Petition — Wright v. International Business Machines Corp.

ve Co US. |

82-1438 | B 26 1982

In the Supreme Court of the

United States

October Term, 1982

RICHARD R. WRIGHT, on behalf of himself and

all others similarly situated,

Petitioner,

Vv.

INTERNATIONAL BUSINESS MACHINES

CORPORATION, INC.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

* HOWARD MOORE, JR.

The Wright Building

554 Oakland Avenue

Oakland, CA 94611

(415) 658-9208

JOHN DE J. PEMBERTON, JR.

University of San Francisco

Law School

San Francisco, CA 94117

Attorneys for Petitioner

Question Presented

May petitioner, in making a claim of racial

discrimination in compensation on behalf of the class of

employees he represents in this Title VII action, properly

proceed on & "disparate impact" theory, Teamsters v. United

States, 431 U.S. 324, 335 n. 15 (1977), where the evidence

showed black employees to have been disadvantaged in salary

in direct relationship to their educational disadvantages and

no evidence suggested that such education bore "a manifest

relationship to the employment in question"? Griggs v. Duke

Power Co., 401 U.S. 424, 432 (1971).

TABLE OF CONTENTS

Gusstion Presented .eccccccccccccccdecccccccse 8

Opinion Below .......eeseeeeees coccccccccs 2

Jurisdiction of this Court.......eeeeeeeeeeeeee 3

Statute Involved... .ccccccvcsccsccsccsccsese 38

Statement of the Case ......ssssscecceccecces 3

Reasons for Granting the Writ.......eeeeeeee08 8

COMCIUSION oc cccccccccccecccccccccccccccccs 16

Appendix

District Court's Findings of Fact

and Conclusions of Law... ..seeeeeeeeceeeee 1a

Memorandum Decision of the Court of Appeals.... 8a

Order Denying Petition for Rehearing.......... Ia

TABLE OF AUTHORITIES

Cases

Albemarle ae Co. V. Moody

422 U.S. 405 1975 eoeeeeeeeeeeeeeneeeeeeeee 14

Chrisner v. Complete Auto Trans. Inc.,

645 F.2d 1251 vc SS | Pp 9

n. 6

Connecticut v. Teal, 102 S.Ct. 2525 (1982)........ 8, n. 4,10

County of SSE ES v. Gunthe,

Te +. as echoes eb eeneeeeaees 8, n.4, ll, 12

-ji-

Dothard v. Rawlinson

a oe a ie bide 14

Grant v. Bethlehem Steel Co.,

635 F.2d 1007 oe 8, n.5, 13

Griges v. Duke Power Co.,

. , *enereene3eene348xeeeeeeeeeeee#ee 2, 8, ll, 12, 16

Pouney v. Prudential Ins. Co. of America,

6 F.2d 7 5, 0 5th rel Ferree ae 9 n., 14, 15, 16

Rowe v. General Motors ‘ape

457 F.2 » (5th r. l e*eeeenwee8s5eeeeneeee#e 8, n.5, 13, 14

Taylor v. reste Corp.,

648 F.2d 1129 je SS Aer ry rere 9n.6

Teamsters v. United States,

431 U.S. 324, 335 n. 15 | ee ee 2

Williams v. Colorado Springs, Colo. School Dist., II,

Af: Yo to % 3p 3, n.5

Statutes

28 United State Code

Section 1254 eeeeeeenerteensrteenrteeneenepee#enseeeneeeeeee 3

Section 1343(4) eeeeeneteeeeeeneeneteeeeeeeeee#ee#e#e## 4

42 United States Code

ET ee er ere Tee ee ee

NO ee a

es osc bb oe bbeaeeaeess > &

EY 4. 5s -o'6. 0.0 66004 60600 668%065) Ie

29 United States Code

eee tad ceake bn Ube Kee ene 12,n.9

Title VII

~iii-

FSP PEE E TEE TURTER CETL

Section 703(a)(2)......ee00-

EE od os 6.66 0406.6 88 0 008 8 Ee Oa O's

Bennett Amendment.......-.

Equal Pay Act... .sceccccsces

Federal Rules of Civil Procedure

Rule 23(¢) 0. ce ccccccccccccs

| a eee

No. 82-_

IN THE SUPREME COURT

of the

UNITED STATES

October, Term 1982

RICHARD R. WRIGHT, on behalf of himself and all others

similarly situated,

Petitioner,

vs.

INTERNATIONAL BUSINESS MACHINES CORPORATION,

INC.,

Respondent.

