E.E.O.C. v. O & G Spring and Wire Forms Specialty Co.

Decision Date11 October 1994
Docket NumberNos. 92-3436,92-4118,s. 92-3436
Citation38 F.3d 872
Parties65 Fair Empl.Prac.Cas. (BNA) 1823, 63 USLW 2308 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellee, v. O & G SPRING AND WIRE FORMS SPECIALTY COMPANY, Defendant-Appellant.
CourtU.S. Court of Appeals — Seventh Circuit

Gail S. Coleman (argued), Equal Employment Opportunity Com'n, Office of Gen. Counsel, Washington, DC, James B. Burns, Office of the U.S. Atty., Chicago, IL, for plaintiff-appellee in No. 92-3436.

Gail S. Coleman (argued), E.E.O.C., Office of Gen. Counsel, Washington, DC, James B. Burns, Office of the U.S. Atty., Mary B. Manzo, E.E.O.C., Chicago, IL, for plaintiff-appellee in No. 92-4118.

Gerard C. Smetana (argued), Michael E. Avakian, Smetana & Avakian, Andrew W. Levenfeld, Levenfeld & Associates, Chicago, IL, for defendant-appellant.

Before WOOD, Jr., CUDAHY, and MANION, Circuit Judges.

CUDAHY, Circuit Judge.

O & G Spring and Wire Forms Specialty Company (O & G) is a small company on Chicago's West Side that manufactures springs and specialty wire forms to order. The shop has about 50 workers, about 35 of whom work at low-skilled jobs in the "secondary department" operating kick and punch presses. O & G recruited for these positions by word-of-mouth and by accepting applications from walk-ins off the street, although walk-ins were only considered during certain hiring "windows." From 1979 until 1985, O & G hired 87 people for the secondary department, 58 of whom were walk-in applicants. None of the 87 hires were African-Americans. On November 27, 1985, the Equal Employment Opportunity Commission (EEOC) filed a complaint charging O & G with engaging in a pattern and practice of racial and age discrimination in recruiting and hiring in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. Sec. 2000e-6(a) (1988), and the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. Sec. 621 et seq. (1988). 1 After a bench trial and subsequent amended opinions, the district court found that O & G had engaged in a pattern of intentional discrimination against African-Americans. 705 F.Supp. 400 (N.D.Ill.1988).

I. Background

The EEOC alleged that, from 1979 until 1985, O & G intentionally discriminated against African-Americans and persons over age 40 in recruitment and hiring for the secondary department, and also that O & G's word-of-mouth recruiting technique had a disparate impact on African-Americans and workers over 40. 2 At trial, the EEOC presented evidence that African-Americans represented the largest group in the walk-in pool during the relevant time period, although O & G claimed that these individuals did not request applications. Four African-American witnesses also provided anecdotal evidence that they had been rejected for jobs at O & G. 3

But the heart of the case was the statistical evidence presented by both parties to calculate how many African-Americans should have been hired based on the relevant labor market serving O & G. The EEOC expert, Dr. Pierre de Vise, concluded that African-American availability in the relevant labor market ranged from 22.5% to 31%. Dr. de Vise opined that these figures probably underestimated the African-American availability, since they excluded unemployed people, and African-Americans were over-represented among the unemployed. O & G's expert, Dr. Glen Meyers, testified that Dr. de Vise's determinations of African-American availability were inaccurate. Dr. Meyers testified that Dr. de Vise failed to consider O & G's preference for skilled machinists as workers or workers' own self-selection. Dr. Meyers also testified that O & G had legitimate business justifications for relying on word-of-mouth and walk-in recruiting and hiring.

The district court found O & G liable for violations of Title VII on both the intentional discrimination and disparate impact claims, but found O & G not liable on the ADEA claim. The district court agreed with O & G that it was reasonable to expect that O & G's work force might be disproportionately composed of recent immigrants, and reasonable for O & G to prefer experienced applicants. 705 F.Supp. at 406. But even so, the district court concluded that "no explanation is sufficient to overcome the 'inexorable zero' employment of blacks at O & G from 1979 though 1985." Id. African-American availability in the relevant labor market would have to be extremely low--6%--to account for no African-American hires and, even if the relevant market had never been precisely defined, the EEOC had proven that availability was in fact significantly higher. Id. The district court amended its decision on May 22, 1989 to clarify its findings.

