Appendix — Union National Bank v. Paxton
Supreme Court brief1983
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82-1220
Supreme Court, U.S
2 2 a 2
No.
7—RA oe.
In THE ALEXAND re\
Supreme Court of the Mnited
OctToser Term, 1982
UNION NATIONAL BANK OF LITTLE ROCK,
Petitioner,
v.
MELVIN PAxTON, ef al,
Respondents.
APPENDIX TO
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT
Erw.is N. GrRiswo_p
(Counsel of Record)
PAMELA S. Eppy
Jones, Day, Reavis & PoGue
1735 Eye Street, N.W.
Washington, D.C. 20006
(202) 861-3898
Counsel for the Petitioner
Of Counsel
James E. Darr, Jr.
EICHENBAUM, SCOTT, MILLER,
Crockett, Darr & Hawk, P.A.
Suite 1400, Union National Bank Building
One Union National Plaza
Little Rock, Arkansas 72207
(501) 376-4531
i
INDEX
APPENDIX TO
PETITION FOR A WRIT OF
CERTIORARI TO Th.E
UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT
APPENDIX A—Opinion of the Court of Appeals...... la
APPENDIX B—Opinion of the District Court............ 40a
APPENDIX C—Judgment of the Court of Appeals... 10la
APPENDIX D—Order Denying Petition for Rehear-
ing . 103a
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
No. 81-1650
MELVIN PAXTON, JR.; and KATRINA E. Terry; PHYLLIS MOSLEY;
Jerry RiLey; GEORGE SPANN,
Appellants,
Vv.
UNION NATIONAL BANK, a corporation,
Appellee.
No. 81-1656
HAROLD DomINIC Brown,
Appellant,
Vv.
UNION NATIONAL BANK OF LITTLE ROCK,
Appellee.
No. 81-1657
MELVIN PAXTON, Jr.; and KATRINA E. Terry; PHYLLIS MOSLEY;
Jerry RiLey; GEORGE SPANN,
Appellees,
Vv.
UNION NATIONAL BANK, a corporation,
Appellant.
Appeals from the United States District Court for the Eastern
District of Arkansas.
2a
Submitted: February 8, 1982
Filed: September 10, 1982
Before HEANEY, McMILLIAN
and ARNOLD, Circuit Judges.
HEANEY, Circuit Judge.
This is an appeal from a judgment of the United States
District Court for the Eastern District of Arkansas denying each
of the named plaintiffs and intervenors relief, refusing to certify
a class action and holding that the Union National Bank of
Little Rock did not discriminate against black applicants or
employees in any aspect of the employment relationship. We
affirm the district court insofar as it denied relief to Melvin
Paxton, Katrina Terry and George Spann, and to the extent
that it refused to certify a class of black applicants. We hold,
however, that Jerry Riley and Phyllis Mosley proved that they
were denied promotions on account of their race, and that
Mosley was discriminatorily discharged. We further hold that
the district court erred in refusing to certify two subclasses of
black discriminatees—those discriminated against with respect
to promotions and those discriminatorily discharged—and in
failing to grant relief to the promotion subclass.
We reverse and remand to the district court with directions
to it to award appropriate relief to Mosley and Riley, and to the
promotion subclass.
1.
PrRocepURAL History
These consolidated Title VII and section 1981 actions were
brought by Melvin Paxton and Harold Dominic Brown against
the Union National Bank of Little Rock, Arkansas, alleging
race discrimination in hiring, testing procedures, promotions,
discharges, job assignments, compensation and other terms and
3a
conditions of employment.' They brought suit on their own
behalf and on behalf of a class alleged to consist of “all black
individuals who are (1) employed by defendant; (2) have
sought employment with defendant, but have been refused due
to race; (3) might seek employment with defendant; (4) have
been employed by defendant and have been adversely affected
by defendant's discriminatory practices and policies.”
Five additional black persons, Katrina Terry, Phyllis
Mosley, Jerry Riley, Bobby Scott and George Spann were
granted leave to intervene as plaintiffs. Terry, Mosley and
Spann were former employees of the Union National Bank,
while Riley and Scott were employees at the time of the trial.
Bobby Scott’s case was settled and dismissed prior to trial.?
The plaintiffs and intervenors moved to certify the litiga-
tion as a class action pursuant to Fed. R. Civ. P. 23. The district
court, Judge G. Thomas Eisele presiding, began an evidentiary
hearing on the certification issue on April 7, 1980. Some time
later, the court, with the apparent acquiescence of the parties,
informally decided to merge the certification hearing with the
trial on the merits and to reserve a decision on the certification
issue until the trial was completed. The trial was recessed on
April 18, 1980, and not resumed until August 12. On October
21, after fifteen days of hearings had been held, Judge Eisele
recused himself. This case was then assigned to Judge Henry
Woods. Judge Woods stated that he would not rehear the
witnesses that had been called while Judge Eisele was presiding
and directed the parties to prepare a transcript of the prior
proceedings. He resumed the trial on April 7, 1981, and
completed it on April 23, 1981, after eleven additional days of
testimony. At the close of the evidence, he refused to certify a
class and ruled against the plaintiffs and intervenors on their
individual claims.
1 Norman Williams, a former black employee of Union National Bank,
also filed a Title VII complaint making similar allegations against the bank.
His case was dismissed before trial without objection pursuant to Fed. R. Civ.
P. 41(b).
2 Scott testified at trial. His testimony was considered by the court as
relevant to the class claims and will be similarly considered by this Court.
4a
The court treated the case as one involving disparate
treatment.? It held that the class action failed because the
plaintiffs and intervenors had not sustained their burden of
proving that Union National Bank discriminated against any
class of its employees, and because the plaintiffs had not met
the requirements of Rule 23. It found that the plaintiffs had
failed to prove a prima facie case of discrimination with respect
to any aspect of the employment relationship and that even if
they had, the defendant had sustained its burden of articulating
a legitimate nondiscriminatory reason for its employment deci-
sions with regard to the six named plaintiffs and intervenors
and all other employees whose names had been suggested as
putative discriminatees.
On appeal, the plaintiffs and intervenors contend that the
court erred in failing to certify a class, and in denying relief to
the class and named plaintiffs and intervenors.
3 An argument can be made that the promotion class claims should have
been decided under the discriminatory impact theory. See Williams v.
Colorado Springs, Colo. Sch. Dist., 641 F.2d 835, 839-842 (10th Cir. 1981).
As we detail, infra, the plaintiffs proved that the racial composition of the
bank’s work force at most above-entry levels does not reflect the composition
of available qualified persons in the relevant labor pool. The court could
have concluded from this that the sum of the defendant’s promotion methods,
although not administered with a discriminatory intent, impacted more
heavily on blacks in the bank’s work force. See Vuyanich v. Republic Nat.
Bank of Dallas, 521 F.Supp. 656, 662 (N.D. Tex. 1981). The bank would —
have then had to show that the disparate results were attributable to
identifiable, neutral personnel practices that were necessary to its business.
Id.
We will, however, review the promotion class claims under a disparate
treatment theory. The plaintiffs are not prejudiced by this approach because
of our holding, infra, that the plaintiffs’ proof was sufficient to find a pattern
or practice of intentional racial discrimination in the bank’s promotion
decisions. The defendant is not prejudiced either because, in contrast to the
rule in disparate impact cases, the bank was never forced to assume the
burden of persuasion as to any aspect of this case.
With respect to the discharge class, the trial court properly tried it as a
case involving disparate treatment. The plaintiffs did not allege that any
facially neutral employment policies impacted more heavily on blacks. They
simply alleged that the bank had intentionally discriminated against blacks by
discharging them because of their race. :
Sa
Il.
GENERAL BACKGROUND
The Union National Bank is a federally chartered bank
with a main office and thirteen branches in Little Rock,
Arkansas. The bank has been owned by Herbert H. McAdams,
an attorney and successful northwest Arkansas banker, since
1971.
The bank hired very few black persons prior to 1973. In
1973, McAdams undertook an effort to develop business from
black businesses and workers. In furtherance of this goal,
McAdams directed Joseph E. Zegler, a vice president and
personnel officer of the bank, to institute an affirmative action
program designed to bring more black employees into the
bank. Zegler published a personnel policy manual, which
contained an equal opportunity policy,‘ actively recruited black
persons for employment, and initiated a course for them in
basic bank training. Black persons were hired into the bank in
numbers approximating their numbers in the work force in the
Little Rock area.
4The manual stated in part:
It is the policy of Union National Bank to implement
affirmatively equal opportunity to all qualified employees and
applicants for employment without regard to race, creed, color,
sex, religion, or national origin. Positive action shall be taken to
insure the fulfillment of this policy, including: |. Hiring, place-
ment, upgrading, transfer or demotion. 2. Recruitment, advertis-
ing or solicitation for employment. 3. Treatment during em-
ployment. 4. Rates of pay or other forms of compensation. 5.
Selection for training. 6. Termination. This policy is consistent
with the requirements and objectives set forth by the Presidential
Executive Orders.
Our objective is to obtain individuals qualified and/or
trainable for positions by virtue of job related standards of
education, training, experience and personal qualifications.
Responsibility for insuring compliance and implementation
of the Bank's policy on equal employment opportunity is as-
signed to the Personnel Director. The Executive Committee will
review this policy every twelve months and measure the results
against these stated objectives.
6a
NUMBER OF EMPLOYEES
AS OF DECEMBER 31
Percent
Year Total White Black Black,
1974 332 293 39 11.8
1975 316 262 545 17.1
1976 343 288 55 16.0
1977 393 320 73 18.6
1978 408 336 72 17.7
1979 441 362 79 17.9
1980 432 358 74 17.1
Most of the black employees were hired into entry-level
positions.
The total number of persons employed by the bank grew
from 332 in 1974 to 432 in 1980. The turnover rate among
employees during the same period was very high, approximat-
ing forty percent per year.
The average educational level of black persons employed
by the bank during this period was 13.1 years; the average for
white employees was 13.5 years. The bank did not preserve the
records with respect to the applicant pool; thus, the record does
not indicate the number of blacks that applied to the bank for
employment or the education and experience of those that did
apply.
Ill.
ANALYSIS
Our first subject of concern is the timing of the district
court’s decision with respect to class certification. These
consolidated actions were filed on April 12, 1976, and Septem-
ber 25, 1978. Extensive discovery was undertaken by the
5 This figure includes the fifteen black graduates of the basic training
school instituted by the defendant. The school was discontinued in 1977 or
1978 when it became clear that the banks in Little Rock were not hiring its
graduates.
7a
parties. On April 7, 1980, the court began evidentiary hearings
on the propriety of maintaining the consolidated suits as a class
action, telling the parties that
[w]e had a terrible experience in this court of
having a moratorium on civil cases for years. Class
actions were filed and they sat here for years, and
we've been faced with arguments that people who
might have asserted their individual claims did not
do so in reliance upon the hope that they would be a
member of a class and get benefits that way four or
five years after the event.
So I think there’s been a suggestion that from the
point of view of the plaintiff that the earlier the class
is certified, the fewer who are left out of that class
*“**
Then the defendants have a vital stake in an
early determination because of the whole scope of the
trial on the merits is thereby affected if there’s going
to be a class at all, and so I think what would have to
be done, absent agreement of the parties, there’s very
little you can’t do, that the Court is going to have to
take it up preliminarily and make a certification or
decide on class at the earliest practicable time.
The subsequent decision to delay certification until after
the trial was completed, notwithstanding the apparent acquies-
cence of the parties, “is directly contrary to the command of
subdivision [23](c)(1) that the court determine whether a suit
denominated a class action may be maintained as such ‘[a]s
soon as practicable after the commencement of [the] action
***'” Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178
(1974). See Horn v. Associated Wholesale Grocers, Inc., 555
F.2d 270, 273 (10th Cir. 1977).
It is rarely appropriate for a court to delay the certification
decision until after a trial on the merits. See Eisen v. Carlisle &
®We assume that the agreement was an informal one reached in
chambers, as there is no record of it in the transcript.
Jacquelin, supra, 417 U.S. at 177-178; Horn v. Associated
Wholesale Grocers, Inc., supra, 555 F.2d at 274; Peritz v.
Liberty Loan Corp., 523 F.2d 349, 353-354 (7th Cir. 1975). It
was not necessary to do so here. The discovery undertaken by
the parties and the evidence adduced during the early stages of
the certification hearing should have provided the court with
sufficient information to resolve the question of whether a class
action was an appropriate vehicle for plaintiffs’ claims. If the
court was still in doubt as to the propriety of a class action, it
could have made the certification “conditional,” and altered or
amended its ruling at any time prior to completion of the trial.
See Fed. R. Civ. P. 23(c)(1).
The prejudice inherent in delaying the certification
determination until after trial has been thoroughly explored in
the context of litigation under subdivision (3) of Rule 23(b).
The court’s concern in Rule 23(b)(3) suits has been to prevent
“one-way intervention;” i.e., to protect defendants from puta-
tive class members who can “opt-out” of an unfavorable
decision rendered simultaneously with class certification but can
choose to be bound by a favorable decision. Rule 23(b)(2)
suits such as this one, from which class member cannot “opt-
out,” do not present the same problem. Even in (b)(2) class
actions, however, “a deliberate deferral of the [class] determi-
nation until full trial on the merits * * * is fraught with serious
problems of judicial economy, and of fairness to both sides.”
Stastny v. Southern Beil Tel. & Tel. Co., 628 F.2d 267, 275 (4th
Cir. 1980) (footnote omitted ).
The court’s delay in this case was at the expense of judicial
economy. If the court had denied certification or certified a
limited class before trial began, the parties and the court could
have focused their energies on the narrower issues presented.
Neither party, however, can claim that the deiay unfairly
prejudiced them. Both parties acquiesced in the decision to
delay certification. The defendant thereupon fully presented its
defense as to all the class and individual claims. The plaintiffs
9a
generally proceeded on a class-wide basis as well.” Under these
circumstances, neither party can assert prejudice from the
delay.
Notwithstanding the timing of the certification decision, we
find that the court abused its discretion in reaching the result
that it did. The court should have certified a class consisting of
the following two subclasses of blacks who were discriminated
against by the bank.®
(1) Black employees who because of their race were
denied a promotion or received lesser salary increases at the
time of their promotion than did similarly situated white
employees during the period January |, 1974, to the completion
of trial (the promotion class).
(2) Black persons with less than two years of experience
who were discharged because of their race during the period
January 1, 1974, to the completion of trial (the discharge
class).
We turn first to the promotion class.
A. The Promotion Class.
1. Class Certification.
a. Rule 23(a).
Rule 23(a) of the Federal Rules of Civil Procedure
establishes four prerequisites to the maintenance of a class
action: (i) “numerosity”—the class must be “so numerous that
joinder of all members is impracticable”; (ii) “‘com-
monality”—the presence of “questions of law or fact common
to the class”; (iii) “typicality’—the claims or defenses of the
7 As we note, infra, the plaintiffs failed to fully develop evidence as to the
claims. Because of the plaintiffs’ consent to the delay, it is
irrelevant that this failure of proof may have been due in part to the lack of a
pretrial certification decision.
® The plaintiffs contend that the district court also erred in failing to
certify a class of black employees who were paid an initial salary rate less than
similarly situated white employees. The plaintiffs made no serious effort,
however, to satisfy the requirements of Rule 23 as to this class and we
therefore need not discuss it on appeal.
10a
class representative must be “typical of the claims or defenses
of the class”; and (iv) a class representative that will “fairly
and adequately protect the interests of the class.” Fed. R. Civ.
P. 23(a). The requirements must be satisfied as to each
subclass. See Stewart v. Winter, 33 Fed. R. Serv.2d 1159, 1168-
1169 (Sth Cir. 1982). We find that these requirements were
satisfied for the proposed class of black bank employees
discriminatorily denied promotions.
(i) Numerosity.
As noted above, the numerosity requirement of Rule
23(a)(1) requires an inquiry into whether the class is “so
numerous that joinder of all members is impracticable.” A
number of factors are relevant to this inquiry, the most obvious
of which is, of course, the number of persons in the proposed
class. No arbitrary rules regarding the necessary size of classes
have been established. Boyd v. Ozark Air Lines, Inc., 568 F.2d
50, 54 (8th Cir. 1977). In addition to the size of the class, the
court may also consider the nature of the action, the size of the
individual claims, the inconvenience of trying individual suits,
and any other factor relevant to the practicability of joining all
the putative class members. See C. Wright & A. Miller, Federal
Practice and Procedure § 1762.
The district court did not specifically address numerosity
with respect to black employees who had been discriminatorily
denied promotions. It stated generally:
With regard to numerosity, there are presently 74
black employees at the bank out of a work force of
432. With the exception of intervenors Riley and
Scott (who settled his case on the eve of trial), no
present black employees of Union National Bank
testified that the bank had discriminated against
them. A number of blacks presently employed at the
bank gave testimony very favorable to the bank on
the issue of discrimination—Bill Pierce, Mike Moth-
ershed, Mildred Hall, Charlotte Johnson and Shirley
Clingman. There hardly appears to be any great
number of blacks at the bank who desire these
plaintiffs to represent them in a class action or who
would profit from such representation. In fact very
few employees purportedly subject to discrimination
have been identified. When they have been identi-
fied, the basis for the discrimination charge has been
exploded either by other testimony, bank records, or
testimony from the alleged discriminatees them-
selves.
519 F.Supp. at 172.
The record simply does not support the court’s statements
that no present black employees testified that he or she had
been discriminated against by the bank,® or that there are not a
® The court attached considerable importance to the testimony of the six
witnesses enumerated above in its finding that the bank had not discriminated
against blacks in any respect. While some of these witnesses stated that they
had not been discriminated against and that they had not observed that other
blacks had been discriminated against, the specifics of their testimony
presented a different picture and tended to support the plaintiffs’ case.
