Eighth Circuit Rejects Workers’ Disparate Impact Claim

The federal appellate court with jurisdiction in Missouri recently ruled against a group of African-American workers who sued their union claiming that they were discriminated against in terms of job placement. According to the Eighth Circuit Court of Appeals, the workers’ evidence, specifically a report prepared by their expert witness, was insufficient to establish a case of disparate impact. Franklin v. Local 2 of the Sheet Metal Workers International Association, No. 08-2707, Eighth Circuit Court of Appeals (May 13, 2009).

Factual Background

Local 2 of the Sheet Metal Workers International Association provides journeymen sheet metal workers to contractors in 100 counties in Kansas and Missouri. Under Local 2’s referral procedures, contractors can hire members through one of three procedures: (1) solicitation, (2) request, or (3) referral.

Robert Franklin, Glenn Steele, Edward Lewis, Darryl Bailey and Leon Booker, all of whom are current or former members of Local 2, filed discrimination charges with the Equal Employment Opportunity Commission against Local 2. The workers claimed that Local 2’s referral procedures discriminated against African-Americans.

The workers later filed a lawsuit against Local 2 in the U.S. District Court for the Western District of Missouri. They claimed that Local 2’s referral procedures discriminated on the basis of race under two theories: (1) Local 2 intentionally discriminated against African-American members on the basis of race, and, alternatively, (2) Local 2’s referral procedures had a disparate impact on African-American members (among other claims). The district court found in favor of Local 2 on the workers’ disparate impact claim and the workers appealed.

Legal Analysis
 
The Eighth Circuit first clarified that a disparate impact claim challenges a practice that is neutral on its face but that falls more harshly on one group and is justified by business necessity. The workers argued that the district court improperly rejected the statistical analysis presented by Dr. Arthur Gutman at trial. According to Dr. Gutman, between 2000 and 2006, white members of Local 2 worked significantly more hours than African-American workers. Dr. Gutman concluded that “race-neutral factors [could not], statistically, account for the difference in hours worked.”

The Eighth Circuit, found that the district court did not err in finding Dr. Gutman’s report unreliable. For example, Dr. Gutman focused solely on the average annual number of hours worked by white and African-American workers. However, despite Dr. Gutman’s assumption that Local 2 was responsible for the number of hours accumulated by its members, the court found that Local 2 did not control the number of hours its members worked.

According to the Eighth Circuit, the only procedure in which the contractor does not have sole authority to make the hiring decision is the “referral.” Under this procedure, Local 2 maintains an out-of-work list from which it refers members when the contractors seeks a referral of a worker with specific skills. According to Local 2’s “first in, first out” policy, workers who have been on the list the longest are referred first. The court noted that Local 2’s only discretion in hiring decisions is limited by its strict “first in, first out” policy. The Eighth Circuit thus ruled that Dr. Gutman’s admission that he had assumed that Local 2 was responsible for the number of hours its members worked “fatally undermines the reliability” of his analysis and conclusions.

Because Dr. Gutman’s analysis only measured the disparity in the number of hours worked by African-American and white workers, his analysis was insufficient to satisfy the workers’ burden to show that Local 2’s referral procedures created a disparate impact in job placement. Thus, the Eighth Circuit affirmed the district court’s judgment on the workers’ disparate impact claim.

Practical Impact

According to Patrick Hulla, a shareholder in Ogletree Deakins’ Kansas City office: “In Franklin, the Eighth Circuit has signaled that plaintiffs prosecuting systemic discrimination claims are not relieved of their burden to demonstrate a correlation between data and adverse actions. Simply arriving at mathematical conclusions based on some of the relevant facts will not survive rigorous scrutiny grounded in all of the facts. Demonstrating the inadequacy of the plaintiffs’ analysis does not require complicated expert testimony. Instead, plaintiffs’ theories can be defeated by merely poking holes in their calculations.”

Note: This article was published in the July 2009 issue of the Missouri eAuthority.