petition to intervene was allowed and the intervenors were, by a consent order, certified as the class representatives to maintain an action charging racial discriminatory practices and policies in the particulars stated in the petition for certification filed by the intervenors but with the class narrowed to include only employees who may have been hired after January 3, 1974. In the same consent order, the EEOC itself agreed to limit its claim of discrimination to "only ... those black persons who worked for the defendant since January 3, 1974."

After joinder of issues and considerable discovery, the actions both of the EEOC and of the plaintiffs-intervenors came on for trial in September, 1980. Following the completion of the trial, the District Court on October 29, 1980, filed its "Memorandum of Decision." It ruled in this Memorandum: (1) That the defendant had discriminated against the intervenor Cooper "by failing to promote her from her job as a settlement clerk ... to a position as utility supervisor" and against the intervenor Russell "by failing to promote her to a utility clerk position from her position as a utility operator" and "by discharging her ... in retaliation for her filing charges of discrimination with the Equal Employment Opportunity Commission;" (2) that the intervenors Moore and Hannah had not "shown the court that they suffered any discrimination on account of their race" and that their claims should be denied; and (3) that defendant had engaged in a pattern and practice of discrimination from 1974 through 1978 by failing to "afford black employees opportunities for advancement and assignment equal to opportunities afforded white employees [only] in pay grades 4 and 5." The "Memorandum" concluded with the direction to "[c]ounsel for plaintiffs ... to propose and submit by December 1, 1980: 1. Proposed findings of fact and conclusions of law consistent with the above findings ...."

The District Court filed on May 29, 1981, findings of fact and conclusions of law. In these it found discrimination by the defendant in the class action, in pay grades 4 and 5, and in individual discrimination claims of the intervenors, Russell and Cooper. It dismissed the individual discrimination claims of Hannah and Moore. While the District Court, as had the District Court in Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 258 (5th Cir.), cert. denied, 449 U.S. 899, 101 S.Ct. 268, 66 L.Ed.2d 129 (1980), stated that "[t]he findings and conclusions herein, however, as well as the Judgment which follows are those of the Court based on an independent review of the record and consideration of the submissions of the parties," such statement was adopted verbatim from the plaintiffs' proposed findings and conclusions; in fact, the statement appears in exactly the same words and in the exact same place as footnote 3 in both the proposed findings and conclusions submitted by the plaintiffs and in the District Court's findings of fact and conclusions of law. Moreover, the Court's 37-page findings and conclusions were almost word for word copies of the findings and conclusions submitted by the plaintiffs.

From the judgment entered pursuant to the findings and conclusions of the District Court, as well as from an order granting an interim allowance of attorney's fees to the intervenors-plaintiffs' counsel, the defendant has appealed. The plaintiffs did not appeal the dismissal of the individual claims of the intervenors Hannah and Moore or the denial of relief in the class claim in all pay grades above pay grade 5. We reverse.

In considering such appeal we shall treat first the decision in the class action claim and, second, the decision on the individual claims of intervenors Cooper and Russell. Before addressing the substantive merits of the class action claim, however, it is necessary to resolve two preliminary points pressed by the defendant. The first of these relates to the nature or type of the class action claims, i.e., are they disparate treatment or disparate impact claims or both? The District Court's "Memorandum of Decision" does not identify the class action claim as either a disparate treatment or a disparate impact claim but in the findings and conclusions later adopted by the Court it is clear that the class action is being treated as both a disparate treatment and disparate impact claim. The defendant, on the other hand, asserts that the class action should be treated solely as a disparate treatment action. We agree.

In Stastny v. Southern Bell Tel. & Tel. Co., 628 F.2d 267 at 274, n. 10 (4th Cir.1980), we stated the necessary elements of a disparate impact claim. These elements, as there declared, are:

"As is now well recognized, the class action commonality criteria are, in general, more easily met when a disparate impact rather than a disparate treatment theory underlies a class claim. The disparate impact 'pattern or practice' is typically based upon an objective standard applied evenly and automatically to affected employees: an intelligence or aptitude test, e.g., Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971); an educational requirement, id.; a physical requirement, e.g., Weeks v. Southern Bell Tel. & Tel. Co., 408 F.2d 228 (5th Cir.1969). Both the existence and the 'common reach' of such objectively applied patterns or practices are likely to be indisputable from the outset, so that no real commonality problems for class action maintenance ever arise in this regard. On the other hand, the disparate treatment pattern or practice must be one based upon a specific intent to discriminate against an entire group, to treat it as a group less favorably simply because of its sex (or other impermissible reason). The greater intrinsic difficulty in establishing the existence and common reach of such a subjectively based practice is obvious. See Hauck v. Xerox Corp., 78 F.R.D. 375, 378 (E.D.Pa.1978). In the instant case, it is clear that plaintiffs' ultimate reliance would of necessity have been upon showing a pattern of disparate treatment. There is no suggestion in the record of a Griggs-type objectively imposed practice having discriminatory disparate impact."

We reiterated those criteria for a disparate impact claim in the recent case of Pope v. City of Hickory, N.C., 679 F.2d 20, 22 (4th Cir.1982):

" 'The disparate impact model applies only when an employer has instituted a specific procedure, usually a selection criterion for employment, [such as an aptitude or intelligence test, or height and weight requirements] that can be shown to have a causal connection to a class based imbalance in the [employer's] work force' and has been said not to be 'the appropriate vehicle from which to launch a wide ranging attack on the cumulative effect of a company's...

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