Petition for a Writ of Certiorari to the

United States Court of Appeals for

the Ninth Circuit

Petitioner prays that a Writ of Certiorari issue to

review the judgment of the United States Court of Appeals

for the Ninth Circuit entered in this action on October 18,

1982, petition for rehearing thereof having been denied

November 29, 1982.

-2-

Question Presented

May petitioner, in making a claim of racial

discrimination in compensation on behalf of the class of

employees he represents in this Title VII action, properly

proceed on a "disparate impact" theory, Teamsters v. United

States, 431 U.S. 324, 335 n. 15 (1977), where the evidence

showed black employees to have been disadvantaged in

salary in direct relationship to their educational

disadvantages and no evidence suggested that such

education bore "a manifest relationship to the employment

in question"? Griggs v. Duke Power Co., 401 U.S. 424, 432

(1971).

ons Below

The Memorandum Opinion of the Court of Appeals for

the Ninth Circuit and the Findings, Conclusions and

Judgment of the District Court for the Northern District of

California, in this case, have not been reported. They are

set forth in the Appendix, infra.

-3-

Jurisdiction of this Court

The judgment of the Court of Appeals for the Ninth

Circuit, herein sought to be reviewed, was rendered on

October 18, 1982. A timely Petition for Rehearing was

denied by that court on November 29, 1982. Jurisdiction of

this Court to grant the writ is conferred by 28 United States

Code, Section 1254.

Statute Involved

This case involves Section 703(a) of the Civil Rights

Act of 1964:

It shall be an unlawful employment

practice for an employer -

(1) to fail or refuse to hire or to

discharge any individual, or otherwise

to discriminate against any individual

with respect to his compensation,

terms, conditions, or privileges of

employment, because of such

individual's race, color, religion, sex,

or national origin; or

(2) limit, segregate, or classify his

employees or applicants for

employment in any way which would

deprive or tend to deprive any

individual of employment

opportunities or otherwise adversely

affect his status as an employee,

because of such individual's race,

color, religion, sex, or national

origin. 42 U.S.C., §2000e-2(a).

Statement of the Case

Petitioner, Richard R. Wright, had been an employee

-4-

of respondent, International Business Machines Corporation,

Ine. ("IBM") from November 20, 1967, until his discharge on

December 19, 1975. He served as a Sales Trainee and a

Marketing Representative in IBM's Data Processing Division

("DPD") at various offices in the San Francisco Bay Area.

Having satisfied the statutory prerequisites, he

commenced this action on March 12, 1976, alleging racial

discrimination in employment. Jurisdiction of the district

court was premised upon 28 U.S.C., § 1343(4) and 42 U.S.C.,

§ 2009e=5(f)(3). The district court determined, pursuant to

Rule 23(c), FRCP, that the action might be maintained as a

class action and defined the class to consist of those blacks

employed in IBM's DPD offices in Oakland and San Francisco

since January 20, 1972. By orders granting summary

judgment, the class issues were limited to the claim that

blacks were discriminated against with respect to pay. At

the conclusion of plaintiff's case, the court granted

defendant's motion, under Rule 41(b), FRCP, for dismissal of

his claims, other than the class pay claim, and at the

conclusion of all of the evidence, made findings for the

defendant on the class claims as well. The court of appeals

affirmed. This petition seeks review of that court's

-5-

affirmance as to the class claim only.

The evidence on the class issue of pay discrimination

consisted almost exclusively of the testimony of experts in

labor economics and statistics concerning analyses done by

them, by “least squares multiple regression", of IBM's

relevant payroll data. That data consisted of the payroll

information recorded as of the end of each of the calendar

years 1971 through 1977 for each of the DPD's Bay Area

employees in Salary Levels 11-23 and 51-58, !

Plaintiff's expert did a multiple regression analysis

which showed a statistically significant black pay

disadvantage

1.7 A "salary level" is a pay range to which positions of

comparable skill and responsibility are assigned by IBM. The

exact pay within each range which each employee earns is a

function of several factors, most importantly: previous

salary amount, time since last salary change, the employee's

rating in the performance evaluation process, the fact of

promotion into a higher salary level (if that has occurred)

and a degree of managerial discretion as to the timing and

amount of earned, or "merit', salary increases. The

employees included in the data base for the experts’

multiple regression analyses done in this case were (1)

technical and clerical employees who were "nonexempt",

within the meaning of the overtime pay provisions of the

Fair Labor Standards Act (Levels 11-23) and (2) "exempt"

sales, systems engineering, and administration employees

(Levels 51-58). Omitted were trainees, employees awaiting

reassignment, and high management officials. The number

of employees in this data base varied from year to year

between 545 and 695. Of these, blacks numbered from 42 to

65.

