Equal Employment Opportunity Commission, Cross-Appellee v. Sears, Roebuck & Company, Cross-Appellant

These appeals are the outgrowth of protracted litigation stemming from an EEOC commissioner's charge filed against Sears, Roebuck & Company (Sears) on August 30, 1973. After efforts at settlement and conciliation failed, the EEOC brought suit against Sears on October 22, 1979, alleging several claims of nationwide discrimination against women (and minorities, but those claims were later withdrawn) in employment practices. Before trial the district court denied Sears' motion to dismiss, which was based on several grounds including an assertion that an EEOC attorney who headed the Sears investigation had a conflict of interest because he served on the Board of Directors of the National Organization for Women Legal Defense and Education Fund (LDEF) prior to and at the time NOW filed charges against Sears with the EEOC.1 EEOC v. Sears, Roebuck & Co., 504 F.Supp. 241 (N.D.Ill.1980) (Sears I ). During the ten-month trial which began September 13, 1984, and consumed 135 trial days,2 the EEOC sought to prove that Sears engaged in a nationwide pattern or practice of discrimination against women from March 3, 1973 to December 31, 1980, by failing to hire and promote females into commission sales positions on the same basis as males and by paying female checklist management employees less than similarly situated male employees. The district court on January 31, 1986, held for Sears on all claims and also denied the EEOC's outstanding motion for partial summary judgment.3 EEOC v. Sears, Roebuck & Co., 628 F.Supp. 1264 (N.D.Ill.1986) (Sears II ).

The EEOC appeals the district court's judgment on the disparate treatment claims and its denial of partial summary judgment regarding a provision that had existed in the Sears Personnel Manual until 1974 allowing a male employee a day off with pay when his wife gave birth.4 Sears cross appeals the district court's refusal to dismiss the case on the alleged ground of conflict of interest.

The EEOC does not challenge the district court's holding that this case involves claims of disparate treatment under Title VII Sec. 703(a)(1), 42 U.S.C. Sec. 2000e-2(a)(1).5 To succeed in a claim alleging disparate treatment, the EEOC ultimately had the burden of proving by a preponderance of the evidence that Sears engaged in a "pattern or practice" of discrimination against female employees. Bazemore v. Friday, 478 U.S. 385, 106 S.Ct. 3000, 3009, 92 L.Ed.2d 315 (1986) (per curiam) (Brennan, J., writing for majority, concurring in part). This includes proof of the employer's discriminatory intent, a factor not required in the disparate impact analysis. International Brotherhood of Teamsters v. United States, 431 U.S. 324, 335 n. 14, 97 S.Ct. 1843, 1854 n. 14, 52 L.Ed.2d 396 (1977). Initially the EEOC, as plaintiff, had the burden of establishing a prima facie case that Sears followed an unlawful pattern or practice of discrimination. Id. "The plaintiffs' prima facie case will thus usually consist of statistical evidence demonstrating substantial disparities in the application of employment actions as to minorities and the unprotected group, buttressed by evidence of general policies or specific instances of discrimination." Coates v. Johnson & Johnson, 756 F.2d 524, 532 (7th Cir.1985) (footnote omitted).

If a plaintiff meets that initial burden, the burden then shifts, temporarily, to the "employer to defeat the prima facie showing of a pattern or practice by demonstrating that the [plaintiffs'] proof is either inaccurate or insignificant." Id. The burden shifts only temporarily because, as the Supreme Court explained in Bazemore, 106 S.Ct. at 3008,

if the defendants ... have responded to the plaintiffs' proof by offering evidence of their own, the factfinder then must decide whether the plaintiffs have demonstrated a pattern or practice of discrimination by a preponderance of the evidence. This is because the only issue to be decided at that point is whether the plaintiffs have actually proved discrimination.

See also United States Postal Service Board of Governors v. Aikens, 460 U.S. 711, 715, 103 S.Ct. 1478, 1482, 75 L.Ed.2d 403 (1983). Whether the plaintiff has done so "will depend in a given case on the factual context of each case in light of all the evidence presented by both the plaintiff and the defendant." Bazemore, 106 S.Ct. at 3009. In essence, therefore, the factfinder looks at all the evidence, and does not accord any special significance to the fact that the plaintiff initially met its burden of proving a prima facie case. See Aikens, 460 U.S. at 715, 103 S.Ct. at 1482; Pollard v. Rea Magnet Wire Co., Inc., 824 F.2d 557, 558 (7th Cir.1987).

