Graffam v. Scott Paper Co., 1st Cir. (1995)

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USCA1 Opinion

July 14, 1995

[Not for Publication] [Not for Publication]

United States Court of Appeals United States Court of Appeals

For the First Circuit For the First Circuit

____________________

No. 95-1046

RONALD E. GRAFFAM, ET AL.,

Plaintiffs, Appellants,

v.

SCOTT PAPER COMPANY, ET AL.,

Defendants, Appellees.



____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. Gene Carter, U.S. District Judge] ___________________

____________________

Before

Boudin, Circuit Judge, _____________

Coffin, Senior Circuit Judge, ____________________

and Stahl, Circuit Judge. _____________

____________________

Gerald F. Petruccelli, with whom James B. Haddow, Dan_______________________ _________________ __

Bates, Francis M. Jackson, and Petruccelli & Martin, were on br_____ __________________ ____________________

appellants.

William J. Kayatta, Jr., with whom Catherine R. Conn __________________________ __________________



Simeon Goldstein, and Pierce, Atwood, Scribner, Allen, S _________________ _____________________________________

Lancaster, were on brief for appellees. _________

____________________

____________________



STAHL, Circuit Judge. Following a nine-day ben STAHL, Circuit Judge. _____________

trial, the district court entered judgment for defendan

Scott Paper Company and S.D. Warren Company (collective

"Warren") in this age discrimination suit brought by ele

former employees ("plaintiffs"). The plaintiffs alleged t

the selection procedures ("selection procedures") used

Warren to reduce by twenty percent the number of salari

employees at its paper mill in Westbrook, Maine, effected

illegal disparate impact on employees over age fifty.

awarding judgment to Warren, the district court found tha

though the selection procedures did indeed have a dispara

impact on older-age employees, Warren had made a sufficie

showing that the procedures were job related and consiste



with business necessity. Graffam v. Scott Paper Co., 870_______ _______________

Supp. 389, 399-404 (D. Me. 1994). After a careful review

the record, we affirm.

I. I. __

Background Background __________

In late 1990, Warren concluded that it must redu

by twenty percent its salaried work force of approximate

471 employees at its mill in Westbrook, Maine. T

conclusion was dictated, at least in part, by Warren

decision to sell the mill and a corresponding requireme

that the mill be made more attractive to potential buyer

Consequently, Warren set about creating selection procedur



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for identifying which employees it would need to discharge

order to meet the desired force reduction goal.

In January 1991, a Mill Leadership Team ("MLT"

consisting of the heads of several departments and t

manager of the Westbrook mill, met for a number of days



develop a plan for achieving Warren's reduction goal. As

result, each department identified job functions and j

positions that could be eliminated. Department heads divi

the jobs in each department -- including those to

eliminated -- into specific job groups and placed salari

employees subject to the downsizing into the newly-for

groups. Positions with similar functions a

responsibilities were grouped together so that employees wi

comparable skills ultimately would be rated against ea

other.

At the same time, MLT members collectively defin

the selection procedures. As their starting point, the

modified procedures previously developed by Warren



corporate offices for use in an employee downsizing.

members reviewed drafts of these selection procedures, sou

to understand and clarify the assessment criteria, a

discussed the applicability of the criteria to the Westbro

mill. After the revisions were included, MLT members test

the new procedures by conducting mock assessments of perso

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known to the MLT members but who were not subject

discharge.

The final assessment plan allocated a total of 1

points to seven criteria: technical job skills (twen

points); performance (ten points); length of service (t

points); leading-change skills (fifteen points

interpersonal skills (fifteen points); self management (t

points); and versatility (twenty points). The skil

included in the technical job skill criterion varied for ea

individual job group. An individual who received ze

technical skill points would not be retained in favor

another employee with a higher technical skill rati



regardless of which employee had the higher respective tot

assessment score. Every employee was awarded the maximum t

performance points, provided that the employee had n

received counselling for unacceptable job performance. T

common criteria of length of service and leading-chan

interpersonal, self-management, and versatility skil

("common criteria") were applied identically to all employe

across all job groups.

Once the MLT finished ironing out the revis

assessment criteria, teams of at least three individuals we

formed to evaluate the salaried employees subject

downsizing. Each team included an MLT member who

participated in developing and discussing the writt



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criteria, and at least one person who possessed substanti

first-hand knowledge regarding the skills and pa

performance of each employee assessed. Every assessor

provided a text explaining the assessment criteria and a li

of technical job skills applicable to the particular j



group he or she would assess. The teams reached a fin

consensus rating for each employee through oral discussi

and group decision. Following the team assessments,

members met to review the process. Additionally, ea

department head was required to present, explain, and justi

the results of the selection process in his or her departme

to a corporate review team that included management personn

from the mill's corporate headquarters.