-6-

over the seven-year period measured. The analysis done by

defendant's expert differed; he found minor differences, but

none of statistical significance. However, defendant's

expert, Dr. Finis R. Welch, testified that substantially all of

the difference between the parties' statistical conclusions

were explained by two "pay determinants" which he entered

as variables in his regression but which plaintiff's expert

omitted. These two factors were (1) an employee's initial

placement (whether initially hired as an exempt or as a

nonexempt employee) and (2) the level of an employee's

educational atainment. He further testified that (1) more

than twice the proportion of blacks in the data base lacked

college degrees as did whites, (2) most non-college blacks

are initially assigned to nonexempt positions, and that (3)

41% of the blacks found in exempt positions came to them

from nonexempt ones, while that was true of only 26% of

the white exempt employees. Thus, both of the variables he

identified as accounting for the racial salary differentials

tended to correlate with each other and to establish

education as the pay determinant which, on average,

-7-

brought about the black salary disadvantage. 2

For hire into the positions involved in these studies

IBM imposed no education requirements, nor do those

positions include any duties dependent upon educational

attainments.3 Rather, IBM provides extraordinarily

intensive in-house training for exempt positions of the kind

found in this data base. In plaintiff's own case, IBM

provided him training in sales for 26 months before putting

2. Testimony did not establish the manner in which

education brought about a salary advantage, only the fact

that it did. Education is a factor employed in initial salary

setting and the explanation might lie in the carry-over

effect from that practice. Alternatively, education might

correlate with the results of subjective performance

evaluations which are a key factor in salary setting after

initial hire. See Note 1, supra. (If the latter were true, it

would still remain undeter a ed whether those performance

evaluations had validity or whether, as Dr. Welch suggested

in explaining his exclusion of them from the variables used

in his regressions, they were merely a mask for

discrimination.) In any event, though the record does not

explain how education determines pay advantage, there is no

reason to doubt that defendant understands how. Dr. Welch

testified, inter alia, that he did over 100 regression runs on

this data base.

3. For a few specialized positions, such as in law, IBM does

impose education requirements. But incumbents of such

positions were not in the data base, or in the plaintiff's

class.

-8-

him into the field as an =Associate Marketing

Representative. Defendant's witnesses testified that IBM

has made no attempt to validate education as being job-

related so as to warrant the education-dependent pay

differentials. Moreover, the record is devoid of evidence

warranting even an inference that better educated

employees have earned a pay advantage by better

performance. In fact, viewing promotions as a measure of

performance, the testimony of defendant's expert, Dr.

Welch, was to the effect that blacks (in the data base under

study) appeared to be equalling, or even outperforming,

whites.

Reasons for Granting the Writ

The court of appeals held that the disparate impact

analysis of Griggs v. Duke Power Co., 401 U.S. 424 (1971),

could not be applied to the facts of this case. We

respectfully submit that this holding conflicts with

applicable decisions of this Court 4 and of several federal

Courts of Appeals. 5

4. In addition to Gri plaintiff believes this conflict

exists with Connecticut v. - Teal 102 S.Ct. 2525 (1982) and

County of Washington v. Gunther, 452 U.S. 161 (1981).

5. For instance, Grant. v. Bethlehem Steel oa 635 F.2d

1007 (2d Cir. 1980); Williams v. oloras Colo.

School Dist. ll, 641 owe V.

General Motors Corp. , 457 F.2d 348 (5th Cir. 1972).

-9-

The Court of Apppeals stated that the "disparate

impact model . . . ‘applies only when an employer has

instituted a specific procedure, usually a selection criterion

for employment, that can be shown to have a ausal

connection to a class based imbalance in the work force."

Memorandum Opinion, Appendix, p. 8a, quoting Pouncy v.

Prudential Ins. Co. of America, 668 F.2d 795, 800 (Sth Cir.

1982. 8 This conclusion, amplified as it is by the judicial

6. The court also, at this point, cited Chrisner v. Complete

Auto uta Ne 645 F.2d 1251 (6th Cir. 1981) which, at the

page cited, said:

Central to both theories of liability

[disparate treatment and disparate

impact] ... is the existence of an

identifiable employment practice or

policy that demonstrably affects all

members of a class in a substantially

similar, if not identical manner. 645

F.2d at 1257.

