Douglas El v. Southeastern Pennsylvania Transportation Authority (\Septa\")

This appeal arises out of a Title VII action alleging employment discrimination based on race. Plaintiff Douglas El claims that the Southeastern Pennsylvania Transportation Authority ("SEPTA") unnecessarily disqualifies applicants because of prior criminal convictions—a policy that he argues has a disparate impact on minority applicants because they are more likely than white applicants to have convictions on their records.1

The Court granted summary judgment, however, in favor of SEPTA, concluding that it had borne the burden of proving that its policy is consistent with business necessity. Though we have reservations about such a policy in the abstract, we affirm here because El did not present any evidence to rebut SEPTA's expert testimony.

I. Factual Background and Procedural History

In January 2000, King Paratransit Services, Inc. ("King") conditionally hired El to drive paratransit buses. The position involves providing door-to-door and curb-to-curb transportation service for people with mental and physical disabilities. King subcontracted with SEPTA to provide paratransit services on SEPTA's behalf. King's subcontract with SEPTA disallowed hiring anyone with, among other things, a violent criminal conviction. Accordingly, among the conditions stipulated in El's offer was successful completion of a criminal background check. Within the first few weeks of El's employment, King discovered that El had a 40-year-old conviction for second-degree murder.2 Following the terms of King's subcontract with SEPTA and El's employment offer, King terminated his employment. According to King personnel, the murder conviction was their sole reason.

As the background check revealed, El was convicted of second-degree murder in 1960. According to his testimony, the murder took place in the context of a gang-related fight in which the victim was shot and died. El was 15 years old at the time, and the victim was 16. El claims not to have been the triggerman, and, indeed, he was not the only person convicted of the murder, but no objective report of the circumstances appears in the record before us. Following his conviction, El served three-and-a-half years for his crime. This now 47-year-old conviction is El's only violent offense.

According to the contract in place between King and SEPTA in 2000, King was required to ensure that anyone in SEPTA service as a driver or attendant have:

e. no record of driving under [the] influence (DUI) of alcohol or drugs, and no record of any felony or misdemeanor conviction for any crime of moral turpitude or of violence against any person(s);

f. have no record of any conviction within the last seven (7) years for any other felony or any other misdemeanor in any category referenced below (see section F.2.10.C) [listing specific offenses], and not be on probation or parole for any such crime, no matter how long ago the conviction for such crime may be.

App. at 429.

The parties dispute whether this provision accurately states the hiring policy that was applied to El. SEPTA contends that it does. El, on the other hand, argues that King and SEPTA applied a much broader exclusion taken from language in another part of the contract that seems to disallow hiring anyone with a criminal conviction of any kind. Specifically, El argues that King applied a nearby provision in the contract stating that "[t]he Contractor [King] shall . . . reject/bar any applicant or current employee from SEPTA-related work whose record includes . . . any conviction for any felony and/or misdemeanor." App. at 430.

The District Court found that King applied the narrower policy. King personnel testified that they applied the narrower policy to El and to all of its SEPTA-related applicants. Moreover, personnel from other SEPTA subcontractors testified that they applied the narrower policy in similar contracts, and SEPTA personnel testified that the narrower policy was the one that SEPTA intended for them to apply and the one that they referred to when asked for assistance with contract interpretation. SEPTA's transactional lawyers may have been less than precise in writing an internally inconsistent contract, but all of the record evidence shows that one particular interpretation of that inconsistency prevailed,3 and so we cannot conclude that the issue is genuinely disputed. Thus, we decide this case on the basis of the narrower hiring policy quoted above.

After his employment was terminated, El filed a complaint with the Equal Employment Opportunity Commission ("EEOC") in which he alleged that SEPTA's hiring policy violated Title VII of the Civil Rights Act of 19644 by discriminating on the basis of race. Specifically, he argued that the policy has a disparate impact: because African Americans and Hispanics are more likely to have a criminal record, they are more likely to run afoul of the policy. After investigating his complaint, the EEOC found in El's favor. The agency was, however, unable to resolve the dispute, and the Civil Rights Division of the Department of Justice declined to pursue the matter.