Mike Mothershed testified that although a majority of the employees in
the mail room have been black persons, a black has never managed the
department. He stated that at least four white persons hired after him and
who did the same work he did received promotions before he did and that he
was paid less than the minimum salary established for the jobs that he held.
He did not know until the time of trial that a white computer trainee was paid
nearly as much as he, an operator with several years of experience. Although
Mothershed has served as a supervisor for several years, he was never told
about the bank’s affirmative action plan nor given instructions as to how to
evaluate employees for possible pay increases or promotions.
Mildred Hall, a black female, testified that when she went to work for
the bank in 1978, her supervisor and the white employees working for her
showed their resentment for her because she was a black woman taking the
place of a white man. She stated that even though she has two years of
college, seventeen years experience as a supervisor and an excellent work
record, she has not been named an officer of the bank and has not been given
an opportunity to get into the management training program. She has
received raises of only four to five percent per year, considerably less than
other supervisors, even though she has been told that her work is outstanding.
Contrary to the district court’s specific finding, Mrs. Hall did not deny that she
or other black employees had been discriminated against.
(footnote continues)
12a
great number of blacks who desire the plaintiffs’ representation.
Moreover, these findings confused the merits of the promotion
class’s claims with the simple question of whether the putative
discriminatees were numerous enough to make their joinder
impracticable.
It was the bank's stated policy to promote from within. '°
This policy was followed in a large majority of cases. During
the period 1974-1979,'' employees received 418 promotions; '?
seventy-five of the promotions went to black persons. The
salary increases accompanying these promotions were larger for
the white employees than for the black employees in the same
salary ranges in ninety percent of the instances. More than
eighty of the promotions were to supervisory or managerial
positions.'? Black employees received only two of the latter
promotions. It would not be practicable to join all the black
employees who received lesser promotions than their white
counterparts, or no promotions at all, particularly because none
of them, individually, could obtain the broad-based declaratory
and injunctive relief that the class representatives sought. See
Taylor v. Jones, 653 F.2d 1193, 1204-1205 (8th Cir. 1981);
Nance v. Union Carbide Corp., 540 F.2d 718, 730 (4th Cir.
(footnote continued)
Charlotte Johnson, a black female, employed in the bank's personnel
office, testified that about one-half of all applicants for jobs with the bank are
black. She could not remember if she had ever been told about the bank's
affirmative action plan, but denied ever being told that the blacks hired by the
bank from the special training program were high-risk employees. She was
aware of the fact that there were several all-white departments in the bank,
including data entry, proof control and some branch banks. She also stated
that Melvin Paxton was discharged—he did not resign.
The testimony of Bill Pierce and Shirley Clingman was supportive of the
bank’s position.
10 See note 17, infra.
11 The defendants introduced two differing exhibits purporting to show
the employment figures for 1980. Because of this ambiguity, we have
eliminated the 1980 totals.
12 Union National Bank defines a promotion as an employment decision
that results in a change of duties closely accompanied by a salary increase.
13 See Defendant's Exhibits 34(c)-34(h). Only those promotions in the
highest reported salary range are included in this number.
13a
1976), vacated, 431 U.S. 952 (1977); Danner v. Phillips
Petroleum Co., 447 F.2d 159 (Sth Cir. 1971). Thus, the
numerosity requirement was satisfied as to the promotion class.
See, e.g., Horn v. Associated Wholesale Grocers, Inc., supra, 555
F.2d at 275-276 (41-46 class members sufficiently numerous);
Arkansas Educ. Ass'n v. Bd. of Educ., Portland Ark. Sch. Dist.,
446 F.2d 763, 765-766 (8th Cir. 1971) (20 class members);
Cypress v. Newport News Gen. & Nonsectarian Hosp. Ass'n, 375
F.2d 648, 653 (4th Cir. 1967) (18 class members); Colston vy.
Maryland Cup Corp., 18 FEP Cases 83, 85 (D. Md. 1978) (25
members); Crenshaw v. Maloney, 13 FEP Cases 154, 155 (D.
Conn. 1976) (16 class members).
(ii) Commonality.
Rule 23(a)(2) requires that there be common questions of
law or fact among the members of the class. The rule does not
require that every question of law or fact be common to every
member of the class, Mosely v. General Motors Corp., 497 F.2d
1330, 1334 (8th Cir. 1974); Like v. Carter, 448 F.2d 798, 802
(8th Cir. 1971), cert. denied, 405 U.S. 1045 (1972), and may
be satisfied, for example, “where the question of law linking the
class members is substantially related to the resolution of the
litigation even though the individuals are not identically situ-
ated.” American Finance Sys., Inc. v. Harlow, 65 F.R.D. 94, 107
(D. Md. 1974),
Judge Woods wasted few words on the issue of the
commonality of the promotion class, stating only: “Spann and
Terry claim that they resigned from the bank because of
discrimination in promotions, but the evidence fails to substan-
tiate this charge as to them or other black bank employees.”
519 F.Supp. 172.
Again, Judge Woods applied an incorrect legal standard
that was improperly influenced by his view of the merits of the
claims. The commonality requirement was satisfied because the
following issue pervades all the class members’ claims—has
Union National Bank discriminated against black employees by
denying them promotions and giving them lesser promotions
than those given whites similarly situated? See Chisholm vy.
l4a
United States Postal Service, 665 F.2d 482, 492 (4th Cir. 1981)
Obviously, the bank's allegedly discriminatory promotion
procedures will affect individual employees in different ways
because of their diverse qualifications and ambitions. These
factual variations are not sufficient to deny class treatment to
the claims that have a common thread of discrimination.
Duncan v. State of Tenn., 84 F.R.D. 21, 29 (M.D. Tenn. 1979).
(iii) Typicality.
Rule 23(a)(3) requires that “the claims or defenses of the
representative parties [be] typical of the claims or defenses of
the class.” This requirement is generally considered to be
satisfied “if the claims or defenses of the representatives and the
members of the class stem from a single event or are based on
the same legal or remedial theory.” C. Wright & A. Miller,
Federal Practice and Procedure § 1764 at n.21.1 (Supp. 1982).
See Penn v. San Juan Hosp., Inc., 528 F.2d 1181, 1189 (10th
Cir. 1975); Smith v. B & O R.R., 473 F.Supp. 572, 581 (D. Md.
1979). See generally Schlei & Grossman, Employment Dis-
crimination Law, 281-282 (Supp. 1979) (hereinafter cited as
Schlei & Grossman).
Jerry Riley and Phyllis Mosley seek to represent the class
of black persons who have been denied promotions or have
been given lesser promotions on account of their race. Jerry
Riley claims that he was denied a promotion to lead control
clerk in the computer department, and that his promotion to
computer operator trainee and computer operator were dis-
criminatorily delayed. Phyllis Mosley alleges that she was not
promoted out of her telephone clerk job because of her race.
The district court did not specifically address the question of
whether these claims are “typical” of the claims of the class.
We find that they are.
Both Riley’s and Mosley’s claims rest on the same legal
theory as that of the class claims; i.e, that they have been
subjected to “disparate treatment” in the area of promotions
because of their race. Much of the evidence relevant to the
individual claims, such as that relating to the subjective nature
of the promotion decisions and the bank’s failure to post
ISa
vacancies, will be proffered to prove the class claims as well.
Typicality is not defeated because of the varied promotional
opportunities at issue, or the differing qualifications of the
plaintiffs and class members. See Donaldson v. Pillsbury Co.,
554 F.2d 825, 831 (8th Cir. ), cert. denied, 434 U.S. 856 (1977);
Doe v. First City Bancorporation of Texas, Inc., 81 F.R.D. 562,
569 (S.D. Tex. 1978),
The typicality requirement as customarily applied tends to
merge with “commonality.” General Tel. Co. of Southwest v.
Falcon, 50 U.S.L.W. 4638, 4641 n.13 (U.S. June 14, 1982).
This Court has given typicality “an independent meaning” by
holding that Rule 23(a)(3) “requires a demonstration that
there are other members of the class who have the same or
similar grievances as the plaintiff.” Donaldson v, Pillsbury Co.,
supra, 554 F.2d at 830. Accord, Wright v. Stone Container
Corp., 524 F.2d 1058, 1062 (8th Cir. 1975), See White v. Gates
Rubber Co., 53 F.R.D. 412, 415 (D. Colo. 1971). The court
must be shown that the representative is not alone in his or her
dissatisfaction with the employer's unlawful practices so as “to
assure that there is in fact a class needing representation.” Jd.
The burden of showing typicality is not an onerous one. It
does, however, require something more than general conclusory
allegations that unnamed blacks have been discriminated
against. '4
The plaintiffs have met the quantitative aspect of the
typicality requirement. Several employees, in addition to Riley
and Mosley, testified that they had been denied timely promo-
tions because of their race and detailed the reasons for their
complaints. The testimony of these employees—including
Bobby Scott, Ralph Martin, Mildred Hall, Betty Jean Abram-
hamson, Mabel Johnson and Vickie Nelson—demonstrated the
typicality of the plaintiffs’ grievances.
(iv) Fairly and Adequately Represent the Class.
The district court found it unnecessary to reach the ques-
tion of whether the named plaintiffs would adequately repre-
4 Hearsay testimony may be admitted to demonstrate typicality. See
Donaldson v. Pillsbury Co., 554 F.2d 825, 830-831 n.3 (8th Cir, 1977).
loa
sent the promotion class, because of its determination that their
proof failed to delineate any class who should be represented.
Because we have held to the contrary, we briefly address this
requirement.
The focus on Rule 23(a)(4) is whether: (1) the class
representatives have common interests with the members of the
class, and (2) whether the class representatives will vigorously
prosecute the interests of the class through qualified counsel.
Gonzales v. Cassidy, 474 F.2d 67, 72 (6th Cir. 1973). See
generally Schlei and Grossman, supra, at 283.
Phyllis Mosley and Jerry Riley allege that they have been
denied promotions within the bank on account of their race.
They share the class’ interest in procuring declaratory and
injunctive relief to eradicate those aspects of the bank’s promo-
tion practices that operate to keep blacks in the lower-level
positions in the bank. There is no indication that their interest
in procuring their rightful place in the bank’s hierarchy will be
at the expense of other class members or will, in any other way,
be antagonistic to the class’ interests. Finally, they have
demonstrated a willingness to prosecute the interests of the class
through qualified counsel. Mosley and Riley will, therefore,
fairly and adequately represent the promotion class.
b. Rule 23(b) (2).
For the reasons set forth above, we find that the appellants
satisfied the requirements of Rule 23(a) in regard to the
promotion class. We must still inquire, however, whether that
action is maintainable under any of the subdivisions of Rule
23(b).
The appellants moved to certify this action under
23(b)(2). Rule 23(b)(2) provides:
(b)***An action may be maintained as a
class action if the prerequisites of subdivision (a) are
satisfied, and in addition:
17a
(2) the party opposing the class has acted or
refused to act on grounds generally applicable to the
class, thereby making appropriate final injunctive
relief or corresponding declaratory relief with respect
to the class as a whole[.]
We have held that Rule 23(b)(2) certification is appropriate
when plaintiffs seek injunctive relief from acts of an employer
“on [the] grounds generally applicable to the class.” United
States Fidelity & Guar. Co. v. Lord, 585 F.2d 860, 875 ( 8th Cir.
1978), cert. denied, 440 U.S. 913 (1979). Racial discrimination
is such a ground; this case seeking injunctive relief against class-
wide race discrimination in the bank’s promotion practices was
appropriately brought under 23(b)(2). See id. at 875; Pettway
v. American Cast Iron Pipe Co., 494 F.2d 211, 257 (Sth Cir.
1974). The fact that back pay was sought incidentally to the
prayer for injunctive relief does not affect this result. E.g.,
United States Fidelity & Guar. Co. v. Lord, supra, 585 F.2d at
875; Senter v. General Motors Corp., 532 F.2d 511, 525 (6th
Cir. ), cert. denied, 429 U.S. 870 (1976); Jones v. Diamond, 519
F.2d 1090, 1100 (Sth Cir. 1975).
2. Merits of the Promotion Class Claims.
After a careful review of the 6,000 page transcript and the
150 exhibits comprising this record on appeal, we are left with
the firm conviction that the district court erred in holding that
the bank did not discriminate against black employees with
respect to promotions. See United States v. United States
Gypsum Co., 333 U.S. 364, 395 (1948). The bank must be
given credit for its adoption in the early 1970’s of an affirmative
action program designed to end discrimination against black
applicants and employees. It must also be credited for its
implementation of that policy with respect to hirings and some
other aspects of the employment relationship. The fact is,
however, that the affirmative action policy has not been imple-
mented with respect to the promotion process, and dis-
crimination continues in this area.
No single reason for this failure appears from the record; it
is rather a combination of factors. White supervisors make
most promotional decisions and the criteria for promotions are
primarily subjective in nature.'5 The affirmative action program
has not been effectively communicated to all supervisors and
adherence to that policy is not required by top management.
Vacancies are not posted. The system recently adopted to
communicate vacancies to employees is incomplete and un-
timely.'® Acts of racism in the bank are not always dealt with
firmly and fairly.
The plaintiffs established a strong prima facie case of racial
discrimination with respect to promotions by showing a history
of discrimination by the bank; by introducing evidence with
respect to each of the factors outlined above; by presenting
evidence of individual instances of discrimination; and by
detailing statistical evidence which tended to show that quali-
fied black employees were not promoted in even rough parity to
their numbers in the promotional pool—employees currently
employed in the bank.
The bank’s primary defense is that the relevant labor
market for promotees was the Little Rock area and not the
employees within the bank itself. It demonstrated that it had
not only hired blacks in accordance with their representation in
the general population, but that it hired them for jobs at all
levels in accordance with their representation in similar skill
levels in the area. The district court accepted this defense.
16 Promotional procedures wherein white supervisors make the
promotional decisions on the basis of largely subjective criteria must be
closely scrutinized because of their susceptability to discriminatory abuse. See
Coble v. Hot Springs School Dist., 29 FEP Cases 201, 205 (8th Cir. 1982);
Royal v. Missouri Highway & Transp. Comm'n, 655 F.2d 159, 164 (8th Cir.
1981); Pettway v. American Cast Iron Pipe Co., 494 F.2d 211, 240-241 (Sth
Cir. 1974); Brown v. Gaston County Dyeing Mach. Co., 457 F.2d 1377, 1383
(4th Cir.), cert. denied, 409 U.S. 982 (1972).
16 Bank employees have traditionally learned of vacancies by word of
mouth. In April, 1979, the bank began publishing notices of vacancies in its
newsletter. All vacancies have not been included, however, and the notices
sometimes appeared after the vacancy had already been filled. The notices
often excluded such information as the qualifications necessary to fill the
position or the salary range for the job.
19a
In our view, the district court clearly erred in so doing. The
bank’s stated policy was and is to promote from within and to
give effect to its affirmative action program in the process.'7
Promotion from within was followed in practice. The record
shows that the bank filled more than seventy-five percent of
above-entry level positions, and over fifty percent of the highest
level managerial and technical positions, in this manner. Under
these circumstances, it was error to use general population
statistics as the basic criteria for determining whether an
inference of discrimination arose from the representation of
blacks at various levels in the bank’s work force. See Mayor of
The City of Philadelphia v. Educational Equality League, 415
U.S. 605, 620-621 (1974); Rivera v. City of Wichita Falls, 665
F.2d 531, 541 n.16 (5th Cir. 1982); Fisher v. Proctor & Gamble
Mfg. Co., 613 F.2d 527, 543-544 (5th Cir. 1980), cert. denied,
449 US. 1115 (1981).
When the proper labor market is considered, the statistical
ev jence is sufficient to raise an inference of discrimination.
At the time of trial, all but one of the twenty-five vice
presidents and assistant vice presidents were white. All division
heads were white, as were fifty-four of the fifty-six persons
having hiring or firing authority at the bank. Seventy-seven of
the eighty bank officers were white, and twelve of the thirteen
branch banks were managed by white employees. No black
employee was promoted to the position of teller until after this
17 The bank's Personnel Policy Manual states:
Promotion Criteria
The Bank policy on filling openings is to do so from within
where possible. This may be from within the department where
the opening exists or by transfer from another department.
The decision to promote is based on many factors. These
include, but are not necessarily limited to, performance in present
position, specialized skills and background, preparation by the
individual for assumption of additional responsibilities, AIB
courses completed, in-house training completed, etc. Seniority is
to be used as a factor only if two candidates are considered
equally qualified in all other respects.
In every promotion decision, the Bank's Affirmative Action
Programs will be considered.
20a
action was commenced and only one black had been appointed
a senior teller by the time the trial occurred. '®
Blacks received only a handful of promotions in the three
highest paid salary ranges. In 1974, thirty white employees and
one black employee received promotions in the three highest
paid salary ranges. In 1975, seventeen whites and two blacks
received promotions in these categories and in 1976, twenty-
nine whites and one black did so. In 1977, the figure was
twenty-four whites and six blacks and in 1978, forty-nine whites
and eight blacks. In 1979, twenty whites and one black
received promotions in these categories. Cumulatively, 169
white employees received promotions in the three highest salary
ranges and only nineteen black employees received similar
promotions. '® Thus, over the five year period, black employees
received only eleven percent of the promotions to these posi-
tions even though their numbers in the work force, their years
of experience with the bank and their educational levels
indicate that more would have been promoted had the process
been free of discrimination. In fact, black employees made
little or no progress in being appointed to professional, techni-
cal, managerial or administrative positions in the period 1974-
1979. The bank employed one person in the technical category
in 1974 and only one in 1979, and it employed one in the
managerial category in 1974 and only two in 1979.
