The Fourth Circuit ordered certification of a race discrimination class action last Friday in Brown v. Nucor Corp. reversing the district court. The 2-1 decision ordered the lower court to certify a class of employees making claims for disparate impact, disparate treatment, and hostile work environment.

The majority opinion, written by Judge Gregory, discussed: (1) when discrimination claims meet the commonality and typicality requirements of Rule 23, (2) the use of statistical evidence when the historical data to make such calculations has been destroyed, and (3) whether the plaintiffs could represent employees who worked in other  departments of the employer.

The plaintiffs, African-American employees at Nucor’s South Carolina plant, asserted that Nucor’s promotion procedure allowed white managers and supervisors to use subjective criteria in promotion decisions, and that this had a disparate impact on African-American employees applying for promotions. 

The trial court had determined that subjectivity in decision-making alone couldn’t establish a disparate impact claim, and had found the statistical evidence presented by the class plaintiffs insufficient to make out a disparate impact. The Fourth Circuit disagreed with both conclusions.

Commonality and Typicality

The Court held that "[a]llegations of similar discriminatory employment practices, such as the use of entirely subjective personnel processes that operate to discriminate, satisfy the commonality and typicality requirements of Rule 23(a)."  It further found that the plaintiffs had "presented compelling direct evidence of discrimination," including:

denials of promotions when more junior white employees were granted promotions, denial of the ability to cross-train during regular shifts like their white counterparts, and a statement by a white supervisor [who wore a Confederate flag emblem on his hardhat] that he would never promote a black employee.

The Court held that "[t]his evidence alone establishes common claims of discrimination worthy of class certification."

The opinion stressed that "[t]he question before the district court was not whether the appellants have definitively proven disparate treatment and a disparate impact; rather the question was whether the basis of appellants’ discrimination claims was sufficient to support class certification." Op. at 11. It further observed that "evidence need not be conclusive to be probative, and even evidence that is of relatively weak probative value may be useful in meeting the commonality requirement." Op. at 12.

Statistical Evidence

On the point of statistical evidence, the main issue involved Nucor’s destruction of promotion records from before 2001.  The plaintiffs had attempt to fill in the missing data by extrapolating from change-of-status forms showing positions filled during the 1999-2000 time period and assuming that the racial composition of the bidding pool had been the same then as in later years.

The Fourth Circuit held that the trial court had improperly refused to consider these calculations:

when an employer destroys relevant employment data, the plaintiffs may utilize alternative benchmarks to make up for this lost data. Certainly, the benchmarks will not be as good as the destroyed data themselves — that would be next to impossible to achieve. Nevertheless, the plaintiffs should not be penalized by the destruction (however innocent) of such data.

Op. at 10 n.4.

There are other significant points on statistical evidence in the opinion, including a discussion of a two standard deviation threshold and the "80% rule."

Adequacy Of Representation

The Court also dealt with a class representation issue: whether the plaintiffs, all of whom worked in one department at the Nucor plant, could represent employees in other departments on their hostile work environment claims. The trial court had said they couldn’t because the other departments were "separate environments."

The Fourth Circuit reversed on this point as well. It held:

it was an abuse of discretion for the district court to find that the employees at the plant were separated into different environments. All of the employees worked at a single facility, in departments that were, at minimum, connected to each other, and employees shared several common areas. There is therefore sufficient evidence to indicate that all of the black employees were affected by the comments and actions of the white employees and supervisors in other departments. Thus, the affidavits of employees in one department are admissible to prove a plant-wide ‘hostile environment that affected employees in other departments, and the plaintiffs have satisfied the commonality requirement for their hostile work environment claim.

Op. at 16.

Judge Agee wrote a lengthy dissent, asserting that the majority had invaded the discretion of the district court.