Taylor v. Teletype Corp.

• Decision Date: 29 August 1979
• Docket Number: No. LR-C-77-65.,LR-C-77-65.
• Citation: 475 F. Supp. 958
• Parties: Tommie W. TAYLOR and Larry C. Peyton, Plaintiffs, v. TELETYPE CORPORATION, Defendant, James H. Bibbs, Ike Bolden, Virginia Burke, Bowman Burns, Jr., Fred Donley, Ray Jackson, Ray Kennard, Will Simmons, William Walker, James Walters, Jr., Cato Conley, Joseph Harris, Earl Jones, and Godfrey Hill, Intervenors.
• Court: U.S. District Court — Eastern District of Arkansas

475 F. Supp. 958

Tommie W. TAYLOR and Larry C. Peyton, Plaintiffs, v. TELETYPE CORPORATION, Defendant, James H. Bibbs, Ike Bolden, Virginia Burke, Bowman Burns, Jr., Fred Donley, Ray Jackson, Ray Kennard, Will Simmons, William Walker, James Walters, Jr., Cato Conley, Joseph Harris, Earl Jones, and Godfrey Hill, Intervenors.

No. LR-C-77-65.

United States District Court, E. D. Arkansas, W. D.

August 29, 1979.

COPYRIGHT MATERIAL OMITTED

John T. Lavey, Little Rock, Ark., for plaintiffs.

Perlesta A. Hollingsworth, Little Rock, Ark., for intervenors.

James W. Moore and G. Ross Smith, Little Rock, Ark., for defendant.

OPINION

ARNOLD, District Judge.

This is a Title VII case. The question is whether certain employees of the defendant Teletype Corporation, which is an employer engaged in interstate commerce, were demoted because they were black. The case was tried to the Court without a jury on July 24, 25, 26, 27, 30, and 31, and August 1, 2, 3, 6, 7, 8, 9, and 10.

I. PRIMA FACIE CASE

Teletype Corporation makes teletype and other related machines for the long-distance transmission of data. Teletype operates two manufacturing plants, one in Little Rock, Arkansas, and one in Skokie, Illinois. The history of the Little Rock plant is set out in some detail in Hoard v. Teletype Corp., 450 F.Supp. 1059 (E.D.Ark.1978), a case tried by the Hon. Gerald W. Heaney, Circuit Judge, sitting by designation. At the beginning of the trial in the instant case, plaintiffs and intervenors moved for a ruling that the findings and conclusions of the Court in Hoard be treated as res judicata. Defendant agreed to the motion, but only on condition that it include also those findings that were favorable to it. The motion was granted on this condition, so certain findings of the Court in Hoard may be set out here as part of the background of this opinion. In addition, there is ample support in the record of this trial for most of the findings about to be mentioned.

Teletype opened its plant in Little Rock in 1957. At that time the only blacks hired were janitors. The company deliberately followed a policy of racial discrimination. The company followed this policy because of its desire to avoid trouble, or what it thought would be trouble, by taking a public attitude too different from prevailing social customs at the time. It should be noted, in all fairness, that the company's conduct was not illegal in 1957. In 1960 Teletype Little Rock employed its first black in a position other than a janitor. By July 30, 1964, shortly after the passage of the Civil Rights Act which included Title VII, seven per cent of its employees were black. Race was a factor in this underrepresentation. In 1970, six years after the passage of the Act and two years after the issuance of an executive order applying to government contractors, of which Teletype was one, an affirmative action plan was developed for the first time. An equal employment opportunity coordinator was also appointed in that year, but the equal employment opportunity program at Teletype has not been signally successful. As the Court found in Hoard, "the EEO coordinators appointed by Teletype for the Little Rock facility were not properly trained or given adequate direction and support, and were unable to provide an effective affirmative action program." 450 F.Supp. at 1062. Until at least 1971, discrimination against blacks continued to hiring for all positions other than service, clerical, and the operative positions below grade 95. (Hourly-wage positions, most or all of which are held by employees covered by a collective-bargaining agreement, have been customarily referred to by two-digit numbers, beginning at 91, the lowest level, and continuing up to grade 98. Salaried employees, on the other hand, most of whom are not part of the bargaining unit, are referred to by three-digit numbers, beginning with grade 903 and continuing up to grade 910. There are numerous other refinements in the grading system at Teletype, some of which will be referred to later.)

