Kentucky Employment Law Blog

Race Discrimination Class Action by Merrill Lynch Brokers Approved by Seventh Circuit

Reversing a district court's denial of class certification to some 700 black brokers in a race discrimination case against Merrill Lynch the Seventh Circuit has shown the limited scope and application of the Supreme Court's Wal-Mart v. Dukes ruling by its recent decision in McReynolds v. Merrill Lynch, No 11-3639 (February 24, 2012).

The main plaintiffs' claim before the court was that two Merrill Lynch policies, the "teaming" and "account distribution" policies, had racially disparate impacts. The "teaming" policy allowed but did not require brokers in the same office to form teams that would share clients and accounts.  The "account distribution" policy regarded the passing out of the accounts of a broker that left Merrill, a procedure that was driven principally by past performance and success.

The plaintiffs claimed team membership was advantageous and that the procedure for team selection and formation had a racially discriminatory impact. The Seventh Circuit, in an opinion authored by Judge Richard Posner, explained this dynamic as follows:

The teams, they say, are little fraternities (our term but their meaning), and as in fraternities the brokers choose as team members people who are like themselves. If they are white, they, or some of them anyway, are more comfortable teaming with other white brokers. Obviously they have their eyes on the bottom line; they will join a team only if they think it will result in their getting paid more, and they would doubtless ask a superstar broker to join their team regardless of his or her race. But there is bound to be uncertainty about who will be effective in brining and keeping shared clients; and when there is uncertainty people tend to base decisions on emotions and preconceptions, for want of objective criteria. 

The "account distribution" policy could likewise have racially disparate impacts in fact perpetuating the discriminatory effects of the "teaming" policy, as the court described:

If as a result of racial preference at the team level black brokers employed by Merrill Lynch find it hard to join teams, or at least good teams, and as a result don’t generate as much revenue or attract   and retain as many clients as white brokers do, then they will not do well in the competition for account distributions either; and a kind of  vicious cycle will  set in.  A portion of  a team’s   pre-existing revenues   are   transferred within a team to a new recruit, who thus starts out with that much “new” revenue credited to him or her—an advantage, over anyone who is not on a team and thus must generate all of his own “new” revenue, that translates into a larger share of account distributions, which in turn helps the broker do well in the next round of such distributions. This spiral effect attributable to companywide policy and arguably disadvantageous to black brokers presents another question common to the class, along with the question whether, if the team-inflected account distribution system does have this disparate impact, it nevertheless is justified by business necessity.

Robert L. Abell
www.RobertAbellLaw.com 

 

 

5th Time the Charm in Ash v. Tyson Foods? The Eleventh Circuit Reverses Itself and Allows To Stand (Partially) A 2d Jury's Race Discrimination Verdict for Plaintiff On The Court's 5th Pass At the Case

Some cases are hard. Some cases illustrate the at times seemingly insurmountable barriers that plaintiffs must overcome time and again to hold one of our Nation's large corporations accountable for lawless and wrongful conduct. And some cases also illustrate the erosion of the primacy of the civil jury to find facts and decide cases. Ash v. Tyson Foods is all three. On December 16, 2011, on the 5th pass by the Eleventh Circuit at the case, Judges Carnes and Pryor reversed their earlier per curiam opinion and allowed to stand the 2d jury verdict in the plaintiff's favor, although the court scornfully vacated the jury's  $1 million punitive damages award, which was the 2d jury to assess $1 million or more in punitive damages in the case.   

15 years of litigation is too much to discuss in a blog post but here is a chronology of the case:

• December 16, 1996 - the case is filed in federal district court in Birmingham, Alabama. There are six plaintiffs, Anthony Ash, Eddie Bullock, Robin Davenport, John Hithon, Travis Tanner and Vivian Thornton
   
• November 18, 1999 - the trial court, Magistrate Judge Robert Armstrong, partially grants but mostly denies Tyson's motions for summary judgment. Left standing are racial discrimination in promotion claims by Ash and Hithon, retaliation claims by Bullock and Tanner, and a fraudulent inducement claim by Thornton. Davenport's claims are dismissed. The claims of Ash and Hithon are severed for trial from the others.
  
  
• February 6, 2002 -  after plaintiffs stay the case and obtain appealability of the summary judgment order, the Eleventh Circuit affirms without issuing a written opinion of any kind, simply a one word order "affirmed." Judges Anderson, Dubina and Mills preside over Ash I.
  
