
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          July 14, 1995                                [Not for Publication]                                [Not for Publication]                            United States Court of Appeals                            United States Court of Appeals                                For the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, Daniel  W.            _______________________              _________________  __________        Bates, Francis M. Jackson, and Petruccelli & Martin, were on brief for        _____  __________________      ____________________        appellants.            William  J.  Kayatta,  Jr.,  with whom  Catherine  R.  Connors, B.            __________________________              ______________________  __        Simeon  Goldstein,  and  Pierce,  Atwood,  Scribner,  Allen,  Smith  &        _________________        _____________________________________________        Lancaster, were on brief for appellees.        _________                                 ____________________                                 ____________________                      STAHL, Circuit Judge.   Following a nine-day  bench                      STAHL, Circuit Judge.                             _____________            trial, the  district  court entered  judgment for  defendants            Scott  Paper Company  and  S.D. Warren  Company (collectively            "Warren") in  this age discrimination suit  brought by eleven            former employees ("plaintiffs").  The plaintiffs alleged that            the  selection procedures  ("selection  procedures") used  by            Warren to  reduce by  twenty percent  the number of  salaried            employees at its paper mill in Westbrook,  Maine, effected an            illegal  disparate impact  on employees  over age fifty.   In            awarding judgment  to Warren, the district  court found that,            though the  selection procedures did indeed  have a disparate            impact on  older-age employees, Warren had  made a sufficient            showing that  the procedures were job  related and consistent            with  business necessity.  Graffam v. Scott Paper Co., 870 F.                                       _______    _______________            Supp. 389, 399-404 (D. Me. 1994).  After a careful  review of            the record, we affirm.                                          I.                                          I.                                          __                                      Background                                      Background                                      __________                      In late 1990, Warren  concluded that it must reduce            by twenty  percent its  salaried work force  of approximately            471  employees  at  its  mill   in  Westbrook,  Maine.    The            conclusion  was  dictated,  at  least in  part,  by  Warren's            decision  to sell  the mill  and a  corresponding requirement            that the  mill be made  more attractive to  potential buyers.            Consequently,  Warren set about creating selection procedures                                         -2-                                          2            for identifying which employees it would need to discharge in            order to meet the desired force reduction goal.                      In January  1991, a Mill  Leadership Team  ("MLT"),            consisting  of  the  heads  of several  departments  and  the            manager of the  Westbrook mill, met for  a number of  days to            develop a plan for  achieving Warren's reduction goal.   As a            result,  each department  identified  job  functions and  job            positions that could be eliminated.  Department heads divided            the  jobs  in  each  department  --  including  those  to  be            eliminated --  into specific  job groups and  placed salaried            employees subject  to the  downsizing  into the  newly-formed            groups.       Positions    with    similar   functions    and            responsibilities were grouped together so that employees with            comparable  skills ultimately  would  be  rated against  each            other.                      At the same time, MLT members  collectively defined            the selection procedures.  As  their starting point, the  MLT            modified   procedures   previously   developed  by   Warren's            corporate offices for  use in  an employee  downsizing.   MLT            members reviewed drafts of these selection procedures, sought            to  understand  and  clarify  the  assessment  criteria,  and            discussed the applicability of  the criteria to the Westbrook            mill.  After the revisions  were included, MLT members tested            the new procedures by  conducting mock assessments of persons                                         -3-                                          3            known  to the  MLT  members  but  who  were  not  subject  to            discharge.                        The final assessment plan  allocated a total of 100            points  to  seven criteria:    technical  job skills  (twenty            points);  performance (ten  points); length  of  service (ten            points);    leading-change     skills    (fifteen    points);            interpersonal skills (fifteen  points); self management  (ten            points);  and  versatility  (twenty  points).     The  skills            included in the technical job skill criterion varied for each            individual  job  group.    An individual  who  received  zero            technical  skill points  would not  be  retained in  favor of            another  employee   with  a  higher  technical  skill  rating            regardless of which employee  had the higher respective total            assessment score.  