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Davis v. District of Columbia

United States Court of Appeals, District of Columbia Circuit

June 7, 2019

Ronda L. Davis, et al., Appellants
v.
District of Columbia, Appellee

          Argued April 20, 2018

          Appeal from the United States District Court for the District of Columbia (No. 1:10-cv-01564)

          Rachel Smith, Student Counsel, argued the cause for appellants. On the briefs were Andrew Mendrala and Aderson B. Francois. Charly Gilfoil, Student Counsel, entered an appearance.

          Holly M. Johnson, Assistant Attorney General, Office of the Attorney General for the District of Columbia, argued the cause for appellee District of Columbia. With her on the briefs were Karl A. Racine, Attorney General, Loren L. AliKhan, Solicitor General, and Stacy L. Anderson, Acting Deputy Solicitor General at the time the brief was filed. Todd S. Kim, Solicitor General at the time the brief was filed, entered an appearance.

          Before: Millett, Pillard and Katsas, Circuit Judges.

          OPINION

          PILLARD, CIRCUIT JUDGE.

         Plaintiffs are 47 former longtime employees, mostly African American, of the District of Columbia (District) Child and Family Services Agency (Agency), many of whom successfully served the Agency for decades. They numbered among the employees terminated as part of a large-scale reduction in force at the Agency following budget cuts. Plaintiffs alleged that their firings were unlawfully discriminatory on the basis of age and race. They have abandoned their age-based claims, but appeal the summary judgment in the Agency's favor on the race discrimination claims.

         We generally affirm the decision of the district court, but reverse and remand on one narrow question: whether the plaintiffs identified a "particular employment practice" susceptible to challenge for its adverse racial impact under Title VII. 42 U.S.C. § 2000e-2(k)(1)(A)(i). On this issue, the District prevailed below on the theory that a reduction in force, or "RIF," is not a particular employment practice. What is at issue here is not a RIF in the abstract, however, but the means by which the Agency implemented it. Plaintiffs challenge the practices of the Agency in selecting for elimination jobs and job categories disproportionately held by African American employees. Nothing in Title VII suggests that the practices an employer uses to effectuate the adverse employment action of layoffs, whether or not dubbed a RIF, are exempt from disparate-impact scrutiny. We accordingly reverse the "particular practice" holding and the accompanying denial of class certification, and remand for further proceedings.

         Having decided the case on that threshold question, the district court had yet to address whether plaintiffs' statistical evidence sufficed to make out a prima facie case of disparate impact, or whether the Agency had business justifications for the layoff criteria it used. We accordingly express no opinion on those issues. We affirm the district court's decisions with respect to plaintiffs' challenge to the college degree requirement the Agency added to one job category, and the applicability of estoppel to certain individual plaintiffs' claims.

         I. Background

         A. Factual Record

         The District of Columbia Child and Family Services Agency provides critical support services to abused and neglected children and struggling families. The Agency's functions include investigating reports of child abuse and neglect, temporarily removing children from unsafe settings, and securing medical care for affected children and families. As of Fiscal Year (FY) 2009, the Agency employed nearly one thousand people in its six major components: Agency Programs, Community Services, Policy and Planning, Clinical Practice, Agency Management, and Financial Operations.

         In the face of significant municipal revenue shortfalls, the District of Columbia City Council decreased the Agency's operating budget for fiscal years 2010 and 2011. Following the budget cuts, the Agency reduced the number of its full-time employees. Relevant here are the job cuts effected for the Agency's FY 2011 budget. The District represented, and plaintiffs did not dispute, that the District could make the needed spending cuts by reducing full-time positions by 52- from 892 to 840-although the Agency fired more than twice that many people and then hired several dozen new employees.

         All told, the Agency let go 115 employees. Plaintiffs here challenge as racially discriminatory the procedures used to implement that reduction in force. At an agency that was 73.4 percent African American, 93 percent (107 out of 115) of the terminated employees were African American. The Agency has never claimed to have laid off the most expensive employees, nor did it set out to make proportional cuts to each department. And, according to the Agency's Director, the cuts were not performance based: the Director assured the fired employees that the layoffs "in no way reflect[] adversely on your performance of your official duties." Joint App'x (J.A.) 660.

         Plaintiffs claim that the Agency instead chose to cut and cull the very job categories most densely occupied by African American employees. The Agency focused its cuts on the Agency Programs Office, the Office of Clinical Practice, and the Office of Community Services, with the Agency Programs Office bearing the brunt. There, the Agency eliminated wholesale two social-worker support positions: Social Worker Associate (SWA), which required a bachelor's degree, and Social Service Assistant (SSA), which did not. The Agency's decision to fire everyone in the SSA and SWA job categories resulted in the termination of approximately 70 employees, 67 of whom were African American. And the culling of positions elsewhere at the Agency resulted in layoffs of 45 employees, 40 of whom were African American.