Finally, it cited Taylor v. Telet Corp., 648 F.2d 1129 (8th

Cir. 1981), a aeucie treatment case which said, of

disparate impact analysis:

A Gr type case challenges

facially neutral standards that affect

employees in a __ significantly

discriminatory pattern. [Citations

omitted.) Here, plaintiffs do not

challenge objective criteria; rather,

they allege improper use of

subjective procedures for demotions.

-10-

statements on which it relies?, impermissibley narrows the

broad language of Section 703(a)(2), 42 U.S.C., §2000e-

2(a)(2), so recently interpreted by this Court in Connecticut

v. Teal, __U.S.__, 102 S.Ct. 2525, (1982). Congress has

made it unlawful for an employer:

(2) to limit, . .. or classify his

would deprive. Ear mae any ndividual of

employment opportunities or

otherwise adversely affect his status

as an employee, because of ... race

» + 42 U.S.C., § 2000e-2(a)(2).

(Emphasis supplied.)

Teal insisted on a literal application of that statutory

language to a practice which had a disparate impact upon

blacks, notwithstanding the existence of an independent

employer practice that compensated by affirmatively

accepting other blacks for hire in large numbers. The

opinion for the Court emphasized the statute's prohibition of

"limitations and classifications" that would have the

prohibited effect. 102 S.Ct. at 2531. (Emphasis in original.)

It held the breadth of its literal interpretation to have been

required by "Congress' basis objective in enacting that

7. See Note 6, above.

-ll]-

statute: 'to achieve equality of employment opportunities

and remove barriers that have operated in the past to favor

an identifiable group of white employees over other

employees." 102 S.Ct. 2532, quoting from Griggs, supra, 401

U.S. at 429-430. It added:

"Gri was rightly concerned that

¢c ood deficiencies in the

education and background of minority

citizens, resulting from forces

beyond their control, not be allowed

to work a cumulative and invidious

burden on such citizens for the

remainder of their lives." 102 S.Ct.

at 2531, quoting from McDonnell

Douglas Corp. v. Green, 4li U.S. 792,

To confine the broad prohibitions of Section 703(a)(2) in the

manner done here by the Court of Appeals, or by the dicta

from other courts which it cites as justification, 8 Teal

holds, is to fail to keep faith with the language and purpose

that Congress has adopted.

This Court's opinion in County of Washington v.

Gunther, 452 U.S. 161 (1981), moreover, as it explained the

8. See Note 6, supra.

-]2-

significance of the Bennett Amendment's having

incorporated into Title VII the fourth affirmative defense

provided for in the Equal Pay Act, 9 explicitly recognized

that disparate impact analysis would, but for that

incorporation, apply to claims for discrimination in

compensation. Since IBM's compensation practice, 10 has a

discriminatory effect based upon race, to which the Bennett

Amendment does not apply, it is clearly one which Gunther

has described as prohibited because, although "fair in form,

[it is] discriminatory in operation." 452 U.S. at 170, quoting

from Griggs, supra, 401 U.S. at 431.

Decisions of other federal courts of appeals also are

directly in conflict with this decision. The Courts of

Appeals for the Second, Fifth and Tenth Circuits have all

held that the practice of reposing insufficiently guided

9. The Bennett Amendment added language to Section

703(h), 42 U.S.C. § 2000e-2(h), that was held in Gunther, to

have imported into Title VII's prohibitions on sex

discrimination the four affirmative defenses of the Equal

Pay Act, 29 U.S.C., § 206(d), when discrimination in

compensation is at issue.

10. Described at Note 1, supra.

-13-

discretion over personnel decisions in cadres of

predominantly white supervisors can be demonstrated (and

in these cases was demonstrated) to have a disparate impact

upon black employees or applicants subject to that

discretion. Grant v. Bethlehm Steel Co., 635 F.2d 1007 (2d

Cir. 1980); Rowe v. General Motors Corp., 457 F.2d 348 (Sth

Cir. 1972); Willliams v. Colorado Springs School District, 641

F.2d 835 (10th Cir. 1981). Each involved practices tending to

"limit" and "classify" individuals in ways that "would deprive

or tend to deprive them of "employment opportunities or

otherwise adversely affect" their status as employees. But

each accomplished such adverse effect through the

indescribably complex and undecipherable funtioning of the

human mind engaged in subjective decision-making. Each

resulted in a holding of violation because the employer could

not justify the process as "manifestly related to the

employment in question", and, therefore, rooted in "business

necessity".