Every employee was awarded the maximum ten            performance  points,  provided  that  the  employee  had  not            received  counselling for unacceptable  job performance.  The            common  criteria of  length  of service  and  leading-change,            interpersonal,   self-management,   and  versatility   skills            ("common criteria") were applied identically to all employees            across all job groups.                       Once  the  MLT  finished ironing  out  the  revised            assessment criteria, teams of at least three individuals were            formed   to  evaluate  the   salaried  employees  subject  to            downsizing.    Each  team  included  an  MLT  member who  had            participated  in  developing   and  discussing  the   written                                         -4-                                          4            criteria, and  at least one person  who possessed substantial            first-hand   knowledge   regarding   the   skills   and  past            performance of  each employee  assessed.  Every  assessor was            provided a text explaining the assessment criteria and a list            of  technical job  skills  applicable to  the particular  job            group he or  she would  assess.   The teams  reached a  final            consensus rating  for each  employee through  oral discussion            and  group decision.    Following the  team assessments,  MLT            members  met  to  review  the process.    Additionally,  each            department head was required to present, explain, and justify            the results of the selection process in his or her department            to a corporate review team that included management personnel            from the mill's corporate headquarters.                      The downsizing process resulted in  the termination            of thirty-nine  percent of  the salaried employees  age fifty            years  and older  but only  nine percent  of  those employees            under age fifty.   All of  the plaintiffs  in this case  were            over age fifty when Warren discharged them as a result of the            downsizing effort.  Following their discharge, the plaintiffs            commenced  this action  in federal  district court,  alleging            that  Warren had  discriminated  against them  on account  of            their  age   in  violation  of  the   Age  Discrimination  in            Employment Act  of 1967  ("ADEA"), 29  U.S.C.     621-34, and            Maine state law.  At trial, plaintiffs, pursuing  their claim            under a theory of disparate impact liability, maintained that                                         -5-                                          5            the  selection  procedures,  though  neutral on  their  face,            effected   a  substantial   disparate  impact   on  older-age            employees.   Following a  nine-day bench trial,  the district            court entered judgment for  Warren, from which the plaintiffs            now appeal.                                         II.                                         II.                                         ___                                      Discussion                                      Discussion                                      __________            A.  Standard of Review            ______________________                      We review  the  district court's  findings of  fact            only for clear error.  See Fed. R. Civ. P. 52(a); Cumpiano v.                                   ___                        ________            Banco  Santander P.R.,  902 F.2d  148,  152 (1st  Cir. 1990).            _____________________            Clear error  exists when, after reviewing  the entire record,            we  have a "strong, unyielding belief that a mistake has been            made."  Cumpiano, 902  F.2d at 152; see also  Industrial Gen.                    ________                    ___ ____  _______________            Corp. v. Sequoia  Pac. Sys. Corp.,  44 F.3d 40, 43  (1st Cir.            _____    ________________________            1995).  If,  however, the district court premised its factual            findings on an incorrect view of the law, we are not bound by            the clearly erroneous standard.  E.g., Brown Daltas & Assocs.                                             ____  ______________________            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  have            been predicated upon, or induced by, errors of law, they will            be accorded diminished respect on appeal."  Dedham Water  Co.                                                        _________________            v.  Cumberland Farms Dairy, Inc., 972 F.2d 453, 457 (1st Cir.                ____________________________            1992).            B.  Age Discrimination Claim            ____________________________                                         -6-                                          6                      The  plaintiffs  contend  that  Warren's  selection                                  procedures,  though neutral  on their  face, resulted  in the            discharge   of  a   disproportionate   number  of   older-age            employees.  The theory of disparate impact liability has  its            roots in the Supreme Court's decision in Griggs v. Duke Power                                                     ______    __________            Co., 401 U.S. 424 (1971).  In Griggs, the Court held that the            ___                           ______            use  of  a  facially   neutral  objective  test  that  tended            disproportionately  to  exclude  African-Americans  from  the            employment  pool  but  did  not  measure skills  demonstrably            related  to  job  performance  violated  Title  VII's   anti-            discrimination  provisions.   