# Equal Employment Opportunity Commission, Cross-Appellee v. Sears, Roebuck & Company, Cross-Appellant > Court of Appeals for the Seventh Circuit · March 15, 1988 · 839 F.2d 302 URL: https://www.frixlaw.com/law-library/cases/9477215 ## Case - **Full name:** EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, Cross-Appellee, v. SEARS, ROEBUCK & COMPANY, Defendant-Appellee, Cross-Appellant - **Court:** Court of Appeals for the Seventh Circuit - **Decided:** March 15, 1988 - **Citations:** 839 F.2d 302 - **Precedential status:** Published - **Opinion:** Concurring in part by Cudahy - **Judges:** Wood, Cudahy, Eschbach - **Cited by:** 160 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9477215 ## How later opinions describe it (automated extraction) - concluding that, on their own, “job titles and job descriptions” cannot establish “job equality” - noting that "the phrase 'partial summary judgment’ is typically a misnomer used to describe a pretrial order under [Rule] 56(d)” because such an order "is definitely interlocutory and nonappealable” - affirming district court's determination that plaintiff's regression statistics were unpersuasive in part because they failed to take into account relative lack of interest in the jobs at issue ## Opinion text CUDAHY, Circuit Judge, concurring in part and dissenting in part: It is extremely difficult to distinguish superficial blemishes from structural defects in this oversized and confusing case. Although its efforts are impressive and, in many respects, commendable, the majority has been only partially successful. Its opinion properly identifies some important shortcomings in the EEOC’s case; but it overstates the significance of others and seems to overlook entirely certain equally serious flaws in Sears’ argument. Thus, it is true that the EEOC’s internal machinations in initiating this case deserve condemnation. It is equally true that the EEOC as much as gave the case away by failing to produce any flesh and blood victims of discrimination. Regression statistics by themselves only demonstrate correlations between variables; to move from correlation to causation, there must be some independent theory about the causal relationships of the variables. See, e.g., D. Baldus & J. Cole, Statistical Proof of Discrimination § 9.4 at 320 (1980). In this case, much of the dispute centers on whether crucial independent variables have been omitted or misspecified. Therefore, the parties’ causal theories, substantiated most convincingly through first-hand accounts, take on particular importance. Hence, the EEOC’s failure to present first-hand evidence makes Sears’ lopsided victory far easier to understand. I would reiterate, however, that key elements in Sears’ case have escaped critical examination. Perhaps the most questionable aspect of the majority opinion is its acceptance of women’s alleged low interest and qualifications for commission selling as a complete *361 explanation for the huge statistical disparities favoring men. The adoption by the district court and by the majority of Sears’ analysis of these arguments strikes me as extremely uncritical. Sears has indeed presented varied evidence that these gender-based differences exist, both in our society as a whole and in its particular labor pool. But it remains a virtually insuperable task to overcome the weight of the statistical evidence marshalled by the EEOC or the skepticism that courts ought to show toward defenses to Title VII actions that rely on unquantifiable traits ascribed to protected groups. I start with the expectation that commission salespeople generally see themselves as the elite of the sales force. They make more money than noncommission sales people and obtain their positions through a more selective hiring process. As a consequence, they enjoy greater prestige. They are people with confidence in their ability to captivate customers and move merchandise. I would expect them to look with condescension, if not contempt, upon retail clerks working as order-takers for a straight wage. I do not therefore quarrel with the majority’s proposition that retail order-taking is a “different” task from commission selling. But I would expect that the jobs are most often seen in a vertical alignment with commission selling on top. Whether or not the perspective that gives rise to this hierarchical ranking is commendable, it is certainly pervasive. I think my view differs from that of the majority, who seem to believe that the tasks are perceived as coequally not as occupying distinct tiers in a vertical pecking order. These perspectives are important because the majority’s more benign view tends to minimize the significance of Sears’ contentions that women lack the interest and qualifications to sell on commission. Women, as described by Sears, the district court and the majority, exhibit the very same stereotypical qualities for which they have been assigned low-status positions throughout history. The majority states that [the] reasons for women’s lack of interest in commission selling included a fear or dislike of what they perceived as cutthroat competition, increased pressure and risk associated with commission sales. Noncommission selling, on the other hand, was associated with more social contact and friendship, less pressure and less risk. Supra at 321. The district court found that noncommission saleswomen were generally happier with their present jobs at Sears, and were much less likely than their male counterparts to be interested in other positions, such as commission sales.... 