Equal Emp't Opportunity Comm'n v. Faps, Inc.
| Decision Date | 26 September 2014 |
| Docket Number | Civil No. 10-3095 (JAP)(DEA) |
| Parties | EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. FAPS, INC., Defendant. |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
Plaintiff, the Equal Employment Opportunity Commission ("EEOC"), filed this action against Defendant Foreign Auto Preparation Service, Inc. ("FAPS") after a member of the EEOC filed a charge alleging violations of Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. § 2000e, et seq. Generally, the complaint alleges that FAPS engaged in a company-wide pattern or practice of discrimination against African Americans in recruiting and hiring.
Before the Court are several motions brought by FAPS and the EEOC. FAPS has filed a motion for summary judgment on the EEOC's Title VII claims [ECF No. 107]. FAPS has also filed a motion to exclude the testimony of the EEOC's expert witnesses [ECF No. 123]. Likewise, the EEOC has filed a motion to exclude the testimony of FAPS's expert witness [ECF No. 113]. These motions are based almost exclusively on the grounds that the testimony of these experts fails to meet the standards delineated by the United States Supreme Court in Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993). For the reasons set forth below, the Court grants FAPS's summary judgment motion in part, and denies it in part. The Court denies FAPS's motions toexclude the testimony of the EEOC's expert witnesses, and grants the EEOC's motion to exclude the testimony of FAPS's expert witness.
FAPS is a New Jersey corporation with principal offices in Port Newark, New Jersey. FAPS operates a large auto processing facility, which processes automobiles moving through Port Newark. FAPS is owned and operated by two brothers, Gary and August LoBue, the grandsons of founder August LoBue. FAPS provides a wide range of services, from the short-term storage of vehicles to be transported to dealerships to the customization of luxury cars.
On October 18, 2007, Stuart Ishimaru, a member of the EEOC, filed a Commissioner's Charge, alleging violations of Title VII by FAPS. After an investigation, the Commission found reasonable cause to believe that FAPS engaged in a company-wide pattern or practice of discrimination against African Americans in recruiting and hiring from at least 2004 until the present. Arising out of this investigation, the Commission also found reasonable cause to believe that FAPS made improper pre-employment disability-related inquires in its application forms, in violation of the ADA.
The facts of this case are strongly disputed by both sides. The EEOC alleges that, from 2003-2008, FAPS hired hundreds of workers, the majority of whom are unskilled or semi-skilled workers. FAPS, however, disputes that it was hiring or looking to hire unskilled or semi-skilled workers; rather, it argues that from 2003 to 2013, when it did hire, it focused on hiring and recruiting employees for skilled job positions. The parties also dispute the various qualifications that FAPS required in its potential employees, and whether or not FAPS will train and/or cross-train its employees for other jobs at FAPS. FAPS also disputes that it was hiring hundreds of workers during the relevant time period; rather, FAPS emphasizes that the automobile industry was goingthrough turmoil at this time, and it was forced to lay off 200 employees. In certain years, FAPS contends that it did not make any recruiting efforts; for example, in 2007 and 2008 it asserts it only hired individuals that were mandatory hires from Nissan in order to obtain an account from Nissan, or Mazda employees as a condition of an acquisition deal of certain Mazda work. Other than these hires, FAPS asserts that it did not recruit or hire in 2008. The EEOC disputes this contention, and has supplied evidence of certain job postings by FAPS from these years.
The EEOC has alleged that FAPS relied primarily on word of mouth to recruit its workers from 2003 through 2008. It is undisputed that FAPS did not have an official policy promoting or encouraging word-of-mouth recruiting. FAPS management was aware that FAPS workers would spread the word in its "small community" when there were job openings at FAPS. While FAPS did not generally advertise externally, it would often post a hiring announcement near the employee time clock. Seemingly as a result, FAPS would receive a large number of "walk-in" applicants, at times almost every day, for these positions. After 2010, FAPS broadened its recruitment process, and starting using online services such as Craigslist, technical schools, and the Newark OneStop Program.