El elected to pursue this claim himself in District Court as a class action. The District Court decided not to determine immediately whether to certify the proposed class. Rather, it allowed full discovery leading up to a period in which parties could file dispositive motions. After completing discovery, SEPTA moved for summary judgment, arguing that (1) it was not El's employer for Title VII purposes, (2) El had not submitted sufficient evidence that SEPTA's policy had a disparate impact on racial minorities, (3) it had submitted sufficient evidence to prove that its policy was justified by business necessity, and (4) El had not submitted sufficient evidence of an alternative policy that would accomplish SEPTA's legitimate goal of public safety. The District Court denied the motion on the first two grounds, but granted it on the second two, thus effectively ending the litigation in SEPTA's favor. This appeal follows.5

The standard for awarding summary judgment is well-worn: it is fitting when "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (internal quotation marks omitted).

Because SEPTA sought summary judgment on its affirmative defense of business necessity, it would bear the burden of proof6 at trial and therefore must show that it has produced enough evidence to support the findings of fact necessary to win. Marzano v. Computer Sci. Corp., Inc., 91 F.3d 497, 502 (3d Cir. 1996); Sorba v. Penn. Drilling Co., Inc., 821 F.2d 200, 202-03 (3d Cir.1987). When a witness's credibility is critical to supporting the necessary findings of fact, the District Court must consider whether there are sufficient grounds for impeachment that would place the facts to which he testifies in legitimate dispute. See Horowitz v. Fed. Kemper Life Assur. Co., 57 F.3d 300, 302 n. 1 (3d Cir.1995) ("Summary judgment is inappropriate when a case will turn on credibility determinations.") (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). In considering the evidence, the court should draw all reasonable inferences against the moving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505 ("The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.") (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970)); see also Atkinson v. LaFayette Coll., 460 F.3d 447, 451 (3d Cir.2006).

If the moving party successfully points to evidence of all of the facts needed to decide the case on the law short of trial, the non-moving party can defeat summary judgment if it nonetheless produces or points to evidence in the record that creates a genuine issue of material fact. Josey v. John R. Hollingsworth Corp., 996 F.2d 632, 637 (3d Cir.1993). The non-moving party cannot rest on mere pleadings or allegations; rather it must point to actual evidence in the record on which a jury could decide an issue of fact its way. Berckeley Inv. Group, Ltd. v. Colkitt, 455 F.3d 195, 201 (3d Cir.2006) ("In this respect, summary judgment is essentially `put up or shut up' time for the non-moving party: the non-moving party must rebut the motion with facts in the record and cannot rest solely on assertions made in the pleadings, legal memoranda, or oral argument.").

Put another way, it is inappropriate to grant summary judgment in favor of a moving party who bears the burden of proof at trial unless a reasonable juror7 would be compelled to find its way on the facts needed to rule in its favor on the law. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (holding that summary judgment is appropriate "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party. . . ."); Hill v. City of Scranton, 411 F.3d 118, 127 n. 11 (3d Cir.2005) ("Of course, because the defendant bears the burdens of proof and persuasion on the third prong[,] . . . to prevail at summary judgment on this prong the defendant must present evidence of such quality that no reasonable juror could conclude that the protected activity was the but-for cause of the termination."); see also Turner v. Hershey Chocolate U.S., 440 F.3d 604, 612 (3d Cir.2006) ("Were we to uphold the District Court's conclusion and grant of summary judgment we would need to conclude that reasonable jurors could not but find that rotating among all three tables is an essential function of the shaker table inspector position at Hershey.") (emphasis added). After all, the burden of proof includes the obligation to persuade the factfinder that one's propositions of fact are indeed true. Black's Law Dictionary 190 (7th ed.1999). Thus, if there is a chance that a reasonable factfinder would not accept a moving party's necessary propositions of fact, pre-trial judgment cannot be granted. Specious objections will not, of course, defeat a motion for summary judgment, but real questions about credibility, gaps in the evidence, and doubts as to the sufficiency of the movant's proof, will.

