Ross v. Lockheed Martin Corp.

• Decision Date: 28 July 2017
• Docket Number: No. 16–cv–2508 (KBJ),16–cv–2508 (KBJ)
• Citation: 267 F.Supp.3d 174
• Parties: Vernon ROSS and Debra Josey, on behalf of themselves and all others similarly situated, Plaintiffs, v. LOCKHEED MARTIN CORP., Defendant.
• Court: U.S. District Court — District of Columbia

267 F.Supp.3d 174

Vernon ROSS and Debra Josey, on behalf of themselves and all others similarly situated, Plaintiffs,

v.LOCKHEED MARTIN CORP., Defendant.

No. 16–cv–2508 (KBJ)

United States District Court, District of Columbia.

Filed July 28, 2017

Charles Vincent Firth, Engelmeier & Umanah, P.A., Minneapolis, MN, Cyrus Mehri, Mehri & Skalet, PLLC, Washington, DC, for Plaintiff

Grace E. Speights, Morgan, Lewis & Bockius, LLP, Washington, DC, Krissy Anne Katzenstein, Morgan, Lewis & Bockius LLP, Washington, DC, for Defendant

MEMORANDUM OPINION

KETANJI BROWN JACKSON, United States District Judge

Named Plaintiffs Vernon Ross and Debra Josey ("Plaintiffs") allege that Defendant Lockheed Martin Corporation ("Lockheed") has "engaged in a pattern or practice of employment discrimination" that is "manifest[ ] in Lockheed Martin's performance appraisal system." (Compl., ECF No. 1, ¶ 11.) According to Ross and Josey, Lockheed's annual employee performance review process is "flawed in both design and implementation" (id. ) because "African–American non-represented, salaried employees below the level of Vice President have received lower overall ratings on their annual performance reviews as compared to similarly situated white employees" (id. ¶ 15), and the lower ratings have, in turn, resulted in "lower salaries, raises, [and] bonuses, [lower] long term incentive awards, fewer promotions, and a lower retention rate" for African Americans at Lockheed (id. ¶ 67). Plaintiffs' three-count complaint claims that Lockheed's performance review process has been systemically injurious in a manner that amounts to both intentional race discrimination (see id. ¶¶ 65–68 (Count I)) and disparate impact race discrimination (see id. ¶¶ 70–73 (Count II)). Plaintiff Ross further contends, solely on his own behalf, that Lockheed retaliated against him "for filing a Charge of Discrimination ... and/or complaining to senior executives at the Company of racial discrimination faced by him and other African–American employees." (Id. ¶ 78 (Count III).)

Critically, Ross and Josey seek to prosecute the race discrimination claims on behalf of the following class of plaintiffs:

[all] salaried non-represented African–American employees below the level of Vice President who received at least one performance evaluation between January 1, 2013 and February 29, 2016, with an overall rating below ‘significantly exceeded commitments’ while employed at Lockheed Martin.

(Id. ¶ 1.) The complaint contends that the discrimination claims are susceptible to class-action treatment because, under Lockheed's performance review process, there is an "absence of measurable indicators" of achievement, which has allegedly "resulted in inadequate safeguards against bias in the assessment of African American employees." (Id. ¶ 18; see also id. ¶ 21 (resting the complaint's systemic discrimination allegations on the fact that "[m]anagers' comments on employee performance have not consistently relied on specific, measurable, time-sensitive measures of employees' performance" and "[a]s a result, similar or even identical performance could garner different ratings under different supervisors").)

Plaintiffs have filed their putative class action complaint along with a proposed Settlement Agreement; therefore, this case has come to this Court fully formed. (See Compl.; Settlement Agreement, ECF No. 4–1.) One key feature of the resolution that Plaintiffs have negotiated with Lockheed (in addition to a $22.8 million settlement fund and certain changes to Lockheed's performance appraisal process) is the class members' agreement to release a broad swath of potential legal claims against the company, including claims that have nothing whatsoever to do with Lockheed's performance review procedures. (See, e.g. , Settlement Agreement at 22 (stating that the class members agree to release "any and all racial employment discrimination claims of whatever nature, known or unknown," including but not limited to all "claims of alleged racial discrimination in employment or in the provision of employee benefits claims under Title VII, Section 1981, ERISA[,]" and "any other federal, state, or local" law).)¹

Also noteworthy is what is not featured in the proposed Settlement Agreement: how much money each class member can expect to receive in exchange for releasing any and all race discrimination claims "that were or could have been" asserted against Lockheed. (Id. ) Plaintiffs' counsel insists that no class member's expected recovery can be determined, or even estimated, up front; rather, each class member must first formally accept the terms of the Settlement Agreement and complete a detailed form that discloses—for the first time—the potential race discrimination and/or benefits claims that she has already agreed to release. (See Tr. of Oral Arg. at 69.) In operation, then, a putative class member must decide whether to opt out of the Settlement Agreement before knowing (1) the nature and value of the potential legal claims that she might otherwise have brought against Lockheed based on her employment history, or (2) the amount that she is likely to receive for participating in the settlement and relinquishing all of her (previously undisclosed) claims.