The EEOC has not structured its argument to clearly fit within these principles, which gives the impression that it has a stronger case than it actually does. In presenting its hiring and promotion claims, the EEOC first argues that it has made out a prima facie case, and then contends that Sears failed to rebut that case.6 In addition, the EEOC makes statements such as "where plaintiffs present a sound statistical prima facie case, there is a substantial burden on the defendant to respond ... with a more probative analysis." Although the district court did find that the EEOC had presented a prima facie case, whether the EEOC actually presented a sound statistical case is questionable. The district court did not find that it had, and we address that issue later. The EEOC implies through the structure of its presentation and statements such as the one quoted above that Sears had a heavy burden to rebut the EEOC's evidence with more compelling evidence and even that Sears had the burden of persuasion. We find no support in the case law for those contentions. It is true that Sears had a rebuttal burden, but to meet that burden, Sears needed only to produce evidence that "raise[d] a genuine issue of fact as to whether it discriminated." Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 254, 101 S.Ct. 1089, 1094, 67 L.Ed.2d 207 (1981). Sears did not have a burden of producing more compelling evidence than did the EEOC. In Teamsters, the Supreme Court stated that an "employer's defense must ... be designed to meet the prima facie case of the [plaintiff]." 431 U.S. at 360 n. 46, 97 S.Ct. at 1867 n. 46. We noted in Coates that " '[t]he strength of the evidence the defendant must produce to prevent the plaintiff[s] from carrying the burden of persuasion ... depends, as in any case, on the strength of the plaintiffs' proof.' " 756 F.2d at 532 (quoting Segar v. Smith, 738 F.2d 1249, 1268 (D.C.Cir.1984), cert. denied, 471 U.S. 1115, 105 S.Ct. 2357, 86 L.Ed.2d 258 (1985)). Whatever the nature of the defendant's evidence, "the defendant need not carry the burden of persuasion as to the nonexistence of a disparity." Segar, 738 F.2d at 1268. The EEOC could not necessarily rest on its showing of a prima facie case. As we noted above, once a defendant "respond[s] to the plaintiffs' proof by offering evidence of [its] own," Bazemore, 106 S.Ct. at 3008, the fact that the plaintiff proved a prima facie case is of no continuing consequence. "The ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff." Burdine, 450 U.S. at 253, 101 S.Ct. at 1093; see Bazemore, 106 S.Ct. at 3008.

The district court's determination as to whether the plaintiff has proved discrimination by a preponderance of the evidence "is subject to the clearly erroneous standard on appellate review." Bazemore, 106 S.Ct. at 3008. The district court's factual findings underlying that ultimate determination are also subject to the clearly erroneous standard. Under that standard, " '[a] finding is "clearly erroneous" when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.' " Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948)). We may have such a conviction if "the trial judge's interpretation of the facts is implausible, illogical, internally inconsistent or contradicted by documentary or other extrinsic evidence." Ratliff v. City of Milwaukee, 795 F.2d 612, 617 (7th Cir.1986). "If the district court's account of the evidence is plausible in light of the record viewed in its entirety, the court of appeals may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently." Anderson, 470 U.S. at 573-74, 105 S.Ct. at 1511. In addition "[w]here there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous." Id.; see Boxhorn's Big Muskego Gun Club, Inc. v. Electrical Workers Local 494, 798 F.2d 1016, 1018 (7th Cir.1986).

The district court in this case made a multitude of factual findings. Some of those findings rested on determinations of the credibility of various witnesses, and some were based on the district court's evaluation of statistical evidence. We accord even more deference to the district court's findings based on evaluations of those types of evidence. In Anderson, 470 U.S. at 575, 105 S.Ct. at 1512, the Supreme Court noted that "[w]hen findings are based on determinations regarding the credibility of witnesses, Rule 52(a) demands even greater deference to the trial court's findings; for only the trial judge can be aware of the variations in demeanor and tone of voice that bear so heavily on the listener's understanding of and belief in what is said." A finding that is "purportedly based on a credibility determination" may be clearly erroneous, however, if docments or objective evidence "contradict the witness' story; or the story itself may be so internally inconsistent or implausible on its face that a reasonable factfinder would not credit it." Id. at 575, 105 S.Ct. at 1512; see Wheeler v. Snyder Buick, Inc., 794 F.2d 1228, 1232 (7th Cir.1986).

