Coward v. ADT Security Systems, Inc.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 2, 1998 Decided April 10, 1998

No. 97-7072

Edward Coward,

Appellant

v.

ADT Security Systems, Inc.,

Appellee

Consolidated with

97-7073

Appeals from the United States District Court

for the District of Columbia

(No. 95cv02062)

(No. 95cv02388)

H. Vincent McKnight, Jr. argued the cause and filed the

briefs for appellant.

Max H. Lauten argued the cause and filed the brief for

appellee.

Before: Sentelle, Tatel and Garland, Circuit Judges.

Opinion for the Court filed by Circuit Judge Tatel.

Opinion concurring in part and concurring in the judgment

filed by Circuit Judge Sentelle.

Tatel, Circuit Judge: In this wage discrimination action,

the district court found that neither plaintiff established a

prima facie case and granted summary judgment for the

employer. Although we agree with the district court with

respect to one plaintiff, we find the other plaintiff satisfied

the minimal evidentiary burden needed to raise a genuine

issue of material fact with respect to his prima facie case.

We therefore affirm in part, reverse in part, and remand.

I

Appellants Melvia Boling and Edward Coward are African

Americans employed by appellee ADT Security Systems, Inc.

A supplier of electronic security systems and services, ADT

maintains a salary grade structure consisting of grades E-3

through E-20. Each grade has five salary "steps." Salary

ranges within grades overlap: A top-step E-8, for example,

earns approximately $11,000 more than a bottom-step E-9.

ADT assigns job titles, codes, and grades to every employee.

Employees with the same job title may have different codes,

different grades, and even different duties; together, all of

these factors determine salary. Job titles generally reflect

duties performed and serve as important, although not dis-

positive, factors in setting salary.

Employed by ADT since the late sixties, Melvia Boling

became a "Data Supervisor" in 1988 with a grade of E-8 and

a salary of approximately $35,000. While working on a

temporary project in 1995, Boling was given the title "Project

Manager." She received no related increase in either grade

or salary. All Project Managers are white and all but two

earn more than Boling. By contrast, Boling earns more than

all Data Supervisors.

An E-8 for most of the last seventeen years, Edward

Coward was briefly promoted in July 1994 to the position of

Telecommunications Network and Facilities Manager

("TNFM"), with a grade of E-9. Approximately nine months

later, ADT reclassified him from E-9 back to E-8, later

changing his title to "Technical Support." Coward earns less

than most TNFMs, all of whom are white; he earns more

than most Technical Support staff.

Alleging that ADT pays them less than their white counter-

parts in violation of 42 U.S.C. s 1981 (1994), Boling and

Coward brought suit in the United States District Court for

the District of Columbia. Claiming that neither plaintiff had

established a prima facie case of wage discrimination, ADT

moved for summary judgment. The district court agreed,

finding that Boling was a Data Supervisor, not a Project

Manager; that Coward was Technical Support, not a TNFM;

and that so viewed, neither had identified any similarly

situated, better-paid white employees.

Boling and Coward now appeal the district court's grant of

summary judgment for ADT. Our review is de novo. Tao v.

Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994). Although we draw

all justifiable factual inferences in favor of Boling and Cow-

ard, they bear the burden of pointing to "affirmative evi-

dence" establishing a genuine factual dispute. Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 255-57 (1986). "If material

facts are at issue, or, though undisputed, are susceptible to

divergent inferences, summary judgment is not available."

Tao, 27 F.3d at 638 (citing Alyeska Pipeline Serv. Co. v. U.S.

EPA, 856 F.2d 309, 314 (D.C. Cir. 1988)).

II

Because Boling and Coward allege intentional wage dis-

crimination, we apply the familiar McDonnell Douglas

burden-shifting test. See McDonnell Douglas Corp. v. Green,

411 U.S. 792, 802 & n.13 (1973). Only the first stage of that

test--the prima facie case--is at issue here. To establish a

prima facie case, Boling and Coward must show by a prepon-

derance of the evidence, Texas Dep't of Community Affairs v.