Apart from the history of discrimination, the reliance on
subjective criteria in the discretion of white supervisors, and the
1® The bank's experience with tellers illustrates the fact that the paucity
of black promotees can not be attributed to low turnover in the bank. Sixteen
black persons were appointed to teller positions between the commencement
of this action and the completion of trial. The turnover rate among bank
employees in all but the highest pay categories approximated forty per cent
from 1974-1980.
19 It appears that the only classes of employees in the highest salary
range were professional and technical employees, managers and adminis-
trators. Thus, 104 promotions were to middle-level positions through the
period 1974-1980. Even if it is assumed that no black employees were
qualified to fill the positions in the highest salary range—an assumption which
is not supported by the record—the fact remains that black employees were
clearly qualified by education and experience to fill most positions in the
second and third highest salary ranges. These two ranges included almost all
of the middle-level supervisory positions and many first-level supervisors.
2la
substantial disparity between black employees available within
the bank and the proportion actually promoted, there is further
evidence of discrimination in salary increases awarded in
connection with promotions. Many promotions involve rela-
tively minor changes in title or job description, accompanied by
salary increases within specified ranges. In over ninety percent
of the cases, black employees received smaller increases than
white employees when promoted within the same salaiy
ranges.20 The extent to which white employees’ salary increases
exceeded those of black employees is as set forth below:
Dollar Amount Cumulative Annual
Per Month Per Month Dollar Percentage
Year in Excess Amount in Excess in Excess
1974 17.94 36
1975 (2.96) 14.98 (5)
1976 8.80 23.78 16
1977 11.00 35.14 18
1978 25.53 60.67 54
1979 18.45 79.12 26
As indicated above, the cumulative effect of the smaller raises
given to black persons each year was that the portion of black
employees’ wages resulting from promotion salary increases, on
the average, lagged almost $80 behind the same figure for their
white counterparts.
20 The bank’s expert witness, Dr. James Gwartney, applied a “regression
analysis” to the earnings of each employee of the bank as of a specific date
and concluded that the differences in salary levels betv'een black and white
employees could be explained on the basis of differences in education,
seniority, full-time versus part-time work, computer experience, bank manage-
ment experience and other management experience. The bank management
factor was said by Dr. Gwartney to account for $83.44 per month of the salary
differentials. To the extent the analysis included this factor, it reflected, rather
than explained away, discrimination by the bank in its promotion decisions.
Dr. Gwartney did not analyze the salary increases granted to employees
who were promoted over the period 1974-1979. Thus, his testimony did not
explain the disparity in salary increases accompanying promotions given to
similarly situated black and white employees.
22a
The bank’s alternative line of defense was the vague
assertion that black employees as a whole within the bank were
not as qualified as the white employees. This is not supported
by the record. On the contrary, the record shows that these two
groups’ qualifications were substantially equal when measured
by two key objective criteria: the black employees had as much
experience as the white employees, and their educational level
averaged 13.1 years, as compared to 13.5 years for the whites.
Little else is offered by the bank to explain the promo-
tional disparities. Unlike the defense to the discharge class’
claims, the bank for the most part did not offer specific
nondiscriminatory reasons for its failure to promote specific
black employees. In those few instances where the bank did
attempt to offer specific nondiscriminatory reasons, the ex-
planations were often inconsistent and contradictory. If a black
person had more education than the white person receiving a
promotion, the bank claimed that it made its selection on the
basis of experience. Conversely, if a black employee had more
experience than the white promoted, the bank claimed that
education was the key to performing that job. And if the black
employee had more experience and a better education, the
bank often simply stated that the white employee was better
qualified without giving a reason for the decision. This set of ad
hoc, contradictory and conflicting explanations does not even
begin to explain the broad pattern of promotional dis-
crimination as a whole, much less is it convincing as to the
relatively few instances in which it was proffered. Moreover, no
explanation whatsoever was proffered to justify the salary
discrimination between blacks and whites who were promoted
within the same salary ranges.
The overriding facts are that black employees were not
promoted to positions for which they were qualified and when
they were promoted, tney consistently received salary increases
significantly less than comparable white employees. Thus, the
plaintiffs’ proof as a whole not only stated a prima facie case,
but also carried the ultimate burden of proof as against the
bank’s limited attempt at an alternative explanation. The only
conclusion which is reasonable on this record is that the bank
23a
discriminated on the basis of race in making promotions during
the period up to the time of this action.
B. The Discharge Class.
1. Class Certification.
We find that the plaintiffs satisfied the requirements of
Rule 23(s) and 23(b)(2) with regard to the discharge class.
We will address this issue only briefly, however, because of our
holding, infra, that although this class should have been
certified, there was insufficient proof of class-wide dis-
crimination against the discharged black employees.
The class of black employees discriminatorily discharged
from the bank was sufficiently numerous to make joinder
impracticable. Fifty-three blacks were discharged during the
period 1974-1980. The record shows that they were discharged
at a rate twice that of the white dischargees. The class claims
have a common question of law and fact—that is, were the
blacks discharged because of their race? Phyllis Mosley’s
allegation that she was discharged from her telephone clerk
position on account of her race is typical of the claims of the
discharge class. Mosley has also shown that she is not alone in
her dissatisfaction with the bank’s racially discriminatory prac-
tices. Two persons besides herself, Melvin Paxton and Harold
Brown, testified that they had been actually or constructively
discharged from their positions because of their race. This was
coupled with evidence that several of the blacks who were
discharged for cause were granted unemployment com-
pensation benefits after hearing.?'
21 Discharged employees may be denied unemployment compensation
benefits under Arkansas law if they were discharged for “misconduct.”
Misconduct is something more than “cause,” and has been variously defined
by the Arkansas courts as “a disregard of standards of behavior which the
employer has a right to expect,” Parker v. Ramada Inn, 264 Ark. 472, 572
S.W.2d 409, 411 (1978), or “an intentional or substantial disregard of an
employer's interests or of an employee’s duties and obligations.” Willis
Johnson Co. v. Daniels, 269 Ark. 795, 601 S.W.2d 890, 893 (Ct. App. 1980).
Because Union National Bank is free to lawfully discharge its black employ-
ees for reasons that do not amount to “misconduct” within the meaning of
(footnote continues)
24a
Further, Mosley has shown that she can fairly and ad-
equately represent the class of black dischargees. Her claim
rests on the same “disparate treatment” theory that underlies
the class claims. She has shown a willingness to prosecute this
action through qualified counsel to vindicate her personal
interests and those of the class.
Finally, the discharge class’ claims were properly brought
under Rule 23(b)(2) to seek declaratory and injunctive relief
to prevent further class-wide discriminatory discharges. The
district court should have certified a class of black persons
discriminatorily discharged from the bank.
2. Merits of the Discharged Class Claims.
The plaintiffs established a prima facie case of racia!
discrimination regarding the bank’s discharge of black employ-
ees. They did so by proving a history of discrimination in the
bank’s employment practices, by introducing statistical evi-
dence that showed that blacks with less than two years of
service were discharged at more than twice the rate of white
employees in the same group2? and by proving that Phyllis
(footnote continued)
Arkansas’s unemployment compensation law, as long as the reasons do not
relate to race, we have not considered the unemployment compensation
awards as evidence on the merits of the discharge class’ claims. We believe,
however, that the fact that a significant proportion of the discharged blacks
filed for and received these claims is probative of the likelihood that a number
of those blacks felt aggrieved, on racial grounds, by the bank’s discharge
practices. Cf. White v. Gates Rubber Co., 53 F.R.D. 412, 415 (D. Colo.
1971).
22 We find no support in the record for the district court’s observation
that more black employees in the target group were discharged than white
employees because the black persons hired were less qualified than their white
counterparts. The defendant's expert witness testified that the higher
discharge rate for black employees could be explained on one of two theories:
(1) that the bank did not apply the same discharge standards to whites that it
did to blacks and thus discriminated against the latter group; or (2) that the
bank hired high-risk black employees from employment pools or training
programs who had little work experience and could not be expected to pan
out as well as the white employees. He declined to adopt either theory as his
own and said that it was up to the court “to look at [the] discrimination data
on an individual-by-an-individual basis and see whether or not the discharge
was or was not justified.”
25a
Mosley was discharged on account of her race. See Taylor v.
Teletype Corp., 648 F.2d 1129, 1135 (8th Cir.), cert. denied, 102
S.Ct. 515 (1981).
The plaintiffs’ prima facie case was rebutted by the defend-
ant. See Texas Dep’t of Community Affairs v. Burdine, 450 U.S.
248, 254 (1981); Locke v. Kansas City Power and Light Co.,
660 F.2d 359, 365 (8th Cir. 1981); Johnson v. Bunny Bread Co.,
646 F.2d 1250, 1254 (8th Cir. 1981). The bank articulated a
reason for each and every discharge of a black employee by
introducing employment records which listed the reason why
each employee with less than two years of service had been
discharged. The reasons were varied. They included dishon-
esty, excessive overdrafts, absenteeism, inefficiency and tardi-
ness.
It was then incumbent on the plaintiffs and intervenors to
prove that the given reasons were pretextual in at least enough
instances that the court could find a pattern and practice of
racial discrimination against blacks in the discharge class. They
failed to do so with respect to any dischargee other than Phyllis
Mosley. Indeed, they did not attempt to rebut the articulated
reason with respect to any black employees other than the
named plaintiffs or intervenors. Thus, they failed to meet their
burden of persuading the court that the class of blacks dis-
charged by the bank had, in fact, been discriminated against on
account of their race.
C. Individual Claims.
1. Jerry Riley.
The district court concluded that there was no credible
evidence that Jerry Riley was subjected to racial discrimination
with respect to promotions and salary increases. Although
there is insufficient evidence from which to conclude that Riley
was discriminated against in terms of salary increases, the
district court erred in concluding that Riley had not been the
victim of a racially motivated promotion decision.
Riley graduated from Pine Bluff High School in 1976, and
was hired by the bank shortly thereafter. He pursued his
education throughout his tenure at the bank. At the time of
26a
trial, he was a junior at the University of Arkansas at Little
Rock (UALR), and had completed almost eighty credit hours
of business-related courses.
Riley's first job at the bank was that of messenger in the
mail room. He was paid $400 a month. There were three black
clerks in the mail room and one white clerk. The mail room
was supervised by a white.
Riley quit his mail-room job on December 31, 1976. On
July 1, 1977, he was rehired for the same job at a monthly
salary of $425. Six weeks later, Riley requested a transfer out
of the mail room. He remained 9 messenger, however, until
November 7, 1977, when he was promoted to “control clerk” in
the computer department of the bank. He held that position
until March 15, 1980; he then became a computer operator
trainee. He still held that position when the trial began.
Riley contends that: (1) he was discriminatorily passed
over for a promotion to “lead control clerk” in July, 1979, in
favor of Gina White, a white woman; and (2) the bank delayed
his advancement to computer operator trainee and computer
operator on account of his race. We first address the “lead
control clerk” controversy.
In July, 1979, Gina White, a control clerk in the bank's
computer department, was promoted to the position of lead
control clerk. The lead control clerk does essentially the same
work as the control clerk, but has the additional duties of
training the other clerks and assuming their functions when one
of them was away from their job.
Riley was qualified to be the lead control clerk. He had
two years of control clerk experience at the time the position
opened. On April 20, 1979, only three months before the
supervisor vacancy occurred, Riley's supervisor characterized
Riley as “a loyal employee who is always eager to learn new
things. He is good at his job and doesn’t mind helping others.
He doesn’t mind working overtime when we need help or are in
a jam.”
Furthermore, Riley's employer was sufficiently on notice
that Riley would likely be interested in the lead control job.
27a
Riley had expressed to Ray Whittier, the computer center
manager, his desire to advance in the bank, specifically in the
computer center. The lead control clerk position would be a
logical advancement for Riley. In light of Riley’s unrefuted
testimony that the vacancy was not posted and that he did not,
through other means, learn of the vacancy until after it had
been filled, we cannot hold that Riley’s prima facie case was
defeated because he did not formally “apply” for the lead
control job.
Finally, Riley’s prima facie case of racial discrimination
was complete when evidence was introduced showing that Gina
White, a person outside the protected group at issue, received
the lead control clerk position. See Freeman v. Lewis, 675 F.2d
398, 401 (D.C. Cir. 1982). The burden then shifted to UNB to
articulate a legitimate, nondiscriminatory reason for its failure
to promote Riley to lead control clerk. See Texas Dep't of
Community Affairs v. Burdine, supra, 450 U.S. at 254; Locke v.
Kansas City Power and Light Co., supra, 660 F.2d at 365;
Johnson v. Bunny Bread Co., supra, 646 F.2d at 1254.
Neither the district court’s opinion nor the defendant's
brief on appeal identified a legitimate, nondiscriminatory rea-
son for the failure to promote Riley. We assume from our
reading of the record that Raymond Whittier’s testimony
regarding the lead control clerk opening constituted the bank’s
defense to Riley’s prima facie case. Whittier advanced two
reasons for the decision: (1) White was more qualified, and (2)
White had more experience in the control functions of the
division.
Because the UNB “articulated a legitimate, nondiscrimina-
tory reason” for failing to promote Riley, it was incumbent on
Riley to show that the proffered reason was in fact a “pretext”
for a racially motivated employment decision. Again, the
defendant's briefs and the district court’s opinion are silent as to
Riley’s evidence of pretext. Our task of review is complicated
by the district court’s failure to specifically address in any way
the lead control clerk promotion issue. The district court merely
noted that that claim was the basis of Riley’s November, 1979,
EEOC charge. We have chosen, however, to treat the court's
28a
general conclusion—that Riley did not suffer “racial dis-
crimination at this bank as far as promotions * * * are con-
cerned”—as its finding of fact on this specific issue. 519
F.Supp. at 170. We have done so because even if we afford
that “finding” the deference an appellate court must give to the
district court’s findings of fact, it cannot stand.
We cannot give credence to the bank's contention that
White was better qualified. Riley had more experience in the
division, he was better educated and he had a good work
record. The witness testifying that White was better qualified
gave no reason for this conclusion; this conclusion was com-
pletely subjective. Nor can we give credence to the claim that
the job involved more control work than distribution work.23
The record does not support the claim. Moreover, Gina White
could not perform all the tasks required of the lead control
clerk. We thus conclude that the bank’s failure to promote
Riley—an experienced, favorably rated control clerk—was
racially motivated.
Jerry Riley also claims that the bank discriminatorily
delayed his advancement to computer operator trainee and
computer operator. We find that Riley failed to prove these
claims.
In December, 1979, Ray Whittier offered Riley a job as
computer operator trainee. The promotion was to be effective
as soon as Riley could train someone to replace him as control
clerk. Whittier had difficulty finding someone acceptable for
the control clerk job, so Riley did not assume his trainee status
until March, 1980.
Riley claims that he should have been promoted to
computer operator trainee as early as May, 1979,24 and that he
23 Riley testified to the contrary. We note that Riley's testimony was
before Judge Eisele. We are thus free to independently judge the credibility
of this testimony because Judge Woods, like us, did not observe the witness
but only reviewed the transcript. See Johnson v. Mabry, 602 F.2d 167, 170-
171 (8th Cir, 1979). We find Riley's statements credible.
% The district court characterized Riley's claim as being much broader
involving all persons hired as computer operators after August, 1977. The
district court clearly erred in doing so.
29a
was damaged as a result of the delay. At that time, Bobby Scott
was fired from his trainee job, and Riley expressed an interest
in replacing Scott. The job was given to David New, a white
person with no prior experience with the bank.
Riley has proved a prima facie case of racial discrimination
regarding the bank’s failure to promote him to the May, 1979,
trainee vacancy. He was qualified for the position. It was not
necessary that the trainee have experience as a computer
operator, as was demonstrated by the bank’s decision to hire
New, who had no such experience. In May, 1979, as in
December, 1979, Riley had accumulated a significant amount
of experience at the bank and was generally viewed as a
competent computer center employee.
Riley’s prima facie case was rebutted by the bank, how-
ever. Whittier testified that New was hired because he was a
computer science major at the UALR and had completed a
number of computer science courses in pursuit of his degree.
Riley did not show that the bank’s “articulated non-
discriminatory reason” for hiring New instead of himself was a
pretext for racial discrimination. During the period 1977-1980,
the bank consistently hired or promoted persons into the
computer jobs who had actual operator experience or who had
progressed significantly toward computer science degrees. The
record reveals only one exception to this: Riley, who was given
a trainee job even though he had no computer operator
experience and was not taking computer courses at UALR.
Thus, we are not faced with the flaw in the bank’s general
rebuttal to the promotion class claims, where varying, inconsist-
ent rationales have purportedly underlain the bank’s promotion
decisions. Riley acknowledged at trial that taking computer
science courses at UALR “would allow someone to move faster
in data processing at the bank.” We conclude that the bank's
proffered rationale for hiring New over Riley, based on a
consistently applied preference for persons who have a demon-
strated interest in computer science, was not shown to be
pretextual. '
Riley also claims that he should have been promoted from
trainee to computer operator sooner than he was. At least one
30a
operator vacancy occurred between June, 1980, when Riley
alleges he was qualified to assume full operator status, and
September, 1980, when he was promoted. That vacancy was
filled by a white person.