On January 26, 1990 the district court reconsidered its decision in light of Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 109 S.Ct. 2115, 104 L.Ed.2d 733 (1989), and held that the disparate impact claim failed since the EEOC had not proven that O & G's word-of-mouth recruiting served no legitimate business purpose. 732 F.Supp. 72 (N.D.Ill.1990). Focusing only on O & G's walk-in hiring, the district court reaffirmed its decision that O & G was liable for intentional discrimination. The district court again reconsidered its decision on March 20, 1992 after this court decided EEOC v. Chicago Miniature Lamp Works, 947 F.2d 292 (7th Cir.1991), in which we reversed a lower court's finding of intentional discrimination because the EEOC had not offered sufficient proof of intent. The district court found the two cases dissimilar, and found no reason to disturb its prior finding. 4 In later proceedings the district court awarded back pay to be paid pro rata to a class of applicants or would-be applicants to O & G. 790 F.Supp. 776 (N.D.Ill.1992). O & G appeals the district court's finding of liability on the Title VII claim, and the denial of its motion for attorneys' fees for the ADEA claim.

II. Sufficiency of evidence

O & G contends that there was insufficient evidence for the district court to find that it engaged in a pattern and practice of intentional discrimination, arguing primarily that statistical evidence alone cannot prove intentional discrimination. The district court squarely held the opposite, noting that "it is beyond cavil that statistical proof alone is sufficient to establish liability under both the disparate treatment and disparate impact of models." 705 F.Supp. at 408 (emphasis in original). O & G's arguments to the contrary have been firmly rejected by the Supreme Court and this circuit. Int'l Brotherhood of Teamsters v. United States, 431 U.S. 324, 339-40 n. 20, 97 S.Ct. 1843, 1857 n. 20, 52 L.Ed.2d 396 (1977) ("Since the passage of the Civil Rights Act of 1964, the courts have frequently relied upon statistical evidence to prove a violation ... in many cases the only available avenue of proof is the use of racial statistics to uncover clandestine and covert discrimination by the employer."); Hazelwood School Dist. v. United States, 433 U.S. 299, 307-08, 97 S.Ct. 2736, 2741, 53 L.Ed.2d 768 (1977); Chicago Miniature, 947 F.2d at 299 ("Statistical evidence of disparities between minority representation in an employer's work force and minority representation in the community from which employees are hired can prove disparate treatment in a pattern and practice case."); EEOC v. Sears, Roebuck & Co., 839 F.2d 302, 311 (7th Cir.1988). Reliance on statistical evidence by no means diminishes the plaintiff's obligation to prove discriminatory intent--but in some cases, statistical disparities alone may prove intent. "Statistics showing racial or ethnic imbalance are probative in a case such as this one only because such imbalance is often a telltale sign of purposeful discrimination; absent explanation, it is ordinarily expected that nondiscriminatory hiring practices will in time result in a work force more or less representative of the racial and ethnic composition of the population in the community from which employees are hired." Teamsters, 431 U.S. at 339-40 n. 20, 97 S.Ct. at 1857 n. 20. 5 Appropriate statistical evidence can also be sufficient to establish a pattern and practice of discrimination--or in other words, that the alleged discriminatory hiring practices were "more than the mere occurrence of isolated or 'accidental' or sporadic discriminatory acts." Teamsters, 431 U.S. at 336, 97 S.Ct. at 1855; Hazelwood, 433 U.S. at 308, 97 S.Ct. at 2742.

But, of course, statistics, like any evidence, are not irrefutable; strong statistics may prove a case on their own, while shaky statistics may be insufficient unless accompanied by additional evidence. Teamsters, 431 U.S. at 340, 97 S.Ct. at 1857; Chicago Miniature, 947 F.2d at 300-01. O & G maintains that the EEOC's statistical evidence was fatally flawed in several respects. Determining the validity and value of statistical evidence is firmly within the discretion of the district court, and we will reverse its findings only if they are clearly erroneous. Pullman-Standard v. Swint, 456 U.S. 273, 287-90, 102 S.Ct. 1781, 1789-91, 72 L.Ed.2d 66 (1982). In this respect, "a statistical model [in a discrimination case] need not be completely specified and some arguably relevant variables can be omitted in certain cases." Chicago Miniature, 947 F.2d at 300; Bazemore v. Friday, 478 U.S. 385, 400, 106 S.Ct. 3000, 3009, 92 L.Ed.2d 315 (1986).

Determining the relevant labor market is an essential step in determining whether there are any statistically significant deviations between the market and the employer's hiring patterns. Chicago Miniature, 947 F.2d at 299-300. The EEOC's expert Dr. de Vise provided three different formulations of O & G's relevant labor market, each with a slightly different geographic or occupational scope. 6 The district court did not choose among the three models, but found that they presented a sufficiently accurate range against which the district court could evaluate O & G's hiring record. ...

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