Bias Affirmed in Firefighter Case, but Back Pay Trial Ordered

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By Kevin McGowan

Sept. 17 — The city of Akron, Ohio, properly was held liable for age and race discrimination in firefighter promotions based on a 2004 exam, but a new trial on back pay is warranted, the U.S. Court of Appeals for the Sixth Circuit ruled Sept. 17.

In its second ruling in the long-running case, the Sixth Circuit said its 2013 decision upholding a preliminary injunction granting most of the 23 plaintiffs promotions to fire lieutenant or captain forecloses Akron's arguments challenging its liability under the Age Discrimination in Employment Act, Title VII of the 1964 Civil Rights Act and Ohio's state civil rights statutes.

Akron failed to show that “extraordinary circumstances” require the appeals court to revisit its earlier conclusions regarding the sufficiency of the plaintiffs' evidence of bias, and the city has forfeited any arguments regarding liability it didn't raise when it opposed the preliminary injunction, Judge Karen Nelson Moore wrote for the Sixth Circuit.

But the appeals panel vacated the district court's $616,218 back pay award and said a new trial on that issue is required.

The district court erred by ruling the plaintiffs' injuries didn't accrue until April 5, 2007, when the promotion eligibility list based on the 2004 exams expired, and by calculating all the plaintiffs' back pay using the same start date, the Sixth Circuit said. The district court's failure to include step increases or prejudgment interest in its back pay calculations means it failed to make the plaintiffs whole, the appeals court said.

The district court didn't abuse its discretion by issuing a permanent injunction that prohibits future discrimination by Akron or by appointing a court monitor to oversee future city firefighter promotions, the Sixth Circuit said. But the monitor's supervision must be limited to one promotion cycle, the court said.

On remand, the case should be reassigned to a different district court judge, the Sixth Circuit said.

“At some point, this litigation needs to end,” Moore wrote. “Unfortunately, we cannot give the parties finality today. We sincerely hope that the parties will resolve this case sooner rather than later.”

Relief Followed Jury Verdict

After a December 2008 trial, a federal district court jury found Akron liable under the ADEA and Ohio law for age discrimination based on disparate impact and returned an advisory opinion finding the city engaged in race discrimination as well. The jury awarded $1.9 million to 23 firefighters who weren't granted promotions.

In October 2009, the district court issued its conclusions of law based on the jury's findings. It found the plaintiffs had established prima facie cases of disparate impact based on age and race, Akron failed to prove its practices for promotion to lieutenant were based on reasonable factors other than age or race, and the city discriminated based on race when making promotions for lieutenant and captain. The court awarded the plaintiffs front pay as determined by the jury, and attorneys' fees and costs.

The trial court then commenced a protracted process to craft back pay, beginning a trial on that issue in July 2011 that was suspended for awhile, resumed in November 2012 and not concluded until August 2013.

The court calculated back pay from a start date of April 5, 2007, through July 17, 2011, which was the day before the plaintiffs' court-ordered promotions took effect. The court awarded a total of $616,218 and calculated each plaintiff's individual back pay award. One plaintiff's back pay claim was dismissed because he never testified and the record didn't support an award.

Akron argued back pay must be reduced because of the probability some of the firefighters would not have been promoted even under a nondiscriminatory promotions process. But the district court said Akron had waived that legal theory by not presenting it during the first trial.

Court's 2013 Opinion

In 2013, the Sixth Circuit upheld a preliminary injunction in which the district court had ordered the city to promote 18 of the unsuccessful candidates to lieutenant and captain positions.

In its 2013 opinion, the Sixth Circuit said the injunction was properly granted because the firefighters established they were likely to prevail on the merits of their disparate impact claims.

The appeals court rejected Akron's argument that exam pass rates, and not promotion rates, should have been compared when applying the “four-fifths rule” used to determine disparate impact. “[A] comparison of exam pass rates cannot adequately capture the effects of a ‘rank-order selection process,' ” the court said.

The Sixth Circuit in 2013 also found no merit to Akron's contention that the firefighters couldn't show an adverse impact on a protected group with respect to the white captain candidates because the firefighters didn't show the city “is that unusual employer who discriminates against the majority.”