In our view, Riis'y has failed to prove that the length of his
training period was the product of racial discrimination. On
this record, we cannot find that Riley was qualified to become
an operator at some point sooner than he did. The bank
introduced a memorandum dated July 11, 1980, three months
after Riley became a trainee, that outlined various deficiencies
in Riley’s performance at that time. Whittier testified that in
July, 1980, when the operator vacancy occurred, Riley’s super-
visors felt that he was not ready to assume that responsibility
because there were various operator functions that Riley could
not yet perform.
Riley does not seriously dispute that his training was
incomplete at that time, but argues that this fact was not his
fault, that the supervisors did not give him the time and
assistance at the computer console necessary to complete his
training. Riley and Whittier testified, however, that the night
shift had always been the busiest time for the computer
operators, so that they had little time to supervise and assist a
trainee’s work at the console. Because of this, Whittier
suggested that Riley work day-shift hours to facilitate his
training, as did Chuck Howland, a white employee training at
about the same time. Riley refused to switch his hours because
that would interfer with his college schedule. Thus, we are
unable on this record to attribute the problems of Riley’s six-
month training to racial discrimination by the bank.
2. Phyllis Mosley.
In our view, the trial court’s specific finding that race
played no part in Phyllis Mosley’s termination is clearly er-
roneous. Its implicit finding that race played no part in the
bank’s failure to promote her is equally erroneous.
Mosley, a high school graduate—with one-half year of
college—was employed by the bank as a file clerk on August I,
1977, at a salary of $425 per month. She was transferred to the
3la
position of telephone clerk on August 2], 1977. Four of the
seven file clerks were black. Four of the five telephone
operators were black. The supervisors of the departments
during Mosley’s tenure were white.
Mosley was a good employee. She received salary increas-
es on October 16, 1977, January 1, 1978, April 1, 1978, and
March 16, 1979. She consistently worked more overtime than
other employees—black or white. Notwithstanding Mosley’s
record, white employees who were hired after her were pro-
moted out of the department in which she was employed to
better jobs. A white woman, who came into the department
after Mosley, was made supervisor of the department shortly
after Mosley was terminated.
On March 29, 1979, Mosley reported to work before 8:00
a.m. Three other employees in the department, including at
least two white employees, left the job before 5:00 p.m. Mosley
told her supeivisor that she had to leave at 5:30 p.m. to catch a
bus to her home—some sixteen miles from Little Rock. Mosley
stated that she had no alternative way to get home and left at
5:30 p.m.
Mosley was then told that she had to work overtime
whenever she was requested to and that failure to do so would
be considered insubordination. She complained about the
unfairness of the overtime distribution.
On April 2, 1979, Mosley again reported to work before
8:00 a.m. During the day, she went to Personnel Director
Zegler’s office and talked to him about being promoted to
supervisor of her department. Sometime in the afternoon, she
was again told that she would have to work after 5:30 p.m. By
the time she was told, it was too late for her to make other
arrangements. At least three white employees of the depart-
ment left at the regular quitting time, 4:30 p.m.; one other white
employee left at 5:05 p.m. Mosley left at 5:30 p.m., after being
warned that she would be discharged if she did. She was
discharged. No reason was advanced at trial as to why the
overtime was not fairly distributed or why the white employees
were permitted to go home at the regular quitting time while
Mosley, who had previously worked more overtime than the
32a
white employees, had to work after 5:30 p.m. Further,
Mosley’s summary termination was in violation of the bank’s
disciplinary policy as set out in its Personnel Policy Manual.25
Mosley established a prima facie case with respect to her
discharge. Her work record, her record of working overtime
and the statistical evidence with respect to the discharge of
black employees with less than two years service, are more than
sufficient in this regard.
The bank did articulate a specific reason for Mosley’s
discharge, but in our view, Mosley introduced more than
sufficient evidence to show that the reason was pretextual.
25 The district court found:
The beek has a discipline policy which is spelled out in its personnel
policy manual and in its supervisor course. If an employee's perform-
ance is not satisfactory, the supervisor first advises the employee orally.
If the sub-par performance continues, the employee is advised in writing
of the specific criticism. If this does not work, a plan for improvement is
instituted in which the supervisor and employee sit down, discuss the
problem and what steps are needed to correct it. The next step, called a
notice of disciplinary probation, involves a formal notice in writing of the
need to correct the employee’s deficiency. This notice is discussed
personally with the employee and is signed by him. At this point the
employee is placed on probation and given a specified number of days,
usually between thirty and ninety, to take corrective action. If all these
measures have failed, dismissal is considered. There are nine division
heads, fifty-six department heads and sixty-nine supervisors in the bank.
If there is a flagrant offense, the supervisor is authorized to terminate an
employee on the spot. A flagrant offense is described by the bank’s
personnel director as theft, fighting, threatening a customer, refusing to
follow a reasonable order or something of a similar nature. Otherwise,
the decision to discharge is made only by the personnel director, the
division manager and the department head in joint consultation. In the
event of a disagreement, the final decision to terminate is made by the
personnel director, who can be overruled only by the executive vice
president. The written memoranda with respect to discipline goes into
the employee’s personnel file.
519 F.Supp. at 146.
33a
Mosley was not only a good employee, she insisted that she
be treated fairly. She worked hard and asked to be promoted;
she complained when racial slurs were directed at her26 or at
blacks generally, and finally complained that overtime was not
being distributed fairly. Notwithstanding her work record and
requests, the defendant made no effort to accommodate her
need to catch her bus at 5:30 p.m., even though they accom-
modated others and lei some employees go home at the regular
4:30 p.m. time. No other employee of the bank had been
discharged for failing to work overtime, and the handbook does
not make such an offense a dischargeable one.
Mosley also established a prima facie case with respect to
her promotion claim. Her education, experience and work
record all qualified her for promotion. She requested that she
be promoted; and not only were her requests denied, but white
employees with less experience were given the promotions or
white persons with no experience in the bank were hired off the
street for the jobs to which she aspired. The defendant failed to
articulate reasons for Mosley being passed over other than to
repeat the general statement that it was their practice to hire the
best qualified person. No specific evidence was offered to
support this contention, and Mosley’s evidence was sufficient to
prove it to be pretextual.
Certainly, Union National Bank has a right to insist that
blacks, as well as whites, obey direct orders, but they also have
an obligation to treat blacks fairly in the distribution of
overtime and with respect to promotional opportunities. Here,
the record as a whole leads to only one conclusion, and that is
that Mosley was discharged?’ and denied promotions because
of her race.
26 Mosley testified that she was subjected to racial slurs on at least two
occasions and was victimized by being given a copy of an offensively worded
“Nigger” application. She complained to management about the slurs and
received an apology from an offending white employee on one of the
occasions.
27 Mosley made application for unemployment compensation benefits;
the bank protested. The Arkansas Employment Security Board held that
Mosley was entitled to benefits.
34a
3. Melvin Paxton.
On April 12, 1976, Melvin Paxton filed a charge with the
EEOC, alleging that he had been hired as a management
trainee and that he should have been paid the same salary as
other white trainees—$600 per month. He was paid consid-
erably less than that sum. Shortly after the charge was filed,
Paxton was called into the office of Zegler, the personnel
director, and questioned at great length as to the reasons for his
filing the charge and his dissatisfaction with the bank. The
interrogation upset Paxton and he resigned on the spot. The
trial court found that Paxton was not a management trainee. It
characterized him as an unsatisfactory employee with an ex-
tremely bad work record. It found that Paxton had not been
either actually or constructively discharged.
While we do not believe that the record supports the view
that Paxton was an unsatisfactory employee and while we
believe that a factfinder could have found that Paxton was
constructively discharged, we are unable to say that the trial
court’s finding with respect to the alleged discharge is clearly
erroneous. We likewise hold that the trial court’s finding that
Paxton was not hired as a management trainee was not clearly
erroneous.
We do, however, hold that Zegler’s intensive interrogation
of Paxton as to why he filed a charge of discrimination with the
EEOC was violative of 42 U.S.C. § 2000e-3, and that the bank
should be enjoined from such activities in the future.
4. Katrina Terry, George Spann and Harold Dominic
Brown.
The trial court’s findings that Terry, a black female, and
Spann, a black male, were neither denied promotions nor
discharged for reasons relating to their race were not clearly
erroneous. The trial court’s findings that Harold Brown, a black
male, was discharged for reasons unrelated to his race were not
clearly erroneous.
D. Relief.
1. Class Relief.
35a
Title VII has vested broad equitable powers in the federal
courts to fashion a decree which will, so far as possible,
eliminate the discriminatory effects of the pasi as well as bar
like discrimination in the future.2® Albermarle Paper Co. v.
Moody, 422 U.S. 405, 421 (1975); Firefighters Inst. v. City of St.
Louis, Mo., 588 F.2d 235, 240 (8th Cir. 1978), cert. denied, 443
U.S. 904 (1979). To the end that a proper decree be fashioned,
we remand the matter to the district court with directions to it to
give the plaintiffs an opportunity to prove the extent to which
class members were damaged by their being denied promotions
on account of their race, to award class members who were
denied promotions the monetary damages they have sustained
and to provide for their promotion to the first vacancy that
occurs in a position for which they are qualified. See Baxter v.
Savannah Sugar Refining Corp., 495 F.2d 437, 443-444 (5th
Cir.), cert. denied, 419 U.S. 1033 (1974). The district court is
also directed to fashion a decree which will insure that race will
not be a factor in future promotional decisions by the bank.
The court shall require that at least the following practices be
instituted:
The bank shall develop job descriptions for all positions
other than entry-level ones. The descriptions shall be in writing
and shall set forth the general requirements and responsibilities
for the position as well as any specific skills that are required,
salary ranges for the position and any other lawful employment
criteria utilized by the bank. See Patterson v. American
Tobacco Co., 535 F.2d 257, 273 (4th Cir.), cert. denied, 429
U.S. 920 (1976).
26 42 U.S.C. § 2000e-5(g) provides in pertinent part:
If the court finds that the respondent has intentionally engaged in or
is intentionally engaging in an unlawful employment practice charged in
the complaint, the court may enjoin the respondent from engaging in
such unlawful employment practice, and order such affirmative action as
may be appropriate, which may include, but is not limited to, reinstate-
ment or hiring of employees, with or without back pay * * *, or any
other equitable relief as the court deems appropriate. * * Interim
earnings or amounts earnable with reasonable diligence by the person or
persons discriminated against shall operate to reduce the beck pay
otherwise allowable.
36a
The bank shall develop standards for selection to each
affected position. These standards, based upon a job analysis,
shall be to the extent possible, “reasonably objective” in nature
and job related. See Muller v. United States Steel Corp., 509
F.2d 923, 927-928 (10th Cir.), cert. denied, 423 U.S. 825
(1975); Baxter v. Savannah Sugar Refining Corp., supra, 495
F.2d at 441; United States v. N. L. Industries. Inc., 479 F.2d
354, 377 (8th Cir. 1973).
To the extent that the personnel director of the bank relies
upon recommendations of supervisory personnel in selecting
persons for non-entry level positions, the recommendations
shall be in writing and shall be in accordance with written
guidelines. See Stewart v. General Motors Corp., 542 F.2d 445,
450 (7th Cir. 1976), cert. denied, 433 U.S. 919 (1977);
Patterson v. American Tobacco Co., supra, 535 F.2d at 273;
Brown v. Gaston County Dyeing Mach. Co., supra, 457 F.2d at
1383.
The bank’s practice of limiting employees considered for
bank officer positions to only those recommended by division
heads shall be discontinued. Employees shall be given an
opportunity to initiate requests for promotions. See Watkins v.
Scott Paper Co., 530 F.2d 1159, 1193-1194 (Sth Cir.), cert.
denied, 429 U.S. 861 (1976).
The bank shall be required to post timely notices of all
non-entry level job vacancies in a conspicuous place in the
bank. Such notice shall contain a reasonably specific descrip-
tion of the position to be filled, the responsibilities involved, the
qualifications required, the salary range for the position and the
procedure for applying for the position. See Senter v. General
Motors Corp., supra, 532 F.2d at 529; Rowe v. General Motors
Corp., supra, 457 F.2d at 360-361; United States v. Jacksonville
Terminal Co., 451 F.2d 418, 458 (Sth Cir. 1971), cert. denied,
406 U.S. 906 (1972).
Any information regarding an employee’s performance,
including periodic ratings, supervisory recommendations, pro-
ductivity records, discipline records, attendance records and
other information relating to her or his employment at the bank
shall be made available to the employee upon her or his
request.
37a
The bank shall develop procedures for promptly resolving
disputes with respect to promotions comparable to the system
mandated by the Court in Alexander v. Aero Lodge No. 735,
Intern. Ass'n, Etc., 565 F.2d 1364, 1386-1387 (6th Cir. 1977),
cert. denied, 436 U.S. 946 (1978).
The bank shall develop standards to insure that black
employees being promoted will receive salary increases equiva-
lent to comparably situated white employees.
The injunctive relief outlined above may not be sufficient
to insure that the bank's practice of discriminating against
blacks with respect to promotions will be eliminated. It may be
necessary to order the bank to meet reasonable goals in this
regard. See Chisholm v. United States Postal Services, supra,
665 F.2d at 498-499; Firefighters Inst. v. City of St. Louis, Mo.,
supra, 588 F.2d at 239. We feel that the district court should
make this decision after the parties have been given an
opportunity to be heard on it.
We finally direct that a decree be fashioned which will
enjoin the bank from intimidating or otherwise harassing
employees who have filed charges with the EEOC,
2. Individual Relief.
Phyllis Mosley is entitled to be reinstated to the position
she previously held, see Danner v. Phillips Petroleum Co., supra,
447 F.2d at 163; Sprogis v. United Air Lines, Inc., 444 F.2d
1194, 1197 (7th Cir.), cert. denied, 404 U.S. 991 (1971), and
given back pay, Albemarle Paper Co. v. Moody, supra, 422 U.S.
at 418. Mosley’s award should be determined by measuring the
difference between actual earnings for the relevant time period
and those which she would have earned absent the unlawful
discrimination by the defendant. The latter calculation would
include back pay from the date of discharge to the present and
any increases she would have received within that period, See
Satty v. Nashville Gas Co., 522 F.2d 850, 855 (6th Cir, 1975),
aff'd in part and vacated in part on other grounds, 434 U.S. 136
(1977). See also Golay & Co. v. N.L.R.B., 447 F.2d 290, 294
(7th Cir. 1971), cert. denied, 404 U.S, 1058 (1972). Mosley is
also entitled to receive as part of her back pay award any fringe
38a
benefits she would have received had she remained employed
by Union National Bank. Pettway v. American Case Iron Pipe
Co., supra, 494 F.2d at 263; Bowe v. Colgate, Palmolive Co., 489
F.2d 896, 903 (7th Cir. 1973).
Once the gross amount of back pay owed Mosley has been
determined, the burden shifts to Union National Bank to prove
what should be deducted from that award as “[i]nterim
earnings or amounts earnable with reasonable diligence.” 42
U.S.C. § 2000e-5(g).
In light of our earlier finding that Mosley was denied
promotions on account of race in violation of Title VII, she is
entitled to receive compensation for wages lost as a result of the
failure of the bank to promote her to the position of supervisor
of her department. See Patterson v. American Tobacco Co.,
supra, 535 F.2d at 269; Berio v. EEOC, 19 FEP Cases 168, 169
(D.C. Cir. 1979); Chisholm v. United States Postal Service, 516
F.Supp. 810, 878 (W.D. N.C. 1980), aff'd, 665 F.2d 482 (4th
Cir. 1981). She is also entitled to “recover in the future the rate
of pay of the position ** * [s]he was denied until [s]he is
placed in a job of equal or higher pay grade.” Chisholm vy.
United States Postal Service, supra, 516 F.Supp. at 878-879,
citing Patterson v. American Tobacco Co., supra, 535 F.2d at
269. She is moreover to be promoted to the first vacancy that
she is qualified to fill. Chisholm v, United States Postal Service,
supra, 516 F.Supp. at 879.
Similarly, Jerry Riley is entitled to compensation lost as a
result of the bank's discriminatory failure to promote him to
lead control clerk in July, 1979. In determining this amount,
the court must also consider the effect this decision had on
Riley's wages not only while he continued to be a control clerk
but after he was promoted to trainee and computer operator as
well. Ray Whittier testified that the salary received by an
employee prior to a promotion is an important consideration in
setting the minimum salary for the new position. Thus, the
bank's failure to promote Riley to lead control clerk and
accordingly raise his salary may have had a continuing depres-
sive effect on his subsequent salary schedule and that must be
taken into account by the district court on remand.
39a
Costs shall be taxed to the appellee. The appellants and
intervenors shall submit to this Court a verified request for
attorneys’ fees for this appeal together with all data necessary
to support the request within thirty days of the entry of this
order. The appellees shall have ten days thereafter to submit
objections, if any, that it may have to appellants’ and inter-
venors’ request.
A true copy.
Attest:
CLERK, U. S. Court or Appeacs, Eicutn Ciracurrt.
40a
In THE
United States District Court
E. D. Arkansas, W. D.
Nos. LR-76-C-110, LR-C-78-330
and LR-C-76-239
MELVIN PAXTON, Jr.,
Plaintiff,
Vv.
UNION NATIONAL BANK, A Corporation,
Defendant,
KATRINA TERRY, PHYLLIS MOSLEY, Jerry RILEY AND
GEORGE SPANN, Intervenors.
HaroO_pD Dominic Brown,
Plaintiff,
Vv.
UNION NATIONAL BANK OF LITTLE ROCK,
Defendant.
NORMAN WILLIAMS,
Plaintiff,
Vv.
