Equal Employment Opportunity Commission v. Joe's Stone Crab, Inc.

This is the paradigmatic “hard” case, and we have labored for many months to reach the right result. On appeal, Defendant, Joe’s Stone Crab, Inc. (“Joe’s”), challenges the district court’s entry of judgment in favor of Plaintiff, the Equal Employment Opportunity Commission (the “EEOC”), on its gender-based disparate impact claims under Title VII. Joe’s is a landmark Miami Beach seafood restaurant which from 1986 to 1990 hired 108 male food servers and zero female food servers. After the EEOC filed its discrimination charge in June 1991, Joe’s hired 88 food servers from 1991 to 1995, nineteen, or roughly 21.7%, of whom were female. The district court concluded that while Joe’s was not liable for intentional discrimination, it was liable for disparate impact discrimination based on these statistical disparities. After thorough review, we vacate the district court judgment, and remand for reconsideration of the EEOC’s *1268intentional discrimination claim consistent with this opinion.

In our view, the facts of this case render a disparate impact finding inappropriate. A disparate impact claim requires the identification of a specific, facially-neutral, employment practice causally responsible for an identified statistical disparity. On this record, the district court has identified no facially-neutral practice responsible for the gender disparity in Joe’s food server population and we can find none. However, some of the district court’s subsidiary findings suggest that there may have been facially-discriminatory practices of Joe’s that were responsible for the identified hiring disparity, although the district court expressly rejected the EEOC’s intentional discrimination claim in summary fashion. Several powerful prudential considerations, including the fact that the record is replete with conflicting witness testimony permitting more than one resolution of this claim, and the fact that some of the district court’s subsidiary factual findings are in apparent conflict with its conclusion that Joe’s was not liable for intentional discrimination, persuade us that the wisest course is a remand to the district court so that it may consider further its factual findings and conclusions of law in light of this opinion.

I.

The facts of this case are reasonably straightforward and are fully outlined by the district court in EEOC v. Joe’s Stone Crab, Inc., 969 F.Supp. 727 (S.D.Fla.1997). Joe’s Stone Crab, Inc. is a fourth-generation, family-owned seafood restaurant and Miami Beach landmark. During the stone crab season, which lasts from October to May, the restaurant is extremely busy— serving up to 1450 patrons each weeknight and up to 1800 patrons each weekend night. Today, the restaurant employs between 230 and 260 employees; of those, approximately 70 are food servers. Throughout its history, Joe’s has experienced extremely low food server turnover — a result of Joe’s family ethos, generous salary and benefits package, and its seven-month employment season. From 1950 onward, however, the food servers have been almost exclusively male.

On June 25, 1991, the Equal Employment Opportunity Commission (“EEOC”) filed a discrimination charge, under sections 706 and 707 of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et. seq., alleging that Joe’s discriminated on the basis of sex in the hiring and recruiting of food servers. On April 17, 1992, the EEOC issued its Decision, finding a pattern and practice of intentional sex discrimination in Joe’s hiring and recruiting practices. Specifically, the EEOC determined that a word-of-mouth recruiting system and Joe’s reputation for hiring only male food servers resulted in almost no women actually applying for food server positions at Joe’s. The EEOC also found that Joe’s subjective hiring practices were responsible for the gross statistical disparity between the percentage of female food servers in the Miami Beach community and the percentage of female food servers working at Joe’s. As required by Title VII, see 42 U.S.C. § 2000e-5(b), the EEOC and Joe’s attempted to conciliate the Decision’s findings but were unsuccessful.

On June 8, 1993, the EEOC filed a complaint in the Southern District of Florida alleging that Joe’s violated Title VII through both intentional disparate treatment discrimination as well as unintentional disparate impact discrimination. The gravamen of the complaint centered around the EEOC’s findings with respect to Joe’s hiring and recruiting practices for food servers. The EEOC sought permanent injunctive relief, back pay, and prejudgment interest for qualified claimants.1 Over fifteen days interspersed from August 1996 to December 1996, the district *1269court held a liability bench trial. The analysis at trial focused on two discrete time periods: first, the pre-EEOC charge period from 1986 to 1990; and finally, the post-EEOC charge period from 1991 to 1995. On'July 3, 1997, the district court issued a partial final judgment — making a series of factual findings with respect to Joe’s employment practices. See Joe’s Stone Crab, 969 F.Supp. at 727-35.