         The District claims that the Agency "did not utilize a single uniform criteria, test or requirement" in determining which positions would be eliminated. Def.'s Statement of Undisputed Material Facts (SOF) ¶ 15, J.A. 235. Rather, the District represents that the choices of which jobs to eliminate came about through "realigning functions and implementing new service models," as well as "multiple individual decisions made by the Director working in close consultation with the Chief of Staff, the Deputy Directors in charge of CFSA's various divisions, and other senior level managers in the Agency's executive team." Id. ¶¶ 15, 17, J.A. 235.

         Immediately following the layoffs, the Agency created a new posting to replace the SSW and SWA roles, Family Support Worker (FSW), which did similar work but required a bachelor's degree. The Agency sought to hire approximately three dozen people to fill the new FSW spots, and it considered applicants whom it had just discharged as well as outside candidates. According to the District, 44 of the 115 people who lost their jobs applied for a position as an FSW, but only 30 of those held the required bachelor's degree. The Agency ultimately hired back into the FSW role 18 of the employees whom it had fired.

         B. Procedural History

         Forty-seven former Agency employees who lost their jobs filed this case as a class action against the District of Columbia; they alleged race and age discrimination under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and the District of Columbia Human Rights Act, D.C. Code § 2-1402.11. Plaintiffs brought both disparate treatment and disparate impact challenges to (1) the Agency's choice to respond to budgetary constraints by eliminating two job categories in which African American employees were most concentrated, and by using a putatively individualized and at least partially subjective process to cull the remaining job categories; and (2) the Agency's imposition of a bachelor's degree requirement on the new FSW position, the duties of which were a close match with the work the SSAs had long performed successfully without a college degree. The district court granted defendant's motion to dismiss the disparate treatment claim against the firings, allowing the named plaintiffs to proceed with the companion claim of disparate racial impact, and both the impact and treatment claims against the degree requirement. See Davis v. Dist. of Columbia, 949 F.Supp.2d 1, 14 (D.D.C. 2013).

         The court bifurcated discovery and pretrial motions, limiting the first stage to the "existence and statistical validity of group-based disparities caused by" the practices challenged on disparate-impact grounds, as well as to several procedural matters including administrative exhaustion and class certification. See Scheduling Order, Davis v. District of Columbia, No. 10-1564 (D.D.C. Apr. 4, 2013) (Scheduling Order). The court held that plaintiffs met the administrative exhaustion requirement because two plaintiffs' timely-filed Equal Employment Opportunity Commission (EEOC) charges put the Agency on notice of the claims and vicariously satisfied the exhaustion requirement for the remaining plaintiffs. Davis v. District of Columbia, 246 F.Supp.3d 367, 388-89 (D.D.C. 2017). Plaintiffs asserted an absence of evidence of business necessity to support the District's claims of "agency-wide realignment" and the decision to hire outsiders to the FSW positions, and requested an admission to that effect. J.A. 679. The Agency postponed responding on the ground that plaintiffs sought "information that is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence relevant to an issue within the scope of the first phase of discovery" under the judge's scheduling order. Id. Discovery into and motions testing the Agency's justifications for its layoff choices were for a later stage.

         Within the constraints of the bifurcated discovery order, each side retained an expert as to the alleged disparate impact of the challenged practices. The experts framed the issues differently and reached contrary conclusions. Plaintiffs' expert, Dr. Paige Munro, found that the Agency's implementation of the layoffs resulted in a termination rate of 15.5% for African Americans, in contrast to a 5.6% rate for non-African Americans. The racial disparities were even more dramatic, according to Dr. Munro, once she analyzed a new dataset provided by the District, which included more focused and detailed demographic information about the Agency's workforce: The effective termination rate jumped from 277% greater for African Americans than non-African Americans to 444% greater for African Americans as compared to Caucasians.

         The District's expert, Dr. Stephen Bronars, found no disproportionate adverse racial impact. He faulted Dr. Munro for calculating the racial disparities in termination rates across the entire agency; according to Dr. Bronars, Dr. Munro's data unreasonably assumed that all positions at the Agency were at risk of cuts. The Agency described itself as conducting an "agency-wide" reduction in force, Defendant's Answer to Third Amended Complaint ¶ 3, J.A. 159, but as Dr. Bronars saw it not all employees were at equal risk of losing their jobs because the District had informed him that it took into account "financial concerns, the reorganization concerns, the realignment of goals, different kind of service models. . . ." Bronars Dep. 183-84, J.A. 820. Instead of assessing the impact of the entire package of layoffs, Dr. Bronars characterized the District's action as "7 different sets of layoff decisions," one for each job category that experienced cuts. J.A. 363. He then separately examined the racial impact of the terminations within each affected position.