In  the context  of Title  VII,            Congress codified  the disparate  impact theory in  the Civil            Rights Act of 1991.  See Pub. L. No. 102-166,   3, 105  Stat.                                 ___            1071  (1991) (listing  as  one of  its  purposes "to  confirm            statutory authority and provide statutory  guidelines for the            adjudication of disparate impact suits under title VII").                      Congress, however, has  never explicitly  addressed            the theory of disparate impact liability in the ADEA context.            Moreover,  though  the  Supreme Court  has  acknowledged that            "[t]here are  important similarities  between [Title  VII and            the ADEA],  . . .   both in their aims --  the elimination of            discrimination from the workplace -- and in their substantive            provisions[,]" Lorillard  v. Pons, 434 U.S.  575, 584 (1978),                           _________     ____            it  has  nonetheless  "never  decided  whether  the disparate            impact  theory of  liability  is available  under the  ADEA."                                         -7-                                          7            Hazen Paper Co.  v. Biggins,  113 S. Ct.  1701, 1706  (1993).            _______________     _______            Similarly,   though   we   assumed   without   analysis   the            applicability of  the theory in  Holt v. Gamewell  Corp., 797                                             ____    _______________            F.2d 36, 37 (1st Cir. 1986), we have never directly addressed            the issue.  See also  Caron v. Scott Paper Co., 834  F. Supp.                        ___ ____  _____    _______________            33,  35-38  (D.  Me. 1993).    Again,  for  purposes of  this            opinion, we assume arguendo that the district court correctly                               ________            held  that the ADEA  supports a claim  for age discrimination            based on a disparate impact theory of liability.1                        As  applied in Title VII cases, to prove a claim of            disparate  impact discrimination, a plaintiff must identify a            facially neutral employment practice  or policy that causes a            statistically  discernible  disparate impact  on  a protected                                            ____________________            1.  Though admittedly addressing only  the issue of disparate            treatment, the  Hazen Court arguably  cast some doubt  on the                            _____            viability of  a  disparate impact  claim  under the  ADEA  by            holding  that  "[w]hen  the  employer's  decision  is  wholly            motivated  by   factors  other  than  age,   the  problem  of            inaccurate and stigmatizing stereotypes  disappears.  This is            true even if the motivating factor is correlated with age . .            .  ."   Hazen, 113  S.  Ct. at  1706.   Taking  note of  this                    _____            language, two of our sister circuits have recently questioned            whether the  theory of disparate impact  liability applies to            the ADEA.  See  DiBiase v. Smithkline Beecham Corp.,  48 F.3d                       ___  _______    ________________________            719, 732 (3d Cir. 1995) (plurality) ("[I]n the wake of Hazen,                                                                   _____            it is doubtful  that traditional disparate impact theory is a            viable theory of liability under the ADEA."); EEOC v. Francis                                                          ____    _______            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)  (No.            _____ ______            94-1558);  but see Houghton v. Sipco, Inc., 38 F.3d 953, 958-                       ___ ___ ________    ___________            59   (8th   Cir.   1994)  (assuming   without   analysis  the            applicability of disparate impact  theory of liability to the            ADEA).  See also Michael C. Sloan, Comment,  Disparate Impact                    ___ ____                             ________________            in  the  Age Discrimination  in  Employment  Act:   Will  the            _____________________________________________________________            Supreme Court Permit It?, 1995 Wis. L. Rev. 507 (1995).            ________________________                                         -8-                                          8            employee group.   See EEOC v.  Steamship Clerks Union,  Local                              ___ ____     ______________________________            1066, 48 F.3d 594, 601  (1st Cir. 1995).  Once  the plaintiff            ____            has  made  this  initial  showing, the  defendant  must  then            attempt to debunk the sufficiency of the plaintiff's evidence            or, in the alternative, show  that the challenged practice is            either job related and  consistent with business necessity or            that  it fits within a specific statutory exception.2  Id. at                                                                   ___            604.   If the employer  attempts to justify  its actions, the            plaintiff may  seek to  cast doubt  on  the justification  by            showing,  inter  alia,  an  alternate  practice  exists  that                      _____  ____            equally  protects the  employer's putative interest  but does            not  disproportionately  burden  employees in  the  protected            class.  Id.                    ___                      The  plaintiffs  contend  that  the  district court            found  that   the  selection  procedures   merely  identified            qualities important  for  employees to  possess  in  general.            