To hire new food servers, Joe’s conducts a “roll call” every year on the second Tuesday in October. Although Joe’s rarely advertises, significantly, the district court found that the roll call is “widely known throughout the local food server community,” and typically attracts over 100 applicants for only a limited number of slots. Joe’s Stone Crab, 969 F.Supp. at 733. At a typical roll call, each applicant completes a written application and an individual interview. Selected applicants then enter a three-day training program where they shadow experienced servers. Upon successful completion of the program, they then become permanent hires. See id.

Until the EEOC’s charge, roll call interviews and hiring selections were handled exclusively by the daytime maitre d’ with occasional interview assistance from other staff members.2 Hiring decisions were made by the daytime maitre d’ on the basis of four subjective factors (appearance, articulation, attitude, and experience) and without upper management supervision or the benefit of instructive written or verbal policies. See id. After the EEOC’s discrimination charge in 1991, Joe’s changed its roll call format somewhat. All applicant interviews were conducted by three members of Joe’s management.3 In addition, each applicant was required to take and pass a “tray test,” which involved the lifting and carrying of a loaded serving tray, or else be automatically disqualified from a food server position. The district court found the tray test to be a “legitimate indicator of an individual’s ability to perform an essential component of a food server’s job at Joe’s,” id., and that “women have the physical strength to carry serving trays,” id. at 732.

In addition to its description of Joe’s hiring process, the district court also made several subsidiary findings relating to the historical operation of the roll call system. The district court observed that while “women have predominated as owner/managers,” “most of Joe’s female employees have worked in positions traditionally viewed as ‘women’s jobs,’ e.g., as cashiers or laundry workers. Food servers generally have been male.” Id. at 731. Although Joe’s hired female food servers during World War II, most of these positions “reverted to men at the’conclusion of the war.” Id. Further, the district court found that, “[f|rom 1950 on, the food serving staff has been almost exclusively male. Indeed, one striking exception proves the rule. Dotty Malone worked as a food server at Joe’s for seventeen years, and for most of this time she was the lone female on a serving staff that ranged between twenty-four and thirty-two.” Id.

In explaining this historical dearth of female food servers, the district court found that Joe’s maintained an “Old World” European tradition, in which the highest level of food service is performed *1270by men, in order to create an ambience of “fine dining” for its customers. Id. at 733. The district court elaborated:

The evidence presented at trial does not establish that Joe’s management had an express policy of excluding women from food server positions. To the contrary, the evidence portrays owner/managers who have been courageous in opposing overt discrimination. For example, Joe’s was picketed for two years when the owners insisted on hiring African-American employees who had been excluded from union membership because of race. What the evidence in this case does prove is that Joe’s management acquiesced in and gave silent approbation to the notion that male food servers were preferable to female food servers.

Id. at 731. As evidence, for this finding, the district court cited three pieces of witness testimony. First, the district court pointed to the testimony of Grace Weiss, Joe’s owner, who stated, “I cannot explain the predominance of male servers, but perhaps it has to do with the very heavy trays to be carried, the ambience of the restaurant, and the extremely low turnover in servers.” Id. at 731-32 (emphasis added by the district court). Second, the district court highlighted the testimony of Roy Garrett, a longtime maitre d’ of Joe’s with hiring authority, who explained that Joe’s had a “tradition” that food server positions were “a male server type of job”:

As I said before, we had very few female applicants over the years. It was sort of a tradition.... It was always tradition from the time I arrived there that it was a male server type of job. And until just recently when we became aware that we had to do other things, ... originally it was traditionally a male place. We always had women that were qualified women .... Traditionally, I mean, it’s just some restaurants, when you walk in, you know there are going to be women waitresses, other restaurants you know it is going to be male waiters.

Id. at 732 (emphasis added).4 Finally, the district court referred to the testimony of Joe’s own restaurant industry expert, Karen McNeil, for a historical explanation of the “male-only” server tradition.