         Dr. Bronars concluded that the Agency's wholesale elimination of the SSA and SWA positions did "not contribute to the statistical significance calculation for adverse impact" because the District terminated every employee in those job categories. J.A. 412. As a consequence, he reasoned, those cuts involved no "excess" termination of African American employees. J.A. 367, 412. Dr. Bronars' statistical significance calculation also excluded any layoffs from job categories occupied exclusively by African American employees, again reasoning that there could be no "excess" termination of African Americans from those categories. J.A. 367. Setting aside all of those layoffs of African American employees, Dr. Bronars applied his job-category-specific methodology to find no statistically significant racial impact resulting from cuts within the remaining categories.

         Following the close of phase I discovery, plaintiffs moved for class certification and the District moved for summary judgment. The district court granted summary judgment for the Agency on all issues.

         Regarding plaintiffs' disparate impact challenge, the Agency contended that plaintiffs' expert evidence of statistical disparity was inadequate. See Def.'s Memo in Supp. of Motion for Summ. J. 2, 20-23, J.A. 207, 225-28. Alternatively, the Agency argued that the Agency's termination decisions were not subject to Title VII scrutiny for disparate racial impact: The Agency contended that its decisions were not actionable because they involved no objective "test or requirement," but only a series of subjective, contextual judgments made in "multiple individual decisions by the agency leadership" that it claimed cannot be challenged on a disparate-impact theory. Id. at 19-20, J.A. 224-25 (contending that "subjective decisions" are not practices subject to challenge for their disparate impact (quoting Leichihman v. Pickwick Int'l, 814 F.2d 1263, 1269 n.5 (8th Cir. 1987), abrogated by Watson v. Fort Worth Bank & Tr., 487 U.S. 977, 989-91 (1988) (plurality opinion), and citing Combs v. Grand Victoria Casino & Resort, No. 1:08-CV- 00414-RLY-JMS, 2008 WL 4452460, at *3 (S.D. Ind. Sept. 30, 2008))).

         In addition to dwelling on the (erroneous) proposition that only objective employment criteria are subject to disparate impact scrutiny, see Watson, 487 U.S. at 989-91, both parties got inexplicably sidetracked into arguing over whether a "facially neutral" employment policy had been identified, see J.A. 224-25 (Agency: "The RIF Was Not A Facially Neutral Employment Policy"); id. at 592-93 (Plaintiffs: "The RIF was a facially neutral policy"); see also Davis, 246 F.Supp.3d at 395. The point of doctrinal references to "facially neutral employment practices" is not to make facial neutrality an element of proof in disparate-impact cases, but merely to make clear that-even though they may lack the overtly or intentionally discriminatory character of practices constituting disparate treatment-facially neutral practices, too, may be challenged under Title VII. Watson, 487 U.S. at 988; Int'l Broth. of Teamsters v. United States, 431 U.S. 324, 349 (1977) ("[T]he Court has repeatedly held that a prima facie Title VII violation may be established by policies or practices that are neutral on their face and in intent but that nonetheless discriminate in effect against a particular group."). Indeed, nothing prevents a plaintiff from challenging a practice as a Title VII violation because it is facially discriminatory and, alternatively, has a disparate impact.

         Without reaching the statistical evidence in the competing expert reports, the district court granted summary judgment to the Agency on the threshold ground that "plaintiffs have failed to identify a specific employment practice" actionable under a disparate-impact theory. Davis, 246 F.Supp.3d at 394. As to plaintiffs' challenges to the FSW's bachelor's degree requirement, the district court granted judgment to the Agency because plaintiffs had failed to present evidence regarding the qualified labor pool. Id. at 399-401. Because plaintiffs chose to rest their disparate treatment claim exclusively on an inference of discriminatory purpose arising from statistical disparity, and no such disparity could be shown in the absence of evidence regarding the qualified labor pool, the court granted summary judgment on that claim as well. Id.

         The court also ruled in favor of the District on issues pertaining only to certain plaintiffs. It held that two plaintiffs lacked standing to challenge the FSW's bachelor's degree requirement because they hold such degrees, id. at 387-88, and that two plaintiffs-one of those with a bachelor's degree, plus a third-were judicially estopped from participating in this lawsuit by their failures to disclose their discrimination claims among their assets in their personal bankruptcy cases, id. at 384-87. In the absence of any surviving claim, the district court denied as moot plaintiffs' motion for class certification. Id. at 401.

         Plaintiffs appealed. They limit their appeal to the district court's grant of summary judgment on the race discrimination class claims, plus the individual standing and estoppel issues.

         II. ...


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