628 F.Supp. at 1313. These conclusions, it seems to me, are of a piece with the proposition that women are by nature happier cooking, doing the laundry and chauffeuring the children to softball games than arguing appeals or selling stocks. The stereotype of women as less greedy and daring than men is one that the sex discrimination laws were intended to address. It is disturbing that this sort of thinking is accepted so uncritically by the district court and by the majority. Perhaps they have forgotten that women have been hugely successful in such fields as residential real estate, door-to-door sales and other direct outside merchandising. There are abundant indications that women lack neither the desire to compete strenuously for financial gain nor the capacity to take risks. Sears, the district court and the majority hang much of their refutation of the EEOC’s hiring and promotion claims on the putative difference between men’s and women’s interest in undertaking commission sales. Huge statistical disparities in participation in various commission selling jobs are ascribed to differences in “interest.” Yet there is scarcely any recognition of the employer’s role in shaping the “interests” of applicants. See, e.g., Catlett v. Missouri Highway and Transp. Comm’n, 828 F.2d 1260, 1265-66 (8th Cir.1987). Even the majority is willing to concede that lack of opportunity may drive lack of inter *362 est, but dismisses the matter as a “chicken-egg” problem. Supra at 322. I concede that the government’s case would be stronger if it had produced even a handful of women willing to testify that Sears had frustrated their childhood dreams of becoming commission sellers of roofing, sewing machines or air conditioners. However, even absent flesh and blood victims, I find the willingness of the district court and the majority to accept the interest defense uncritically, and without recognition of its close parallel to the stereotypes that Title YII seeks to eradicate, perplexing and unacceptable. In any event, if we are to wrestle with the ambiguous quality of interest, we must honestly assess the EEOC’s claim that significant gender-based disparities remain after appropriate adjustments are made to control for interest. In the analysis of hiring data, EEOC’s logit and cross-classification analyses {see Sears II, 628 F.Supp. at 1296-99) adjusted initial estimates of the expected proportion of female hires to account for six factors that might legitimately affect an applicant’s odds of selection. Four of these factors, “job applied for,” “job type experience,” “product line experience” and “commission sales experience,” can be viewed as imperfect proxies for interest, and, to a lesser extent, for subjective qualifications. These adjustments brought down the expected proportions of female hires. The cross-classification method, for example, reduced the expected proportion of women hired into full-time commission sales nationwide for the entire liability period from 61.1% to 37.2%. But statistically significant disparities between expected and actual hiring rates remained in a majority of years for every region. Sears II at 1297-98. 1 These adjusted findings derive independent support from the EEOC’s analysis of Sears’ Applicant Interview Guides. This *363 analysis shows that women were more than sixty percent of the full-time sales applicants surveyed (EEOC Exhibit A) and forty percent of the persons who considered themselves most ready, willing and able to sell installed home improvements at Sears (EEOC Exhibit A 30). But women comprised only 1.7% of full-time commission sales hires in 1973 and between 5.3% and 10.5% thereafter. See EEOC Exhibit 1 Supp. Table 10. “Interest” may be the valid — even crucial — factor in the assignment of applicants to positions that Sears asserts it to be, but it hardly accounts for the vast statistical discrepancies involved here. Sears, the district court and the majority contend that the adjustments made by the EEOC understate for various reasons the true effects of differences in interest. These criticisms, however, are not serious enough to explain away the enormous disparities that remain after the adjustments are made. The majority also approves the district court’s finding that Dr. Siskin’s regression analyses failed to adjust adequately for subjectively assessed qualifications. Supra at 325-27. The majority even goes so far as to approve the district court’s finding that the regressions failed to take into account characteristics such as “ ‘physical appearance, assertiveness, the ability to communicate, friendliness, and economic motivation.’ ” Id. at 327 (quoting Sears II, 628 F.Supp. at 1303), which had been mentioned as “desirable” traits for commission salespersons. I think a critique based on such obviously unquantifiable and peripheral considerations is inordinately critical of the statistical evidence being presented. In Bazemore the Supreme Court rejected the Fourth Circuit’s determination that a regression analysis was “unacceptable” because it did not include “all measurable variables.” Bazemore v. Friday, 478 U.S. 385 , 106 S.Ct. 3000, 3009 , 92 L.Ed.2d 315 (1986). Here, there is no claim that the EEOC failed to include any relevant, measurable variable. The EEOC loses because, in the eyes of the district court and the majority, it has not carried the still heavier burden of disproving the enormous significance that Sears attributes to unmeasurable variables. Cf. Caviale v. Wisconsin Dep’t of Health & Social Serv., 744 F.2d 1289, 1294 (7th Cir.1984) (“rule requiring members of the comparison pool to possess subjective qualifications would render a plaintiff’s burden of production nearly insurmountable”). The majority’s