Julie Lynch, the current Human Resources Manager, has admitted that FAPS did not undertake any efforts to recruit African Americans in 2007, 2008, or 2009. Where the race of FAPS workers can be determined, between 2003 and 2008 FAPS only hired twelve African American unskilled or semi-skilled workers, whereas it hired 263 non-African Americans. Over 10 years, FAPS hired only 16 African Americans out of 339 new hires in what the EEOC has alleged are unskilled or semi-skilled positions. As discussed more fully below, the EEOC's expert labor economist, Dr. Robert LaJeunesse, has concluded that there is essentially a zero percent probability that such a low hiring rate for African Americans would occur by chance.
FAPS has, at least in part, described any alleged failure to hire or recruit African Americans on both its lack of hiring during the relevant years, the mandatory hiring of employees from Nissan and Mazda, and the skill level of the employees for which it was searching. FAPS also argues that the Waterfront Commission of New York Harbor ("Waterfront Commission") and the International Longshoremen's Association, Local 1478 (the "Union") are "inextricably woven in the selection and hiring process at FAPS," which impacts the discretion that FAPS has in hiring applicants for job openings. See Def.'s Br. at 4-6. First, under the rules of the Waterfront Commission, any applicant for a job in which he or she will come into contact with waterborne freight must obtain a waterfront card from the Waterfront Commission. An applicant cannot apply to the Waterfront Commission for a waterfront card without a "sponsorship letter" from an employer. Accordingly, people seeking to work at FAPS would go to its office, fill out an application, and then be interviewed by Lynch. The FAPS job application seeks basic information about work experience and training. It also asks questions about how the applicant was referred to FAPS and whether the applicant has a criminal background. Lynch reviews the application on the spot, conducts a basic interview, which usually covers work experience or background, and then discusses work hours and pay. Lynch would then present the application to William Mazur. Mazur is the Vice-President and General Manager of FAPS, and has worked at FAPS for 30 years. Mazur signs off on whether the applicant is given a sponsorship letter for the Waterfront Commission. The denial of a sponsorship letter by FAPS is effectively a denial of employment. In other words, while a sponsorship letter is not a promise of employment, when FAPS gives someone a sponsorship letter it usually means that FAPS has a job for that person and that the applicant will be hired. If FAPS provides a sponsorship letter, the applicant then seeks a waterfront card from the Waterfront Commission.
Generally, the process of applying for a waterfront card involves filing out an application, paying a fee, and providing documentation. Upon receiving an application, the Waterfront Commission conducts a background check and determines whether the applicant meets certain standards. The Waterfront Commission has complete discretion to determine to disqualify a registration applicant because of a prior bad act or conviction. The Waterfront Commission will also consider a list of factors relevant to the holistic consideration of an application, including prior criminal behavior, history of workplace violence, theft, fraud, and other "bad acts" such that he should not be permitted to work at the Port. According to Jeffrey Schoen, the Director of Law and Licensing for the Waterfront Commission, it is not the conviction or the arrest per se that is the grounds for denying an application, but rather the facts and circumstances of the underlying act that is significant to the Waterfront Commission when making a determination. There appears to be a dispute between the parties with regards to how long the Waterfront Commission would take to review an application. FAPS has asserted that it was experiencing long delays in hiring because of this application process, because the process was taking up to 8 to 12 weeks. The EEOC disputes the significance of this, as these delays allegedly did not start until 2010. Once the waterfront card is issued, the applicant returns to FAPS and can start working. FAPS cannot hire anyone before a waterfront card is issued by the Waterfront Commission.
FAPS has also asserted that the Union is a significant presence in the employment practices at FAPS. Under the collective bargaining agreement ("CBA"), FAPS is required to notify the Union of any employment opportunities, and interview all potential employees referred to FAPS by the Union. FAPS has asserted that the CBA governs the terms and conditions of employment at FAPS, including the method of selection and other conditions of recruitment and hiring. However, FAPS witnesses have admitted that the CBA places no limitations or restrictions on FAPS's abilityto recruit and hire applicants of its choosing, other than to interview any Union referrals. Furthermore, FAPS's witnesses and Union officials have testified that FAPS is under no obligation whatsoever under the terms of the CBA to hire any of Union members. FAPS, however, argues that the Union has effectively told FAPS how...
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