International Brotherhood of Electrical Workers, AFL-CIO, Local Unions Nos. 605 & 985 v. Mississippi Power & Light Co.

United States Court of Appeals

Fifth Circuit

IN THE UNITED STATES COURT OF APPEALS

F I L E D

March 2, 2006

FOR THE FIFTH CIRCUIT

Charles R. Fulbruge III

Clerk

No. 04-60975

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO,

Local Unions Nos. 605 & 985; LARRY BRIDGES; JOYCE RILEY

Plaintiffs - Appellees

v.

MISSISSIPPI POWER & LIGHT CO

Defendant - Appellant

Appeal from the United States District Court for the

Southern District of Mississippi

Before KING, BARKSDALE, and CLEMENT, Circuit Judges.

KING, Circuit Judge:

On behalf of and along with two of their individual members,

Local Unions 605 and 985 of the International Brotherhood of

Electrical Workers, plaintiffs-appellees, filed suit against

defendant-appellant Mississippi Power & Light Company, alleging

that Mississippi Power & Light had engaged in employment

practices with a racially disparate impact. Following a bench

trial, the district court found that the challenged employment

practices had an unlawful disparate impact, as defined by 42

U.S.C. § 2000e-2(k)(1), on Mississippi Power & Light’s African-

1

American employees and potential employees. The district court

awarded lost wages to the individual plaintiffs-appellees, Larry

Bridges and Joyce Riley, and attorneys’ fees to plaintiffs-

appellees’ trial counsel. The district court also directed

Mississippi Power & Light to reform its challenged employment

practices. Mississippi Power & Light then filed this appeal.

For the following reasons, we REVERSE and RENDER judgment in

favor of Mississippi Power & Light.

I. BACKGROUND

A. Factual History

The two individual plaintiffs-appellees, Larry Bridges

(“Bridges”) and Joyce Riley (“Riley”), began working for

defendant-appellee Mississippi Power & Light Company (“MP&L”)

before it was acquired by Entergy, Inc. (“Entergy”).1 During

their employment with MP&L, Bridges and Riley were also members

of the International Brotherhood of Electrical Workers. Local

Unions 605 and 985 of the International Brotherhood of Electrical

Workers (collectively, “IBEW”) are the other two plaintiffs-

appellees.2 After several years of service, Bridges and Riley,

1

Although Entergy is an entity holding operating

companies similar to the former MP&L in several states, because

MP&L is the named party, and following the example of the

district court and the parties, we will frequently refer to MP&L

alone in the remainder of this opinion, even when discussing

events that occurred after Entergy acquired MP&L.

2

Collectively, the plaintiffs-appellees will be referred

to as “the Plaintiffs.”

2

both African Americans, were laid off in 1995 due to a general

reduction across MP&L’s workforce.3 The circumstances

surrounding these layoffs gave rise to the Plaintiffs’ lawsuit.

At the time of these layoffs, IBEW and MP&L had reached a

collective bargaining agreement which permitted laid-off

employees with a certain measure of seniority to “bump” into

positions held by more junior employees, provided the senior

employees could qualify for the new positions. After they were

laid off, both Bridges and Riley attempted to bump into

“Storekeeper” and “Plant Storekeeper” positions which were

covered by the relevant provisions of the collective bargaining

agreement.4 To qualify for the positions, however, Bridges and

Riley had to pass a validated aptitude test known as the Clerical

Aptitude Battery (“CAB,” “test,” or “CAB test”).5 After taking

the test, both Bridges and Riley failed to meet the cutoff score

set by MP&L, and neither was allowed to bump into the Storekeeper

3

Both Bridges and Riley were subsequently rehired,

albeit for positions other than those at issue. Both remained in

MP&L’s employ at the time the district court rendered its

decision.

4

Prior to these layoffs, Bridges and Riley were both

employed by MP&L as electric metermen.

5

The CAB is produced by the Edison Electric Institute

(“EEI”), which is responsible for validating the test by

establishing the statistical correlation between success on the

test and success on the jobs for which the test is given. EEI

also provides suggested scores and ranges to individual

employers, and it requires individual employers to be certified

to conduct the test. Once certified, an individual employer may

set and vary its own cutoff scores.

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positions.