The decision below conflicts, we submit, because it

erroneously rejects as not susceptible to disparate impact

analysis a complex salary-setting mechanism that has the

effect of penalizing educational disadvantage and,

therefore, of injuring black employees. The mechanism is,

-]4-

we agree, more complex than the high school diploma

requirement in Griggs, the testing requirement in Albemarle

Paper Co. v. Moody, 422 U.S. 405 (1975), or the height and

weight requirements in Dothard v. Rawlinson, 433 U.S. 321

(1977). But nothing in the language or history of Section

703(a) confines its operation to practices that are merely

simple.

The decision below placed mistaken reliance on

another decision of the Court of Appeals for the Fifth

Circuit, Pouncy v. Prudential Ins. Co. of America, 668 F.2d

795 (1982). Without turning its back on its earlier decision in

Rowe _ v. General Motors Corp., supra, the Fifth Circuit in

Pouncy rejected a disparate impact claim because that

plaintiff failed to establish a prima facie case. Plaintiff's

proof in Pouncy showed only that blacks in the relevant

Prudential workforce, on average, (1) earned fewer dollars

than whites, (2) received fewer promotions to managerial

positions, (3) earned their promotions only after having

served a greater length of time, and (4) were clustered in

the lower ranks of the workforce. Plaintiff, in Pouncy, then

merely speculated that these effects were the consequence

of three practices adhered to by Prudential: (1) job vacancies

were not posted, (2) the system of salary levels somehow

-15-

(but plaintiff does not explain how) induced the initial hire

of blacks at lower levels than whites, and (3) employee

performance evaluations involved the use of subjective

criteria. But plaintiff's proof made no showing as to what

effect, if any, each such practice had upon any of the four

disadvantageous consequences he had established. In holding

that plaintiff failed to prove a prima facie case, the Fifth

Circuit said:

We require proof that a specific

practice results in a discriminatory

impact on a class in an employer's

workforce in order to allocate fairly

the parties' respective burdens of

proof at trial . . . Identification by

the aggrieved party of the specific

employment practice responsible for

the disparate impact is necessary so

that the employer can respond by

offering proof of its legitimacy. 668

F.2d at 800-801.

By contrast, in the present case defendant's multiple

regression analyses have shown precisely what effect

education (and its partial surrogate, initial placement) have

had on compensation and plaintiff's proof has shown the

average dollar amount of that effect. Although plaintiff

cannot explain in what way these "pay determinants" have

produced the proven effect, defendant is not lacking in the

means of attaining that knowledge and has had every

opportunity to "respond by offering proof of its legitimacy".

-16-

Pouncy does not narrow the generality of Section 703(a)'s

prohibitions on practices that "limit" or "classify" so as to

discriminate on the basis of race. Only the decision below

does, ll

Many employers have come to appreciate that

providing equal employment opportunities serves well the

employer's own interest in enhancing productivity and

profitability. There is every reason to believe that IBM is

such an employer. But the practice at issue in this case, of

paying black Americans because of past disadvantage less

than whites for discharging the same responsibilities, is not

one which any employer has any incentive to change. It is

not even in the long range self-correcting. This is just

where the law of Title VII, as interpreted by Griggs and its

successors, is needed to accomplish the racial justice which

Congress sought.

ll. As would the dicta in the two other cases cited by the

court below for this holding. See Note 6, supra.

Conclusion

For the reasons stated, petitioner respectfully submits, the

writ prayed for should issue.

Respectfully submitted,

HOWARD MOORE, JR.

The Wright Building

554 Oakland Avenue

Oakland, CA 946ll

JOHN de J. PEMBERTON, JR.

School of Law

University of San Francisco

San Francisco, CA 94ll7

Attorneys for Petitioner

February 25, 1983

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

RICHARD R. WRIGHT, on behalf of )

himself and all others similarly )

situated, ) No. C 76-508 SW

)

Plaintiff, ) FINDINGS OF FACT

) AND CONCLUSIONS

Vs. ) OF LAW

)

INTERNATIONAL BUSINESS )

MACHINES CORPORATION, INC., )

)

)

)

Defendant.

This action having been submitted to the Court, sitting

without a jury, and the Court having considered the evidence

produced in the entire proceedings in this action, does hereby

adopt findings of fact and conclusions of law as required by Rule

52(a) of the Federal Rules of Civil Procedure as follows:

FINDINGS OF FACT

1. Plaintiff, Richard R. Wright, is a black male college

graduate who was employed by defendant International Business

Machines Corporation ("IBM") in its Data Procesing Division

("DPD") offices in Oakland or San Francisco, California, from

November 20, 1967 until his termination on December 19, 1975.