They  argue that such  a finding  is equivalent  to measuring            "the  person in  the abstract"  and not  the "person  for the            job,"  Griggs, 401 U.S. at 436, and, therefore, is inadequate                   ______            to establish an  affirmative defense to a claim  of disparate                                            ____________________            2.  The ADEA provides that an  employer may take an otherwise            prohibited employment  action if the action  is predicated on            "reasonable factors other than age."  29 U.S.C.    623(f)(1).            The plaintiffs  contend that, in  the context of  a disparate            impact claim, this defense is equivalent to Title VII's "job-            related/business-necessity"  defense.     Cf.  29  C.F.R.                                                          ___            1625.7(d)  (interpreting the  "reasonable  factor other  than            age"  defense as  limited only  to  factors justifiable  as a            "business necessity").                                         -9-                                          9            impact discrimination.  The plaintiffs argue further that the            district court erred by failing to inquire whether Warren had            established that the selection procedures identified specific            job  behaviors  that significantly  correlated  to successful            performance of the specific jobs  in question.  They maintain            that,  if  the  correct  standard  were  to  be applied,  the            evidence is  insufficient to  support a  finding in favor  of            Warren.  We disagree.                      Our review  of  the district  court's  careful  and            extensive opinion  satisfies us that it  did supportably find            that  Warren's selection  procedures measured skills  and job            behaviors necessary  for, and significantly  correlated with,            successful performance of  the jobs in  question.  The  court            found  that  the  common   criteria  used  in  the  selection            procedures  identified  necessary  technical  and  managerial            skills "important  to all  the rated jobs  at the mill."   To            support this  finding, the court pointed  to Warren's expert,            Dr.  Richard  S.  Barrett,  a  consultant  in  the  field  of            industrial psychology, who testified  at some length that the            common  criteria   described   job  behaviors   required   in            managerial  and technical  jobs in  a manufacturing  facility            such as the  Westbrook mill.   In addition,  the court  noted            that three department heads at the mill, who had participated            in  designing  and  implementing  the  selection  procedures,            testified  that  the   common  criteria  fairly   represented                                         -10-                                          10            important  skills  needed  to   perform  the  jobs  in  their            departments.   The  court also  relied  on the  testimony  of            Warren's  Human  Resource  Director,  Gary  Parafinczuk,  who            explained, inter alia, that,  prior to the downsizing, Warren                       _____ ____            had devoted  money and resources to  teaching and encouraging            the very skills assessed by the common criteria.                        The district court also noted that the testimony of            the various department  heads established that the  technical            skills  portion of the  selection procedures  (which differed            for  each job  group) identified  important skills  needed to            perform the specific  jobs in  each job group.   Finally,  in            discrediting  the testimony  of the  plaintiff's  expert, Dr.            James Mahoney, in  favor of Dr.  Barrett, the district  court            expressly  rejected  the  plaintiff's  contention   that  the            selection procedures were not consistently  predictive of, or            significantly  correlated with, the  necessary skills for the            successful performance of the specific jobs in question.                      Notwithstanding   the   district  court's   careful            analysis, the plaintiffs contend that, because Warren applied            the  same common criteria in equal weights to every job group            assessed, the selection procedures could not possibly measure            job   skills   significantly   correlated   with   successful            performance of any specific job.  We are not  convinced:  The            fact  that the skills identified by  the common criteria were            important in  many managerial and technical  mill jobs simply                                         -11-                                          11            does not compel a  finding that the skills were  unrelated to            the particular  jobs at  issue.  Furthermore,  the plaintiffs            totally  disregard the  fact  that the  technical skills  and            performance  criteria  directly   measured  each   employee's            specific  job performance  skills and  that,  although Warren            applied the  common criteria to all  employees, the employees            were rated and ranked only within their specific job group by            persons familiar with  individual employees and group  needs.            Moreover,   we  seriously  doubt   that  Warren   would  have            previously committed  money and resources  to developing  the            skills measured  by  the common  criteria  if they  were  not            directly related to successful job performance.  In addition,            the employees' own expert  admitted on cross-examination that            one way to assess the validity of the selection procedures as            a  tool   for  measuring  skills  directly   related  to  job            performance  would  be  to  examine  whether   a  statistical            correlation existed  between earlier promotions  at the  mill            and the  assessment scores.  