It has been an attitude and standard, it comes from Europe. In all of Europe you will find in all of the grade three restaurants in Europe, there is an impression that service at that high level is the environment of men, and that it ought to be that way. And I think that that attitude a few decades ago came and was felt a little bit here in this country.... Those [European] opinions and those sensibilities, I think were in fact carried here by restauranteurs who hoped to create something serious. If you wanted to create a serious restaurant that would become known in the community, that would become one of the community’s great restaurants, you did what they did in Europe, you modeled yourself after them. I don’t think anybody thought about it. They said, well, men did it there. It tended to be men here, too, who had those skill.sets, and so men were [sic] automatically became the labor pool.

Id. The district court added that “Joe’s [had] sought to emulate Old World traditions by. creating an ambience in which tuxedo-clad men served its distinctive menu.” Id.

With this historical background in place, the district court then focused on Joe’s female hiring statistics for the relevant pre- and post-charge periods. For the pre-charge period of 1986-1990, the number of female food server applicants at Joe’s annual hiring roll calls was minuscule. While there is little available evidence as to the actual numbers of female applicants at these roll calls (because Joe’s *1271historically did not retain any employment data from its roll calls), the district court determined, and both parties agreed, that during this period, no more than two or three women per year (or, at most, 3% of the overall applicant class) actually attended the roll calls. - See id. at 733. In that same period, 108 new male food servers were hired while zero women were hired. See id. During the post-charge period (from 1991 to 1995), many more women (in all, 22% of the actual applicant pool) applied for food server positions. Of Joe’s 88 new food server hires during this period, 19 were women. These post-charge figures translate into a female hiring percentage of 21.7% — -a percentage almost exactly proportional to the percentage of females in the actual applicant pool. See id. at 733-34. Joe’s female applicant flow data for the post-charge period breaks down the following way:

Season Women applicants Women hired

1991-92 15.1% 20.0%

1992-93 21.9% 22.7%

1993-94 23.0% 10.5%

1994-95 26.8% 35.3%

Oct. — Dec.1995 23.3% 20.0%

22.02% 21.7% Average

Id. at 734.

However, in making its findings, the district court found this actual applicant flow data “unreliable because it is skewed.” Id. at 734. Relying on hearsay trial testimony from local female food servers, the district court found that Joe’s public reputation for not hiring women encouraged women to self-select out of the hiring process— thereby skewing the actual applicant flow.5 See id. at 733-34. The district court explained:

In the preceding findings, the court held that Joe’s reputation in the community, which reflected the restaurant’s historical hiring practice, led potential female applicants not to apply for server positions. Joe’s reputation, therefore, was largely responsible for the gender skew in the pool of applicants at the annual roll call. It is well-settled that an employer’s reputation for discriminatory hiring practices can lead to a self-selected applicant pool not reflective of the actually available labor pool. Quite irrespective of the intentions of the employer, a rational qualified female candidate is likely to self-select out of the application process, declining to make what she considers a “futile gesture.” Thus,-the existence of such a reputation is highly relevant to whether Joe’s actual applicant flow data reflects the available labor pool. Put more narrowly, evidence *1272of Joe’s reputation in.the food serving community was admitted as highly relevant to whether, how, and why would-be applicants were chilled from applying for traditionally male jobs. .While Joe’s vehemently. contested the admissibility of this reputation evidence, its objections fall wide of the mark. They presuppose that evidence of Joe’s reputation was offered as proof of conduct consistent with the reputation,, as proof of Joe’s hiring practices themselves, or as proof of bad character or intent to discriminate. None of these is the case. Evidence of Joe’s reputation was admitted solely to establish the existence of the reputation, and not for any other purpose.

Id. at 736 (internal citations omitted). Although the district court noted that female food server applications to Joe’s dramatically increased as a result of publicity about the EEOC charge, it still found Joe’s post-charge applicant pool data (depicting a female applicant pool of 22%) unreliable after comparing' it with hiring rates, between 30% and 40% female, for other area seafood restaurants.6 See id. at 734.