We must also defer to the district court to a certain extent regarding the court's factual findings based on statistical evidence. As the district court noted, "[v]irtually all the proof offered by the EEOC in this case is statistical in nature, or related to the statistical evidence." Sears II, 628 F.Supp. at 1285. We stated in Soria v. Ozinga Brothers, Inc., 704 F.2d 990, 995 n. 6 (7th Cir.1983), that "[e]specially where statistical evidence is involved, great deference is due the district court's determination of whether the resultant numbers are sufficiently probative of the ultimate fact in issue." In Soria, which involved, as did this case "a Babel of competing experts, contradictory statistical demonstrations, and diametrically opposed accounts of crucial events," the court found it necessary to "wholly defer to the district court's assessment of the credibility of both lay and expert witnesses and [had to] only disturb its resolution of dissonant evidence if that resolution is manifestly erroneous." Id. We follow suit in this case, as the district court had to resolve the "contradictory statistical demonstrations" proffered by the primary statistical experts for each side--Dr. Bernard R. Siskin for the EEOC and Dr. Joan G. Haworth for Sears. These two witnesses together produced 5,275 pages of trial testimony. The judge specifically stated regarding this testimony that "[t]he credibility of statistical experts and the weight to be given their testimony were ... of great importance."7 Sears II, 628 F.Supp. at 1279 & n. 2.

Regarding all major claims at issue--hiring, promotion and compensation--the district court found that EEOC's failure to present testimony of any witnesses who claimed that they had been victims of discrimination by Sears confirmed the weaknesses of the EEOC's statistical evidence. The EEOC, conceding it did not present any witnesses who testified to individual acts of discrimination,8 argues that the district court gave undue weight to the absence of individual victim testimony. The EEOC cites Bazemore v. Friday, 478 U.S. 385, 106 S.Ct. 3000, 92 L.Ed.2d 315 (1986), International Brotherhood of Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977), and Hazelwood School District v. United States, 433 U.S. 299, 97 S.Ct. 2736, 53 L.Ed.2d 768 (1977), for the proposition that individual victim testimony is unnecessary. We agree that those cases did not hold that individual victim testimony is necessary to support a finding of intentional discrimination in violation of Title VII. See Hazelwood, 433 U.S. at 307-08, 97 S.Ct. at 2741; Teamsters, 431 U.S. at 339, 97 S.Ct. at 1856. Neither did the district court in this case. We believe the district court accorded this lack of evidence the proper weight. We acknowledge that in Hazelwood School District, 433 U.S. at 307-08, 97 S.Ct. at 2741, the Supreme Court held that "[w]here gross statistical disparities can be shown, they alone may in a proper case constitute prima facie proof of a pattern or practice of discrimination." The Court had earlier recognized in Teamsters, 431 U.S. at 339, 97 S.Ct. at 1856, however, that individual victim testimony is useful to bring "cold numbers convincingly to life." This court has recognized that "examples of individual discrimination are not always required, but we think that the lack of such proof reinforces the doubt arising from the questions about validity of the statistical evidence." Griffin v. Board of Regents, 795 F.2d 1281, 1292 (7th Cir.1986). Similarly, in Garcia v. Rush-Presbyterian-St. Luke's Medical Center, 660 F.2d 1217, 1225 (7th Cir.1981), we stated:

We find very damaging to plaintiffs' position the fact that not only was their statistical evidence insufficient, but that they failed completely to come forward with any direct or anecdotal evidence of discriminatory employment practices by defendants. Plaintiffs did not present in evidence even one specific instance of discrimination. There was no individual to testify how defendant discriminated against him.

See also Rossini v. Ogilvy & Mather, Inc., 798 F.2d 590, 604 (2d Cir.1986) ("In evaluating all of the evidence in a discrimination case, a district court may properly consider the quality of any anecdotal evidence or the absence of such evidence." (citing EEOC, 628 F.Supp. at 1278 n. 2)).