2. IBM, a New York corporation with its principal place of

business in New York, is an employer within the meaning of 42

U.S.C. §2000e-(b).

~2a-

3. Plaintiff submitted three written charges of

discrimination to the Equal Employment Oportunities

Commission ("EEOC"), the first on September 15, 1972, the

second on December 12, 1974, and the third in January, 1976

(after his termination by IBM).

4. Plaintiff duly received Right-to-Sue letters with

respect to each charge.

5. In his complaint plaintiff alleges, inter alia, that

IBM unlawfully discriminated against him individually in

pay, in promotion and in termination, and against blacks as a

class in pay and promotion. The Court provisionally

certified a class of all blacks allegedly discriminated against

in pay and promotion by IBM's DPD offices in Oakland and

San Francisco since November 20, 1971 - - a date 300 days

prior to the date plaintiff first submitted a complaint of

discrimination to the EEOC and 360 days prior to the first

date that the charge could have been filed with the EEOC.

Subsequently, and pursuant to the decision of the Supreme

Court in Mohasco Corp. v. Silver, (1980) __U.S._, 100 S.Ct

2486, the class was redefined to include those blacks

employed in IBM's DPD offices since January 20, 1972 -- a

date 240 days prior to the date of the submission of the

charge of the EEOC.

-3a-

6. On September 25, 1979, the Court granted IBM's

motion to decertify from the class, on the promotion issue, all

blacks employed in Office and Clerical positions. The Court also

granted IBM's motion with respect to the promotion issue as to all

other members of the originally certified class. IBM's motion

with respect to plaintiff's class-wide pay claims was denied.

7. At the conclusion of plaintiff's case, the Court granted

IBM's motion to dismiss plaintiff's individual claims pursuant to*

Rule 41(b) of the Federal Rules of Civil Procedure. That decision

was and is based on the failure of plaintiff to show any racial

motivation for defendant's conduct. Conversely, the evidence

shows ample justification for plaintiff's dismissal and further

indicated plaintiff's treatment by defendant in regard to job

assignment and promotion was equal to if not better than other

employees of defendant having comparable qualifications and

experience. The Court denied IBM's motion to dismiss plaintiff's

class-wide claims of pay discrimination, and directed it to present

the testimony of a witness familiar with IBM's personnel practices

and policies and that of its expert witness as to the alleged

adverse impact of IBM's pay system on the class.

8. The majority of DPD employees in Oakland and San

Francisco, California, are employed in branch offices in one of

three career paths or functions: sales, systems engineering, or

-4a-

administration. Each branch office is headed by a Branch

Manager. The Branch Managers report to the Regional Manger of

DPD Region 13, which is headquartered in San Francisco. Prior to

January 1, 1974, when Region 13 was formed, the DPD Branch

offices in Oakland and San Francisco reported to DPD District 16,

which no longer exists.

9. IBM uses the term "exempt" to indicate exemption from

the overtime pay requirements of the Fair Labor Standards Act

(29 U.S.C. § 201, et seq.) In the DPD, exempt employees include

all managers and all persons employed in the sales and in the

systems engineering or other professional functions, except

trainees. All other employees, i.e., nonmanagement

adminstration employees and many trainee positions for sales,

systems engineering or other professional jobs are classified as

"nonexempt."

10. The placement of a particular position within the

hierarchy of increasing levels of responsibility and compensation

is designated in IBM by a two-digit number known as a "salary

level." The lower salary levels, i.e., levels ll through 23, are used

in IBM to refer to nonexempt positions; the higher levels, i.e.,

levels 51 and above, are used to refer to exempt positions. Each

such salary level refers to a range of dollars within which persons

in that salary level are normally paid. Many trainees for sales,

systems engineering or other professional positions are assigned

-5a-

the trainee code "08" or "0" in lieu of salary level. There is no

range of dollars associated with trainee codes.

ll. Employees in the Oakland/San Francisco DPD offices

have entered the same salary level in the same year in different

ways, i.e., by promotion into the salary level from a lower salary

level or trainee position or by "demotion" into the salary level

from a higher salary level for various reasons including

performance deficiencies, releveling of positions or career path

changes. More often than not, IBM does not decrease the salary

of an employee upon "demotion" into a lower salary level. During

the relevant period, blacks more often than not were promoted

into their observed salary levels whereas nonblacks were

disproportionately "demoted" into their observed salary levels.

12. Not all persons hired by IBM into the same position

receive the same starting salary. It is IBM's practice to make

distinctions in starting salary for persons hired as trainees for

sales, systems engineering, or other professional positions based

on the educational attainment and prior work experience of the

individual trainee hired.