Before this Court at present is Plaintiffs' motion for preliminary certification of this case as a class action and preliminary approval of the Settlement Agreement. (See Pls.' Mot. for Preliminary Approval of Class Action Settlement Agreement ("Mot."), ECF No. 4.) In the motion, Plaintiffs request that this Court make a preliminary determination that the complaint satisfies the requirements of a viable class action under Federal Rule of Civil Procedure 23, and Plaintiffs also seek preliminary approval of the Settlement Agreement so that the class-wide notice and detailed claim forms can be distributed. (See generally Mot.; Settlement Agreement.) Plaintiffs have consistently maintained that their putative class and proposed settlement satisfy all of the necessary criteria for certification and approval under Rule 23 such that this case should be permitted to cruise right into the notice and hearing stages of the class-wide settlement process. However, for the reasons explained fully below, this Court has reluctantly concluded that it has no choice but to pump the brakes.

In brief, Plaintiffs have failed to demonstrate that the commonality prerequisite for Rule 23 class certification can be adequately established, because they have not explained how it is that Lockheed's performance appraisal process systematically discriminates against African–Americans such that it qualifies as either a "general policy of discrimination" or a "testing procedure or other companywide evaluation method" that gives rise to discrimination claims that are susceptible to common proof. See Wal–Mart Stores, Inc. v. Dukes , 564 U.S. 338, 353, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011). This Court also sees several fairness-related red flags when it considers the terms of the proposed Settlement Agreement, including an egregious imbalance between the particular claims alleged in the complaint and the scope of the class members' release; a draconian set of consequences that results from a putative class member's mere failure to respond to the class-wide notice; and a dearth of crucial information about the potential expected recovery in relation to the claims being released, as is required for adequate assessment of each putative class member's individual settlement position.

Consequently, not only is this Court unable to find that Plaintiffs have defined a certifiable class for the purpose of Federal Rules of Civil Procedure 23(a) and 23(b), the Court must also conclude that the proposed Settlement Agreement cannot be preliminarily approved as "fair, reasonable, and adequate" under Rule 23(e)(2). Accordingly, the instant motion for preliminary approval of the Settlement Agreement must be DENIED . A separate order consistent with this memorandum opinion will follow.

I. BACKGROUND

A. Disparate Treatment And Disparate Impact Claims Under Title VII

Claims of employment discrimination under Title VII may proceed under both "disparate treatment" and "disparate impact" theories. Ricci v. DeStefano , 557 U.S. 557, 577, 129 S.Ct. 2658, 174 L.Ed.2d 490 (2009) ; see also Griggs v. Duke Power Co. , 401 U.S. 424, 431, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971).² "Disparate treatment occurs when ‘[t]he employer simply treats some people less favorably than others because of their race, color, religion, sex, or national origin.’ " Anderson v. Zubieta , 180 F.3d 329, 338 (D.C. Cir. 1999) (alteration in original) (quoting Int'lBhd. of Teamsters v. United States , 431 U.S. 324, 335 n.15, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977) ); see also 42 U.S.C. § 2000e–2(a)(1) (making it unlawful for an employer "to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin"). To make out a prima facie case of disparate treatment discrimination, a plaintiff must prove that "(i) [he or she] suffered an adverse employment action (ii) because of [his or her] race, color, religion, sex, or national origin." Brady v. Office of Sergeant at Arms , 520 F.3d 490, 493 (D.C. Cir. 2008) ; see also id. at 493 & n.1 (citing McDonnell Douglas Corp. v. Green , 411 U.S. 792, 802, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973) ). "Proof of discriminatory motive is critical for [disparate treatment] claims." Anderson , 180 F.3d at 338 (internal quotation marks and citation omitted).

By contrast, a disparate impact claim arises when "policies or practices that are neutral on their face and in intent ... nonetheless discriminate in effect against a particular group." Id. at 339 (emphasis added; internal quotation marks and citation omitted); see also 42...