uncritical acceptance of the inordinate explanatory power that Sears ascribes to interest and subjectively assessed qualifications may be most apparent in its rejection of the EEOC’s “early years” argument. The EEOC contends that the early years of the liability period (from the beginning of the period in March 1973, through the implementation of the Mandatory Achievement of Goals (“MAG”) plan in June or July 1974) should be analyzed separately from the later years (from the implementation of the MAG plan through 1980). The majority declines to consider the two periods separately, primarily because it claims the EEOC’s “arbitrary and false assumptions” deprive its statistics of probative value with respect to either period. Supra at 310. In the alternative, the majority holds that even if the EEOC’s basic statistical analysis were sound, separate consideration of the early years would be unnecessary because the EEOC has not established that the two periods are distinct. Id. at 315-16. Neither rationale for declining to analyze the early years separately withstands scrutiny. For the majority, the EEOC’s failure to account adequately for claimed differences in interest and subjectively assessed qualifications makes it unnecessary to consider the early years separately. In insisting that the EEOC establish the validity of its basic findings before proceeding with its discussion of the differences between the pre-MAG and post-MAG periods, however, the majority misunderstands the significance of the EEOC’s argument. Separate consideration of the early period not only focuses attention on the largest disparities, it also underscores the dramatic difference in the representation of women in commission sales before and after the MAG program. The sharp decline in gender-based *364 disparities seems far more suggestive of a discrete change in hiring practices than of more gradual changes in women’s aspirations and qualifications. The logical implication is that the MAG plan removed barriers to women in Sears’ hiring practices. 2 Viewed in this light, the analytic distinction between the earlier and later periods is not some elaborate extension of the EEOC’s argument, valid only if the EEOC’s basic statistical model is presumed valid. Instead, this distinction is an additional means of assessing the coherence of Sears’ and the EEOC’s conflicting interpretations of the numbers. Given the slipperiness of the interest and qualifications variables on which Sears relies so heavily, the court should employ every available means of assessing Sears’ explanation. Instead, the majority uses its conclusions as blinders to block inconvenient arguments from view. I am also unpersuaded by the majority’s alternative argument for declining to consider the early period separately. The majority temporarily suspends its disbelief in the EEOC’s overall statistical approach to consider whether the disparity between pre-MAG and post-MAG statistics, if validly measured, would justify separate consideration of the early years. In this respect, the majority approves the district court’s finding that the EEOC failed to establish either that Sears adopted the MAG program in response to the EEOC’s enforcement efforts or that significant disparities actually exist between the earlier and later periods. I find the discussion of motives peripheral and the effort to minimize the difference over time unconvincing. In my view, Sears’ precise motives for implementing the MAG plan have little bearing on the appropriateness of separate treatment. The MAG plan, whether prompted by the threat of enforcement or by Sears’ disinterested dedication to the ideal of equal opportunity, was clearly intended to increase the numbers of women in male-dominated jobs. See Sears II, 628 F.Supp. at 1293. This objective provides a reasonable basis for looking at the differences in hiring rates between the two periods. A sharp improvement in the success of women applicants after the implementation of a change in hiring practices conveys valuable information, whether or not Sears left evidence that a guilty conscience motivated the change. 3 In assessing the significance of the MAG plan, I find that the numbers clearly show a sharp increase in women applicants’ commission sales jobs after 1974. For example, women represented 9.9% of full-time commission sales hires nationwide in 1973, and 17.6% in 1974; the corresponding annual figures for the period from 1974 through 1980 ranged from 30.7% to 40.5%. EEOC Exhibit 1 at 13, Table 1. Similar differ- *365 enees are reflected in the data on part-time hires for four of Sears’ five regions. The majority questions the EEOC’s comparisons between the earlier and later period on two grounds. First, the majority observes that the data for calendar years 1973 and 1974 do not correspond to the “early period,” which ran from March 1973, through June or July 1974. The best available numbers for the “early years” therefore include two months of 1973 that antedated the liability period and five or six months of 1974 that followed full implementation of the MAG plan. Precise numbers for the sixteen to seventeen month period in question would no doubt strengthen the EEOC’s argument for separate treatment. I do not see, however, how this mismatch can by any stretch of the imagination negate the sharp differences between the two periods, particularly since including the late-1974 months in the early years should only reduce the disparities between the earlier and later periods. The majority also observes that some of the specific comparisons presented by the EEOC tend to overstate the differences between the