Having found the actual applicant pool data wholly unreliable, the district court discarded it and then set about selecting alternative non-applicant labor market data. The EEOC’s expert witness, a labor economist, suggested a qualified female labor pool of 44.1% based on 1990 census data for female food servers living and/or working in the Miami Beach area (a labor pool which included cocktail and buffet servers). See id. at 734-35. Not surprisingly, the district court rejected this figure in part because there was no demonstration that this female labor pool necessarily was qualified to work at Joe’s. Instead, the district court “refined” the relevant labor pool to include all female servers who lived or worked on Miami Beach and earned between $25,000 and $50,000 — thereby “using past earning capacity as a proxy for experience, and by extension, experience as a proxy for qualification.” Id. at 735. Solely based on this alternative methodology, the district court was able to find “that at all relevant times, 3119% of the available labor pool has been female.” Id.

With these findings in place, the district court then drew two pertinent conclusions of law. First, the district court summarily rejected the EEOC’s disparate treatment claims without analysis, stating only that “the court finds that the EEOC has not met its burden of proof under disparate treatment analysis.” Id. at 735. The only other mention of the disparate treatment claims is found in the introduction of the district court’s opinion. There, the district court unambiguously states: “[biased on an evaluation of the evidence, the court finds that the EEOC has not proven intentional discrimination.” Id. at 730. Second, however, the district court determined that Joe’s was liable for disparate impact discrimination.7 See id. Specifically, the district court found that “the challenged employment practice in this case ..., [Joe’s] undirected and undisciplined delegation of hiring authority to subordinate staff,” id. at 738, was responsible for the statistical disparity between the 31.9% female “available” labor pool and Joe’s female hiring rates in the pre-charge (0%) and post-charge (21.7%) periods, id. at 739-40. The district court then entered a partial judgment of liability in favor of the EEOC.

*1273On April 15, 1998, a bench trial was held on the remedies portion. The EEOC presented five female plaintiffs who unsuccessfully applied for food server positions at Joe’s in the 1990’s. They testified that they would have applied to Joe’s at an earlier juncture but for the fact that they knew applying was futile based on Joe’s male-only reputation. The. district court awarded four of them backpay relief plus prejudgment interest. The district court also ordered extensive injunctive relief through the year 2001 that required Joe’s to adopt a statement of non-discrimination in the hiring of food servers, comply "with the district court’s monitoring of Joe’s future hiring and recruiting practices (including its public advertising of hiring roll-calls), allow the supervision of each roll-call by a court-appointed monitor, permit the introduction of a standardized tray test at the roll-call, and provide mandatory training sessions with an industrial psychologist for all of Joe’s hiring decisionmakers.

II.

The first and central issue in this appeal is whether the district court erred in finding that the EEOC had established disparate impact discrimination.8 We review the district court’s conclusions of law de novo, and its factual findings for clear error. See Central State Transit & Leasing Corp. v. Jones Boat Yard, Inc., 206 F.3d 1373, 1376 (11th Cir.2000); Hill v. Seaboard Coast Line R.R. Co., 885 F.2d 804, 812 (11th Cir.1989) (citing Eastland v. Tennessee Valley Auth., 704 F.2d 613, 620 (11th Cir.1983)). In this case, where the bulk of the evidence came in the form of conflicting witness testimony, we allot even greater deference to the factfinder who is in a better position to assess the credibility of the witnesses. See Stano v. Butterworth, 51 F.3d 942, 944 (11th Cir.1995) (citing Anderson v. City of Bessemer City, 470 U.S. 564, 575, 105 S.Ct. 1504, 1512, 84 L.Ed.2d 518 (1985)).

That said, we have struggled on appeal to find the proper resolution of this case. As we explain in detail, we believe that the district court’s factual findings simply do not support a legal conclusion that Joe’s is liable for disparate impact discrimination. Based on the district court’s findings, no specific facially-neutral employment practice of Joe’s can be causally connected to the statistical disparity between the percentage of women in the qualified labor pool and the percentage of women hired as food servers by Joe’s.