Burdine, 450 U.S. 248, 252-53 (1981), membership in a pro-

tected class (uncontested by ADT), and " 'that [they] were

performing work substantially equal to that of [white employ-

ees] who were compensated at [ ] higher rate[s] than [they

were]' " (vigorously contested by ADT). Aman v. Cort Fur-

niture Rental Corp., 85 F.3d 1074, 1087 (3d Cir. 1996) (quot-

ing Hohe v. Midland Corp., 613 F. Supp. 210, 214 (E.D. Mo.

1985), aff'd, 786 F.2d 1172 (8th Cir. 1986)) (alterations in

original); see also Miranda v. B & B Cash Grocery Store,

Inc., 975 F.2d 1518, 1529 (11th Cir. 1992) (prima facie case

consists of showing membership in protected class and that

plaintiff's job is similar to higher paying jobs occupied by

non-class members). Although "minimal," St. Mary's Honor

Ctr. v. Hicks, 509 U.S. 502, 506 (1993), and "not onerous,"

Burdine, 450 U.S. at 253, the prima facie case "serves an

important function," id. at 253-54:

[I]t eliminates the most common nondiscriminatory rea-

sons for the plaintiff's rejection.... [T]he prima facie

case raises an inference of discrimination only because

we presume these acts, if otherwise unexplained, are

more likely than not based on the consideration of imper-

missible factors. Establishment of the prima facie case

in effect creates a presumption that the employer unlaw-

fully discriminated against the employee.

Id. at 254 (citations and quotation marks omitted). If a

reasonable factfinder could infer a genuine issue of material

fact with respect to any element of the prima facie case--such

as whether white employees performing substantially similar

work earn more than the plaintiff--summary judgment at

that stage is inappropriate.

To establish their prima facie cases, Boling and Coward

relied on two types of evidence: a multiple regression analy-

sis comparing salaries of minority and non-minority employ-

ees throughout the company; and comparisons of their actual

individual salaries to those of immediate co-workers. We

consider this evidence in Sections III and IV.

III

Controlling only for race and seniority, the multiple regres-

sion analysis shows that throughout ADT's Mid-Atlantic Divi-

sion, the company pays African American employees approxi-

mately twelve percent less than white employees. Because

the regression analysis failed to account for education or prior

work experience, the district court excluded it from consider-

ation.

The Supreme Court established the rule governing admissi-

bility of regression analyses in discrimination cases in Baze-

more v. Friday, 478 U.S. 385 (1986):

While the omission of variables from a regression analy-

sis may render the analysis less probative than it other-

wise might be, it can hardly be said, absent some other

infirmity, that an analysis which accounts for the major

factors must be considered unacceptable as evidence of

discrimination. Normally, failure to include variables

will affect the analysis' probativeness, not its admissibili-

ty.

Id. at 400 (Brennan, J., concurring in part, joined by all

Justices) (citations and quotation marks omitted). Qualifying

this rule, the Court added that "[t]here may, of course, be

some regressions so incomplete as to be inadmissible as

irrelevant." Id. at 400 n.10. We too have explained that

although "a defendant cannot undermine a regression analy-

sis simply by pointing to variables not taken into account that

might conceivably have pulled the analysis's [sic] sting ...

Bazemore [does not] require acceptance of regressions from

which clearly major variables have been omitted--such as

education and prior work experience." Koger v. Reno, 98

F.3d 631, 637 (D.C. Cir. 1996) (citations omitted).

"Major factors" that a regression analysis must include

depend on the facts and theory of the particular case. In

Bazemore, for example, the Court found that omission of a

variable accounting for differences in salaries by county,

though relevant to plaintiffs' claim of state-wide wage dis-

crimination, did not require exclusion of the regression analy-

sis. Bazemore, 478 U.S. at 401-03. Depending on the theory

of the case, some variables may be entirely unsuitable.

Where plaintiffs allege discriminatory promotion practices,

for example, this court considers inclusion of grade variables

"inappropriate" because an employee's grade may itself re-

flect discrimination. Valentino v. U.S. Postal Serv., 674 F.2d

56, 72 n.30 (D.C. Cir. 1982) (citation omitted).