This case is somewhat unusual because the validity of the

CAB test itself was never directly questioned; rather, the

Plaintiffs argued that MP&L’s method of setting the cutoff scores

for the Storekeeper positions at issue was the unlawful cause of

the disparate impact. MP&L’s testing policy can be broken into

three separate time periods: from 1984 to 1989; from 1989 to

1993; and from 1993 to the time of the trial in 1999. From 1984

to 1989 MP&L used a cutoff score of 178 for the Storekeeper

positions, based on EEI’s recommendation. From 1989 to 1993 MP&L

used a cutoff score of 150. By MP&L’s admission, this shift was

also based on EEI’s recommendation, after MP&L reported

significant amounts of turnover in the Storekeeper positions and

the difficulty encountered by its applicant pool in passing the

CAB. In 1993, following its acquisition by Entergy, MP&L raised

its cutoff score to 180 for the Storekeeper positions, motivated

in part by the desire to create uniformity with Entergy’s other

divisions. Therefore, at the time Bridges and Riley attempted to

bump into the Storekeeper positions, the cutoff score was set at

180. The circumstances surrounding this 1993 shift shaped the

core issues of the underlying suit and this appeal.

B. Procedural Posture

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The Plaintiffs filed suit pursuant to 42 U.S.C. § 2000e-2,6

which proscribes, inter alia, those employment practices with a

disparate and adverse impact upon protected classes which cannot

be justified by an employer’s legitimate business needs. At

trial, the Plaintiffs contended that the 1993 increase in the

cutoff score from 150 to 180 had a significant adverse and

disparate impact on African-American applicants for the

Storekeeper positions. MP&L responded by arguing that its

decision to raise the cutoff score was justified by business

necessity. The parties presented evidence and arguments during

the course of a bench trial on May 17-20, 1999, and the district

court rendered its judgment for the Plaintiffs on September 30,

2004, directing MP&L to amend its employment practices, awarding

the individual plaintiffs lost wages, and awarding the Plaintiffs

attorneys’ fees.7 MP&L appeals from this judgment.

II. DISCUSSION

Ordinarily, this court reviews a district court’s legal

conclusions de novo and its findings of fact under the clearly

erroneous standard. See, e.g., Davis v. City of Dallas, 777 F.2d

6

In reference to its origins in the 1964 Civil Rights

Act, Pub. L. No. 88-352, 78 Stat. 241 (1964), and in keeping with

common usage, 42 U.S.C. § 2000e-2 will be referred to as “Title

VII.”

7

Neither party was able to explain the district court’s

delay of more than five years between the date of trial and the

day on which the district court rendered its decision, a delay

which seems to us to be wholly unacceptable.

5

205, 208 n.1 (5th Cir. 1985). However, when, as here, this court

finds that a district court’s findings were based “‘upon a

mistaken impression of applicable legal principles, the reviewing

court is not bound by the clearly erroneous standard.’” Walker

v. City of Mesquite, 169 F.3d 973, 982 (5th Cir. 1999) (quoting

Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 855 n.15

(1982)).

We begin our inquiry, of course, with the plain language of

the governing statute. Moore v. Cain, 298 F.3d 361, 366 (5th

Cir. 2002). “An unlawful employment practice based on disparate

impact” is established under 42 U.S.C. § 2000e-2(k)(1)(A) only

when

(i) a complaining party demonstrates that a respondent

uses a particular employment practice that causes a

disparate impact on the basis of race, color, religion,

sex, or national origin and the respondent fails to

demonstrate that the challenged practice is job related

. . . and consistent with business necessity; or (ii) the

complaining party makes . . . [a] demonstration . . . [of

an acceptable] alternative employment practice and the

respondent refuses to adopt such alternative employment

practice.

42 U.S.C. § 2000e-2(k)(1)(A)(i), (ii) (2000) (emphasis added).

The plain language of the statute shows that the burden of

demonstrating acceptable alternative employment practices, set

forth in § 2000e-2(k)(1)(A)(ii), is one that rests upon Title VII

plaintiffs, not defendants. Id.

This direct and unambiguous statutory language reflects the

clear intent of Congress. Congress set forth this framework for

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disparate impact suits as part of the Civil Rights Act of 1991.

See Pub. L. No. 102-166, § 105, 105 Stat. 1071, 1074-75 (1991)

(adding § 2000e-2(k)(1)(A) to Title VII). In the 1991 Civil

Rights Act’s statement of formal purposes, Congress stated its

intent to “provide statutory guidelines for the adjudication of

disparate impact suits” under Title VII and “to codify the

concepts of ‘business necessity’ and ‘job related’ enunciated by

the Supreme Court in Griggs v. Duke Power Co., 401 U.S. 424

(1971), and in the other Supreme Court decisions prior to Wards

Cove Packing Co. v. Atonio, 490 U.S. 642 (1989).” Id. § 3, 105

Stat. at 1071.