Subsequently,  Dr. James Medoff,            an expert  in labor statistics retained  by Warren, testified            that,  when he reviewed the data supplied by Warren, he found            a strong correlation between those two factors.                      In  sum,  we believe  that, in  determining whether            Warren had  sufficiently justified  its use of  the selection            procedures,  the district  court  supportably found  that the                                         -12-                                          12            procedures  measured skills  necessary  for,  and  correlated            with, successful performance of the jobs in question.3                         We also believe that the record adequately supports            the  district court's finding that Warren's implementation of            the  selection procedures  assured  that  they  would  fairly            identify the  employees who  most fully possessed  the skills            and  abilities needed  for  successful job  performance.   In            making this finding the court relied in part on Dr. Barrett's            assessment of  Warren's efforts.  Barrett  testified that the                                            ____________________            3.  Furthermore,  we do not think, on the facts of this case,            that the  law necessarily required Warren  to offer empirical            studies to validate the  selection procedures as job related.            Such  a  requirement  would  place a  substantial  burden  on            employers, like  Warren, already forced by economic necessity            to reduce the  size of their  work force.   See generally  29                                                        ___ _________            C.F.R.    1607 (EEOC  guidelines outlining  empirical methods            for validating  selection procedures in  Title VII  context).            Employers, however,  are not  required,  "even when defending            standardized   or  objective   tests,  to   introduce  formal            `validation studies' showing that particular criteria predict            actual on-the-job performance."   Watson v. Fort Worth Bank &                                              ______    _________________            Trust, 487 U.S. 977, 999 (1988) (plurality); cf. id. at 1006-            _____                                        ___ ___            7 (Blackmun, Brennan, Marshall,  JJ., concurring) ("While . .            . formal validation  techniques .  . . may  sometimes not  be            effective  in measuring  the  job-relatedness of  subjective-            selection processes,  a variety of methods  are available for            establishing the link  between these selection processes  and            job  performance, just  as they  are  for objective-selection            devices." (footnote omitted)); Albemarle Paper Co.  v. Moody,                                           ___________________     _____            422  U.S. 405, 449 (1975)  (Blackmun, J., concurring).  Here,            the selection procedures are  not objective tests employed to            screen potential job applicants, but instead are more akin to            subjective evaluations directly measuring actual abilities of            known employees.  Moreover, there is no evidence in this case            that  the procedures  were used  to "freeze"  the effects  of            prior intentional  age  discrimination.   See Albemarle,  422                                                      ___ _________            U.S.  at 427 ("The question of job relatedness must be viewed            in  the context of the  plant's operation and  the history of            the testing program.").                                             -13-                                          13            team  format  for  rating  each employee,  calling  for  open            discussion and justification of each assessment and consensus            decision-making, enhanced  the quality of  the rating system.            The court  also pointed  out  that all  raters who  testified            stated that  they understood  the criteria  and how  to apply            them.   Furthermore,  the  court noted  that the  post-rating            review sessions,  at which each department  head was required            to justify his or her decisions, further  assured the quality            and fairness of the assessments.  We have reviewed the record            and  find that  it adequately  and convincingly  supports the            district  court's  conclusions.    Accordingly,  the district            court's findings are not clearly erroneous.4                                         III.                                         III.                                         ____                                      Conclusion                                      Conclusion                                      __________                      For  the  foregoing reasons,  the  judgment  of the            district court is affirmed.                                                   ____________________            4.  Warren  additionally contends that the plaintiffs' appeal            should  fail  because, inter  alia,  they  improperly used  a                                   _____  ____            subgroup  (employees  age  fifty  years  and  older)  of  the            protected class (employees age forty years  and older) as the            basis for their disparate  impact claim.  Because we  find no            error in  the district  court's factual findings,  we do  not            reach this argument.                                          -14-                                          14