The district court properly recognized the value of anecdotal evidence when it determined that lack of individual victim testimony reinforced its conclusions regarding the deficiencies in the EEOC's statistical evidence. Segar v. Smith, 738 F.2d 1249, 1278 (D.C.Cir.1984), cert. denied, 471 U.S. 1115, 105 S.Ct. 2357, 86 L.Ed.2d 258 (1985), is not to the contrary. In Segar, the District of Columbia Circuit stated that "when a plaintiff's statistical methodology focuses on the appropriate labor pool and generates evidence of discrimination at a statistically significant level, no sound policy reason exists for subjecting the plaintiff to the additional requirement of either providing anecdotal evidence or showing gross disparities." Id. at 1278. In this case the district court considered the lack of anecdotal evidence only after finding there were major problems with the EEOC's labor pool and determining that the EEOC's statistical evidence was severely flawed. This is in accord with the District of Columbia Circuit's statement in Valentino v. United States Postal Service, 674 F.2d 56, 69 (D.C.Cir.1982), that "when the statistical evidence does not adequately account for 'the diverse and specialized qualifications necessary for [the positions in question],' strong evidence of individual instances of discrimination becomes vital to the plaintiff's case." (bracketed material in original) (quoting Wilkins v. University of Houston, 654 F.2d 388, 410 (5th Cir. Unit A Dec. 1981), vacated, 459 U.S. 809, 103 S.Ct. 34, 74 L.Ed.2d 47 (1982)). When experts disagree, as they did here, the court may need the help of live witnesses to relate their actual experiences.

The EEOC's reasons for not presenting such individual testimony are not satisfying. The EEOC argues that such evidence would be "inappropriate" because "where 47,000 hires and promotions were at issue ... it would have been impossible to present enough individual demonstrations [sic] of discrimination to meaningfully reflect on the statistics." We do not agree that examples of individual instances of discrimination must be numerous to be meaningful. Even a few examples would have helped bring "cold numbers convincingly to life." Teamsters, 431 U.S. at 339, 97 S.Ct. at 1856. Furthermore, we agree with the district judge that considering the ten-year length of the lawsuit and the amount of investigation by the EEOC and information passed by Sears to the EEOC, it is difficult to see how the EEOC could fail to "identify at least some members of the alleged huge class of victims it purports to represent." Sears II, 628 F.Supp. at 1325 & n. 82. The EEOC also argues that an individual applicant would not know if she had been discriminated against. While this speculative argument may be more apt for the hiring situation, in which an applicant may not know whether there was a vacancy or the qualifications of other persons who were hired, we agree with the district judge that in the area of promotions and compensation at least, the number of Title VII suits filed by individuals against employers in general "seems to fairly refute EEOC's contention." Id.

II. DISPARATE TREATMENT--HIRING AND PROMOTIONS

The EEOC argues that the district court erred in determining that it did not show a pattern or practice of discrimination by Sears against women in hiring and promotions into commission sales positions.9 We base our decision on the well-reasoned and comprehensive opinion of the district court, see Sears II, 628 F.Supp. at 1277, and address the principal and dispositive issues raised by the parties. Although in Coates v. Johnson & Johnson, 756 F.2d 524, 533 (7th Cir.1985), this court briefly reviewed all the evidence in that disparate treatment case, it is not expedient or necessary to do so here, considering the variety and amount of statistical and nonstatistical evidence and the detailed summary of all the evidence by the district court in its opinion on the merits. Although we consider all the evidence, we will review the evidence here only to the extent necessary to consider the EEOC's contentions that the district court has clearly erred in reaching various factual findings.

The nature of the evidence presented by each party in this case was significantly different. It is helpful to briefly overview the types of evidence presented by the parties. The EEOC presented, almost exclusively, statistical evidence in the form of regression analyses based on information from employment applications of rejected sales applicants and Sears' computerized payroll records from 1973 through 1980. The EEOC based other regression analyses on information from Applicant Interview Guides Sears had administered at various times from 1978 through 1980 at two Sears stores in its Southwestern Territory. The EEOC attempted to bolster this statistical evidence through nonstatistical evidence regarding the subjective nature of Sears' selection process and allegedly discriminatory aspects of Sears' testing practices.