A. Disparate Impact

Under Title VII of the Civil Rights Act of 1964, an employer may be found liable for unlawful sex discrimination under any one of three discrete theories: pattern and practice discrimination, disparate treatment discrimination, or disparate impact discrimination. Both pattern and practice and disparate treatment claims require proof of discriminatory intent;9 disparate impact claims do not. See In Re Employment Litig. Against the State of Ala., 198 F.3d 1305, 1310 n. 8 (11th Cir.1999). In order to show discriminatory intent, a plaintiff must demonstrate “ ‘that the decisionmaker ... selected or reaffirmed a particular course of action at least in part “because of,” not merely “in spite of,” its adverse effects on an identifiable group.’” Id. at 1321 (quoting Personnel Administrator of Mass. v. Feeney, 442 U.S. 256, 279, 99 S.Ct. 2282, 2296, 60 L.Ed.2d 870 (1979)). Therefore, in a dis*1274parate treatment case, the plaintiff bears the ultimate burden of proving that the employment action at issue was taken because of the plaintiffs sex. See Holifield v. Reno, 115 F.3d 1555, 1564-65 (11th Cir.1997). Likewise, in a pattern and practice case, the plaintiff must prove, normally through a combination of statistics and anecdotes, that discrimination is the company’s “standard operating procedure.” International Brotherhood of Teamsters v. United States, 431 U.S. 324, 335-36, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977); see also Mozee v. American Commercial Marine Service Co., 940 F.2d 1036, 1051 (7th Cir.1991).

In contrast, disparate impact theory prohibits neutral employment practices which, while non-discriminatory on their face, visit an adverse, disproportionate impact on a statutorily-protected group. See Griggs v. Duke Power Co., 401 U.S. 424, 431, 91 S.Ct. 849, 853, 28 L.Ed.2d 158 (1971) (explaining that Title VII “proscribes not only overt discrimination but also practices that are fair in form, but discriminatory in operation”); see also In re Employment, 198 F.3d at 1311; Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1117 (11th Cir.1993). The doctrine seeks the removal of employment obstacles, not required by business necessity, which create “ ‘built-in headwinds’ ” and freeze out protected groups from job opportunities and advancement. Griffin v. Carlin, 755 F.2d 1516, 1524 (11th Cir.1985) (quoting Griggs, 401 U.S. at 431-32, 91 S.Ct. 849). As the district court correctly identified, “[t]he premise of disparate impact theory is that some employment practices, adopted without a deliberately discriminatory motive, may be the. functional equivalent of intentional discrimination.” Joe’s Stone Crab, 969 F.Supp. at 735. In essence, disparate impact theory is a doctrinal surrogate for eliminating unprovable acts of intentional discrimination hidden innocuously behind facially-neutral policies or practices.

The disparate impact framework under Title VII by now is well-settled. “Since Griggs, Congress has codified the appropriate burdens of proof in a disparate impact case in 42 U.S.C. § 2000e-2(k) (1994), and a settled" jurisprudence has arisen to implement the methodology.” In re Employment; 198 F.3d at 1311. As correctly identified by the district court, a plaintiff in a sex discrimination suit must establish three" elements: first, that there is a significant statistical disparity between the proportion of women in the available labor pool and the proportion of women hired; second, that there is a specific, facially-neutral, employment practice which is the alleged cause of the disparity; and finally, and most critically in this case, that a causal nexus exists between the specific employment practice identified and the statistical disparity shown. Joe’s Stone Crab, 969 F.Supp. at 735. See generally MacPherson v. University of Montevallo, 922 F.2d 766, 771 (11th Cir.1991) (citing Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 655-56, 109 S.Ct. 2115, 2124, 104 L.Ed.2d 733 (1989); Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 994-95, 108 S.Ct. 2777, 2789, 101 L.Ed.2d 827 (1988)).