Applying these standards to this case, we find that the

regression analysis was "so incomplete as to be inadmissible

as irrelevant," Bazemore, 478 U.S. at 400 n.10, though for a

reason not considered by the district court. The regression

analysis failed to account for job title or any other variable

representing type of work performed. This omission is fatal

because Boling and Coward claim that they should be com-

pared to employees in other job categories who perform

similar work but who earn more than they. According to

their own theory of the case, therefore, job title, or some

other measure of type of work, serves as a "major factor"

within the meaning of Bazemore. But because the regression

analysis compares all employees in all job categories without

accounting for type of work, it tells us nothing about whether

employees who perform similar work are paid differently.

Boling and Coward therefore cannot use the regression analy-

sis to show that similarly situated white employees earn

more. Since the regression analysis is flawed as a matter of

law, we need not decide whether the reason given by the

district court--the omission of education and prior experience

variables--would independently have invalidated the analysis.

IV

This brings us to Boling and Coward's efforts to establish

prima facie cases by showing that they personally earn less

than similarly situated whites. The district court held that

neither did so; we agree with respect to Boling, but not

Coward.

Because Boling claims that she is underpaid given her

duties, experience, and seniority, and because she earns more

than all Data Supervisors, her case depends on her assertion

that she is similarly situated to Project Managers, all of

whom are white and most of whom earn more than she. In

support of her claim, Boling points to ADT's own records

which refer to her as a Project Manager. She also argues

that during the pendency of this case, ADT changed her job

title from Project Manager back to Data Supervisor. Admit-

ting that Boling briefly held the title of Project Manager,

ADT argues that the title was temporary, that it should have

been changed when the project ended, and that Boling per-

forms none of the duties of other Project Managers. ADT

points out that Boling's own complaint identifies her as a

Data Supervisor. It also relies on her deposition testimony

acknowledging not only that she was unaware of the title

change at the time, but that she knows nothing about Project

Manager duties.

Under these circumstances, we agree with the district court

that Boling failed to create a genuine issue of material fact

with respect to a critical element of her prima facie case--

that she is similarly situated to Project Managers. The

"Project Manager" title in ADT's records is her only evidence

suggesting that her duties and skills amount to anything

other than those of a Data Supervisor. She has pointed to no

other evidence that would support an inference that she is a

Project Manager or should be paid like one. Although job

titles usually serve as strong evidence of an employee's actual

skills and duties, see, e.g., Burger v. New York Inst. of Tech.,

94 F.3d 830, 833 (2d Cir. 1996) (under ADEA, similarity of

jobs could be inferred from parallel job titles), Boling's admis-

sion that she knew nothing about the duties of Project

Managers or even that she held the title, together with ADT's

undisputed explanation that the title was temporary, elimi-

nates any genuine dispute about the real nature of her work.

We thus compare Boling's salary not to salaries of Project

Managers, but to salaries of Data Supervisors. Because no

Data Supervisor makes more than she, the district court

properly granted ADT summary judgment with respect to

Boling.

Unlike Boling, Coward has pointed to evidence that creates

a genuine factual issue about whether similarly situated white

employees earn more than he. Coward's service record

reflects his "promotion" to the position of TNFM. Unlike

Boling, who testified that she knew nothing about the duties

of Project Managers, Coward described himself and his duties

as managerial and supervisory, consistent with TNFM status.

ADT "acknowledge[d] there is some overlap between [Cow-

ard's] position and that of a TNFM." Appellee's Br. at 15.

Indeed, at oral argument counsel for ADT conceded the

existence of a genuine issue of material fact over whether

Coward is a TNFM. Accordingly, Coward's TNFM status

should not have been resolved at summary judgment.

The district court also found that Coward failed to raise a

genuine issue of material fact about whether he was either

the lowest graded or lowest paid TNFM. With respect to the

question of grade, the district court "suppos[ed] that a rea-

sonable juror could conclude that white TNFMs were slotted

in higher grades than Coward," but nevertheless rejected this

possible evidence of wage discrimination, pointing out that

under ADT's overlapping salary structure Coward theoreti-

cally could earn as much as higher-graded TNFMs. But the

court had before it ADT's own chart listing all TNFMs and

showing that employees with higher grades generally have

higher salaries. A reasonable juror thus could infer wage

discrimination from Coward's lower grade. By rejecting this

inference in Coward's favor, the district court usurped the

jury's factfinding role.