UNION NATIONAL BANK, A CORPORATION,
Defendant.
May 26, 1981
MEMORANDUM OPINION
HENRY WOODS, District Judge.
Melvin Paxton filed an individual and a Rule 23 class
action suit against the Union National Bank on April 12, 1976
(LR-76-C-110). Jurisdiction was invoked pursuant to 28
U.S.C. §§ 1343(4), 2201 and 2202 and 42 U.S.C. §§ 1981 and
4la
2000e-5(f). The latter sections are part of Title VII of the Civil
Rights Act of 1964. The complaint charged that the bank had
discriminated against plaintiff and the class he represents on the
basis of race or color in hiring, testing procedures, promotions,
raises and job assignments. After some preliminary skirmis-
hing, the bank answered on June 27, 1977 and denied the
allegations of the complaint. On June 12, 1979 Katrina Terry
and Phyllis Mosley, former bank employees, were permitted to
intervene in this cause by order of Chief Judge G. Thomas
Eisele and to assert charges of racial discrimination. Katrina
Terry alleged that she was denied advancement opportunities
and promotions because of her race. Phyllis Mosley made the
same allegations and in addition claimed that she was dis-
charged for racial reasons. Jerry Riley, Bobby Scott and
George Spann were permitted to intervene in this cause on
October 30, 1979. Riley and Scott are present employees of the
Bank, and Spann is a former employee. These intervenors
alleged racial discrimination on the basis of promotions, raises
and work assignments. The bank has denied the allegations of
the intervenors. On July 19, 1976 Norman Williams filed a
complaint against Union Bank invoking the same code sections
as Paxton and making similar allegations (LR-76-C-239). On
September 20, 1978 this case was consolidated with the Paxton
case (LR-76-C-110). On September 25, 1978 Harold Dominic
Brown filed an individual and class action suit against the
Union National Bank alleging jurisdiction under 42 U.S.C.
§ 2000¢e et seq. and a broad spectrum of discrimination employ-
ment practices on the part of defendant bank (LR-C-78-330).
On October 16, 1978 the bank filed its answer denying the
allegations of the complaint. On August 28, 1979 Chief Judge
Eisele ordered a consdlidation of the Brown case (LR-C-78-
330) with the Paxton case (LR-76-C-110). Bobby Scott, one of
the intervenors in the Paxton case, settled his intervention and
was dismissed from the litigation by order of Judge Eisele on
April 3, 1980. The consolidated cases were set for trial before
Chief Judge Eisele on April 7, 1980. At the outset of the trial,
the case of Norman Williams v. Union National Bank ( LR-C-
76-239) was dismissed without objection by Judge Eisele under
Rule 41(b) Fed.R.Civ.P. The status of the litigation was then
42a
as follows. The case of Harold Dominic Brown v. Union
National Bank (LR-C-78-330) had been consolidated with
Melvin Paxton, Jr. v. Union National Bank (LR-76-C-110). In
the latter case there were four remaining intervenors—Katrina
Terry, Phyllis Mosley, Jerry Riley, and George Spann. Judge
Eisele decided that he would take testimony in this matter on
both the class action and individual claims and issue such
further orders as was justified by the evidence. He took
testimony on April 7 through April 11, April 14, 15 and 18,
August 12, 13, 14, 15, 19, 20 and 21, all in 1980. After these 15
trial days, Chief Judge Eisele recused in this case on August 21,
1980. His reasons for doing so are set forth in a lengthy
memorandum dated September 4, 1980 and will not be re-
peated here. On September 18, 1980 Chief Judge Donald P.
Lay of the Court of Appeals of this Circuit assigned the case to
me. It was set for a continuation of testimony on April 7, 1981.
By letter dated November 12, 1980, I advised counsel of my
unwillingness to rehear the evidence heard by Judge Eisele.
The parties were directed to furnish me with a complete
transcript of the testimony by February |, 1981. Cost of the
transcript was to be shared on the basis of one-half by the bank
and one-half by the plaintiffs and intervenors. I reserved the
right to tax the entire transcript cost on the losing party.
Testimony was begun before me on April 7, 1981 and contin-
ued through April 9. It was resumed on April 13 and continued
through April 16; resumed on April 20 and concluded on April
23—a total of eleven days of trial time extended over three
weeks. If this time is added to Judge Eisele’s trial time of
fifteen days, it will be seen that 26 days have been spent in trial
time alone. This does not include the time spent in several pre-
trial conferences. The case has hardly justified such a large
expenditure of judicial time and resources, not to mention the
time, trouble and expenditure of the parties and their counsel.
After carfully reading the transcript of the testimony taken
before Judge Eisele and after hearing eleven days of testimony,
during which copious notes were taken, I have some difficulty in
understanding the wisdom of filing and proceeding with this
lawsuit. There are undoubtedly a number of employers in this
district who are discriminating against their employees, but
43a
Union National Bank would not seem to be one of them—at
least not from the evidence produced by plaintiffs and inter-
venors in this case.
I find the claims of the plaintiff and the intervenors to be
without merit on an individual or class action basis. This bank
has aggressively pursued affirmative action during the period in
question. The case developed by the plaintiffs and intervenors
has a number of fatal flaws. One of the most glaring is that
inadequate discovery was undertaken, with the result that the
- major portion of plaintiffs and intervenors’ case consisted of in-
court discovery of bank officials. The lengthy examination of
these adverse witnesses produced little evidence of value to
plaintiffs and intervenors but much evidence that was very
harmful to their cause. This trial tactic did result in a great
expenditure of trial time. After plaintiffs’ counsel had examined
Joseph E. Zegler, the bank’s personnel director, as an adverse
witness for an entire week, Chief Judge Eisele made the
following comments, which I consider very apropos:
[ W Jhat I am concerned about is that the questions reveal
that discovery that should have been made either wasn’t
made or is not available to Mr. Walker in many respects
because he has asked if the man knows something about it.
He finds out that he doesn’t. Had he asked during the
discovery period he would have found it out and he
wouldn’t have to take the Court’s time to know that. He
could have done it by other means. So to a large extent
this week has been in essence a discovery of the limits of
this man’s knowledge, much of which is very limited and
which he has demonstrated he would not be the appropri-
ate witness to make the proof that Mr. Walker seeks to
make, but which could be made by the proof.
I feel that it has gone on tremendously long in comparison
to the meat that has come out of it in terms of the facts. To
have the witness state over and over that he doesn’t know,
that he would have to look at his records, that he doesn’t
recall when there are other witnesses who obviously would
know this information and should be called for that
purpose, it seems to be an imposition upon the Court. (T.
918-19)
44a
Even more harmful to the plaintiff and intervenors were
some of their own witnesses. Mike Mothershed is a good
illustration. Mr. Mothershed, a black, is now the night super-
visor of computer operators at the bank. He has two blacks and
eight whites under his direction—two lead computer operators,
two computer operators, one computer operator trainee, four
distributors and balance clerks and one data librarian. He
could hardly be insensitive to discrimination against blacks
because his sister, The’a Mothershed, was one of the eight
black students who b: aved an unruly and abusive mob, encour-
aged by unscrupulous demagogues, to integrate Little Rock
Central High School in 1957. Mothershed denied that the bank
had been guilty of discriminatory practices toward him or other
employees. His own career at this bank substantiates his
testimony. Mothershed was hired by Union National Bank
after he was discharged by First National Bank for which he
candidly admitted was a mistake on his part. He testified that
Mr. Zegler at Union Bank had given him another chance when
he needed a job. Mothershed was hired as a messenger in the
mail room on April 13, 1975 at $380.00 monthly. In the six
years of his employment, Mothershed has had six promotions
and eleven salary increases (Def. Exh. 80). He is now earning
$1,400 a month. Mothershed testified that he had at one time
registered a discrimination complaint because he felt that a
white employee had been moved ahead of him, but that the
bank had established to his satisfaction that its decision had
been based on the superior knowledge and experience of the
other employee. Testimony had been elicited that Mothershed
had been the subject of discrimination because he had not been
made a computer progres nmer. However, Mothershed testified
that he had been offeicd that opportunity but had declined
because he was not interested in becoming a computer
programmer. He also testified that he has specifically requested
the night shift assignment.
Another damaging witness called by the plaintiff and
intervenors was Mrs. Mildred Hall, a black supervisor of the
collection department at the bank. She had worked in the
Treasurer's office at Sears Roebuck in Chicago, 1966-78, but
45a
married a Little Rock resident and moved to Little Rock in
1978. Mrs. Hall denied discrimination in her own case and that
of other employees. All employees under her supervision are
white.
Two other blacks, called by plaintiffs and intervenors as
adverse witnesses, seriously damaged their case— William
Pierce and Charlotte Johnson. William Pierce has been a
Senior Vice President of this bank since 1975. He had
previously been executive director of the Arkansas Business
Development Corporation and was for many years a field
representative for the Arkansas Farm Bureau Federation.
Pierce has been Chairman of the Board of the Little Rock
Branch of the Federal Reserve Bank and has been a member of
the Board of the Federal Reserve Bank. Plaintiffs and inter-
venors through their witnesses have tried to portray Pierce's
employment as window-dressing. He is described as having no
real duties or function at the bank. We reject this image.
Pierce is a college graduate with a wide background in the
Arkansas farming and business community, particularly in its
black segment. Pierce is undoubtedly a considerable asset to
Union Bank both as an executive and as a source of black
business. Pierce testified as to the bank’s aggressive affirmative
action program after the control of the bank was assumed by
Mr. Herbert McAdams about ten years ago. He testified as to
the bank’s continuing efforts to recruit black employees and to
train prospective black employees. He testified that he is in
constant communication with the personnel office with regard
to the hiring and promotion of black employees. He used a
chart of the bank work force of March 31, 1980 (Joint Exh. A)
to illustrate wide dispersement of blacks through virtually all
the bank's departments. He testified that even where the chart
showed totally white departments, there had been blacks
employed in these departments. An example he cited was
auditing, shown to be completely white on March 31, 1980.
Andrew Green, a black had been assistant auditor, the second
job in the department. Pierce testified that the bank planned to
promote Green to auditor upon retirement of the bank’s chief
auditor. This was confirmed by other testimony and by Green
46a
himself, who left the bank to take what he considered to be a
better job. Pierce denied discriminatory treatment of blacks at
Union Bank. He concluded his cross-examination with this
statement: “I don’t think there’s another bank in the area that
can match what Union is attempting to do and has done [in
affirmative action efforts ].”
Mrs. Charlotte Johnson, another black witness called by
plaintiffs and intervenors as an adverse witness, works in the
bank's personnel office. She actually screens applicants to
determine if further interest in their applications on the bank's
part is justified. Mrs. Johnson testified that to her knowledge
the bank had never mistreated an employee on account of race
and no employee had ever complained to her in this regard.
She knew of no instance where the bank had failed to promote
an employee because of race or had discriminated in any regard
because of an employee’s race. I was impressed by the
intelligence and forthrightness of this witness. In early 1979
Mrs. Johnson resigned from the bank to work in the office of
Governor Bill Clinton. At the end of his term in January of
1981, she returned to the personnel office of the bank in her
former capacity.
Besides the plaintiffs and intervenors themselves, who are
the subject of detailed findings, infra, the case against the bank
depends upon the testimony of Bobby Scott, Edith Williams,
Tommy Sproles, Ralph Martin and two experts. Scott was
originally an intervenor in the Paxton case but settled his case
on the eve of the trial and is no longer a party. After strong
criticism for his work performance (Def. Exh, 78(a)), Scott
was discharged by the Bank on April 24, 1979 for failing to call
his supervisor when absent from work on three consecutive
days—violation of bank rules. At his unemployment com-
pensation hearing, the bank discovered that a white employee
had been guilty of the same infraction and had not been fired.
The bank then reinstated Scott with back pay. He was given
another chance as a computer operator trainee on May 14, 1980
(Def. Exh. 78(b)), and he is now a computer operator on the
day shift. After 7 months as a computer trainee on a previous
occasion, he had failed to master the job and was returned to
47a
his former job as a distribution clerk. He blamed his failure on
poor rapport with the operator who was training him, and the
bank agreed to give him another chance on May 14, 1980 ( Def.
Exh. 78(b}). Scott displayed a great deal of hostility toward
the defendant bank. For instance, he refuses to keep his own
money in Union but is the customer of a competitor. He
showed considerable resentment at having been called on the
carpet for overdrafts and claimed that others had been guilty of
overdrafts with impunity. Scott felt that he had individually
been the object of discrimination by the bank. We need not
explore this subject because his case was settled and he is no
longer an individual litigant. His testimony would of course
bear on the class allegations. We find it unpersuasive. He
began work as a file sorter, an entry level job, on May 24, 1977
and has had a series of promotions and raises to his present
position as computer operator. Scott’s testimony consisted of
criticism of the bank’s policies in promotions and raises given to
various employees in comparison to those awarded to others.
With little direct knowledge of the reasons behind the manage-
ment’s personnel decisions, Scott draws sweeping inferences of
discrimination. His testimony is based on gossip, hearsay and is
generally unsubstantiated. His criticism of the bank’s personnel
actions in various individual cases has been effectively rebutted
by the bank’s records and witnesses and in some instances by
the alleged discriminatees.
Even more unpersuasive is the testimony of Edith Wil-
liams. Ms. Williams worked as a secretary less than a year at
the bank from September, 1976 to August, 1977, at which time
she resigned. Documents from Ms. Williams’ personnel file
reflect that from the inception of her employment she was a
serious disciplinary problem. She was unable to get along with
either her supervisors or co-workers. She wrote beligerent notes
to bank officers ( Def. Exh. 82), refused to redraft a document
when ordered by her supervisor ( Def. Exh. 82), failed to shred
material in violation of bank rules (Def. Exh. 83), performed
her work poorly (Def. Exh. 84, 90), absented herself from her
job without permission (Def. Exh. 85), could not or would not
follow directions (Def. Exh. 86) or take direct orders from her
48a
supervisor (Def. Exh. 87), and engaged in long personal
telephone calls on bank time (Def. Exh. 88, 89). In the eleven
months of her employment, Edith Williams was the subject of
ten critical memos from her supervisor to the personnel depart-
ment. As noted above, these covered a wide spectrum of
insubordination and poor work performance. Like Bobby
Scott, this witness made a number of vague, unsubstantiated
charges of discrimination on the bank’s part based on gossip
and hearsay. Against the bank’s charges of her own short-
lived, poor work performance at Union Bank, her own criti-
cisms of the bank’s policies are entitled to scant weight in the
evidentiary scale.
Mr. Tom Sproles, a black, was hired by Union National
Bank as a branch manager on January 11, 1977 at a salary of
$14,400. Incidentally, this was the highest salary paid to any
branch manager; most of the white branch managers were paid
* $10,000 or less (Def. Exh. 7). At that time he was branch
manager at First National Bank in Little Rock. He resigned
July 7, 1979, after being severely criticized over an incident
when he failed to properly document a loan and caused the
bank to lose somewhere between $59,000 and $80,000. Until
this incident Sproles had been a highly satisfactory employee,
and there is no evidence of any friction with senior officers or
any criticism of the bank for treatment of him or others. He
was an Officer making $17,400 a year with a $1500 expense
account and various other fringe benefits. Sproles probably
had a fine future with this bank until he made an egregious
error, which would have cost him his job at many business
institutions. The bank, however, did not discharge or demote
him. It did justifiably criticize him. He took umbrage at the
criticism and resigned. Like Bobby Scott and Edith Williams,
he now makes nonspecific charges of discrimination against the
bank. He named eight blacks against whom he claimed the
bank had discriminated. They were Bill Pierce, Bob Donald-
son, Wanda Jackson, Ralph Martin, Brenda Easterling, Jackie
Jones, Diane Lefere, (T. 1906) and Jann Henderson (T. 1945).
Pierce’s testimony has been discussed, supra. He is a senior vice
president of the bank. He has denied any discrimination on the
Bank’s part to him or anyone else. The only one of the others
49a
who testified is Ralph Martin, and his testimony will be
discussed presently. It should be noted, however, that Pierce,
Bob Donaldson, Wanda Jackson and Jann Henderson are all
presently officers of the bank. Donaldson is a branch manager,
and Ms. Jackson is an installment loan officer. Jann Henderson
is the commercial loan documentation officer with the responsi-
bility of documenting loans as large as several million dollars.
She is a highly regarded employee who was recently offered a
position as a commercial loan officer. She turned down the
offer because she did not want the responsibility of approving
large loans. Brenda Easterling, formerly an assistant branch
manager, is now a courtroom deputy in the U.S. District Clerk’s
office at Little Rock, Arkansas. She was employed as a teller
trainee on March 24, 1976 and was later promoted to teller and
assistant branch manager on July 1, 1979. In the three years of
her employment, she received six salary increases. Her name
was suggested in connection with the recusal of Judge Eisele, at
which time plaintiffs counsel expressed an intention to call her
as a witness. She was never called nor was Ms. Jones or Ms.
Lefere. When pressed for specific instances of discrimination,
Sproles’ testimony proved untrustworthy. He was asked why he
considered that the bank had discriminated against Bob Don-
aldson. He replied that Donaldson had been a branch manager
trainee for 18 months before being made a branch manager (T.
1981). This testimony proved to be completely incorrect.
Donaldson was a trainee for six months before being made a
branch manager (Def. Exh. 8). Since Donaldson’s employ-
ment at the bank on June |, 1976 as a management trainee, he
has had two promotions and six salary increases ( Def. Exh. 9).
As noted above, he is now a bank officer.