earlier and later periods. Supra at 316. I agree that the EEOC’s presentation on this point is not a model of clarity. However, the undeniable differences between the two periods (differences that are probably understated by the implementation of the MAG Plan well before the end of the 1973-74 period) appear to me to compel a conclusion that something fundamental occurred. The district court attributed the increase in women hires during the liability period to changes that made these jobs more attractive to women, including an increase in part-time commission sales jobs, the introduction of base salaries for the commission sales force, increasing availability of female “role models” in commission sales jobs and the increased availability of day care. Sears II, 633 F.Supp. at 1309. The sharp differences over time cannot be explained by these four factors (three of which did not appear until 1977) or by the broad social changes that Sears claims affected women’s role in the work force during the 1970’s. 4 The majority has vested the unmeasured differences in interest and subjectively assessed qualifications with the power to explain both vast disparities and sharp swings in those disparities. The majority thus seems to credit Sears with having devised an all-purpose deus ex machina, invulnerable to refutation by any argument from quantifiable factors. With respect to promotions, the majority again attempts to dismiss the inexorable numbers by falling back on highly dubious assumptions about the disparate levels of “interest” of men and women in commission selling. The EEOC tried to meet the “interest” objection by adjusting for greater male interest to the extent of 1.5, 2, or even 3 times female interest. The majority seeks to dénigrate the proof emerging from these adjustments by arguing that men may be more than three times as interested in commission selling as women. Supra at 335. At least, the majority puts the burden on the EEOC to show that the interest differential is not more than three to one. Id. This approach vividly illustrates the virtually insurmountable obstacle that the differential interest defense can place in the way of proof in a case of this sort. “Interest” by its very nature is a fuzzy quality which hardly lends itself to mathematical demonstration. To say that men are three times as interested as women in commission selling is a rough attempt to describe a dynamic social phenomenon; it is hardly a matter susceptible of precise delineation. A factor of three seems to be near the limits of plausibility and the majority’s demand that the EEOC rule out the possibility of multipliers greater than three rather than Sears proving these greater disproportions strikes me as absurd. In *366 addition, the admittedly changing levels of feminine “interest” during the 1970’s — noted by the district court and the majority— make the majority’s objections to the EEOC’s promotion statistics seem nitpicking and unrealistic. If what passed for lack of interest in the early 1970’s was really lack of opportunity, the subsequent shift in the numbers should hardly redound to the benefit of Sears. See Catlett, 828 F.2d at 1265-66 . Two other aspects of the majority opinion, the treatment of the pregnancy leave issue and the wage discrimination claim, warrant brief comment. The Sears Personnel Manual granted a day of paid leave to male employees when their wives gave birth but denied this benefit to female employees giving birth. The district court held that the Personnel Manual did not make out a prima facie case of discrimination without a further showing that these provisions were actually implemented. Sears II, 628 F.2d at 1275-76. The majority affirms this reasoning. Supra at 353-357. The majority concedes that the authority of Durant v. Owens-Illinois Fiberglass, 517 F.Supp. 710 (E.D.La.1980), the principal support for the startling result reached here, is “perhaps weak.” I would characterize Durant’s authority as virtually nonexistent since the defendant employer in that case presented evidence that contract provisions, which appeared to establish stricter guidelines for pregnancy leave than for sick leave brought on by illness, were routinely subordinated to recommendations of women’s personal physicians. Id. at 723 . Sears presented no analogous evidence. The majority’s insistence that the EEOC prove that Sears implemented its official written policies illustrates how the majority heightens its demands on the EEOC beyond reason and common sense. Finally, on the wage discrimination claim, I would agree that under existing case law the Hay Method job descriptions are probably not adequate to show substantial equality of the jobs for purposes of Equal Pay Act analysis. Therefore, this claim must fail. I would, however, take sharp exception to the majority’s view that the EEOC’s regression failed to take account of enough independent variables. Assuming basic comparability of the jobs, the EEOC took account of every reasonably arguable variable and the results still showed women decisively the losers. In summary, this case was tainted in its origins and was tried without recourse to flesh and blood victims. The statistical evidence is nonetheless quite strong and the majority has misconstrued and grossly overstated its frailties. I must therefore respectfully dissent as to the matters I have discussed. . The EEOC obtained similar results when it performed these adjustments on figures for expected hires disaggregated by product line. See EEOC Exhibit 1 at 41A, Table 15. Even if one accepts the overly restrictive assumption that only disparities of greater than three standard