The downsizing process resulted in the terminati

of thirty-nine percent of the salaried employees age fif

years and older but only nine percent of those employe

under age fifty. All of the plaintiffs in this case we

over age fifty when Warren discharged them as a result of t



downsizing effort. Following their discharge, the plaintif

commenced this action in federal district court, allegi

that Warren had discriminated against them on account

their age in violation of the Age Discrimination

Employment Act of 1967 ("ADEA"), 29 U.S.C. 621-34, a

Maine state law. At trial, plaintiffs, pursuing their cla

under a theory of disparate impact liability, maintained t

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the selection procedures, though neutral on their fac

effected a substantial disparate impact on older-a

employees. Following a nine-day bench trial, the distri

court entered judgment for Warren, from which the plaintif

now appeal.

II. II. ___

Discussion Discussion __________

A. Standard of Review ______________________

We review the district court's findings of fa

only for clear error. See Fed. R. Civ. P. 52(a); Cumpiano___ ________



Banco Santander P.R., 902 F.2d 148, 152 (1st Cir. 1990 _____________________

Clear error exists when, after reviewing the entire recor

we have a "strong, unyielding belief that a mistake has be

made." Cumpiano, 902 F.2d at 152; see also Industrial Ge ________ ___ ____ ____________

Corp. v. Sequoia Pac. Sys. Corp., 44 F.3d 40, 43 (1st Ci _____ ________________________

1995). If, however, the district court premised its factu

findings on an incorrect view of the law, we are not bound

the clearly erroneous standard. E.g., Brown Daltas & Assoc ____ ___________________

v. General Accident Ins. Co., 48 F.3d 30, 36 (1st Cir. 1995 _________________________

"[T]o the extent that findings of fact can be shown to ha

been predicated upon, or induced by, errors of law, they wi

be accorded diminished respect on appeal." Dedham Water C ______________



v. Cumberland Farms Dairy, Inc., 972 F.2d 453, 457 (1st Ci ____________________________

1992).

B. Age Discrimination Claim ____________________________

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The plaintiffs contend that Warren's selecti



procedures, though neutral on their face, resulted in t

discharge of a disproportionate number of older-a

employees. The theory of disparate impact liability has i

roots in the Supreme Court's decision in Griggs v. Duke Po ______ _______

Co., 401 U.S. 424 (1971). In Griggs, the Court held that t ___ ______

use of a facially neutral objective test that ten

disproportionately to exclude African-Americans from t

employment pool but did not measure skills demonstrab

related to job performance violated Title VII's ant

discrimination provisions. In the context of Title VI

Congress codified the disparate impact theory in the Ci

Rights Act of 1991. See Pub. L. No. 102-166, 3, 105 Sta ___

1071 (1991) (listing as one of its purposes "to confi



statutory authority and provide statutory guidelines for t

adjudication of disparate impact suits under title VII").

Congress, however, has never explicitly address

the theory of disparate impact liability in the ADEA contex

Moreover, though the Supreme Court has acknowledged t

"[t]here are important similarities between [Title VII a

the ADEA], . . . both in their aims -- the elimination

discrimination from the workplace -- and in their substanti

provisions[,]" Lorillard v. Pons, 434 U.S. 575, 584 (1978 _________ ____

it has nonetheless "never decided whether the dispara

impact theory of liability is available under the ADE

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Hazen Paper Co. v. Biggins, 113 S. Ct. 1701, 1706 (1993 _______________ _______

Similarly, though we assumed without analysis t

applicability of the theory in Holt v. Gamewell Corp., 7 ____ _______________

F.2d 36, 37 (1st Cir. 1986), we have never directly address

the issue. See also Caron v. Scott Paper Co., 834 F. Sup ___ ____ _____ _______________

33, 35-38 (D. Me. 1993). Again, for purposes of t



opinion, we assume arguendo that the district court correct ________

held that the ADEA supports a claim for age discriminati

based on a disparate impact theory of liability.1

As applied in Title VII cases, to prove a claim

disparate impact discrimination, a plaintiff must identify

facially neutral employment practice or policy that causes

statistically discernible disparate impact on a protect

____________________

1. Though admittedly addressing only the issue of dispara

treatment, the Hazen Court arguably cast some doubt on t _____

viability of a disparate impact claim under the ADEA

holding that "[w]hen the employer's decision is whol

motivated by factors other than age, the problem

inaccurate and stigmatizing stereotypes disappears. This

true even if the motivating factor is correlated with age .