The Supreme Court first recognized that Title VII plaintiffs can make out a viable employment discrimination claim without alleging or proving discriminatory intent in Griggs v. Duke Power, 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971). The Court held that plaintiffs can succeed by showing that the challenged employment policy has a discriminatory effect that is not justified by the needs of the defendant's business. The Court announced that these "disparate impact" cases should proceed in two steps: (1) the plaintiff must prove that the challenged policy discriminates against members of a protected class, and then (2) the defendant can overcome the showing of disparate impact by proving a "manifest relationship" between the policy and job performance. This second step came to be known as the "business necessity" defense,8 and it serves as an employer's only means of defeating a Title VII claim when its employment policy has a discriminatory effect.9

The Supreme Court further developed the business necessity defense over a series of cases. In Griggs, it dealt with aptitude tests administered by an employer in making hiring decisions. The Court held that discriminatory employment tests must "bear a demonstrable relationship to successful performance of the jobs for which it was used." Griggs, 401 U.S. at 431, 91 S.Ct. 849. It further held that "any given requirement must have a manifest relationship to the employment in question." Id. at 432, 91 S.Ct. 849. In Albemarle Paper Co. v. Moody, 422 U.S. 405, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975), it elaborated on the use of discriminatory tests by adopting the EEOC's determination that test results must predict or correlate with "important elements of work behavior which comprise or are relevant to the job or jobs for which candidates are being evaluated." Id. at 431, 95 S.Ct. 2362 (quoting 29 C.F.R. § 1607.4(c)). In Dothard v. Rawlinson, 433 U.S. 321, 97 S.Ct. 2720, 53 L.Ed.2d 786 (1977), the Court rejected height and weight criteria for hiring prison guards, holding that discriminatory requirements must "be shown to be necessary to safe and efficient job performance." Id. at 331 n. 14, 97 S.Ct. 2720. The employer in that case argued that strength was an essential quality and that the height and weight criteria served as a proxy for strength. The Court rejected this argument, holding that while strength may have been an essential quality, the employer had not specified the amount of strength necessary or demonstrated any correlation between these height and weight criteria and the necessary amount thereof. Id. at 331-32, 97 S.Ct. 2720. In Connecticut v. Teal, 457 U.S. 440, 102 S.Ct. 2525, 73 L.Ed.2d 130 (1982), it held that an employer may not justify using a discriminatory test for determining promotion eligibility by also using an affirmative action system after the fact to achieve an appropriate racial balance. As the Court noted, Title VII operates not primarily to the benefit of racial or minority groups, but to ensure that individual applicants receive the consideration they are due and are not screened out by arbitrary policies or devices. Id. at 453-54, 102 S.Ct. 2525.

For our purposes, two aspects of these cases are noteworthy. First, the Court refused to accept bare or "commonsense"-based assertions of business necessity and instead required some level of empirical proof that challenged hiring criteria accurately predicted job performance. Dothard is particularly noteworthy because the Court rejected an employer's common-sense argument that prison guards must be relatively strong to justify criteria that roughly measured strength. The lesson is that employers cannot rely on rough-cut measures of employment-related qualities; rather they must tailor their criteria to measure those qualities accurately and directly for each applicant.

Second, the Court did not allow employers to rely on "more is better"-style reasoning to justify their policies. In Griggs, Albemarle, and Dothard, the employers argued that the challenged criteria were justified by the fact that one would naturally prefer smarter or stronger employees to less intelligent or weaker ones, and so it was of no moment that the criteria might be set a bit higher than strictly necessary. The Court held, however, that some abstract notion that more of a given quality is better is insufficient to justify a discriminatory policy under Title VII; rather, the employer must present real evidence that the challenged criteria "`measure[s] the person for the job and not the person in the abstract.'" Dothard, 433 U.S. at 332, 97 S.Ct. 2720 (quoting Griggs, 401 U.S. at 436, 91 S.Ct. 849).