deviations are significant, Sears II, 628 F.Supp. at 1287, the adjusted figures still reveal significant disparities for most product lines in most years. I do not mean, however, to imply that I accept the three standard deviation cutoff employed by the district court, id. at 1287, and implicitly approved by the majority, supra at 323 n. 20. Statistical convention ascribes significance to findings that have only a five percent probability or lower of having resulted from chance factors. The translation of this five-percent chance of erroneously ascribing significance to chance results into standard deviation terms (also known as determining "the ninety-five percent confidence interval”) depends upon the type of distribution at issue. For a normal distribution, this five-percent level corresponds to a 1.96 standard deviation threshold for a "two-tailed" test, designed to test the hypothesis that a variable has no explanatory power (e.g., that being female neither increases nor reduces an applicant’s odds of landing a commission sales job), and a 1.65 standard deviation threshold for a “one-tailed” test, designed to test the hypothesis that a particular variable does not influence outcomes in one direction (e.g., that being female does not reduce the odds of landing a commission sales job). See generally Palmer v. Schultz, 815 F.2d 84, 92-97 (1987) (discussing one-tailed and two-tailed tests of statistical significance); D. Baldus and J. Cole, Statistical Proof of Discrimination § 9.221 (1980 & Supp.1986) (describing differences and, in supplement, advocating use of less restrictive one-tailed test "if the possibility of intentional discrimination favoring the protected group can be ruled out”). The Z statistics calculated by the EEOC are based on a binominal distribution, which approaches a normal distribution for selection processes involving large numbers. Thus, the probability of obtaining a Z of 3.0 or greater in the EEOC study due to chance events is very close to the probability of randomly selecting an observation three standard deviations or more above the mean from a normal distribution — about .001. This is substantially lower than the probability of obtaining a Z of 2.0, which is very close to the probability of selecting an observation two standard deviations above the mean of a normal distribution— about .023. There is some authority for courts’ applying a stricter standard of significance than the five-percent convention favored by social scientists, see, e.g., Hazelwood School Dist. v. United States, 433 U.S. 299, 307-08 , 97 S.Ct. 2736, 2741 , 53 L.Ed.2d 768 (1978); Coates v. Johnson & Johnson, 756 F.2d 524 , 547 n. 22 (7th Cir.1985), but I find none for a per se rule that any disparity of less than three standard deviations is to be disregarded. See, e.g., Castaneda v. Partida, 430 U.S. 482 , 497 n. 17, 97 S.Ct. 1272 , 1281 n. 17, 51 L.Ed.2d 498 (1977) (differences "greater than two or three standard deviations significant to social scientists’’); Palmer, 815 F.2d at 92 (surveying case law on confidence levels). . It is possible, of course, that the MAG plan did not eliminate discrimination, but instead replaced an evenhanded process with one that affirmatively favored women. Sears' strongest evidence for this interpretation is its data comparing job performance for male and female commission sales people. Sears Exhibit 6-3-2. Both the district court and the majority rely on these figures in their acceptance of Sears’ qualifications argument. Sears II, 628 F.Supp. at 1320-22; supra at 338-39. I find these data unpersuasive. Sears’ expert conceded that only comparisons between men and women in the bottom ten percent of candidates who are hired provide persuasive evidence of affirmative action. Tr. 14,616-19, 18,494 (testimony of Dr. David A. Wise). Sears’ data compare the bottom ten percent of performers, however, not the bottom ten percent of candidates as assessed at the time of hiring. Inferior performance among the bottom ten percent of women commission sellers would imply affirmative action in the hiring process only if Sears knew which candidates would become low performers. Sears assumed an almost perfect correlation of .99 between assessed qualifications and performance. Its results do not hold if more realistic correlations are assumed. EEOC Exhibit, Siskind’s Rebuttal Testimony at 21-22 (written testimony of Dr. Bernard R. Siskind); Tr. at 17,407-09 (trial testimony of Dr. Siskind). . Nothing in the cases cited by the majority on the separate periods issue suggests that a plaintiff seeking to distinguish periods before and after a corrective action must demonstrate that the employer acknowledged past illegality when it implemented the changes. See, e.g., Teamsters v. United States, 431 U.S. 324, 341-42 , 97 S.Ct. 1843, 1857-58 , 52 L.Ed.2d 396 (1977) (corrective action does not excuse prior discrimination); Rich v. Martin Marietta Corp., 522 F.2d 333, 346 (10th Cir.1975) (improvement after filing of charges does not prove lack of pre-filing discrimination). . Sears accuses the EEOC of "refuting the entire women’s movement” by refusing to accept social change during the 1970’s as a complete account for women’s improved prospects at Sears. Appellee’s Brief at 98. The factors Sears cites include changes in women’s attitudes toward home life and the work place and the increased availability of birth control. Important as these factors may have been, I do not think that they account for two to three years of sharp improvements followed by a gradual leveling off. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9477215. Public record. Not legal advice.