Ralph Martin, called as a rebuttal witness, was employed
at the bank in August, 1976 as a management trainee at a
salary of $650 monthly. He resigned on January 2, 1980, at
which time he had moved up to installment loan officer and was
making $11,700 annuaity. He left the bank to take a job with
Western Electric as a staff associate at $17,900 annually, an
increase of $6,200 in salary. Martin’s testimony is subject to the
same objection as that of Sproles. He made general allegations
50a
that the bank discriminates against blacks, but he was difficult
to pin down as to specifics. His testimony does not effectively
rebut in any sense the strong defense made by the bank.
As is evident in the findings set forth infra, we have given
great weight to the testimony of defendant’s expert, Dr. James
Gwartney, an economics professor from Florida State Univer-
sity. Dr. Gwartney has master and doctoral degrees in
economics from the University of Washington. His areas of
specialization are labor economics, economics of discrimination
and micro-economics. He is the author of seven books and
numerous articles published in the major professional journals
of his areas of specialty (Def. Exh. 18). One of his articles,
entitled “Statistics, the Law, and Title VII—An Economist’s
View,” was published in the Notre Dame Law Review and was
introduced in evidence (Def. Exh. 19). Dr. Gwartney’s in-
depth analysis of the issues in this case was most impressive.
Actually, the only area in which Dr. Gwartney was seriously
challenged by the two experts called by plaintiffs and inter-
venors was the area of discharge. Dr. Frank James, a math
professor at the University of Arkansas, was the principal
expert witness against the bank. He has a master’s degree in
math from the University of Arkansas and a doctorate from
New York University. The approach of Dr. James to the issues
in these cases was purely statistical. This is understandable
since his entire academic background has been in the field of
math and statistics. He has had no academic training in the
field of labor economics, labor discrimination, employment
discrimination statistics, or labor relations. The statistical
analysis made by Dr. James was in many respects favorable to
the bank. Dr. James admitted that the number of blacks
employed at Union Bank was higher than black representation
in the work force in the area. His figures showed that the bank
is hiring almost twice the number of blacks percentage-wise as
their representation in the work force—26.2% black hirees
against 15.3% blacks in the work force (Pls. Exh. 7). His
figures also show that the bank hired 26.29% blacks in the five-
year period 1974-78 and only 22.8% of the blacks terminated.
On the other hand, during this same period of time 73.8%
Sla
whites were hired and 77.2% whites terminated. These figures
show that whites are terminated at a faster rate than blacks at
this bank. With reference to these figures, Judge Eisele made
the following comment with which the witness agreed:
THE COURT: And the effect will be if that continues
is that the white population in the enterprise will decrease
and the black population is increasing, because even
though they have like you pointed out a high rate of
discharges, the terminations which cover them all shows
that more blacks are being hired than are leaving and the
reverse for the whites. Less whites are being hired than are
leaving. So over a period of time the population of
blacks —
THE WITNESS: Would tend to increase marginally
while the whites would tend to decrease.
That trend is shown in Table | in terms of the’
percentage. If you consider the years "73 through °77, you
will find a constant decrease in the white percentage and a
fairly constant increase or at least a larger percentage in
the °75, °76 and "77 black population. (T. 2139)
There was only one statistical area from which Dr. James
could infer discrimination on the bank’s part. This was in the
area of discharges. In the period 1974-78 there were 117
discharges, 53 of which were black and 64 white. This
undoubtedly showed a higher representation of blacks among
those discharged in proportion to their representation in the
bank’s work force. An inference of discrimination is possible if
we look at the bare statistics. In view of the bank’s
nondiscriminatory statistical performance in all other areas
(hirees, initial job assignments, initial salary, promotions, sal-
ary increases, terminations, warnings, and discharges), the
discharge figures are worthy of further analysis. Dr. Gwartney
subjected these figures to such further analysis; Dr. James did
not. For instance, Dr. Gwartney examined the discharge rate of
those employees who had been with the bank at least two years.
In this group of employees, there was no significant difference
in the rate of discharge as between whites and blacks. In other
words, Dr. Gwartney demonstrated that the high incidence of
52a
black discharges occurred during the first two years of their
employment. (Seventy out of seventy-seven of the black
discharges from 1974 through 1980 occurred within the first
two years of employment.) He also demonstrated through a
series of tables set forth infra that there is a disproportionate
number of black discharges only where the black had been
hired in the same year as the discharge. The discharge figures
are susceptible of one or two inferences. One is that the bank is
discriminating ayainst blacks in the area of discharges. Another
is that the bank was an aggressive affirmative action employer
who hired “high risk” black employees at a far higher rate than
their qualified representation in the work force. Some of these
black hirees are predestined to failure by virtue of such
overrepresentation in their numbers. It is logical that their
failures would occur in the first year. When a bank is hiring
blacks at two or three times the expected rate and taking
greater risks on black employees, some of these underqualified
and undereducated hirees are not going to become suitable
employees. These deficiencies in the sophisticated atmosphere
of a bank will become quickly evident, and they will be
discharged within the first year of their employment.
We accept the latter explanation for the high rate of
discharge of short-term black employees. We reject the
hypothesis that the rate of discharge of short-term black
employees indicates discrimination on the bank's part. If the
bank wanted to discriminate against blacks in the matter of
discharge, it is inconceivable that it would discriminate only
against a certain small group—the short-term employees. We
also rely on some further analysis by Dr. Gwartney in accepting
the nondiscriminatory explanation. Dr. Gwartney made an
analysis of the number of warnings given to blacks prior to
discharge vis-a-vis those given to whites. He found that blacks
were given more warnings per discharge than whites. In other
words, whites were more likely to be summarily discharged.
The statistics illustrating this fact are set forth infra. Dr.
Gwartney also analyzed in detail each of the discharges during
the pertinent period—black and white—as to their factual
background. Both from his analysis and from other evidence
53a
presented by the bank, we are satisfied that there were reason-
able objective facts supporting the decisions to discharge and
that the decisions were unrelated to race.
Dr. John Fluker, the other expert called by plaintiffs and
intervenors, took the same position as Dr. James in relation to
discharges. We reject his conclusions from the discharge
figures for the reasons set forth above. Dr. Fluker also
concluded that the bank had discriminated because the mean
starting salary at the bank was $531 for blacks and $656 for
whites. We reject this comparison because Dr. Fluker took all
the employees hired at the bank and made no attempt to
compare whites and blacks hired in the same category of
employment. Dr. Gwartney did make the latter type of com-
parison and found no significant difference in entry salaries for
whites and blacks. Dr. Fluker also concluded there was
discrimination in the fact that on June 1, 1979 there were three
black officers and 77 white officers at the bank (there are more
now). Since there were 80 officers out of 408 employees (of
which 71 were black), Dr. Fluker concluded that there should
be 14 black officers. We reject this kind of bare “warm body”
statistical approach in making this analysis. Dr, Fluker did not
consider availability of officer-qualified personnel in the work
force. He also assumed that the capabilities, education and
training of blacks and whites in the bank work force was equal.
These later assumptions were patently unjustified by the evi-
dence developed in this case.
In short we completely reject the claims of the plaintiffs
Paxton and Brown and the intervenors that the defendant has
discriminated against them. The proof to the contrary is
overwhelming. We reject the class action allegations because
the requirements of FRCP 23 have not been established by
proof adduced on behalf of plaintiffs and intervenors.. In
support of these conclusions, we make the following specific
findings of fact and conclusions of law. In these findings the
abbreviation SMSA is used for Standard Metropolitan Statisti-
cal Analysis, a grouping used by the Census Bureau and the
Arkansas Employment Security Division.
54a
FINDINGS OF FACT
1. Herbert H. McAdams, an attorney and successful
northwest Arkansas Banker, acquired a controlling interest in
Union National Bank of Little Rock approximately ten years
ago after the bank had undergone a period of instability and
mismanagement.
2. Among the reforms he instituted at this bank was an
aggressive affirmative action program. While there was an
affirmative action program at the bank, Mr. McAdams ex-
pressed the desire to have it sharply improved. Mr. Joseph E.
Zegler was brought into the bank on March 3, 1973 and given a
direct mandate by McAdams to institute a comprehensive
affirmative action plan. Mr. Zegler has applied himself con-
scientiously and sincerely to this task. Zegler has also instituted
personnel office reforms in the area of job descriptions, salary
grades, salary review and job evaluation. He also prepared a
personnel policy manual (Def. Exh. 3), which contained the
following statement under “Equal Opportunity Policy”:
It is the policy of Union National Bank to implement
affirmatively equal opportunity to all qualified employees
and applicants for employment without regard to race,
creed, color, religion, or national origin. Positive action
shall be taken to insure the fulfillment of this policy,
including: one, hiring, placement, upgrading, transfer, or
demotion; two, recruitment, advertising or solicitation or
employment; three, treatment during employment; four,
rates of pay or other forms of compensation; five, selection
for training; six, termination. This policy is consistent with
the requirements and objectives set forth by the presiden-
tial Executive Orders.
Our objective is to obtain individuals qualified and-or
trainable for positions by virtue of job-related standards of
education, training, experience and personal qualifications.
Responsibility for insuring compliance and implementa-
tion of the bank’s policy on equal employment opportunity
is assigned to the personnel director. The Executive
55a
Committee will review this policy every 12 months and
measure the results against the stated objectives.
3. In the bank’s hiring and promotion policy since Mr.
McAdams acquired control of the bank and particularly since
Mr. Zegler became personnel manager, the following factors
have been considered in hiring and promotion: education,
experience and job performance. There is no credible evidence
that race has played a part in either hiring or promotion at this
bank. However, since the plaintiff and all of the intervenors
were actually hired by the bank, we do not consider this a case
of discriminatory hiring in either an individual or a class action
sense.
4. The bank has had an active recruitment policy for black
applicants and has sent integrated recruitment teams of bank
employees to the predominantly black colleges in this
area— University of Arkansas at Pine Bluff, Philander Smith at
Little Rock, and Lemoyne-Owen in Memphis, Tennessee.
These teams have also visited predominantly white colleges
such as Ouachita Baptist at Arkadelphia, Arkansas.
5. The bank operates in-house training programs and
offers other training programs in cooperation with various
banking associations and educational institutions. For instance,
the bank sends 15-20 people to a data processing school at
Arkansas Tech College each year. There is a teller training
school, and all employees are encouraged to attend American
Institute of Banking classes. The latter classes are held in Little
Rock during spring and fall semesters and consist of three-hour
courses one night of the week for 14 weeks. Participation in the
AIB courses is voluntary. Blacks do not participate in AIB
courses in the same percentage as whites, but both races are
actually encouraged to participate in this program. The bank
also sends employees to the Arkansas Basic School of Banking,
which is held each summer in two one-week sessions at Little
Rock. This school deals with the fundamentals of banking.
The bank also sends employees to graduate banking schools at
Rutgers, LSU and SMU. There are intensive in-house training
programs held during banking hours that cover a wide range of
56a
banking subjects. All of these training programs are available
to blacks as well as whites, and there is no evidence of
discrimination by the bank in the selection of participants in
these various training programs.
6. Every week the bank published an in-house news letter
called “Who’s Where.” It lists all personnel transfers, promo-
tions, terminations and openings and the new employees.
7. The bank leadership in late 1974 or early 1975 decided
that there were disadvantaged people in the community who
could be made more attractive to the banking community if
they had some banking training. In conjunction with the
Opportunities Industrialization Center, the bank established a
course in basic training for blacks. The bank provided instruc-
tors and textbooks and defrayed all the costs of this program. It
was the intent of the bank to provide these blacks with
knowledge and skills that would make their likelihood of
finding employment in banking more probable. This was the
first involvement of OIC with banking and banking training for
minorities in the Little Rock area. Classes were first held in the
OIC classroom and then on-the-job training was given at Union
Bank. All classroom instructors were Union Bank officers and
employees. The program lasted twelve weeks, of which an
eight-weeks period was classroom training and a four-weeks
period was on-the-job training. Fifteen black students com-
prised the initial class and were all selected by the OIC.
Although Union Bank made it clear that it was not obligated to
hire any of these participants, it did in fact hire the entire first
class, which was conducted in the summer of 1975. Some went
into teller training, some into account services and some into the
computer center. Four similar classes were conducted, and the
bank hired participants from subsequent classes, but in dimin-
ishing numbers. The bank also operates a tuition refund
program under which they will refund 75% of an employee's
expenses for courses related to banking that are taken at a
college or business school.
8. The banking industry is a low-salaried industry and has
a problem in competing for competent personnel with highly
unionized industries such as Southwestern Bell and Teletype
57a
Corporation. Neither is its salary scale comparable to utilities
such as Arkansas Power & Light Company and Arkansas
Louisiana Gas Company. Bank salaries are also consistently
lower than comparable positions in state, local and federal
government. For this reason there is a large turnover of
employees in the banking industry in central Arkansas. While
Union Bank pay scales are comparable and competitive with
other banks in central Arkansas, it shares with the latter the
problem of attracting and holding desirable employees.
9. The bank has a discipline policy which is spelled out in
its personnel policy manual and in its supervisor course. If an
employee’s performance is not satisfactory, the supervisor first
advises the employee orally. If the sub-par performance
continues, the employee is advised in writing of the specific
criticism. If this does not work, a plan for improvement is
instituted in which the supervisor and employee sit down,
discuss the problem and what steps are needed to correct it.
The next step, called a notice of disciplinary probation, involves
a formal notice in writing of the need to correct the employee’s
deficiency. This notice is discussed personally with the employ-
ee and is signed by him. At this point the employee is placed
on probation and given a specified, number of days, usually
between thirty and ninety, to take corrective action. If all these
measures have failed, dismissal is considered. There are nine
division heads, fifty-six department heads and sixty-nine super-
visors in the bank. If there is a flagrant offense, the supervisor
is authorized to terminate an employee on the spot. A flagrant
offense is described by the bank’s personnel director as theft,
fighting, threatening a customer, refusing to follow a reasonable
order or something of a similar nature. Otherwise, the decision
to discharge is made only by the personnel director, the division
manager and the department head in joint consultation. In the
event of a disagreement, the final decision to terminate is made
by the personnel director, who can be overruled only by the
executive vice president. The written memoranda with respect
to discipline goes into the employee’s personnel file.
10. Authority over promotions and transfers is within the
nine division managers as long as the employee’s department is
within his division. If the promotion or transfer is from one
58a
division into another division, then the personnel department is
involved in the decision. In seeking a promotion or transfer
within the department or division, the employee would first
deal with his supervisor. If he deserves promotion or transfer
outside the department or division, he would first take it up
with the personnel office, according to established bank proce-
dures, In the latter eventuality the personnel office makes an
estimate of qualifications, finds if an opening exists and coordi-
nates with the gaining and losing departments in the promotion
or transfer.
11. The bank has about thirty persons in 10-12 feeder-type
classifications. These are entry level positions where people are
on some occasions hired with little or no experience. They are,
however, hired by the bank with the idea that at some point in
time they will be promoted out of the feeder-type position.
12. There are 175 job descriptions in the bank, which are
constantly being revised. These job descriptions do not em-
brace bank officers. Officer status normally results from
recommendation by the division head.
13. Mr. Zegler, the Personnel Director, and Mr. William
Pierce, a black senior vice president of the bank, cooperated in
starting a program at the University of Arkansas at Pine Bluff,
which has primarily been a black college. Under this program,
black students in distributive education were hired into the
bank and hired for a semester to expose them to the field of
banking. Members of the UAPB faculty were brought into the
bank in order to adjust their curriculum to train students who
could be brought into the bank and upgraded to responsible
positions.
14. At the initiative of Mr. McAdams, Union was the first
bank in this area to start a Minority Enterprise Small Business
Investment Corporation. The bank began this organization
with an investment of $75,000 in early 1973, which was half of
the total amount put into MESBIC by other financial in-
stitutions. Capitalization of MESBIC is matched by the Small
Business Administration to take high risk loans in which
minorities are involved.
| 59a
15. When the Arkansas Business Development Corpo-
ration, a black-administered program, was begun, Herbert
McAdams was a member of the board. He played a key role in
helping this organization succeed and made available space to
it in the Union Bank.
16. Union Bank sponsored a series of meetings with black
ministers of all denominations in Little Rock to assist them in
setting up their books, learning how to make a proper financial
statement, and making loan applications. These meetings were
staffed by officers from the bank’s Consumer Loan, Commercial
Loan and Accounting Departments.
17. Mr. William Pierce, a black Senior Vice President of
Union Bank, meets several times a week with Mr. Zegler, the
Personnel Director, and Mr. Dierks, the Assistant Personnel
Director, to discuss how blacks can be moved from entry level
jobs to those of higher responsibility. They also discuss how
blacks are succeeding in productivity and possible openings
which can be filled by blacks (T. 1258). They have utilized
charts similar to Joint Exhibit A to assess the dispersement of
blacks throughout the bank in order to determine if blacks can
be elevated to certain positions (T. 1259). These men have
made strong efforts to involve blacks in every area of the bank,
and there are now blacks in most departments (T. 1259).
18. The typical complaint of both white and black
employees of the bank is poor pay. The banking industry does
not pay well. Only when officer status is obtained, do employ-
ees come into a stream of pay that is commensurate with other
businesses and other industry (T. 1262). This is the principal
reason for the high turnover in bank employees. Mr. William
Pierce, the black Senior Vice President, is a focus of these
complaints from blacks. His counsel to them is to develop their
skills through educational courses offered by the bank.
19. At the time William Pierce was made senior vice
president of this bank, he was the only black to occupy such a
position in a white-owned bank in the Eighth Federal Reserve
District, which includes Arkansas and Texas and parts of the
States of Missouri, Kentucky, Tennessee, Mississippi and Il-
linois.