Sears did not respond with like regression analyses based on employment application and payroll records. Instead, most of Sears' evidence was directed at undermining two assumptions Sears claimed were faulty and fatal to the validity of the EEOC's statistical analysis--the assumptions of equal interests and qualifications of applicants for commission sales positions. This evidence consisted of testimony by Sears store managers, personnel managers, and other store officials, a study based on interviews of women in nontraditional jobs at Sears, national surveys and polls regarding the changing status of women in American society, morale surveys of Sears employees and 1976 and 1982 job interest surveys of Sears employees, national labor force data, and an analysis of the Applicant Interview Guides that attempts to measure differences in interest among men and women. Sears also presented evidence regarding its hiring figures, general evidence regarding the characteristics of commission salespersons including a case study of all commission sales hires in all stores, based on information in personnel files of applicants who were hired and sales performance data, evidence regarding the employment milieu at Sears, especially relating to commission selling and the structure of Sears, and evidence regarding its affirmative action efforts.

Regarding the claim of discrimination in promotions, the EEOC again relied almost totally on regression analyses based on female proportions of noncommission salespersons in each store at the end of a year compared with the proportion of women actually hired into commission sales. Sears again relied on the evidence relating to interest, the nature of commission sales, characteristics of commission salespeople, and its affirmative action efforts. In addition, Sears introduced further evidence of interest in the form of responses to Career Aspirations Questionnaires it had administered to noncommission salespersons, and performed various adjustments of the EEOC's statistical analysis.

Each side featured one primary expert on statistical evidence--the EEOC starred Dr. Bernard R. Siskin in this role, while Sears was represented by Dr. Joan G. Haworth.

The EEOC argues that Sears' "generalized interest evidence" is inadequate as a matter of law to refute the EEOC's statistical presentation. We have already partially discussed this argument in the context of the burdens of proof, but there is another aspect of this argument. The EEOC implies that Sears had the burden of responding with a more probative statistical analysis. The Supreme Court in Teamsters specifically stated, however, that "[w]e do not ... suggest that there are any particular limits on the type of evidence an employer may use." 431 U.S. at 360 n. 46, 97 S.Ct. at 1867 n. 46. An employer may attempt to show that plaintiffs' proof is "either inaccurate or insignificant," id. at 360, 97 S.Ct. at 1867, or the plaintiff may attempt to provide a "nondiscriminatory explanation for the apparently discriminatory result." Id. at 361 n. 46, 97 S.Ct. at 1867 n. 46. Then-Justice, now Chief Justice Rehnquist, concurring in Dothard v. Rawlinson, 433 U.S. 321, 338-39, 97 S.Ct. 2720, 2731, 53 L.Ed.2d 786 (1977), stated that defendants in a discrimination case "may endeavor [in rebuttal] to impeach the reliability of the statistical evidence, they may offer rebutting evidence, or they may disparage in arguments or in briefs the probative weight which the plaintiffs' evidence should be accorded." See also Catlett v. Missouri Highway & Transportation Commission, 828 F.2d 1260, 1266 (8th Cir.1987) (defendant may introduce evidence that a lesser interest in certain jobs on part of female applicants explains statistical disparity); Segar v. Smith, 738 F.2d 1249, 1268 (D.C.Cir.1984) (defense "[t]ypically ... will focus on the integrity of the plaintiffs' statistical methodology and the significance of the results shown"), cert. denied, 471 U.S. 1115, 105 S.Ct. 2357, 86 L.Ed.2d 258 (1985). "The defendants' rebuttal must ... at least raise a genuine issue of material fact concerning the accuracy of the picture painted by the plaintiffs' statistics." Segar, 738 F.2d at 1268. The cases cited by the EEOC to support its argument that Sears had the burden of rebutting its statistical analysis with more "refined, accurate and valid" statistical evidence did not state that the defendant must produce such evidence to succeed in rebutting the plaintiffs' case. Instead, those cases indicated that a defendant could or "was entitled to" use such a means of rebuttal. See Shidaker v. Carlin, 782 F.2d 746, 750 (7th Cir.1986), vacated, --- U.S. ----, 107 S.Ct. 1621, 95 L.Ed.2d 195 (1987); Movement for Opportunity & Equality v. General Motors Corp., 622 F.2d 1235, 1245 (7th Cir.1980). These cases involve disparate impact claims--without deciding whether these principles are applicable in a disparate treatment case, we can say that EEOC misconstrues the principles. These cases suggest, and the cases we have cited above confirm, that statistical evidence is only one method of rebutting a statistical case. Cf. Teamsters, 431 U.S. at 340, 97 S.Ct. at 1827 ("Statistics are not irrefutable; they co