After 1974, when the Hoard action was initiated, there was no discrimination in initial hiring, but between 1971 and 1974 the company continued to discriminate in hiring for higher-grade professional and supervisory positions. Blacks were also discriminated against with respect to promotion to supervisory positions and bargaining-unit positions above grade 95. As the court held in Hoard, "the discrimination cannot be explained or justified by the seniority provisions of the collective-bargaining agreement or the seniority practices of the company," 450 F.Supp. at 1064, because "under the terms of the collective bargaining agreement, seniority is a factor but is not controlling in movement of employees within the bargaining unit. . . . management retains final approval of movement within the production unit." id. at 1063. See also id. at 1068. The Hoard Court nevertheless absolved defendant of discrimination with respect to discharges and with respect to promotions into certain grades. Claims of discriminatory failure to promote were made in Hoard with respect to grades 96, 97, 98, TG (Trades Group) 1 and 2, 505 through 510 (the equivalent of 905 through 910), jobsetters and machinesetters, engineering associates (EA), UG (Ungraded—sometimes also referred to as ANSE, standing for Administrative Non-supervisory Employee) 1, 2, and 3, Section Chiefs, and Department Chiefs. Plaintiff's claim of discriminatory failure to promote was upheld only with respect to grades 97 and 98, Section Chief, and Department Chief. With regard to all of the other categories mentioned, the Hoard court held that the defendant had satisfied its burden of rebutting a prima facie case.

The instant case involves 16 individual claims, brought by the two original named plaintiffs and 14 intervenors, 13 of whom were permitted to intervene before trial, and one of whom was permitted to intervene after he testified at trial. In addition, on June 5, 1979, a class was certified to be represented by plaintiffs and intervenors, as follows:

Those black employees of the defendant who were demoted on or after February 28, 1974, including both bargaining-unit and non-bargaining-unit employees, and including those persons still employed by defendant and those employees no longer employed by defendant.

This opinion will address each of these claims in turn, but before doing so it is appropriate to add some details to the general history of black employment at Teletype —Little Rock already mentioned, and to address the question whether plaintiffs have made a prima facie case.

Both sides presented statistical evidence which the Court has found interesting and helpful. Dr. John Drane, defendant's statistician, presented a study of demotions between February 28, 1974, the beginning date for the certified class under this Court's order, and June 26, 1979. There were 1132 demotions during this time period, 301 of which involved blacks. There were 2,759 total employees during this time period, of whom 684 were black. The black representation in the work force was 24.79%, while black representation among employees demoted was 26.59%. The question, of course, is whether this deviation is statistically significant. In approaching this issue, statisticians use a concept known as the "standard deviation." This concept involves a comparison of the number of blacks actually demoted with the number that one would expect to be demoted if color were not operating as a factor. Here, since black representation was 24.79%, one would expect black demotions also to be 24.79%, unless color had some operative effect. Black demotions were larger, to be sure, but were they sufficiently larger to raise an inference?

Dr. Drane computed the "standard deviation" to be 1.403, and there is no dispute over the mathematical accuracy of his computation. In this situation, there is reason to believe that the differences are not statistically significant. The Supreme Court has had occasion to describe the "standard deviation" concept in a related context. In Castaneda v. Partida, 430 U.S. 482, 97 S.Ct. 1272, 51 L.Ed.2d 498 (1977), the Court was dealing with a sample of 870 persons. "As a general rule for such large samples," the Court said, "if the difference between the expected value and the observed number is greater than two or three standard deviations, then the hypothesis that the jury drawing was random would be suspect to a social scientist." Id. at 496 n. 17, 97 S.Ct. at 1281. The same observation was repeated with approval in Hazelwood School Dist. v. United States, 433 U.S. 299, 309 n.14, 97 S.Ct. 2736, 53 L.Ed.2d 768 (1977). Here, a standard deviation of 1.403 is well below the level mentioned by the Supreme Court, so Dr. Drane's evidence indicates, when considered alone, that actual black demotions did not deviate from expected black demotions sufficiently to ground a reasoned inference of discrimination.

On the other hand, Dr. Frank A. James, plaintiffs' statistician, presented studies that took a different point of view. He was not in significant disagreement with Dr. Drane with respect to the total time period covered by the class certified in this case, but Dr. James presented a more narrowly focused analysis of layoffs during the years 1974 through 1976. This case, of course, is about downgrades or demotions, not layoffs, but in a sense a layoff is the ultimate downgrade, and many of the layoffs that occurred at Teletype were the result of demotions of higher graded employees, employees who in turn "bumped" others, thus ultimately resulting in layoffs. Layoff statistics, therefore, may reasonably be considered a proxy for demotions for purposes of analysis. During the years 1974 through 1976, or, what is the same thing, during the years 1975 and 1976 (there were no layoffs in 1974), a total of 457 employees were laid off at Teletype—Little Rock. The greater number of the layoffs...