60a
20. A white employee of the bank was fired on the spot for
using derogatory racial terms to a black employee (T. 1282).
21. If an employer is discriminatory against a group of
people, it will manifest itself statistically in disparity between
similarly situated employees or persons that are chosen out of a
labor pool or a promotion pool. The following factors are
important in determining if discrimination has been present:
(a) comparison of the representation of blacks in the appropri-
ate work force pools with blacks in the employer’s work force;
(b) representation of blacks among the hirees of the employer
in comparison to blacks in the appropriate labor market pool
from which the employer draws its employees; (c) comparison
of the hiring salaries of blacks to hiring salaries of white in
similar positions; (d) comparison of promotions of blacks to
promotions of whites; (e) comparison of terminations of blacks
and terminations of whites; and (f) comparison of overall
compensation to blacks to that of whites, that is, whether or not
similar employees receive the same kinds of compensation.
22. According to the U.S. Census of 1970, the median
years of schooling completed by professional and technical
personnel is 16.2; accountants, 15.3; computer specialists, 15.5;
bank officials and financial managers, 14.6; managers, salaried,
13.9; bank tellers, 12.6; bookkeepers, 12.6; file clerks, 12.4;
office machine operators, 12.5 (Def. Exh. 20).
23. According to the 1970 U.S. Census, there are 27,148
blacks out of a total population of 175,157 (25 years of age or
more) in Little Rock (SMSA) or a percentage of 15.5%. Of
this group 98,964 completed 12 years or more of school, of
which 8,042 or 8.1% were black. While 61.4% of the whites
aged 25 years and over in Little Rock completed 12 or more
years of schooling, only 29.6% of the blacks did so (Def. Exh.
21).
24. According to the 1970 United States Census, the
representation of blacks in Little Rock (SMSA) in the various
occupations involved in this litigation was as follows: Profes-
sional and technical workers as an entire classification, 8.7%.
However, within this classification, 1.5% of accountants were
6la
black and 0% of computer specialists. 3% of the managers and
administrators were black, and 6.4% of the clerical workers
were black. Within the latter classification, 4.5% of the bank
tellers and cashiers were black, 0.6% of the bookkeepers and
billing clerks, 4.5% of the file clerks, 5% of the secretaries and
stenographers, and 6.4% of the typists (Def. Exh. 22).
25. According to a 1979 report of 16 Arkansas Employ-
ment Security Divisions, 6.3% of the Professional and Technical
Employees (except for engineers, teachers, medical and health
workers) in Little Rock (SMSA) were black. 2.7% of the
managers and administrators and 6.1% of the clerical employ-
ees were black. 19.7% in all other occupations were black ( Def.
Exh. 23).
26. Pursuant to findings 22-25, it is further found that the
availability of blacks in the various occupational and education-
al categories from which the bank draws its employees is
approximately 6%-8%.
27. The representation of whites and blacks in the work
force at Union National Bank, 1974-1980, is as follows:
No. of Employees as
of December 31
Percent
Year Total White Black Black
1974 332 293 39 11.8
1975 316 262 54 17.1
1976 343 288 55 16.0
1977 393 320 73 18.6
1978 408 336 2 17.7
1979 441 362 79 17.9
1980 432 358 14 17.1
1974-80 ( Average )........ 380.7 317.0 63.7 16.7
28. The representation of blacks in the work force at
Union National Bank is approximately twice their availability
in the occupations from which the bank hires intensely.
62a
29. The representation of blacks in the work force at
Union Bank at year end 1974-80 compared to their representa-
tion in the labor market pool is set forth infra. The acceptable
range in the last column is derived by using the percentage of
blacks in the labor market pool (column 1) as the benchmark.
The acceptable range is the expected number of blacks (column
3) plus or minus two standard deviations. This procedure is in
accordance with the technique approved by the Supreme Court
in United States v. Hazelwood School District, 433 U.S. 299,
308, footnote 14, 97 S.Ct. 2736, 2742, footnote 14, 53 L.Ed.2d
768 (1977). The data on Union National Bank employees
were derived from the employment history sheets provided by
the bank for all employees present during 1974-80. The labor
market pool data (column |) are from the Arkansas Employ-
ment Security Division, Manpower Information for Affirmative
Action Programs— 1979 (Table 3):
1975
Blacks Total
asa No. of Acceptable
Percent of Employees Expected Observed Range
the Labor UNB Work No. of No. of (No. of
Market Pool Force, Black Black Black
Occupation 1978 1975 Employees Employees Employees)
Professional & Technical.. 6.3 ll 0.7 l 0.0- 2.3
Managers & Administra-
tors 2.7 74 2.0 0.0- 4.8
Clerical Workers............... 6.1 214 13.1 5.9-19.1
TOME ccccrserecossnsesssceenes - 316 19.1
Occupation 1978
Professional & Technical.. 6.3
Managers & Administra-
tors 2.7
Clerical Workers............... 6.1
Occupation 1978
Acceptable
Range
(Neo. of
Black
Employees )
Professional & Technical... 6.3
tors 2.7
Clerical Workers................ 6.1
ME I ainenticanansnaneassccnin 19.7
0.0- 2.3
0.0- 4.8
$/9-19.1
0.0- 6.6
1980
Blacks Total
Asa No. of Acceptable
Percent of Employees Expected Observed Range
the Labor UNB Work Ne. of Ne. of (Ne. of
Market Pool Force, Black Black Black
Occupation 1978 1980 Employees Employees Employees)
Professional & Technical.. 6.3 17 | l 0.0- 3.1
Managers & Administra-
tors 2.7 79 2.1 _ 4 0.0- 5.0
Clerical Workers............... 6.1 311 19.0 65 10.6-27.4
PE I cccksestibintatsienarveies 19.7 25 49 4 0.9- 8.9
TRAINUIE winkathetcbicsdaiinsabias — 432 27.1 74 _
30. If unemployed members of the work force were
included in the above figure, the result would not be materially
changed, since during the period in question, roughly 95 of the
work force was employed (T. 2309-12).
31. The benchmark figures used above are substantiated
by the fact that in 1973-74, 4.9% of those receiving a college
degree in business and management were blacks and 4.6% of
those receiving degrees in computer science were black. In
1975-76 the figures were 6.6% and 5.8% respectively (T. 2312-
13).
32. Approximately two-thirds of the bank’s work force is
clerical. Based on availability of black clerical workers in the
work force, the Union Bank in the years 1975-80 had about
three times the number of such employees in its work force that
would be expected (T. 2316).
33. During the years 1975-80 in every classification of
occupation utilized by the bank, based on Arkansas Employ-
ment Security Division statistics, it is observed that representa-
tion of blacks at Union Bank exceeded the expected representa-
.tion of blacks. For example, whereas in 1975 it would be
expected that 19 blacks would be employed in the bank,
actually 54 were in its work force; in 1976 the figures were 20
65a
expected and 55 actually in its work force; in 1978, 23 were
expected but 73 blacks were actually in the bank’s work force;
in 1979, 26 expected but 76 in the work force; and in 1980, 27
expected but 74 in the work force.
34. During the period 1975-80, the representation of
blacks in the bank’s work force exceeds their representation in
the total population of Little Rock (SMSA) and in the work
force of Little Rock (SMSA).
35. If in fact the Union Bank was discriminatory against
black employees during the years 1975-80, an _ under-
representation of blacks in the various work categories and an
underrepresentation of blacks in the aggregate work force
would have been manifest in the figures quoted, supra. The
opposite conclusion is evident from the figures.
36. The makeup of hirees of the bank during the year
1974-80 is shown by the following figures:
No. of Employees as
of December 31
Percent
Year Total White Black Black
i 194 159 35 18.0
SRNR ACh 108 65 43 39.8
FORE ATE 175 131 44 25.1
i 233 173 60 25.8
SB 211 171 40 19.0
OME eet 240 191 49 20.4
RISES 174 137 37 21.3
Total, 1974-80... 1,335 1,027 308 23.1
37. The percentage of blacks among hirees set forth in
finding number 37 is substantially greater than their.representa-
tion in the Little Rock labor force and in the population of
Little Rock. It is about three times the black representation
66a
among persons who have completed a high school degree (8%)
and substantially greater than representation among the clerical
work force and among professional and clerical workers. To
summarize, blacks have been hired by the Union National
Bank at a greater percentage than their representation in any
kind of benchmark that might be utilized.
38. If the hiring is broken down by job classification, we
find that in the period 1974-80 the number of black hirees in
each classification substantially exceeded the number of ex-
pected hirees. The following figures make the point:
1974-76
Blacks Total
asa No. of Acceptable
Percent of Employees Expected Observed Range
the Labor Hired by No. of No. of (No. of
Market Pool UNB Black Black Black
Occupation 1978 1974-16 Hirees Hirees Hirees)
Professional & Technical.. 6.3 ll 0.7 2 0.0- 2.3
Managers & Administra-
tors y 33 0.9 3 0.0- 2.8
Clerical Workers............... 6.1 408 24.9 104 15.2-34.6
PAMe GIUNONG cicscsticesictéccicsonsece 19.7 25 49 13 0.9- 8.9
PME asscssedivsiines — 477 31.4 122
1977-78
Blacks Total
asa No. of Acceptable
Percent of Employees Expected Observed Range
the Labor Hired by Neo. of No. of (Ne. of
Masket Pool UNB Black Black Black
Occupation 1978 1977-78 Hirees Hirees Hirees)
Professional & Technical.. 6.3 16 19 0 0.0- 2.9
Managers & Administra-
tors 2.7 18 0.5 1 0.0- 1.9
Clerical Workers............... 6.1 394 24.0 94 14.5-33.5
PTE QURGIG cn sccsesisticosccssisoses 19.7 16 3.2 5 0.0- 6.4
RON iasiscicicossteate _ 444 28.7 100 _
1979-80
Blacks Total
asa No. of Acceptable
Percent of Employees Expected Observed Range
the Labor Hired by No. of No. of (No. of
Market Pool UNB Black Black Black
Occupation 1978 1979-80 Employees Employees Employees)
Professional & Technical.. 6.3 7 0.4 0 0.0- 1.7
Managers & Administra-
tors ae 14 0.4 0 0.0- 1.6
Clerical Workers............... 6.1 352 21.5 79 12.5-30.5
PAIR CONANT coeséhcsstasnccetecenesoce 19.7 4l 8.1 7 3.0-13.2
NORM iccecickinctcedaan _ 414 30.4 86 —
39. A reasonable and proper inference from these figures
is that the Union National Bank is aggressively and actively
pursuing affirmative action policies and is making strong efforts
to provide employment opportunities for blacks in the Little
Rock area.
40. There is no significant black-white variation in the
mean initial monthly salaries of full-time employees hired
during the period 1974-78 as is illustrated by the following
figures:
1974-75
No. of Hirees Mean Initial Monthly Salary
B/W
Occupation w 8 w K Percent
Professional & Technical.. 6 2 $862 $856 99.3
Managers & Adminis-
NPN hGilicecsishchocsdennbseke 19 l $1247 $2500 200.5
Sales Representatives ....... l l $575 $475 82.6
REID ccs csssabdbcssinesdiadce | 0 $500 - _
Computer Operators......... 9 1 $462 $450 97.4
OCI IITION csscsccsssusesssoseubeces 9 3 $514 $442 86.0
All Other Clerical
NNMIRUODEN sciSchiskcasesescseocorss 133 53 $393 $398 101.3
68a
1976-77
No. of Hirees Mean Initial Monthly Salary
a/w
Occupation w B w 8 Percent
Professional & Technical.. 10 0 $1032 — _
Managers & Adminis-
NURRUIIES cnciccclotcensestdesetsenese 19 3 $1078 $833 77.3
COOMSCUIER <2: ssiscccrsnecncesvccnves 2 1 $600 $575 95.8
Computer Operators......... 10 3 $523 $458 87.6
Secretaries ........cccessessesesvees 9 0 $578 — _
All Other Clerical
IIR ccercdnnezccsctrcsereece 206 82 $470 $449 95.5
All Other Employees ........ 0 1 - $450 —
1978
No. of Hirees Mean Initial Monthly Salary
aw
Occupation w " w 8 Pervent
Professional and Techni-
cal 7 0 $1328 - _
Managers and Adminis-
RUNNER esis snscscriccessenceeevers 10 0 $1058 ~ _
Sales Representatives ....... 1 0 $700 = _
COMOCIOES <ercocccsescccscccsessecee 6 2 $700 $A25 89.3
Computer Operators......... 7 1 $642 $500 719
Secretaries .....ssecsssveressssees 5 0 $608 _ _
All Other Clerical
WOPrke Ps ....csssesesesesesseeeees 97 28 $505 $504 99.8
All Other Employees ........ 5 l $542 $500 92.3
41. The figures that are significant to the court in the tables
immediately above are those under the category “all other
clerical workers” constituting the vast majority of the people
hired. The other categories would appear to be too small
numerically and generally require specialized training or ex-
69a
perience prior to hiring. Even in these small categories, we do
not find significant differences in pay except for computer
operators and secretaries, which could be explained by varying
levels of experience and education. In the “all other clerical
workers” there was a slight differential in favor of the blacks in
1974-75 and a slight differential in favor of the whites in later
years. A fair and reasonable inference is that Union Bank was
not guilty of discrimination against blacks in their initial salary
rate, and the court so finds.
42. Blacks in the Union Bank have been promoted at a
higher rate than would be expected. For example at the
beginning of 1974, 9.9% of the bank’s work force was black.
There were 75 promotions during that year and of those
promotions, if the 9.9% of the blacks had received their share,
we would have expected that blacks would have received 7.4%
of the promotions. The observed rate was 14%, well over the
expected rate. Promotion is defined as a change in job title
accompanied by an increase in earnings. The figures for the
entire 1974-80 are given in the following table:
Blacks as
a Percent
of UNB Expected Observed Acceptable
Work Force No. of No. of No. of Range
at the Promotions Promotions Promotions (No, of
Beginning During the Received Received Promotions
Year of the Year Year by Blacks by Blacks for Blacks)
AF TO vcsccenssnssccecsbes 9.9 75 74 14 2.2-12.6
BUD sphitdiesedscreenees ‘8 30 3.5 6 0.0- 7.0
SOTO ticivasenitidcheseds 17.1 55 9.4 12 3.8-16.0
DUT aiestcsiessiccahinen 16.0 42 6.7 ll 1.9-11.5
ee 18.6 65 12.1 10 5.7-18.5
OTD ccscheocsecsisocacse 17.7 73 12.9 21 6.4-19.4
SOG scccdevssscotessinss 17.9 64 11.5 15 5.4-17.6
Total ccccssors pati al 63.5 89 -
43. There was no discrimination against blacks at the
Union National Bank in the matter of promotions. As a matter
of fact, in every year beginning in 1974, with the exception of
70a
1978, blacks have been promoted at a far higher rate than
would be expected. The difference in 1978 was insignificant.
44. Blacks at Union National Bank have also received a
greater number of salary increases than would be expected on a
statistical basis. In the following table change in position is not
considered, but only whether an increase in pay was given:
1974-80
Blacks as
a Percent Expected Observed Acceptable
of UNB No. of Number Number of Range
Work Force Salary of Salary Salary (No. of
at the © Increases Increases Increases Salary
Beginning During the Received Received Increases
Year of the Year Year By Blacks By Blacks for Blacks)
FTG cicvecssaddbeveteeis 9.9 419 41.5 45 29.3- $3.7
BOTS csverdccesesivocenee 11.8 310 36.6 45 25.2- 48.0
BOTW cacciodesisherseieee 17.1 302 51.6 50 38.5- 64.7
BUTE stcccsekecnteisiees 16.0 325 52.0 55 38.8- 65.2
ET sracctscnssseiscciss 18.6 4l11 76.4 88 60.4- 92.4
SED stitcletticictsnie 17.7 449 79.5 82 63.3- 95.7
SOD sdinvicinsiniesesies 17.9 521° 93.3 97 75.8-110.8
ORME citsecssiten — 2737 430.9 462 —_
45. There has been no discrimination against blacks at the
Union National Bank in reference to the number of salary
increases given to black employees. Blacks received their share
of upgrades whether an upgrade be defined as only a raise or a
raise plus a change of position. The data suggests that blacks
received a higher percentage of upgrades than would be
expected statistically. There is no evidence of a disparate
impact in the area of salary or promotion.
46. If we go further and delve into the mean change in
monthly salary for employees receiving an increase in monthly
salary rate or an increase with a change in job title at Union
Bank in the 1974-80 period, we find that there is no significant
difference in the figures for black and white employees. This
conclusion is substantiated by Defendant’s Exhibits 34(c)
through 34(i) and 35(b) through 35(H).
Tla
47. If terminations of employees are considered, whether
voluatary or involuntary, there is no significant difference in the
number of blacks and whites terminating in the period 1974-80.
This is illustrated by the following tables which take the
terminations during each year and classify them according to
how long the employees had been with the bank. This is a
significant relationship because the longer a person has been
with an employer, the less likely he is to terminate. In this
series of tables infra, it is conclusively demonstrated that the
higher number of blacks terminating is to be found in the short-
term employees. For example, out of 28 blacks terminating in
1974, 17 had been hired that same year. Even so, in no year is
the number of blacks terminating outside an acceptable range;
actually, in each year the figure is almost exactly what would be
expected. The tables follow:
1974
Black
Employees Expected Observed Acceptable
Present in 1974 No. of Ne. of No. of Range (No.