. ." Hazen, 113 S. Ct. at 1706. Taking note of t _____



language, two of our sister circuits have recently question

whether the theory of disparate impact liability applies

the ADEA. See DiBiase v. Smithkline Beecham Corp., 48 F. ___ _______ ________________________

719, 732 (3d Cir. 1995) (plurality) ("[I]n the wake of Haze ___

it is doubtful that traditional disparate impact theory is

viable theory of liability under the ADEA."); EEOC v. Franc ____ ____

W. Parker School, 41 F.3d 1073, 1076-78 (7th Cir. 1994 _________________

cert. denied, 1995 U.S.L.W. 3887 (U.S. June 19, 1995) ( _____ ______

94-1558); but see Houghton v. Sipco, Inc., 38 F.3d 953, 95 ___ ___ ________ ___________

59 (8th Cir. 1994) (assuming without analysis t

applicability of disparate impact theory of liability to t

ADEA). See also Michael C. Sloan, Comment, Disparate Impa ___ ____ _____________

in the Age Discrimination in Employment Act: Will t __________________________________________________________

Supreme Court Permit It?, 1995 Wis. L. Rev. 507 (1995). ________________________

-8- 8



employee group. See EEOC v. Steamship Clerks Union, Loc

___ ____ ___________________________

1066, 48 F.3d 594, 601 (1st Cir. 1995). Once the plainti ____

has made this initial showing, the defendant must t

attempt to debunk the sufficiency of the plaintiff's eviden

or, in the alternative, show that the challenged practice

either job related and consistent with business necessity

that it fits within a specific statutory exception.2 Id.___

604. If the employer attempts to justify its actions, t

plaintiff may seek to cast doubt on the justification



showing, inter alia, an alternate practice exists t _____ ____

equally protects the employer's putative interest but do

not disproportionately burden employees in the protect

class. Id. ___

The plaintiffs contend that the district cou

found that the selection procedures merely identifi

qualities important for employees to possess in genera

They argue that such a finding is equivalent to measuri

"the person in the abstract" and not the "person for t

job," Griggs, 401 U.S. at 436, and, therefore, is inadequa ______

to establish an affirmative defense to a claim of dispara

____________________



2. The ADEA provides that an employer may take an otherwi

prohibited employment action if the action is predicated

"reasonable factors other than age." 29 U.S.C. 623(f)(1

The plaintiffs contend that, in the context of a dispara

impact claim, this defense is equivalent to Title VII's "jo

related/business-necessity" defense. Cf. 29 C.F.R.___

1625.7(d) (interpreting the "reasonable factor other t

age" defense as limited only to factors justifiable as

"business necessity").

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impact discrimination. The plaintiffs argue further that t



district court erred by failing to inquire whether Warren

established that the selection procedures identified specif

job behaviors that significantly correlated to successf

performance of the specific jobs in question. They mainta

that, if the correct standard were to be applied, t

evidence is insufficient to support a finding in favor

Warren. We disagree.

Our review of the district court's careful a

extensive opinion satisfies us that it did supportably fi

that Warren's selection procedures measured skills and j

behaviors necessary for, and significantly correlated wit

successful performance of the jobs in question. The cou

found that the common criteria used in the selecti



procedures identified necessary technical and manageri

skills "important to all the rated jobs at the mill."

support this finding, the court pointed to Warren's exper

Dr. Richard S. Barrett, a consultant in the field

industrial psychology, who testified at some length that t

common criteria described job behaviors required

managerial and technical jobs in a manufacturing facili

such as the Westbrook mill. In addition, the court not

that three department heads at the mill, who had participat

in designing and implementing the selection procedure

testified that the common criteria fairly represent

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10



important skills needed to perform the jobs in the

departments. The court also relied on the testimony

Warren's Human Resource Director, Gary Parafinczuk,

explained, inter alia, that, prior to the downsizing, Warr _____ ____

had devoted money and resources to teaching and encouragi

the very skills assessed by the common criteria.

The district court also noted that the testimony



the various department heads established that the technic

skills portion of the selection procedures (which differ

for each job group) identified important skills needed

perform the specific jobs in each job group. Finally,

discrediting the testimony of the plaintiff's expert,

James Mahoney, in favor of Dr. Barrett, the district cou

expressly rejected the plaintiff's contention that t

selection procedures were not consistently predictive of,

significantly correlated with, the necessary skills for t

successful performance of the specific jobs in question.