  
• September 19, 2002 - a jury returns identical verdicts in favor of both Ash and Hithon on their race discrimination claims awarding each $250,000 in compensatory damages and $1.5 million in punitive damages.
  
  
• March 26, 2004 - a year and a half after the trial, the Magistrate Judge Robert Armstrong grants Tyson's Rule 50 motions and vacates the jury's verdicts in the plaintiff's favor. The same day stipulations of dismissal are filed as to the claims of Bullock, Tanner and Thornton.
  
  
• May 18, 2004 - although Magistrate Judge Armstrong has already vacated the jury's verdict and granted Tyson's Rule 50 motion, Judge Armstrong, nonetheless, also grants Tyson's alternative motion for a new trial.  Judge Armstrong explains that the compensatory damages and punitive damages awards "are against the great weight of the evidence and are outrageously excessive and shocking to the judicial conscience." A second jury will later award Hithon $300,000 in compensatory damages and $1 million in punitive damages.
  
  
•  April 19, 2005 - the Eleventh Circuit (Judges Dubina, Carnes and Marcus) affirms the district court's rulings regarding Ash's discrimination claims but reverses regarding Hithon's, although it upholds the new trial order explaining that "there was insufficient evidence to support the jury's punitive damages award and the compensatory damages award was excessive." This is Ash II. 
  
  
• February 21, 2006 - the Supreme Court reverses the Eleventh Circuit in a per curiam opinion. 546 U.S. 454 (2006). The Court chastised the Eleventh Circuit for its efforts to disregard or explain away the racially discriminatory bias that can reasonably be inferred from a white supervisor referring to a grown African-American man as "boy":
  
  First, there was evidence that Tyson's plant manager, who made the disputed hiring decisions, had referred on some occasions to each of the petitioners as "boy." Petitioners argued this was evidence of discriminatory animus. The Court of Appeals disagreed, holding that "while the use of 'boy' when modified by a racial classification like 'black' or 'white' is evidence of discriminatory intent, the use of 'boy' alone is not evidence of discrimination." Id. at 533. (citation omitted). Although it is true the disputed word will not always be evidence of racial animus, it does not follow that the term, standing alone, is always benign. The speaker's meaning may depend on various factors including context, inflection, tone of voice, local custom, and historical usage. Insofar as the Court of Appeals held that modifiers or qualifications are necessary in all instances to render the disputed term probative of bias, the court's decision is erroneous. 
  
  
•  August 2, 2006 - undeterred by the Supreme Court's reversal the Eleventh Circuit (Judges Dubina, Carnes and Marcus) repeats its earlier ruling. Ash's claims are finished and Hithon's remanded for a second jury trial. This is Ash III.
  
  
• August 14, 2007 -  a second jury returns a verdict for Hithon and against Tyson on his race discrimination claim. The jury awards Hithon $35,000 in back pay, $300,000 in compensatory damages and $1 million in punitive damages.
  
  
• August 17, 2010 - more than 3 years after the second jury's verdict in Hithon's favor against Tyson, the Eleventh Circuit in a 2-1 decision by Judges Carnes and Pryor vacates the jury's verdict and orders, notwithstanding the verdicts of two separate juries at two separate trials nearly five years apart, that judgment be entered in Tyson's favor. Judge David Dowd (a visiting district judge from the Northern District of Ohio) dissents, explaining simply "Two juries have found the issues in favor of the plaintiff Hithon and granted both compensatory and punitive damages." Judge Dowd does suggest that the punitive damages should be remitted.  This is Ash IV.
   
•  December 16, 2011 - exactly 15 years after the case was filed, Judges Carnes and Pryor reverse themselves on a petition for rehearing. On its 5th pass at the case, the Eleventh Circuit partially lets stand a jury's verdict in Hithon's favor against Tyson Foods and upholds the jury's award of compensatory damages and back pay, although it strikes down the $1 million punitive damages award explaining, in essence, that Tyson Foods is too large and unwieldy to be held accountable for the lawlessness of its manager's conduct. This is Ash V. 

The lead plaintiffs' counsel in the case is Alicia K. Haynes of the Birmingham, Alabama firm of Haynes & Haynes. Whatever your view of this case may be lawyer Haynes is to be commended for her extraordinary representation of her clients in this case.