13. The educational atainment of black and nonblack

employees in the Oakland/San Francisco DPD offices during the

relevant period differs markedly. Fifty-five percent (55%) of the

black employees had not obtained a Bachelor's degree whereas

-6a-

only twent-five percent (25%) of the nonblack employees had to

obtained a Bachelor's degree.

14. It takes an employee initially hired as a nonexempt

administration employee considerable longer to reach an exempt

salary level than it does for an employee initially hired as a

nonexempt trainee for an exempt sales, systems engineering, or

other professional position. During the relevant period, a higher

proportion of black employees than nonblack employees reached

exempt salary levels by way of promotion from nonexempt

administration positions.

15. Exempt employees experience more rapid salary

progress than do nonexempt employees.

16. IBM has had a long-standing policy, in form and

substance, to afford equal opportunity and equality of treatment

in all aspects of employment without regard to race, color, creed,

national origin, age or sex.

17. This policy utilizes a variety of checks and balances to

ensure that minority employees - - including blacks - - are not

discriminated against. These checks and balances include

monitoring of salary equity at the corporate level, the DPD

headquarters level, and at the DPD Region 13 level.

18. The policy is fully effective, as a result of which plaintiff has

been unable to show any policy, practice or instance

-Ta-

in which a black employee has been the victim of discrimination.

CONCLUSIONS OF LAW

l. The Court has jurisdiction of the parties and the subject

matter of this action under Title VII of the Civil Rights Act of

1964, as amended, (42 U.S.C. §2000e, et seq.) ("Title VII") as to

claims of racial discrimination brought by plaintiff on behalf of

himself and/or the class which arose on or after January 20, 1972,

and under Section 1981 of the Civil Rights Act of 1866 (42 U.S.C.

$1981) ("Section 1981") as to claims of racial discrimination brought

by plaintiff on behalf of himself and/or the class which arose on

or after March 12, 1973.

2. Plaintiff has failed to show by a preponderance of the

evidence that IBM discriminated against blacks as a class with

respect to pay because of race.

3. Plaintiff has failed to show by a preponderance of the

evidence that IBM violated any rights of plaintiff under Title VII

or Section 1981.

DATED: February 10, 1981

United States District Judge

-8a-

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

RICHARD WRIGHT, on behalf of

himself and all others

similarly situated, No. 81-4132

Plaintiff-Appellant, DC C76-508SMW

INTERNATIONAL BUSINESS

MACHINES CORPORATION, INC.,

)

)

)

)

vs. MEMORANDUM

)

Defendant-Appellee.

Argued and Submitted: July 16, 1982

Appeal From The United States District Court

for the Northern District of California

Honorable Spencer M. Williams, Presiding.

Before: WISDOM*, DUNIWAY, and NORRIS, Circuit Judges.

The plaintiff/appellant, Richard R. Wright, filed this class

action against his former employer, International Business

Machines Corporation ("IBM"), alleging individual and group

employment discrimination in violation of Title VII of the Civil

Rights Act of 1964, as amended, 42 U.S.C. § 2000e, et seq., and

the Civil Rights Act of 1866, 42 U.S.C. § 1981. The district court

heard the evidence without a jury, and at the conclusion of

* The Honorable John Minor Wisdom, Senior United States

Circuit Judge for the Fifth Circuit, sitting by designation.

-9a-

plaintiff's evidence granted IBM's motion to dismiss the individual

claim under Rule 4l(b), Fed. R. Civ. P. Following a full trial on

the class pay discrimination claims, the district court entered

judgment for IBM, and filed its Findings of Fact and Conclusions

of Law. On appeal, Wright contends that the district court erred

in granting IBM's motion to dismiss the individual claims, and in

finding that IBM did not discriminate against its black employees

in compensation. Because we conclude that these findings were

not clearly erroneous, we affirm.

The plaintiff's individual claim of racial discrimination

against IBM is based on two incidents of alleged disparate

treatment: the company's decision not to promote him to the

position of Sales Instructor in 1972; and its decision to terminate

his employment in 1975. With respect to IBM's promotion

decision, the appellant's claim fails because he was unable to

prove a prima facie case of intent to discriminate. Texas Dept.

of Community Affairs v. Burdine, 450 U.S. 248, 252-53, 101 S.Ct.