Notwithstanding the district court's caref

analysis, the plaintiffs contend that, because Warren appli

the same common criteria in equal weights to every job gro

assessed, the selection procedures could not possibly measu



job skills significantly correlated with successf

performance of any specific job. We are not convinced: T

fact that the skills identified by the common criteria we

important in many managerial and technical mill jobs simp

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does not compel a finding that the skills were unrelated



the particular jobs at issue. Furthermore, the plaintif

totally disregard the fact that the technical skills a

performance criteria directly measured each employee

specific job performance skills and that, although Warr

applied the common criteria to all employees, the employe

were rated and ranked only within their specific job group

persons familiar with individual employees and group nee

Moreover, we seriously doubt that Warren would ha

previously committed money and resources to developing t

skills measured by the common criteria if they were n

directly related to successful job performance. In additio

the employees' own expert admitted on cross-examination t

one way to assess the validity of the selection procedures



a tool for measuring skills directly related to j

performance would be to examine whether a statistic

correlation existed between earlier promotions at the mi

and the assessment scores. Subsequently, Dr. James Medof

an expert in labor statistics retained by Warren, testifi

that, when he reviewed the data supplied by Warren, he fou

a strong correlation between those two factors.

In sum, we believe that, in determining whet

Warren had sufficiently justified its use of the selecti

procedures, the district court supportably found that t

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procedures measured skills necessary for, and correlat

with, successful performance of the jobs in question.3

We also believe that the record adequately suppor

the district court's finding that Warren's implementation

the selection procedures assured that they would fair

identify the employees who most fully possessed the skil

and abilities needed for successful job performance.



making this finding the court relied in part on Dr. Barrett

assessment of Warren's efforts. Barrett testified that t

____________________

3. Furthermore, we do not think, on the facts of this cas

that the law necessarily required Warren to offer empiric

studies to validate the selection procedures as job relate

Such a requirement would place a substantial burden

employers, like Warren, already forced by economic necessi

to reduce the size of their work force. See generally___ _________

C.F.R. 1607 (EEOC guidelines outlining empirical metho

for validating selection procedures in Title VII context

Employers, however, are not required, "even when defendi

standardized or objective tests, to introduce for

`validation studies' showing that particular criteria predi

actual on-the-job performance." Watson v. Fort Worth Ban

______ ______________

Trust, 487 U.S. 977, 999 (1988) (plurality); cf. id. at 100 _____ ___ ___

7 (Blackmun, Brennan, Marshall, JJ., concurring) ("While .

. formal validation techniques . . . may sometimes not

effective in measuring the job-relatedness of subjecti

selection processes, a variety of methods are available f

establishing the link between these selection processes a



job performance, just as they are for objective-selecti

devices." (footnote omitted)); Albemarle Paper Co. v. Moo ___________________ ___

422 U.S. 405, 449 (1975) (Blackmun, J., concurring). Her

the selection procedures are not objective tests employed

screen potential job applicants, but instead are more akin

subjective evaluations directly measuring actual abilities

known employees. Moreover, there is no evidence in this ca

that the procedures were used to "freeze" the effects

prior intentional age discrimination. See Albemarle, 4

___ _________

U.S. at 427 ("The question of job relatedness must be vie

in the context of the plant's operation and the history

the testing program.").

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team format for rating each employee, calling for op

discussion and justification of each assessment and consens

decision-making, enhanced the quality of the rating syste

The court also pointed out that all raters who testifi

stated that they understood the criteria and how to app

them. Furthermore, the court noted that the post-rati

review sessions, at which each department head was requir

to justify his or her decisions, further assured the quali

and fairness of the assessments. We have reviewed the reco

and find that it adequately and convincingly supports t

district court's conclusions. Accordingly, the distri

court's findings are not clearly erroneous.4

III.



III. ____

Conclusion Conclusion __________

For the foregoing reasons, the judgment of t

district court is affirmed.

____________________

4. Warren additionally contends that the plaintiffs' appe

should fail because, inter alia, they improperly used_____ ____

subgroup (employees age fifty years and older) of t

protected class (employees age forty years and older) as t

basis for their disparate impact claim. Because we find



error in the district court's factual findings, we do n

reach this argument.

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Graffam v. Scott Paper Co., 1st Cir. (1995)

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