The Supreme Court has never dealt directly with criminal record policies, though it has done so tangentially with criminal behavior in two cases. In McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), the Court sustained an employer's refusal to rehire a former employee on the ground that the employee had participated in various disruptive, illegal protests in front of the employer's premises. Id. at 794-95, 804, 93 S.Ct. 1817. Specifically, it held that the employer's fear that this employee would continue to be disruptive in violation of the law was a legitimate business reason for the refusal. Id. at 804, 93 S.Ct. 1817. In New York City Transit Authority v. Beazer, 440 U.S. 568, 99 S.Ct. 1355, 59 L.Ed.2d 587 (1979), the Court held that it was permissible under Title VII to refuse to hire anyone using methadone to treat their addiction to illegal drugs for "safety sensitive" positions on a city transit system because such a policy serves the "legitimate employment goals of safety and efficiency." Id. at 587 n. 31, 99 S.Ct. 1355.

Although these two Supreme Court cases deal with illegal activity on the part of the applicant, neither one squarely addresses the issue of prior convictions. In McDonnell Douglas, the employer had other specific reasons for fearing disruption from the applicant than the mere existence of a criminal record. In Beazer, the Court addressed the suitability of hiring people actively using methadone to recover from addiction to illegal drugs, not the suitability of people with records of past criminal behavior. Moreover, the business necessity defense was not the focus of either case, and so the Court did not articulate the contours of the defense with any specificity.

In 1989 the Supreme Court expanded the business necessity defense in Wards Cove Packing Co., Inc. v. Atonio, 490 U.S. 642, 109 S.Ct. 2115, 104 L.Ed.2d 733 (1989). There it held that a challenged discriminatory employment practice need not be necessary in the sense of "essential" or "indispensable" to pass muster under Title VII; rather, the practice must merely "serve[], in a significant way, the legitimate employment goals of the employee." Wards Cove, 490 U.S. at 659, 109 S.Ct. 2115. Even more significant was that it shifted the burden of proof from the employer to the employee. Id.

Recognizing this holding as a departure from Griggs, Congress responded with the Civil Rights Act of 1991 (the "Act"), which placed back on the employer the burden of proof. 42 U.S.C. § 2000e-2(k). The Act also abrogated the Wards Cove definition of business necessity. Civil Rights Act of 1991, § 3(2), Pub.L. No. 102-166, 105 Stat. 1071 (1991) (stating that a purpose of the Act is to codify the concept of business necessity as it existed prior to Wards Cove). Congress noted both in the purpose section of the Act and in an authoritative interpretive memorandum that "[t]he terms `business necessity' and `job related' [as used in the Act] are intended to reflect the concepts enunciated by the Supreme Court in Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971), and in the other Supreme Court decisions prior to Wards Cove Packing Co., Inc. v. Atonio, 490 U.S. 642, 109 S.Ct. 2115, 104 L.Ed.2d 733 (1989)." 137 Cong. Rec. S15, 273-01 (daily ed. Oct. 25, 1991) (statement of Sen. Danforth); see also Civil Rights Act of 1991, §§ 3(2) & 105(b) (adopting the Griggs definition of business necessity and stating that only the interpretative memorandum quoted may be used in construing the Act). Thus, the text and legislative history lead directly to the conclusion that Congress intended to codify the Griggs definition of business necessity, as clarified and developed in the Supreme Court's pre-Wards Cove jurisprudence.

Unfortunately, as numerous courts and commentators have noted, Griggs and its progeny did not provide a precise definition of business necessity. See, e.g., Lanning v. Southeastern Pa. Transp. Auth., 181 F.3d 478, 488 (3d Cir.1999) (Lanning I) (noting that the Act was so unclear that both proponents and opponents of a strict business necessity standard claimed victory); Susan S. Grover, The Business Necessity Defense in Disparate Impact Discrimination Cases, 30 Ga. L.Rev. 387, 391-93 (1996); Andrew C. Spiropoulos, Defining the Business Necessity Defense to the Disparate Impact Cause of Action: Finding the Golden Mean, 74 N.C.L.Rev. 1479, 1520 (1996). Normally, we would look to additional legislative history to determine if it clarifies what Congress meant by business necessity. However, Congress stipulated that courts may not consider any document other than the interpretive memorandum quoted above as the Act's legislative history. Civil Rights Act of 1991, § 105(b) (stating that nothing other than a specified interpretive memorandum should be considered legislative history and thereby used to construe the Act). In Lanning I and II, we heeded Congress's instruction and looked no further than the memorandum. Lanning v. Southeastern Pa. Transp. Auth., 308 F.3d 286, 289 (3d Cir.2002) (Lanning II); Lanning I, 181 F.3d at 488.