Robert L. Abell
www.RobertAbellLaw.com 

 

 

Racial and Sexual Harassment Results in $1 Million Plus Judgment Against Whirlpool

Racial and sexual harassment creating a hostile work environment has resulted in a $1 million plus judgment against Whirlpool Corporation.  Federal district judge John T. Nixon found that a hostile work environment was created based on the following:

Baker frequently directed songs and explicit commentary at Freeman. While isolated
episodes of teasing or sexual comments do not rise to the level of a hostile work environment,
the Court finds that Baker harassed Freeman on an almost daily basis, both during breaks and
while he worked in close proximity to her on the Line. As the months wore on, Baker’s
harassment became more and more threatening, as he began mumbling and pointing at Freeman and eventually assaulted her.

Whirlpool's argument that the conduct was not sex-based and therefore not illegal sex discrimination:

Non-sexually explicit harassing behavior that is “directed at women and
motivated by discriminatory animus against women satisfies the ‘based on sex’ requirement.”Id. Multiple witnesses describe Baker as mumbling and staring at Freeman and her co-worker Chinica Lillard, also African-American, preceding the assault. After punching Freeman, Baker verbally threatened Lillard as well and threw a pipe at her. The Court finds that the assault was the final harassing act in a campaign of harassment that Baker targeted at Freeman because of her sex. Any reasonable person would find Freeman’s working environment to be hostile and abusive.

The Court entered a judgment in excess of $1 million in Freeman's favor.  You can read a copy of the Court's opinion, Freeman v. Whirlpool Corporation.

Robert L. Abell
www.RobertAbellLaw.com

When Does A Racial Hostile Work Environment Become Unlawful?

In a racial harassment case an unlawful the hostile work environment exists where the harassment is severe or pervasive.  Recently, the Fourth Circuit Court of Appeals in EEOC v. Central Wholesalers, No. 08-1181 (July 23, 2009), described the type of facts that could establish an unlawful hostile work environment:

"We also conclude that a reasonable jury could find that the race-based harassment was objectively severe or pervasive.  Three of Medley's co-workers in Inside Sales used the word n****r, and at least one of them used it 'pretty much everyday.'  Moreover, during the November 10 incident, DaBay called Medley a black stupid n****r, a black n****r, and a black stupid b***h, among other derogatory terms.  In addition, two of her co-worker's kept blue-colored mop-head dolls in their offices which they had hanging by nooses tied around the dolls' necks.  As in past cases, 'we cannot ignore the habitual use of epithets here or view the conduct without an eye for its cumulative effect.'" 

Robert L. Abell
www.RobertAbellLaw.com

How Can You Prove Harassment Is Based On Race?

For harassment in the workplace to be unlawful it must be shown to be based on some sort of discriminatory criteria such as race.  Recently, the Fourth Circuit Court of Appeals decided a case, EEOC v. Central Wholesalers, No. 1181 (July 21, 2009), where the court found the following to be sufficient evidence that race motivated the harassment:

"The evidence also shows that a number of Medley's co-workers (Medley was the employee harassed) used the work n****r in her presence on a regular basis, and at least one co-worker used the word 'pretty much everyday.'  Moreover, [a co-worker] called Medley a black stupid n****r and other racially derogatory terms during the November 10 incident.  In addition, both Tony [another co-worker] and DaBay kept blue-colored mop-head dolls in their offices and had the dolls hanging from noose which were tied around the dolls' necks.  Given this evidence, a reasonable jury could conclude that the harassment was also based on Medley's race."

Robert L. Abell
www.RobertAbellLaw.com

Earlier Discriminatory Acts of Supervisor Admissible In Support of Failure to Promote Claim

The discriminatory acts of a prior supervisor marred the work record of an employee when he later sought promotion. The employee sought to present evidence on these past discriminatory acts to support his failure to promote claim based on race. The trial judge excluded this evidence and, in doing so, committed reversible error the Sixth Circuit has ruled in Cobbins v. Tennessee Dept. of Transportation, No 07-6491 (April 2, 2009). 

Gregory Cobbins, an African-American male, was a ten year employee of the Tennessee Department of Transportation and sought promotion to a supervisor position. He was unsuccessful and one of the explanations for the decision was that the successful candidate had no record of disciplinary action, while Cobbins "had several oral and written warnings in his work file."  The warnings were all received between 1998 and 2002 by a former supervisor, Yocum. Cobbins claimed in a prior lawsuit that these warnings were the product of race discrimination by Yocum. The prior lawsuit was dismissed without a judgment on the merits of Cobbins' claim. In this case, he claimed that these earlier discriminatory acts by Yocum deprived him of the opportunity to compete fairly for the promotion to the supervisor position.

