Lowery v. Circuit City Stores, Inc.
| Decision Date | 14 September 1998 |
| Docket Number | 97-1470,Nos. 97-1372,97-1917 and 98-1170,s. 97-1372 |
| Parties | 77 Fair Empl.Prac.Cas. (BNA) 1319, 74 Empl. Prac. Dec. P 45,605, 41 Fed.R.Serv.3d 1116 Renee LOWERY; Lisa S. Peterson, Plaintiffs-Appellees, and Shelby McKnight; Gregory Fleming; Sonya Hairston; Dynelle Johnson; Nadra Smith; Ponnette Smith; Sheila Smith; Patricia Spencer; Edward Stokes, Plaintiffs, v. CIRCUIT CITY STORES, INCORPORATED, Defendant-Appellant. Chamber of Commerce of the United States of America; Washington Legal Foundation; Equal Employment Advisory Council; National Retail Federation; Equal Employment Opportunity Commission; NAACP Legal Defense and Education Fund, Inc., Amici Curiae. Shelby McKNIGHT; Gregory Fleming; Renee Lowery; Nadra Smith; Ponnette Smith; Sheila Smith; Patricia Spencer; Edward Stokes; Lisa S. Peterson, Plaintiffs-Appellants, and Sonya Hairston; Dynelle Johnson, Plaintiffs, v. CIRCUIT CITY STORES, INCORPORATED, Defendant-Appellee. Chamber of Commerce of the United States of America; Washington Legal Foundation; Equal Employment Advisory Council; National Retail Federation; Equal Employment Opportunity Commission; NAACP Legal Defense and Education Fund, Inc., Amici Curiae. Shelby McKNIGHT; Renee Lowery; Lisa S. Peterson, Plaintiffs-Appellees, and Gregory Fleming; Sonya Hairston; Dynelle Johnson; Nadra Smith; Ponnette Smith; Sheila Smith; Patricia Spencer; Edward Stokes, Plaintiffs, v. CIRCUIT CITY STORES, INCORPORATED, Defendant-Appellant. Equal Employment Opportunity Commission; NAACP Legal Defense and Education Fund, Inc., Amici Curiae. Renee LOWERY, Plaintiff-Appellee, and Shelby McKnight; Gregory Fleming; Sonya Hairston; Dynelle Johnson; Nadra Smith; Ponnette Smith; Sheila Smith; Patricia Spencer; Edward Stokes; Lisa S. Peterson, Plaintiffs, v. CIRCUIT CITY STORES, INCORPORATED, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Fourth Circuit |
ARGUED: Andrew Lewis Frey, Mayer, Brown & Platt, Washington, D.C., for Appellant. David Jay Cynamon, Shaw, Pittman, Potts & Trowbridge, Washington, D.C., for Appellees. ON BRIEF: Kenneth S. Geller, Donald M. Falk, Peter C. Choharis, Mark S. Davies, Mayer, Brown & Platt, Washington, D.C.; W. Stephen Cannon, Pamela G. Parsons, Teri C. Miles, Circuit City Stores, Inc., Richmond, Virginia, for Appellant. Phillip D. Bostwick, James B. Hamlin, Duane K. Young, Shaw, Pittman, Potts & Trowbridge, Washington, D.C.; Joseph M. Sellers, Avis Buchanan, The Washington Lawyers' Committee for Civil Rights and Urban Affairs, Washington, D.C.; John A. Gibney, Jr., Shuford, Rubin & Gibney, P.C., Richmond, Virginia, for Appellees. Robert J. Smith, Harry A. Rissetto, Mona C. Zeiberg, Morgan, Lewis & Bockius, L.L.P., Washington, D.C.; Stephen A. Bokat, Robin S. Conrad, Sussan L. Mahallati, National Chamber Litigation Center, Inc., Washington, D.C., for Amicus Curiae Chamber of Commerce. John J. Gallagher, Barbara Berish Brown, Neal D. Mollen, Kelly J. Koelker, Paul, Hastings, Janofsky & Walker, L.L.P., Washington, D.C.; Daniel L. Popeo, Paul D. Kamenar, Washington Legal Foundation, Washington, D.C., for Amicus Curiae Foundation. Ann Elizabeth Reesman, Robert E. Williams, McGuiness & Williams, Washington, D.C., for Amicus Curiae Advisory Council; Robert P. Joy, Morgan, Brown & Joy, Boston, Massachusetts, for Amicus Curiae National Retail Federation. C. Gregory Stewart, General Counsel, J. Ray Terry, Jr., Deputy General Counsel, Gwendolyn Young Reams, Associate General Counsel, Vincent J. Blackwood, Assistant General Counsel, Paul D. Ramshaw, Equal Employment Opportunity Commission, Washington, D.C., for Amicus Curiae EEOC. Elaine R. Jones, Director/Counsel, Theodore M. Shaw, Norman J. Chachkin Before MURNAGHAN, WILKINS, and HAMILTON, Circuit Judges.