The company's list of TNFMs further supports Coward's

contention, also rejected by the district court, that he earned

less than most TNFMs. According to the chart, eight

TNFMs (one E-9 and seven E-10s) earn more than Coward

and only three (one E-8 and two E-9s) earn less. All

TNFMs listed are white. That some TNFMs make less than

Coward, a fact heavily relied on by ADT, makes no difference.

Coward need not show that all similarly situated white em-

ployees receive better treatment. Identifying some similarly

situated employees--even one--establishes a prima facie

case. See Parker v. Secretary, U.S. Dep't of Hous. and

Urban Devel., 891 F.2d 316, 321 (D.C. Cir. 1989) ("[T]he fact

that ... a black female was denied educational opportunities

when another white male employee was not, gives rise to an

inference of discriminatory treatment."); Pittman v. Hatties-

burg Mun. Separate Sch. Dist., 644 F.2d 1071, 1074 (5th Cir.

Unit A May 1981) ("The usual unequal pay case involves two

employees, one black and one white, employed at the same

time and doing substantially the same work."). Having iden-

tified eight higher-paid white employees, the majority of

TNFMs, Coward has satisfied the minimal requirements of a

prima facie case.

V

Since the district court ceased its inquiry at the prima facie

stage, deciding neither whether ADT proffered a nondiscrimi-

natory reason for Coward's salary and grade nor whether

Coward rebutted such a proffer, see McDonnell Douglas

Corp., 411 U.S. at 802, we reverse and remand Coward's case

so the district court can complete the summary judgment

inquiry. As to Boling, we affirm.

So ordered.

Sentelle, Circuit Judge, concurring in part and concur-

ring in the judgment: I concur with the majority's result, but

do not join all its reasoning in Part III of its opinion.

The majority correctly judges Coward's regression analy-

sis, which controlled only for race and years of service, "so

incomplete as to be inadmissible as irrelevant." Maj. Op. at 6

(quoting Bazemore v. Friday, 478 U.S. 385, 400 n.10 (1986)).

The district court had concluded that the regression failed to

include "essential variables" like education and experience.

The majority today finds a different flaw: the omission of

"job title or any other variable representing type of work

performed." Maj. Op. at 6.

From either perspective, the bottom line is this: the re-

gression has no probative value because it does not compare

employees who can reasonably be deemed "similarly situat-

ed." Besides race, the regression controls only for years of

service at ADT. Thus, it groups together all employees with

equivalent seniority, whether mailroom clerks or high-level

managers, so long as they have been with the company an

equivalent length of time. Such a classification, applied to

the entire body of ADT employees, is too broad: Under no

reasonable definition of the term could employees be consid-

ered similarly situated on the basis of seniority alone. As we

have said before, when a "regression model ignores informa-

tion central to understanding the causal relationships at

issue," it does not adequately raise an inference that discrimi-

nation accounts for salary differences among employees. Va-

lentino v. United States Postal Service, 674 F.2d 56, 71 (D.C.

Cir. 1982). Employee pay depends on far too many addition-

al factors to allow this salary comparison based only on

seniority to raise a presumption of race discrimination. Thus,

the regression is irrelevant and was properly excluded by the

district court.

The majority, like the district court, attempts to identify

specifically what the regression should have included to ren-

der it probative. The flaw with the regression is neither that

it excluded "major factors" like education or experience, nor

that it failed to account for "job title" or "type of work

performed." There are a variety of different (perhaps even

mutually exclusive) ways to select a set of independent varia-

bles which will group together employees who are, more or

less, similarly situated. The flaw with this regression is that

the independent variable selected did not even begin to

classify employees by similar training, experience, perfor-

mance, duties, or function. Including variables for education

and experience might go a long way toward identifying

relevant similarities, but so might including variables for job

title or type of work. Neither approach is necessarily the

"correct" or best one. Either could lead to an admissible

regression analysis; it would then be up to the experts and

lawyers to argue the meaning and weight to be accorded to it.