An examination of the Supreme Court’s disparate impact

decisions before Wards Cove reveals that Congress succeeded in

its intent to codify their framework for disparate impact suits

in 42 U.S.C. § 2000e-2(k)(1)(A)(i) and (ii).8 Again, this

framework plainly establishes that the burden of demonstrating

acceptable alternative business practice evidence is one that

rests upon Title VII plaintiffs, not defendants. Shortly after

Griggs, the Supreme Court clarified the structure and allocation

8

Congress specifically revived the standard for

demonstrations of alternative business practices that prevailed

before Wards Cove in the 1991 Civil Rights Act, adding

§ 2000e-2(k)(1)(C) to Title VII, which states that the

alternative practices “demonstration referred to by subparagraph

[§ 2000e-2(k)(1)](A)(ii) shall be in accordance with the law as

it existed on June 4, 1989, with respect to the concept of

‘alternative employment practice.’” Pub. L. No. 102-166, § 105,

105 Stat. at 1074. Wards Cove was decided on June 5, 1989.

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of burdens in Title VII cases thusly:

[a defendant-employer’s business necessity] burden

arises, of course, only after the complaining party or

class has made out a prima facie case of discrimination

. . . . If an employer does then meet the burden of

proving that its tests are ‘job related,’ it remains open

to the complaining party to show that other tests or

selection devices, without a similarly undesirable racial

effect, would also serve the employer’s legitimate

interest . . . .

Albemarle Paper Co. v. Moody, 422 U.S. 405, 425 (1975) (citing

McDonnell Douglas Corp. v. Green, 411 U.S. 792, 801-05 (1973))

(internal citations omitted) (emphasis added).9 The same

structure and allocation of burdens were consistently reiterated

by the Supreme Court during the time period between Griggs and

Wards Cove. In Dothard v. Rawlinson, 433 U.S. 321 (1977), the

Court held that

[o]nce it is thus shown that the employment standards are

discriminatory in effect, the employer must meet “the

burden of showing that any given requirement (has) . . .

a manifest relationship to the employment in question.”

If the employer proves that the challenged requirements

are job related, the plaintiff may then show that other

selection devices without a similar discriminatory effect

would also “serve the employer’s legitimate interest

. . . .”

Id. at 329 (quoting Griggs, 401 U.S. at 432, and Albemarle, 422

U.S. at 425) (internal citations omitted) (emphasis added); see

also Connecticut v. Teal, 457 U.S. 440, 447 (1982) (stating that

a Title VII plaintiff may still prevail after an employer-

9

This passage from Albemarle demonstrates that a Title

VII disparate impact plaintiff has the right, but not the

obligation, to respond with evidence of acceptable alternative

practices when a defendant makes a showing of business necessity.

8

defendant’s showing of business necessity “if he shows that the

employer was using the practice as a mere pretext for

discrimination”). This plain and repeated direction from the

Supreme Court, which Congress expressly intended to revive, is

echoed in the plain language of the governing statute: the burden

of demonstrating the existence of acceptable alternative business

practices rested and continues to rest squarely upon Title VII

plaintiffs.10

The district court departed from this standard and erred by

10

Only a handful of appellate opinions address this

issue; as one of our sister circuits has noted, very few courts

of appeals have dealt with the allocation of disparate impact

burdens as modified by the 1991 Civil Rights Act, and those “that

have applied the Act’s standard to a Title VII challenge have

done so with little analysis.” Lanning v. Se. Pa. Transp. Auth.,

181 F.3d 478, 488 (3d Cir. 1999). In fact, at least one of our

sister circuits has arrived at precisely the opposite

interpretation that we reach today, concluding that the 1991

Civil Rights Act somehow imposed the burden on an employer-

defendant to show “the lack of an effective alternative policy

that would not produce a similar disparate impact.” Bradley v.

Pizzaco of Neb., Inc., 7 F.3d 795, 797 (8th Cir. 1993); see also

Davey v. City of Omaha, 107 F.3d 587, 591-92 (8th Cir. 1997)

(quoting Bradley).

Our contrary interpretation accords with the interpretations

of the Third and Eleventh Circuits. In Lanning, the Third

Circuit applied the 1991 Civil Rights Act and held that when an

employer meets its burden of demonstrating business necessity,

Title VII disparate impact “plaintiffs may still prevail if they

can show that an alternative employment practice has a less

disparate impact and would also serve the employer’s legitimate

business interest.” 181 F.3d at 485. Similarly, the Eleventh

Circuit has applied the 1991 Civil Rights Act and held that a

Title VII disparate impact “plaintiff may still overcome a

proffered business necessity defense by demonstrating that there

exist alternative policies with less discriminatory effects that

would be comparably as effective.” Fitzpatrick v. City of

Atlanta, 2 F.3d 1112, 1118 (11th Cir. 1993).