Charles Stephen Ralston, NAACP Legal Defense and Education Fund, Inc., New York, New York, for Amicus Curiae Fund.
Affirmed in part, vacated in part, and remanded with instructions by published opinion. Judge HAMILTON wrote the opinion, in which Judge MURNAGHAN and Judge WILKINS joined.
This case involves claims of racial discrimination brought by eleven African-American current and former employees (collectively, the Plaintiffs) individually and on behalf of all African-Americans employed at the Richmond, Virginia headquarters (HQ) of Appellant, Circuit City Stores, Inc. Circuit City appeals from a jury verdict finding that Circuit City engaged in a pattern or practice of racial discrimination and that Circuit City discriminated against plaintiffs Renee Lowery (Lowery) and Lisa Peterson (Peterson) on account of their race. Circuit City also appeals from the district court's grant of injunctive relief, punitive damages, costs and attorneys' fees. Finally, Circuit City appeals the district court's grant of a motion by Lowery to compel Circuit City's compliance with a portion of the injunctive relief ordered and the district court's award of her reasonable attorneys' fees and costs incurred in connection with her motion in an amount to be subsequently determined. The Plaintiffs cross-appeal the district court's decertification of their class action. We affirm in part, vacate in part, and remand with instructions.
Circuit City owns and operates a rapidly growing chain of retail consumer electronic stores that by January 1996 employed 37,000 "associates" nationwide. By November 1996, Circuit City employed 3,500 people at its Richmond HQ, about 800 of whom were African-Americans. Several hundred other Circuit City employees work for a wholly-owned subsidiary called First North American National Bank ANB, which operates as a separate and distinct entity, providing consumer credit to Circuit City's customers.
Lowery, Peterson and the other nine Plaintiffs, Shelby McKnight, Gregory Fleming, Sonya Hairston, Dynelle Johnson, Nadra Smith, Ponnette Smith, Sheila Smith, Patricia Spencer and Edward Stokes, are African-American current and former employees of Circuit City and FNANB. The Plaintiffs filed this action in late 1995, alleging that Circuit City and FNANB (collectively, Circuit City) have a corporate culture of racial animus toward African-Americans, promulgated, fostered and condoned by a group of white senior managers. Plaintiffs claim that Circuit City's all-white management intentionally carried out their racial animus and stereotypical thinking through discriminatory promotion policies and practices that included, among other things: (1) excessively subjective procedures and criteria used to deny opportunities for promotion to qualified African-Americans; (2) making the existence of job promotion vacancies known only through informal networks of white employees rather than through formal job posting procedures; (3) requiring African-American employees to satisfy more onerous requirements for promotion than those required for white employees; and (4) maintaining more onerous performance standards for African-American employees than for similarly situated white employees.
Circuit City's promotion practices are developed in Circuit City's Human Resources (HR) Division. Between 1984 and 1996, HR was headed by William Zierden, a former business professor from the University of Virginia. Zierden believed that large companies are hampered by bureaucracy, including "rigid systems of job descriptions and rigid [qualifications]" for the people to fill job openings. (J.A. 2680). Zierden accordingly implemented an HR system which Circuit City claims limits bureaucracy and gives employees and managers wide freedom of action. Circuit City produced evidence that this philosophy has strong support among management experts.
Circuit City's management policy requires all managers and supervisors to attend a week-long "Managing Through People" seminar that instructs them in appropriate supervision. (J.A. 2194). Managers receive training on promotions, including how to interview and evaluate employees. According to Circuit City, managers are warned not to use impermissible selection criteria, and are admonished that (J.A. 1723).
The Plaintiffs claim that Circuit City's management style has encouraged and fostered racial discrimination in promotions. According to the Plaintiffs, Circuit City: (1) has no written procedures indicating how managers and supervisors should go about promoting employees; (2) has no written procedures or practices requiring a review, either by HR or anyone else, of any promotion decision; (3) does not require promoters to post or advertise job openings, but permits them to announce an opening to a single candidate of the promoter's own choosing without notifying anyone else of the vacancy; and (4) when a job opening is posted, has no requirements about what the posting should contain. Furthermore, Plaintiffs allege that a promoter has unfettered discretion to use any procedures he or she desires when making a promotion decision. For example, a promoter has full discretion to establish the minimum qualifications necessary for a position and the weight to be given to the factors considered in making the decision. The Plaintiffs note that the majority of those making promotion decisions at HQ are white, and claim that the result of Circuit City's promotion policies is that only white employees are promoted above the assistant supervisor level.
Circuit City, on the other hand, argues that its promotion policies have produced a racially diverse work force. Circuit City claims that the percentage of African-American employees at HQ increased from 19.5 percent in 1992 to 22 percent in 1995, while...
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