1089, 1093, 67 L.Ed.2d 207, 215 (1981); Piva v. Xerox Corp., 654

F.2d 591, 594 (9th Cir. 1981); Golden v. Local 55, Ass'n of

Firefighters, 633 F.2d 817, 821 (9th cir. 1980). The disputed

position went to a black; racial discrimination played no part in

-l0a-

the decision not to promote Wright. See Jefferies v. Harris Cty.

Community Action Ass'n, 615 F.2d 1025 (5th Cir. 1980). And IBM

did not yet know that the appellant had filed charges with he

EEOC (even if he had filed them at the time he was denied a

promotion, which is unclear), so retalilation is impossible.

The plaintiff's individual claim based on IBM's decision to

terminate his employment in 1975 is also without merit.

According to the court's Findings of Fact, "the evidence showed

ample justification for plaintiff's dismissal." (Finding of Fact #7).

Here the defendant demonstrated that the plaintiff was fired

because he falsified his time cards. The Supreme Court in

Burdine requires only that the employer articulate some

legitimate, nondiscriminatory reasons for its employment

decisions. The burden of persuasion then shifts back to the

plaintiff to show that these reasons were not the true reasons,

"but were a pretext for discrimination". Burdine, 450 U.S. at 253.

The district court concluded that Wright did not shoulder this

burden before resting, and therefore there was no need to hear

the defendant's evidence. See Sime v. Trustees of Cal. State

University and Colleges, 526 F.2d 1112, 1113-1114 (9th Cir. 1975). A

trial court's conclusions regarding the success or failure of a Title

-lla-

VII litigant in meeting his burden of proof is reviewed under the

clearly erroneous test. Piva v. Xerox Corp., 654 F.2d 591, 594

(9th Cir. 1981). The same rule applies with respect to factual

findings. Shah v. Mt. Zion Hospital and Med. Ctr., 642 F.2d 268,

271 (9th Cir. 1981). In view of the specific and legitimate

justifications offered by IBM for its treatment of Wright, and in

view of his inability to demonstrate that these reasons were

pretextual, we hold that the district court's decision to grant the

41(b) motion was not clearly erroneous.

Wright's second contention on appeal is that the district

court erred in finding that the defendant did not discriminate

against its black employees in compensation. We disagree. The

plaintiff attempts to characterize this case as one of

"disproportionate impact" in which a facially neutral test,

qualification, or standard has a discriminatory effect, and the

employer is required to justify it with a legitimate business

purpose. See Griggs v. Duke Power Co., 401 U.S. 424, 430-31, 91

S.Ct. 849, 853, 28 L.Ed.2d 158, 163-64 (1971); International

Brotherhood of Teamsters v. United States, 431 U.S. 324, 349-50,

97 S.Ct. 1843, 1861-62, 52 L.Ed.2d 396, 423 (1977). Relying

primarily on the defendant's evidence that salaries correlated

with education and initial placement in the company, he argues

-l2a-

that IBM's "policy" of paying higher salaries based on education

disfavors blacks. The disparate impact model, however, "applies

only when an employer has instituted a specific procedure, usually |

a selection criterion for employment, that can be shown to have a

causal connection to a class based imbalance in the work force."

Pouncy v. Prudential Ins. Co. of America, 668 F.2d 795, 800 (5th

Cir. 1982). See also Chrisner v. Complete Auto Trans., Inc., 645

F.2d 1251, 1257 (6th Cir. 1981). Taylor v. Teletype Corp., 648 F.2d

29 (8th Cir. 1981), At most, Wright was able to show a

correlation between education and salary, not a causal link

atributable to IBM's practices or policies. Because IBM instituted

no specific procedures, practice or test, the plaintiff's claim is

properly one of disparate treatment, rather .than disparate

impact. In a treatment case, unlike an impact case, it is

necessary to prove an employer's intent to discriminate. Heagney

v. University of Washington, 642 F.2d 1157, 1163 (9th Cir. 1981).

The district court's finding that the appellant failed to show by a

preponderance of the evidence that IBM discriminated against

blacks with respect to pay is not clearly erroneous.

The judgment is AFFIRMED.

-13a-

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

RICHARD WRIGHT, on behalf of

himself and all others

similarly situated, No. 81-4132

Plaintiff-Appellant, DC C76-508SMW

INTERNATIONAL BUSINESS

MACHINES CORPORATION, INC.,

)

)

)

)

vs. ORDER

)

Defendant-Appellee.

Before: WISDOM*, DUNIWAY and NORRIS, Circuit Judges.

Upon due consideration, Appellant's Petition for Rehearing

is denied.

* The Honorable John Minor Wisdom, Senior Us.ted States

Circuit Judge for the Fifth Circuit, sitting by designation.