In Rollins v. Traylor Brothers, Case No. 14-CV-1414 (W.D. Wash. Jan. 21, 2016),  Judge John Coughenour of the U.S. District Court for the Western District of Washington certified the claims of a class of workers alleging claims of discrimination under both disparate impact and disparate treatment liability theories. Id. at 6-12, 18. The Court also approved plaintiffs’ request to proceed through a two-stage trial process, whereby if plaintiffs established a discriminatory policy or disparate impact during stage one, “each class member would be awarded a rebuttable inference that all class members were victims of defendants’ allegedly discriminatory practices and/or suffered a disparate impact” in stage two. Id. at 16.

The Court’s order serves as another reminder that, even after Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), judges may still certify a discrimination class action based on subjective decision-making, at least when presented with the types of facts before the Court in this case.

Case Background

In Rollins, defendants were contractors for the Sound Transit “University Link” light-rail projects, which included making hiring and firing decisions for laborers the Union dispatched to the Project. In response to “allegations of discrimination and harassment” by black laborers, Sound Transit hired an investigator and statistician, who made findings and prepared a report concluding that the defendants’ “subjective decision-making had a disparate impact on black laborers.” Id. at 2. Specifically, the statistician concluded that black laborers dispatched to defendants’ site had a “threefold higher risk” of not being hired or of being terminated and that, on average, white and Hispanic laborers worked twice as many hours a week as black laborers. Id. Notably, while it expressly disavowed relying on the report’s ultimate conclusion, the Court referenced the report and its factual findings throughout the decision.

The District Court’s Certification Decision

To certify the class, the Court first undertook its own modifications to the class definition. The Court rejected plaintiffs’ proposed “class of laborers of African-American decent with dark skin and/or appearing African American” — a description the Court noted that one of the named plaintiffs may not fit. Instead, the Court defined the class as “laborers who identify as black or believe that Defendants perceived them as black.” Id. at 4. Similarly, the Court also rejected as potentially ambiguous plaintiffs’ inclusion of laborers “who were dismissed shortly after being hired, dismissed after working only a few shifts, and/or otherwise treated unfairly.” Id. Rather, the Court, on its own initiative, reformulated the description to include laborers who “were not hired after being dispatched, were hired but later terminated, and or believe they were otherwise treated unfairly.” Id.

The Court’s certification decision focused a substantial amount of its analysis on findings supporting commonality. Specifically, the Court concluded that substantial anecdotal and statistical evidence supported both disparate treatment and disparate impact theories of liability.  For example, the Court detailed a number of racially insensitive and derogatory comments made by supervisors tasked with hiring and firing decisions. The Court also noted instances that could be interpreted as retaliation for complaining about unfair treatment. The Court also highlighted the statistical disparity between terminations and hours worked by black laborers and white laborers. The Court rejected defendants’ contention that black laborers were simply less qualified, comparing the statistics at defendants’ site to that of related project site run by a different contractor utilizing the same Union dispatch process where the racial disparities were substantially less. Accordingly, based on what the Court described as “substantial anecdotal and statistical evidence that site-wide discrimination affected employment decisions,” the Court concluded that plaintiffs established common questions of liability relating to the specific project site. Id. at 9, 11.

In certifying the class, the Court also rejected defendants’ administrative exhaustion argument.  Defendants argued that plaintiffs could not bring claims under a disparate impact theory because this theory was not alleged in any of the prerequisite EEOC charges. The Court concluded, however, that plaintiffs’ disparate impact theory was not procedurally barred because it “could reasonably be expected to grow out of the charge of discrimination.” Id. at 13. The Court emphasized that in this case, both the disparate treatment and disparate impact theories were “connected to Defendants’ alleged failure to institute policies to guide their managers’ discretionary decision-making,” and thus, “it would be reasonable to expect that EEOC investigators would look into Defendants’ job assignment, discipline, and termination policies” that the plaintiffs contended support the disparate impact theory. Id.

The District Court’s Trial Plan

Finally, the Court approved plaintiff’s bifurcated trial plan. In stage one, plaintiffs would bear the burden of establishing liability, by a preponderance of the evidence, on their disparate treatment and disparate impact claims, as well as the availability of punitive damages. The Court noted that “if successful on these claims, Plaintiffs would be awarded a rebuttable inference that all class members were victims of Defendants’ allegedly discriminatory practices and/or suffered a disparate impact from its neutral employment policies.” Id. at 16. In stage two, the Court noted that it would hold individual hearings before a separate jury, in which each individual class member would need to show that “he suffered an adverse employment decision or was adversely affected by a challenged policy or practice.”  The burden would then shift to defendants to show that any such adverse action was taken for legitimate reasons or to raise any other applicable affirmative defenses.

Implications For Employers

The Court’s decision highlights that, despite the hurdles to certifying class actions alleging discrimination under Title VII after Wal-Mart, courts may be willing to certify class actions where the action is defined to a specific job location and where the plaintiffs can bring forth “substantial” statistical and anecdotal evidence.

However, the Court’s decision still leaves ambiguity regarding how a trial of such claims can proceed. While the Court laid out the general procedures for the bifurcated trial, the Court emphasized that it had not determined “the exact details of how trial will proceed.” Id. at 17-18.  Accordingly, the Court ordered further briefing on the issue. Id. at 18. As such, despite the Court’s extensive order, there are still open questions regarding how this matter will be tried in a manner that comports with due process.