On August 27, 2012, the Tenth Circuit issued its opinion in Apsley v. Boeing Co., No. 11-3238, 2012 WL 3642800 (10th Cir. Aug. 27, 2012), in a large-scale age discrimination lawsuit. In a positive decision for employers, the Tenth Circuit rejected Plaintiffs’ statistical evidence and affirmed summary judgment in favor of defendants - The Boeing Company and Spirit Aerosystems - on claims that they engaged in a pattern or practice of discrimination against older workers. 

In a unanimous opinion, the Tenth Circuit held that, although Plaintiffs showed a statistically significant disparity in the treatment of older and younger workers, the disparity in absolute terms was too small to demonstrate a systemic pattern or practice of age discrimination or a significant disparate impact on older workers. 

Factual Background

On June 16, 2005, Boeing terminated its 10,671-member workforce at its Wichita Division and sold the Division to Spirit. Id. at *3. The following day, Spirit rehired 8,354 employees selected for rehire by Boeing managers. Although older workers predominated in the workforce before and after the sale, Spirit rehired a lower percentage of older workers and, following the sale, the average age of the workforce decreased by about five months. Id.

Plaintiffs brought a putative class action on behalf of about 700 employees who Spirit did not rehire. Plaintiffs asserted, among other things, claims for age discrimination in violation of the ADEA under both pattern or practice and disparate impact theories. Id. The district court conditionally certified a class, and then dismissed most of Plaintiffs’ claims. Id. at *3-4.

Although Plaintiffs’ individual claims for disparate treatment remained pending, the district court granted the parties’ motions to certify its orders for appellate review under Rule 54(b). Id. at *4. The Tenth Circuit affirmed.

The Tenth Circuit’s Opinion

The Tenth Circuit held that, although Plaintiffs introduced evidence of age discrimination, Plaintiffs failed to prove that the companies engaged in a pattern or practice of age discrimination or that their hiring practices had a significant disparate impact on older workers. Id.

Plaintiffs presented expert statistical evidence that, viewing the workforce as a whole, the difference between the number of employees over age 40 who should have been recommended in the absence of discrimination (8,028) and the number who were recommended (7,968) was greater than five standard deviations. And, the difference between the number who should have been hired in the absence of discrimination (7,285) and the number who were hired (7,237) was over four standard deviations. Id. at *6. 

The Tenth Circuit found that the disparities identified by Plaintiffs lacked practical significance. Id. at *9. It explained that, in light of the thousands of total recommendations and hires at issue, the observed disparities were small; “it is precisely because we are looking at thousands of hiring decisions that the statistics are noteworthy.” Id. The companies recommended and hired over 99% of the older employees who they would have been expected to recommend and hire in the absence of any discrimination; in fact, if Spirit had recommended 60 more employees over the age of 40, or if Spirit had hired 48 more people over the age of 40, the discrepancies would have disappeared. Accordingly, the Tenth Circuit concluded that no reasonable trier of fact could have found that discrimination was the companies’ “standard operating procedure – the regular rather than the unusual practice.” Id. at *10. 

Plaintiffs also pointed to statements by company managers reflecting concern about an aging workforce and desire to save money on pension costs. Id. at *12. The Tenth Circuit concluded that, whereas some of the comments suggested that discrimination “may have occurred,” across a workforce of over 10,000 people in three locations, the handful of statements constituted only evidence of “isolated or sporadic discriminatory acts by the employer, which are insufficient to establish a prima facie case of a pattern or practice of discrimination.” Id. at *13.

The Tenth Circuit also upheld summary judgment on Plaintiffs’ disparate impact claim. It noted that, although the Plaintiffs’ statistics revealed a “highly unlikely disparity in the treatment of older and younger workers,” the disparity, in absolute terms, was “very small.” Id. at *16. Thus, Plaintiffs also failed to show that the divestiture caused a significant disparate impact on older workers. Id.

Implications

The Tenth Circuit in Apsley refused to rely merely on superficial statistical disparities and took a deeper look at the practical implications of the evidence. In this respect, the decision is a positive one for employers faced with pattern or practice and disparate impact claims, particularly those extending across large workforces. 

The Tenth Circuit’s decision, however, is somewhat disappointing for employers in that it stopped short of blessing the district court’s decision-making group analysis. The evidence showed that only four of the 21 director groups studied had statistically significant differences adverse to older employees. Id. at *6. The district court held that Plaintiffs “would, at a minimum, have to show that in a significant number of director groups older workers were adversely affected at a statistically significant level.” Id. at *11. 

The Tenth Circuit noted that, like Plaintiffs’ use of aggregated data,  the “divide and conquer” approach “has not escaped academic criticism.” Id. The Tenth Circuit focused its attention on the company-wide aggregated data presented