9

imposing the burden of demonstrating the absence of acceptable

alternative employment practices upon the defendant, MP&L.

Shortly before ruling for the Plaintiffs, the district court

stated that

the business justification evidence offered by the

defendant . . . must justify an employer’s use of the

practice in question and establish that there are no

alternative practices that would achieve the same

business ends, with less racial impact. Certainly, the

defendant most adequately has justified the practice of

testing, and the validity of the CAB as a useful tool for

the purpose of selecting applicants for clerkship

positions. The only question to be resolved is whether

the legitimate business purpose can be achieved only by

establishing and maintaining a cutoff score of 180. This

court is not persuaded that this cut-off score is the

only way to achieve the defendant’s desired ends.

Local Union Nos. 605/985, Int’l Bhd. of Elec. Workers v. Miss.

Power & Light Co., No. 3:96-CV-572-WS, at 46 (S.D. Miss. Sept.

30, 2004) (mem.) (internal citations omitted) (emphasis added).

This excerpt shows both that the district court erred and that

this error had a substantial effect upon the district court’s

ultimate conclusions. But for this error of law, the district

court apparently would have been persuaded that MP&L had “most

adequately” provided an acceptable business justification for its

challenged business practices. See id.

After reviewing the record, we agree with the district

court’s conclusion that the Plaintiffs succeeded in establishing

a prima facie case of disparate impact, and MP&L does not argue

otherwise. We also conclude that MP&L adequately demonstrated

10

that its challenged business practices were both job related and

consistent with business necessity. MP&L showed that increasing

the CAB cutoff score to 180 from 150 significantly increases the

likelihood that successful applicants for the positions in

question will develop into proficient employees.11 These

differences have great value: MP&L can and has pointed to

specific and sizable savings estimates related to its challenged

practices.

Finally, we conclude that the Plaintiffs failed to respond

to MP&L’s demonstration of business necessity because they failed

to provide any meaningful showing of acceptable alternative

employment practices, as they might have done in accordance with

§ 2000e-2(k)(1)(A)(ii) and the clear direction of the Supreme

Court. MP&L’s brief to this court states flatly that “[t]he

Plaintiffs did not offer any proof of an alternative employment

practice.” The Plaintiffs’ brief does not respond to that

statement or even address alternative employment practices. The

court inquired at oral argument whether alternative employment

practices evidence had been presented in the district court.

Plaintiffs’ counsel claimed that Plaintiffs’ expert provided

11

More specifically, MP&L’s expert demonstrated that an

applicant with a score of 180 on the CAB has almost a 50% chance

of developing into an above-average worker, and only a 31% chance

of winding up in the bottom third of all workers. On the other

hand, an applicant scoring 150 on the CAB is equally likely (at

39%) to develop into an above-average employee or to wind up in

the bottom third of all employees.

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evidence of acceptable alternative practices by describing a

process in which MP&L might require applicants to perform sample

Storekeeper tasks, perhaps during the course of an interview.

While acknowledging that this showing was not particularly

“precise,” Plaintiffs’ counsel argued that it was sufficiently

specific to meet the Plaintiffs’ burden of demonstrating

acceptable alternative employment practices. We cannot agree.

After reviewing the transcript of his testimony, which runs

for over 250 pages, we have found only two instances in which

Plaintiffs’ expert mentioned such an alternative, and we note

that Plaintiffs’ expert even declined to specify whether such a

“structured interview” would involve written or oral questions.

We need not and do not decide whether a more substantial showing

would demonstrate that such hiring practices constituted an

acceptable alternative to the challenged practices at issue. We

simply conclude that the Plaintiffs’ presentation was so tenuous

that it cannot, in any meaningful sense of the word, be

considered an “alternative” to the testing practices that MP&L

has shown were justified by business necessity. Therefore, we

hold that the Plaintiffs failed to show that MP&L’s employment

policies constituted unlawful employment practices based on

disparate impact under Title VII.

III. CONCLUSION

For the reasons stated above, we REVERSE and RENDER judgment

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in favor of the defendant-appellant, VACATING both the district

court’s restraint upon the challenged employment practices and

the district court’s award of lost wages and attorneys’ fees to

the plaintiffs-appellees. Costs in the district court and in

this court shall be borne by the plaintiffs-appellees.

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