The "cat's paw" theory in employment discrimination litigation refers to a situation in which a biased subordinate, who lacks decisionmaking power, influences the unbiased decisionmaker to make an adverse hiring decision, thereby obscuring the subordinate's discriminatory intent. See Arendale v. City of Memphis, 519 F3d 587, 604 n.13 (6th Cir 2008)("When an adverse hiring decision is made by a supervisor who lacks impermissible bias, but that supervisor was influenced by another individual who was motivated by such bias, this Court has held that the employer may be held liable under a 'rubber-stamp' or 'cat's paw' theory of liability.").  Here, Cobbins sought to show that Yocum's past discriminatory acts, which resulted in warnings in his file, influenced the decisionmaking process that resulted in Cobbins' being passed over for promotion unfairly:

Plaintiff seeks only to demonstrate that certain conduct and actions of his supervisor at that time impacted his work record and promotion chances; and such evidence is, therefore, relevant in this case.

This case represents an often-encountered scenario: the discriminatory bias of a supervisor inflicts permanent damage to an employee's career by packing his or her file with unfounded or unfair warnings.

Robert L. Abell
www.RobertAbellLaw.com

Discrimination Based On Advocacy For or Association With Co-Worker

Discrimination against an employee based on his or her advocacy for or association with a co-worker of a different race is a violation of Title VII of the 1964 Civil Rights Act. This is because a white employee discriminated against because of his or her association with an African-American co-worker is discriminated on the basis of his or her race, because the discrimination stems from disapproval of the interracial association and therefore on the employee’s own race. The Sixth Circuit recently held in Barrett v. Whirlpool Corporation, No. 08-5307 (February 23, 2009), that the degree of association or advocacy was immaterial to the employee's claims.  

A violation could be shown if an employee shows that (1) she was discriminated against at work, (2) because she was associated with members of a protected class, regardless of the degree of association. Similarly, the degree of advocacy is irrelevant to such a claim. While the court acknowledged that “as with association, severe or pervasive discriminatory harassment [is] more likely to correlate with more vigorous advocacy, it is unnecessary as long as a plaintiff offers proof that she was, in fact, discriminated against because she advocated for protected employees."  Furthermore, the court added that in assessing the proof of whether an actionable hostile work environment existed “both types of impermissible harassment are considered in the aggregate to determine whether they were so severe or pervasive as to be actionable under the established hostile work environment standard.” However, the court cautioned that this does not include evidence of incidents of harassment directed at African-Americans but “only harassment that specifically targeted those who associated with and advocated for African-Americans would result in actionable hostile work environment claims for such individuals.”

The court ruled that a jury could find that one plaintiff, Nickens, was subjected to a severe or pervasive hostile work environment based on the following: she received a threat of physical violence for reporting racist language, she was subjected to a regular stream of offensive comments about her relationship with an African-American co-worker, and the same relationship was allegedly used as a reason to prevent her from applying for improved job positions. Furthermore, she had reported nearly all the relevant incidents to one of two supervisors, who failed to take corrective action, while both participating in harassment of her directly. The court took care in this case to specify that a white employee discriminated against because of his or her association with an African-American is discriminated on the basis of his race, because the facts support a finding that the discrimination was based on disapproval of the interracial association and therefore on the employee’s own race.

Robert L. Abell
www.RobertAbellLaw.com

Two Employees Awarded $350,000 Each In Race Discrimination Case

    After enduring several years of having their co-workers refer to them as "boy," "hey boy," or "damn it boy" and being subjected to other forms of racial harassment, two black men, Bobby Bailey and Robert Smith, filed suit and were each awarded after a judge trial compensatory damages for emotional distress and mental anguish of $350,000.   The verdicts were upheld by the Sixth Circuit in Bailey v. USF Holland, Inc. (No. 07-5304, decided May 16, 2008).

    The workplace at this company was permeated with racism.  Racist and derogatory comments were directed at the plaintiffs, racist graffiti was sprayed in the employee locker rooms and restrooms and a noose appeared in the workplace.  The employer's response was at best half-hearted.  One employee advised that he would continue to spout racist epithets and did, despite human resources training.  A lawyer was hired who wrote a white-wash report downplaying the racist atmosphere.  One employee who was fired supposedly for his racist misconduct was reinstated.  The company did not install security cameras and stop the racist graffiti until nearly a year after the suit had been filed.  The trial court judge awarded the maximum amount of compensatory damages under federal law ($300,000) and an additional $50,000 under state law. 

Robert L. Abell
www.robertabelllaw.com