The city waived that argument by failing to object to the district court's omission of a jury instruction on that requirement, the Sixth Circuit said. But even if Akron hadn't waived the “unusual employer” argument, the court said it has adopted that requirement only for disparate treatment claims, not for disparate impact.

No New Look at Liability

In its latest appeal, Akron again challenged the sufficiency of the evidence of disparate impact, arguing that the district court erroneously relied on the “four-fifths rule,” which presumes disparate impact if the selection rate for the group challenging the promotion process is less than 80 percent of the selection rate for the group with the highest rate.

Akron also said it was entitled to judgment regarding the white plaintiffs' claims because there's no evidence showing it's “the unusual employer” that discriminates against the majority. The district court gave erroneous instructions to the jury, whose verdict was against the “manifest weight of the evidence,” the city argued.

But the Sixth Circuit said that under the “law of the case” doctrine, it wouldn't revisit issues already decided in its 2013 opinion.

“That means that unless Akron provides compelling reasons to revisit those holdings, we will not address Akron's contention that the plaintiffs' evidence that Akron's promotional process adversely affected Caucasian Captain candidates was insufficient because they did not prove that Akron is an ‘unusual employer,' ” the court said. “Akron has not demonstrated that ‘extraordinary circumstances' militate in favor of abandoning our prior holding.”

Akron's failure in its 2013 appeal to challenge the legal sufficiency of the adverse impact evidence, the jury instructions and the district court's conclusion that the jury verdict wasn't against the manifest weight of the evidence preclude the city from raising those arguments now, the Sixth Circuit said.

Absent evidence of “plain error” by the district court, the Sixth Circuit affirmed the liability findings.

Back Pay Process Flawed

Both Akron and the plaintiffs appealed the district court's back pay calculations, and the Sixth Circuit ruled a new trial is required on that issue only.

Back pay under Title VII and the ADEA is intended to “make whole” discrimination victims by restoring them to the position they would have occupied but for the discrimination, the court said.

The district court erred by making April 5, 2007, the uniform start date for calculating the plaintiffs' back pay, the Sixth Circuit said.

Rather, a plaintiff's back pay start date depends on either the date of injury or when he or she filed an Equal Employment Opportunity Commission charge, the court said. “To address the appropriate back-pay award adequately, the district court should have made an individualized inquiry as to when to start each plaintiff's back-pay calculations,” the appeals court said.

The district court erred by assuming the plaintiffs' injury didn't occur until April 2007, when the eligibility list based on the 2004 exam expired, and by calculating all the plaintiffs' back pay using the same start date, the court said.

Given that the plaintiffs filed multiple EEOC charges, the district court should have calculated each plaintiff's back pay from the date no more then two years before he or she filed an EEOC charge, the Sixth Circuit said.

Failure to include step increases in back pay calculations also was erroneous, the court said. The trial court had all the information needed to compute step differentials and it must do so on remand, the Sixth Circuit said.

The district court's award didn't make the plaintiffs whole because it failed to include prejudgment interest, the appeals court said. “The delays in this case have been considerable,” the court said. “The plaintiffs ‘should not be penalized for delays in the judicial process,' nor should Akron ‘benefit from such delays.' Accordingly, we hold the district court abused its discretion by failing to award prejudgment interest to the plaintiffs.”

Akron argued the district court should have reduced the back pay award by 67 percent for the lieutenant candidates and by 71 percent for the captain candidates, because those are “the respective probabilities” the plaintiffs wouldn't have been promoted even under a completely fair process.

The district court erred by finding Akron waived this “lost-chance” theory, but the Sixth Circuit declined to address if back pay calculations “must include” a lost-chance reduction.

Rather, the district court should address in the first instance if Akron has presented credible evidence that use of the lost-chance method is appropriate, the appeals court said.

Judges Deborah L. Cook and Avern Cohn joined in the decision.

Elfvin & Besser and Thompson & Bishop Law Offices represented the firefighters. Tucker Ellis LLP and Roetzel & Andress LPA represented the city.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

Text of the opinion is available at http://www.bloomberglaw.com/public/document/WILLIAM_HOWE_et_al_PlaintiffsAppelleesCrossAppellants_v_CITY_OF_A.