On Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civil Action No. 76-3673.
Higginbotham, Chief Judge,*fn* Mansmann and Rosenn, Circuit Judges.
On Remand from the United States Supreme Court
A. LEON HIGGINBOTHAM, JR., Chief Judge.
This is an employment discrimination class action brought under 42 U.S.C. § 2000e (1982) ("Title VII"), and 42 U.S.C. § 1981 (1982). The plaintiffs-appellants ("plaintiffs" or "class") are a class of black persons who unsuccessfully sought employment at the Production and Maintenance Department of the Fairless Hills, Pennsylvania plant of defendant-appellee USX Corporation ("USX"), formerly known as United States Steel Corporation. After a December 1982 trial on liability issues,*fn1 the United States District Court for the Eastern District of Pennsylvania determined that USX was liable under plaintiffs' disparate impact theory of liability, but was not liable under their disparate treatment theory. Green v. United States Steel Corp., 570 F. Supp. 254 (E.D.Pa. 1983). On appeal, this court affirmed the district court's finding of liability on the disparate impact theory, and held that the district court erred in concluding that plaintiffs failed to make out their disparate treatment claim. Green v. USX Corp., 843 F.2d 1511 (3d Cir. 1988). On June 12, 1989, the United States Supreme Court vacated our decision and remanded this case for further consideration in light of Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 109 S. Ct. 2115, 104 L. Ed. 2d 733 (1989). USX Corp. v. Green, 490 U.S. 1103, 109 S. Ct. 3151, 104 L. Ed. 2d 1015 (1989).
For the reasons that follow, we believe that Wards Cove does not undermine the district court's finding of liability on plaintiffs' disparate impact theory. However, upon reconsideration, we will affirm the district court's summary judgment in favor of USX on the plaintiffs' disparate treatment claim.
The facts and procedural history of this case were fully set out in the prior opinions of this court and the district court, an exercise that we need not repeat in detail here. Instead, we shall focus on the rationale underlying our previous opinion, which we are now compelled to reexamine.
In our prior opinion, we rejected USX's contention that disparate impact analysis is inapplicable to challenges to a multicomponent hiring system that utilizes subjective criteria. We stated:
USX asks us to disregard the fact that a statistically significant discriminatory result occurred as the result of its hiring practices, and focus only upon the fact that the class is unable to isolate a single offensive component. We cannot conclude that this is a proper balance of the burdens between employees and employers in such cases, or that it is the result contemplated by Congress, or by the Supreme Court in its interpretation of Title VII.
843 F.2d at 1521-22. Although we were persuaded that the class had "sufficiently identified the interview process as one component of the USX hiring system that resulted in the disparate hiring results", we also upheld the plaintiffs' challenge to USX's entire multicomponent hiring system. Id. at 1523.
We also rejected USX's argument that disparate impact analysis is inapplicable to a challenge to a hiring process which includes subjective criteria. The court was not persuaded that there was a "well-reasoned distinction between objective criteria that present barriers to employment opportunities for blacks, and subjective criteria that lead to the same results . . . ." Id. at 1525. The exclusion of subjective criteria from the disparate impact analysis, we held, would encourage employers to use a wide range of subjective criteria "without ever articulating these criteria clearly or, more importantly, without validating their necessity to the selection procedure." Id. at 1525. We did not consider that requiring an employer to defend a challenge to its subjective hiring criteria constituted an onerous burden, since the employer could be presumed to have superior knowledge of its own employment practices.
We also held that the district court had erred in concluding that plaintiffs had not made out a prima facie case under their disparate treatment theory. We considered that the district court had used an impermissibly high, "smoking gun" standard of intent in making this determination. In our view, the prima facie showing of discriminatory intent was made out by the employer's awareness of a significant racial disparity in hiring, its use of "unguided subjective criteria," and its failure to maintain required employment records to monitor its compliance with a consent decree entered in a previous employment discrimination action. We further held ...