According to Title VII, “[i]n the first stage of a disparate impact case, the ‘complaining party [must] demonstrate [ ] that a respondent uses a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin.’ ” In re Employment, 198 F.3d at 1311 (quoting 42 U.S.C. § 2000e-2(k)(1)(A)(i)). “To ‘demonstrate’ means to ,‘meet[ ] the burdens of production and persuasion.’ ” Id. (quoting 42 U.S.C. § 2000e(m) (1994)). “In other words, in order to surmount the first hurdle in a disparate impact race discrimination case, the plaintiff must make out a prima facie case ‘that [a] facially neutral employment practice ha[s] a significantly discriminatory impact.’ ” Id. (quoting Connecticut v. Teal, 457 U.S. 440, 446, 102 S.Ct. 2525, 2530, 73 L.Ed.2d 130 (1982)). As the Supreme Court explained in Watson, “the plaintiff must offer statistical evi*1275dence of a kind and degree sufficient to show that the practice in question has caused the exclusion of applicants for jobs or promotions because of their membership in a protected group.” Watson, 487 U.S. at 994, 108 S.Ct. 2777 (emphasis added); see also Edwards v. Wallace Community College, 49 F.3d 1517, 1520 (11th Cir.1995) (observing that “[a] plaintiff must identify a specific employment practice that leads to the disparate impact”); MacPherson, 922 F.2d at 771(noting that “ ‘a plaintiff must demonstrate that it is the application of a specific or particular employment practice that has created the disparate impact under attack’ ”) (internal citation omitted).

Once each of these three elements are shown, a plaintiff has established a prima facie case of disparate impact discrimination. See Fitzpatrick, 2 F.3d at 1117; MacPherson, 922 F.2d at 771. The burden of production then shifts to the defendant to establish that the challenged employment practice serves a legitimate, non-diseriminatory business objective. See Fitzpatrick, 2 F.3d at 1117. However, even if the defendant satisfies this burden, a plaintiff may still prevail by proving that an alternative, non-discriminatory practice would have served the defendant’s stated objective equally as well. See id. at 1118.

As for the first prong of the analysis, it is critical to observe that no statistically-significant disparity exists between the percentage of women who actually applied to Joe’s and the percentage of women who were hired as servers by Joe’s. The record indicates that for the precharge period (October 1986 to June 1991) very few female food servers applied to Joe’s, “perhaps 3% of [all] applicants,” Joe’s Stone Crab, 969 F.Supp. at 734, out of an actual applicant pool of between 80 and 120 people a year.10 In this five-year time period, 108 male food servers were hired and no women were hired. Despite the fact that no women were hired during this period, Joe’s pre-charge hiring rate demonstrated no significant statistical disparity because so few women actually applied for food server positions.11 For the post-charge period (July 1991 to December 1995), the district court found that, on average, 22.02% of Joe’s food server applicants were women and that Joe’s hired roughly 21.7% women for these positions. Both parties admit (as they must) that, based on this record, there is no statistieally-significant hiring disparity when the actual number of female applicants is compared to the actual number of female hires for either period.12 In other words, Joe’s hiring system did not produce a significant statistical disparity between the actual *1276percentage of women who applied to Joe’s for server positions and the percentage of women actually hired for these positions.

This insight is important for disparate impact analysis because the mere fact that Joe’s hired no women in the pre-charge period is not, alone, sufficient to impose upon Joe’s Title VII liability. To hold otherwise would be to impose liability upon Joe’s based on “bottom line” reasoning which the Supreme Court has expressly forbade. In Watson, the Supreme Court made clear that Title VII liability could not be based solely on “bottom line” statistical imbalances in an employer’s workforce. See Watson, 487 U.S. at 992, 108 S.Ct. 2777 (explaining that it is “unrealistic to suppose that employers can eliminate, or discover and explain, the myriad of innocent causes that may lead to statistical imbalances in the composition of their workforces”). The Supreme Court then further explained in Wards Cove:

Just as an employer cannot escape liability under Title VII by demonstrating that, “at the bottom line,” his work force is racially balanced (where particular, hiring practices may operate to deprive minorities of employment opportunities), a Title VII plaintiff does not make out a case of disparate impact simply by showing that, “at the bottom line,” there is racial imbalance in the work force. As a general matter, a plaintiff must demonstrate that it is the application of a specific or particular employment practice that has created the disparate impact under attack. Such a showing is an integral part of the plaintiffs prima facie case in a disparate-impact suit under Title VII.

Id., 490 U.S., at 656-57, 109 S.Ct. 2115 (internal citation omitted) (emphasis added); see also MacP