Years as a Percent Employees Blacks Blacks of Blacks
of Hire of the Total Terminating Terminating Terminating Terminating)
ri liciesdtecnsnteeds 18.0 78 14.0 17 7.2-20.8
SITU sustichaestnieiecnds 16.4 53 8.7 8 3.3-14.1
OFFA vandsindtaphineencie 11.5 25 2.9 l 0.0- 5.1
BOSE E cnsdrccescecses 5.3 8 0.4 l 0.0- 1.7
Prior to 1969....... 48 ‘sé 1.1 l 0.0- 3.1
/ ae — 187 27.1 28 —
1975
Black
Expected Observed Acceptable
Present in 1975 No. of No. of No. of Range (No.
Years as a Percent Blacks Blacks of Blacks
of Hire of the Total Terminating Terminating Terminating Terminating)
RUF TUE doasschasinnsesiqaee 40.2 29 11.7 14 6.4-17.0
SITING eadivocitniisncdesns 15.5 55 8.5 il 3.1-13.9
) ERTS 17.5 20 a9 2 0.1- 6.9
| y MINA 10.9 10 Ll l 0.0- 3.1
Prior to 1970....... 5.3 10 0.5 0 0.0- 1.9
1976
Black
Employees Expected Observed Acceptable
Present in 1976 No. of No. of No. of Range (No.
Years as a Percent Employees Blacks Blacks of Blacks
of Hire of the Total Terminating Terminating Terminating Terminating)
STO sescsrteserteoienes 44.0 . 63 27.7 19 19.8-35.6
| REE 29.0 38 11.0 15 5.4-16.6
Ly pe ey 7.0 21 1.5 2 0.0- 3.8
So: ee 12.0 13 1.6 0.0- 3.9
Prior to 1971....... 6.0 14 0.8 0 0.0- 2.6
Total .......0000 a 149 42.6 43 a
1977
Black
Employees Expected Observed Acceptable
Present in 1977 Neo. of No. of No, of Range (No.
Years asa Percent Employees Blacks Blacks of Blacks
of Hire of the Total Terminating Terminating Terminating Terminating)
PUT ccninincopinnnevein 25.8 87 22.4 24 14,.2-30.6
|, eR 22.3 53 11.8 10 5.7-17.9
|: ee 35.0 ll 3.9 5 0.7- 7.1
|: 10.0 19 2.1 2 0.0- 4.8
Prior to 1972....... wa’ 14 1.0 l 0.0- 2.9
ye — 184 41.2 42 —
1978
Black
Expected Observed Acceptable
Present in 1978 Ne. of No, of No. of Range (No.
Years as a Percent Employees Blacks Blacks of Blacks
of Hire of the Total Terminating Terminating Terminating Terminating )
|) Se ee 19.0 86 16.3 18 9.0-23.6
UGF-7 eicscsavntzecscnses 24.7 68 16.7 14 9.6-23.8
ADA incichiecsensevevees 25.4 18 46 5 0.9-8.3
1973-75 ..cccmereseeee 23.2 6 1.4 2 0.0- 3.5
Prior to 1973....... 1.6 18 1.4 3 0.0- 3.6
42
1979
Black
Expected Observed Acceptable
Present in 1979 No. of Ne. of No. of Range (No.
Years asa Percent Employees Blacks Blacks of Blacks
of Hire of the Total Terminating Terminating Terminating Terminating )
|, na 20.4 82 16.7 16 9.4-20.0
7, nen 17.7 56 9.9 12 4.2-15.6
RUPE. T cepdsvinsiensteieins 28.2 30 8.5 8 2.6-13.4
SO TONTW itccsnssnstiate 23.1 22 5.1 6 L.t- 91
Prior to 1974....... 6.2 17 Ll l 0.0- 3.1
Total ......00000 — 207 41.3 43 _
1980
Black
Expected Observed Acceptable
Present in 1980 No, of No. of Ne. of Range (No.
Years asa Percent Employees Blacks Blacks of Blacks
of Hire of the Total Terminating Terminating Terminating Terminating)
DUG sicccstininstiseckente 21.3 55 11.7 14 5.6-17.8
SOUS tichsticeanstinehe 20.3 73 14.8 15 7.9-21.7
UTE teciticisetnteisins 15.9 18 2.9 3 0.0- 6.0
BDFD PU GC atbiescinsteses 25.8 15 3.9 4 0.5- 7.3
Prior to 1975....... 6.3 14 0.9 4 0.0- 2.7
TO ennai — 175 34.2 40 _
48. A fair and reasonable inference from the tables set
forth immediately supra is that there was no discrimination
against blacks in the matter of terminations by the Union Bank
and the court so finds. The court further finds that the
proportion of whites hired to whites terminated in comparison
to blacks hired to blacks terminated will necessarily result in a
continuing increase of black percentages at the Union Bank (T.
2378-79). The relevant question of disparate impact in the
matter of termination is whether the blacks and whites who
have the same seniority have different termination rates. We
find that they do not.
74a
49. The following figures represent the number of blacks
discharged in a stated year with the percentage which dis-
charges represent of the total terminations during the year:
1974, 26 (13.9%); 1975, 18 (14.5%); 1976, 17 (11.4%); 1977,
31 (16.8%); 1978, 27 (13.8%); 1979, 24 (11.6%); 1980, 28
(16%)—Total 171 (14%).
50. If we focus on the number of blacks discharged in the
year 1974 to 1980, we find that there is a disproportionate
number of black dischargees only where the blacks had been
hired in the same year as the discharge. The tables which
illustrate this fact are as follows:
1974
Black Employees Acceptable
Present in 1974 No. of Expected No. Observed No. Range (No.
Years as a Percent Employees of Blacks of Blacks of Blacks
of Hire of the Total Discharged Discharged Discharged Discharged)
SOF TW chiecinecoucianensi 18.0 15 2.7 9 0.0-5.7
Rew vitdeisioscicticins 16.4 9 1.5 2 0.0-3.7
oe pee 11.5 l 0.1 0 0.0-0.7
BITTE tateniaseienes 5.3 0 0.0 0 0.0-0.0
Prior to 1969....... 4.8 l 0.1 0 0.0-0.7
; ea 26 44 ll _
1975
Black Employees Acceptable
Present in 1975 No. of Expected No. Observed No. Range (No.
Years as a Percent Employees of Blacks of Blacks of Blacks
of Hire of the Total Discharged Discharged Discharged Discharged)
Cee incketacsiccsnbiane 40.2 2.4 0.0-4.8
3
8
Ss
oc
De as Ohba
So
nw
eceloem-onwu
Ss
8
1976
Black Employees Acceptable
Present in 1976 Ne, of Expected No, Observed No. Range (No.
Years as a Percent Employees of Blacks of Blacks of Blacks
of Hive of the Total Discharged Discharged Discharged Discharged)
1976 sceccceccesecssveceee 25.1 7 1.8 3 0.0-4,1
1DTS cccoorsseceesncesses 37.0 6 2.2 4 0,0-4.6
LOT sctvindecssiecteens 7.0 2 0.1 0 0,0-0.8
197 1273 cecerccccescere 12.0 0 0.0 0 0,0-0.0
Prior to 1971... 6.0 2 0.1 0 0.0-0,7
Total ..cecereeees o 17 42 7 =
1977
Black Employees Acceptable
Present in 1977 Ne, of Exppcted No, Observed No. Range (No.
Years ase Percent Employees of Blacks of Blacks of Blacks
of Hire of the Total Discharged Discharged Discharged Discharged)
1977 scccoeccecesocsereee 25.8 17 44 10 0.8-8.0
TTD sccccecescescesoneee 22.3 10 2.2 6 0,0-4.8
BOTS ‘scccccsvecceeseveves 35.0 0 0.0 0 0.0-0.0
1972-74 cccccseesereee 10.8 3 0.3 1 0,0-1.4
Prior to 1972....... 71 1 0.1 0 0.0-0.6
; = 31 7.0 17 —_
1978
Black Acceptable
Present in 1978 Ne. of Expected No, Observed No. Range (No.
Years as a Percent Employees of Blacks of Blacks of Blacks
of Hire of the Total Discharged Discharged Discharged Discharged)
1O7G secccescsrcccesecees 19.0 14 2.7 7 0.0-5.6
1977 cccccccreccceecceece 24.7 7 1.7 2 0.0-4.0
19776 cccscscercereceseee 25.4 2 0.5 l 0,0-1.7
1973-75 vcscersrevenees 23.2 2 0.5 0 0.0-1.7
Prior to 1973....... 16 2 0.2 0 0.0-1.0
Total .....cccvee _ 27 5.6 10 -
1979
Black Employees
Present in 1979 No. of Expected No, Observed No. Range (No.
Years an a Percent Employees of Blacks of Blacks of Blacks
of Hive of the Total Discharged Discharged Discharged Discharged)
(i, pe Se 20.4 11 2.2 7 0,0-4,9
SU TE vatelertocsoriiienss 17.7 7 1,2 2 0,0-3,2
EDIT sesrteeinsbitinntens 28.2 3 0.8 | 0,0-2.4
SFT TO sccksorsrstvees 23.1 l 0,2 0 0,0-1,0
Prior to 1974.,..... 6.2 2 0,1 l 0,0-0.8
y | Re - 24 45 il _
1980
Black Employees Acceptable
Present in 1980 No, of Expected No, Observed No, Range (No.
Vears as a Percent Employees of Blacks of Blacks of Blacks
of Hire of the Total Discharged Discharged Discharged Discharged)
RID sesaciebineseensense 21.3 9 1.9 4 0,0-4.4
Oo Oe 20.3 13 2.6 7 0.0-5,5
|) ee 15.9 3 0.5 1 0.0-1.8
SRTENTT tictesterniaes 25.8 l 0.3 0 0,0-1.0
Prior to 1975....... 6.3 2 0.1 l 0,0-0.8
Total ....css0000 _ 28 5.4 13 —_
51. We infer from the tables set forth immediately supra
and other evidence in this case and so find that there is an over-
representation of blacks among employees who have been
discharged because Union Bank has been aggressive in its
affirmative action policy and is accepting a lower standard for
blacks as indicated by the overrepresentation of blacks among
the bank’s hirees. It is hiring blacks at two or three times the
expected rate and is therefore taking greater risks on black
employees than on white employees. This greater risk becomes
particularly manifest in the short term employees, some of
whom are simply not suitable employees, a fact the bank
77a
discovers after a short time. We find that this is a necessary
concomitant where employment opportunity is being given to a
disproportionate number of underqualified and undereducated
people. If we look at the discharge rates of employees who
have been at the bank for more than two years, there is no
difference in the discharge rate of blacks and whites. We reject
the hypothesis that the rate of discharge of blacks employed for
only a short time indicates discrimination on the bank’s part. If
the bank wanted to discriminate against blacks in the matter of
discharge, it is inconceivable that it would discriminate only
against a certain small group—those who had been there only a
short time.
52. The above finding is reinforced by statistical studies
with regard to the warnings given to black and white employees
prior to discharge. Whites were much more likely to be
discharged with no prior warning whatsoever. In spite of
smaller numbers, blacks were given substantially more warn-
ings than whites prior to discharge. In other words, the bank
was far more patient with the shortcomings of black employees
than it was with those of white employees. This is illustrated by
the following table for the years 1974-78:
Whites Blacks
1. Number of Employees Discharged, 1974-78.........0000 66 53
2. Number of Employees Discharged Without Formal
Prior Warning, 1974-78 4l 16
3. Percent of Employees Discharged Without Formal
Warning, 1974-78 62.1 30,2
4. Total Number of Formal Warnings Given to Dis-
charged Employees, 1974-78 55 78
5. Mean Number of Formal Warnings Given to Dis-
charged Employees, 1974-78 0.83 1.47
If the employees fired without warning are classified according
to reason for discharge, the whites exceed the blacks in every
category except embezzlement/ misappropriation (Def. Exhs.
49, F, F(1), F(2)). If we search deeper into the matter of
warning prior to discharge and classify the discharges according
to reason for discharge, we find that in each category the
warning per discharge was higher for blacks than for whites,
78a
again indicating patience and tolerance on the bank’s part
toward its black employees and a reluctance to discharge them.
This is illustrated by the following table:
No. of
Notifications
tmployees
No. of Received
Employed Warning of Warnings
Discharged for the Need for Per
the Reason Corrective Action Dincharge
Renson for Discharge White Black White Bleck Whie Black
1, Excessive Overdrafts ............. K 7 12 0.88 3.00
2. Misappropriation of Funds... 1 5 0 0 0.00 8 0,00
3. Absenteeism & Tardiness...... 13 7 8 19 0.62 2.71
Ot FIED cickissttieinttstinanistiaes 10 il 2 5 0.20 8360.45
5. Inefficiency & Poor Perform-
ance 25 24 29 » 1.16 1,25
6 Miscellaneous ......:0c0ssveveeeveee 9 2 12 9 133 450
53. A statistical study of blacks voluntarily terminating
their employment at Union National Bank, infra demonstrates
that their voluntary termination in every year except one was
less than the statistically expected rate. This study also
demonstrates that most blacks voluntarily quit in the year of
their hire:
1974
Black Employees Neo. of Acceptable
Present in 1974 Employees Expected No. Observed No. Range (No.
Veer Asa Percent Quitting of Blacks of Blacks of Blacks
of Hire of the Total Voluntarily Quitting Q iting Quitting)
De ccistaeavstetincians 18.0 63 11.3 s 5.2-17.4
Pare saicasaihiibabdes 16.4 44 7.2 6 2.3-12.1
__ ees 11.5 24 2.8 l 0.0- 5.9
8 Ee 5.3 8 0.4 l 0.0- 1.7
Prior to 1969....... 48 22 1 1 0.0- 3.1
Total .....ccveeee - 161 22.8 17 -
1975
Black Employees Ne. of
Present in 1975 Employees Expected
Year Asa Percent Quitting of Blacks
of Hire of the Total Voluntarily Quitting
BOTS secccsssscencccseees 40.2 23 9.2
1976 ccrrcossscesesseece 15.5 48 74
EGTD cssstnctscnssiiziese 17.5 18 3.2
19 TO cT2 scccccsesceeses 10.9 K 0.9
Prior to 1970....... 5.3 9 0.5
DOU csastienen 7 106 21.2
1976
Black Employees Neo. of
Present in 1976 Employees Expected
Year Asa Percent Quitting of Blacks
of Hive of the Total Voluntarily Quitting
BGT scccccssocnscsssces 25.1 56 14.1
yp 37.0 32 11.8
BFS eteccssunedenieenes 7.0 19 13
a 12.0 13 1.6
Prior to 1971....... 6.0 12 0.7
DOB crssssenns — 132 29.5
1977
Black Employees Ne. of
Present ie 1977 Employees Expected No.
Year Asa Percent Quitting of Blacks
of Hire of the Total Voluntarily Quitting
BG 77 ‘sesiétctecseensenee 25.8 70 18.1
SPO cttnstverterteiens 22.3 43 9.6
ROTO cocsssccteninsevipes 35.0 il 3.9
RGTB FS sesccscccesiens 10.8 16 1.7
Prior to 1972....... 71 13 0.9
<n _ 153 34.2
Acceptable
Observed No. Range (No.
of Blacks of Blacks
Quitting Quitting)
9 4,5-13.9
9 2.4-12.4
2 0.0- 6.4
0 0,0- 2.7
0 0.0- 1.8
20 om
Acceptable
Observed No. Range (No.
of Blacks of Blacks
Quitting Quitting )
16 2.6-20.6
ll 6.3-17.3
2 0.0- 3.5
7 0.0- 3.9
0 0.0- 2.3
% am
Acceptable
Observed No. Range (No.
of Blacks of Blacks
Quitting Quitting)
14 10.8-25.4
4 4.1-15.1
5 0.7- 7.1
l 0.0- 4.2
1 0.0- 2.8
25
1978
Black Employees Ne. of
Present in 1978 Employees Expected No.
Year Asa Percem Quitting of Blacks
of Hire of the Total Voluntarily Quitting
TO sicninscscesessiens 19.0 72 13.7
LE nen 24,7 61 15.1
BU TU tsssrecsintveenscens 25.4 16 41
Si 23.2 4 0.9
Prior to 1973....... 7.6 16 1.2
“Weicsniccunns _ 169 35.0
1979
Black Employees Ne. of
Present in 1979 bmployees Expected No.
Vear As a Percent Quitting of Blacks
of Hire of the Total Votumtarily Quitting
RD TD ceicrecsrenspmenns 20.4 71 14.4
7 17.7 49 8.7
BOAT cscesmesenesetinine 28.2 27 16
ROTO TO ccscrescctereee 23.1 21 49
Prior to 1974....... 6.2 15 0.9
; os 183 36.5
1980
Black Employees Ne. of
Present in 1980 Employees Expected No.
Year As a Percent Quitting of Blacks
of Hire of the Total obuntarily Quitting
BOT ccccsccsossennsesens 21.3 4% 9.8
1 20.3 60 12.2
ee 15.9 15 2.4
STDOED scsnesstedieds 25.8 14 3.6
Prior to 1975....... 63 12 0.8
Wiens _ 147 28.8
"Acceptable
Observed No. Range (No.
of Blacks of Blacks
Quitting Quitting)
ll 7.0-20.4
12 8.4-21.8
4 0.6- 7.6
2 0.0- 2.6
3 0.0- 3.3
32 _
Acceptable
Observed No. Range (No.
of Blacks of Blacks
Quitting Quitting)
13 7.6-21.2
10 3.4-14.0
7 2.9-12.3
6 1.0- 8.8
0 0.0- 2.8
% ap
Acceptable
Observed No. Range (No.
of Blacks
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