While some may be skeptical of Congress's power to instruct courts what legislative history they may take into account when interpreting a statute, we need not consider anything beyond the interpretive memorandum because doing so would be unhelpful in this case.10 Members of Congress simply could not agree on a precise definition of business necessity; all they could agree upon was overruling Wards Cove and reinstating the Supreme Court's somewhat conflicting post-Griggs and pre-Wards Cove jurisprudence. Thus, our task is to be as faithful to that intent as possible.

Attempting to implement the Griggs standard, we have held that hiring criteria must effectively measure the "minimum qualifications for successful performance of the job in question." See Lanning I, 181 F.3d at 481. This holding reflects the Griggs/Albemarle/Dothard rejection of criteria that are overbroad or merely general, unsophisticated measures of a legitimate job-related quality. It is also consistent with the fact that Congress continues to call the test "business necessity," not "business convenience" or some other weaker term.

However, hiring policies need not be perfectly tailored to be consistent with business necessity. As we held in Lanning II, employers need not set the bar so low that they consider an applicant with some, but unreasonably low, probability of successful performance. Lanning II, 308 F.3d at 292 ("It would clearly be unreasonable to require SEPTA applicants to score so highly on the run test that their predicted rate of [job] success be 100%. It is perfectly reasonable, however, to demand a chance of success that is better than 5% to 20%."). After all, the Supreme Court has held that Title VII never forces an employer to accept an unqualified—or even less qualified—applicant in the name of non-discrimination. Griggs, 401 U.S. at 436, 91 S.Ct. 849 ("Congress has not commanded that the less qualified be preferred over the better qualified simply because of minority origins."). Moreover, the Supreme Court has noted that bright-line criteria, such as aptitude tests, are legitimate and useful hiring tools so long as they accurately measure a person's qualifications. Id.

Putting these standards together, then, we require that employers show that a discriminatory hiring policy accurately—but not perfectly—ascertains an applicant's ability to perform successfully the job in question. In addition, Title VII allows the employer to hire the applicant most likely to perform the job successfully over others less likely to do so.

2. Applying the Defense to Criminal Conviction Policies

Prior decisions on business necessity do not directly control here. The standards set out in Griggs and its progeny (including the standards noted by our Court in Lanning I and II) do not parallel the facts of this case. In the cases cited above, the hiring policies at issue were tests designed or used—at least allegedly—to measure an employee's ability to perform the relevant jobs. Here, however, the hiring policy has nothing to do with the applicant's ability to drive a paratransit bus; rather, it seeks to exclude applicants who, while able to drive a bus, pose too much of a risk of potential harm to the passengers to be trusted with the job. Thus, our standard of "minimum qualifications necessary for successful performance of the job in question" is appropriate in test-score cases, but awkward here because "successful performance of the job" in the usual sense is not at issue. See Lanning I, 181 F.3d at 482. SEPTA could argue that successful performance of the job includes not attacking a passenger and, therefore, that the standard is still appropriate. However, the standard is worded to address ability, not risk. Yet, the issue before us is the risk that the employee will harm a passenger, and the phrase "minimum qualification" simply does not fit, as it is hard to articulate the minimum qualification for posing a low risk of attacking someone.

The only reported appellate level case to address squarely the issue of exclusions from eligibility on the basis of prior convictions is Green v. Missouri Pac. R.R. Co., 523 F.2d 1290 (8th Cir.1975). There the employer refused to hire anyone for any position who had been convicted of any offense other than a minor traffic violation. Id. at 1292. Green had applied for an office job, and he was not considered because of a previous conviction for refusing to answer the draft (after failing to qualify as a conscientious objector).