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Ernst v. City of Chicago

United States Court of Appeals, Seventh Circuit

September 19, 2016

Stacy Ernst, et al., Plaintiffs-Appellants,
v.
City of Chicago, Defendant-Appellee.

          Argued February 25, 2016

         Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. l:08-cv-04370 - Charles R. Norgle, Judge.

          Before Bauer, Manion and Kanne, Circuit Judges.

          Manion, Circuit Judge.

         After Stacy Ernst and four other women applied unsuccessfully to work as Chicago paramedics, they brought this Title VII gender-discrimination lawsuit against the City of Chicago. These women were experienced paramedics from public and private providers of emergency medical services; they sought employment as paramedics with the Chicago Fire Department, but they did not apply to firefighting positions. All five women were denied jobs because they failed Chicago's physical-skills entrance exam.

         In district court, this Title VII case was split into two parts. The plaintiffs' disparate-treatment claims went to a jury trial, in which the district court provided an erroneous jury instruction. Their disparate-impact claims were tried in a separate bench trial. This second group of claims turned largely on whether Chicago's test was based on a statistically validated study of job-related skills. We remand for a new jury trial on the disparate-treatment claims, reverse the bench trial's verdict on disparate impact because the physical-skills study was neither reliable nor validated under federal law, and affirm the evidentiary rulings below.

         Background

         The Chicago Fire Department employs several hundred paramedics. [1] When hiring new paramedics, Chicago has not always tested its applicants' physical skills. From the 1970s through the year 2000, paramedics were hired without any physical test. The hiring process changed in 2000, however, when Chicago implemented a physical-skills test created for it by Human Performance Systems, Inc. Deborah Gebhardt, the president of HPS, led this test-creation process.

         Gebhardt had previously created a physical test for the Chicago Fire Department's entry-level firefighters. That test had a disparate impact on women. The plaintiffs argue that Chicago's decision to rehire Gebhardt for the paramedic test, without taking bids from anyone else, reflects Chicago's desire to reduce the number of women it hired as paramedics.

         In this case, Gebhardt tested volunteer Chicago paramedics. These were incumbent paramedics working for the Chicago Fire Department. Gebhardt tested these study volunteers on physical skills designed to reflect job-related skills. She tested the paramedics on three "work samples" also designed to reflect job-related skills. Then she compared the results from the skills testing with the results from the work-sample testing. Through this process, Gebhardt selected physical skills that, together, formed Chicago's physical-skills entry exam for paramedic applicants. This was a concurrent validation study, as this opinion will later explain.

         Between 2000 and 2009, nearly 1, 100 applicants took Gebhardt's entrance examination. Among these, 800 were men, and 98% of the male applicants passed. Another 300 were women; 60% of female applicants passed. Stacy Ernst, Dawn Hoard, Katherine Kean, Michelle Lahalih, and Irene Res-Pullano took the test in 2004, as licensed paramedics with experience working in other public fire departments or for private ambulance services. In their daily work, they moved patients and did so safely. When they took the Chicago physical-skills examination, however, they all failed.

         After they were denied employment based on their exam results, Ernst and her fellow plaintiffs filed suit. They challenged the skills test as discriminatory; they urged that there was no evidence of Chicago paramedics ever lacking the physical ability to properly care for their patients. Instead, they argued, the test was implanted to keep women out. Ultimately, their suit had two parts. On their disparate-treatment claims, they asked a jury to find that Chicago had a discriminatory motive against women when Chicago implemented its skills test. On their disparate-impact claims, the plaintiffs argued in a bench trial that improper statistical methods were used to establish the skills test.

         The jury instruction on disparate treatment was vigorously debated before both the magistrate judge and the district judge. The plaintiffs urged that their burden on this disparate-treatment claim was to prove illegal purpose: that Chicago had a discriminatory intent or motive for implementing the skills test. When arguing before the magistrate judge, Chicago claimed that the plaintiffs had to satisfy a but-for test: that Chicago would have hired the plaintiffs if, all other factors being equal, they were male. In responding to this effort, the magistrate judge said, "That is absolutely not what this case is about at all. At all. And you know it."

         The disparate-treatment jury instruction, labeled Jury Instruction 24 at all times in this case, included this language when the magistrate judge settled the instructions:

Plaintiffs contend the City discriminated against them on the basis of sex in violation of Title VII of the Civil Rights Act of 1964, as amended. In order to succeed on this claim, Plaintiffs must prove by a preponderance of the evidence that the City intentionally created or used the physical abilities test for the purpose of excluding females or reducing the number of females who would be hired as paramedics by the Chicago Fire Department. The City denies that it intentionally created or used the physical abilities test to discriminate against female applicants.
It is not enough for Plaintiffs to prove merely that the City knew the physical abilities test would have an adverse impact on female applicants. An adverse impact exists where the rate at which female applicants pass the test is substantially less than the rate at which male applicants pass. The parties do not dispute that the test had an adverse impact.

         As approved by the magistrate judge, Jury Instruction 24 went on to explain that the plaintiffs should prevail if they prove by a preponderance of the evidence that Chicago "intentionally created or used" the skills test to "exclude or reduce" the women hired as paramedics. If the plaintiffs did not prove this, however, Chicago must prevail. There was no problem with the jury instruction on disparate treatment as established at this point in the litigation.

         Chicago was not done urging the but-for test, however, and the City successfully resurrected its argument before the district judge. After a hearing on the matter, the district judge issued a written order that ruled for the defense. He stated that "[b]ecause this is 'an individual action, rather than a class action, evidence of a pattern of practice can only be collateral to evidence of specific discrimination against the plaintiff[s].'" App. 13 (citing Matthews v. Waukesha Cty., 759 F.3d 821, 829 (7th Cir. 2014)) (quotation marks in original). Given this reliance on the individual-action analysis, the district judge struck the original contents of Jury Instruction 24. He inserted the pattern instruction on General Employment Discrimination, so that Instruction 24 now read:

Each Plaintiff claims that she was not hired as a Chicago Fire Department Paramedic because of her gender. To succeed on this claim, each Plaintiff must prove by a preponderance of the evidence that she was not hired by the City of Chicago because of her gender. To determine that a Plaintiff was not hired because of her gender, you must decide that the City would have hired the Plaintiff had she been male but everything else had been the same.

         When the case went to the jury, the jurors expressed confusion over this instruction. After deliberating for 90 minutes, they sent a note to the district court: "Question to the Judge regarding instruction 24. Please provide clarification of the sentence, quote: To determine that a plaintiff was not hired because of her gender, you must decide that the City would have hired the plaintiff had she been male but everything else had been the same." While the district court and parties were discussing this, a second note came out: "The jury cannot deliberate further without a response to our question. May we know what the time [is] for a response?" The district court provided this written response, to which the plaintiffs objected: "Reread all instructions. The sentence you are asking to clarify speaks for itself." Four minutes later, the jury returned a verdict for the defense.

         During the bench trial on disparate impact, the district court found it clear that the plaintiffs had established a disparate impact on women. The burden therefore shifted to Chicago, which had to prove that its physical-skills test was job-related and consistent with business necessity. In adopting Chicago's proposed conclusions of law, the district court concluded that Gebhardt's validation study satisfied Chicago's burden. The issues at this point in this trial turned on whether Gebhardt's study satisfied the law's technical standards for validity studies, which appear at 29 C.F.R. § 1607.14(B)(4). The district court wrote that the "[p]laintiffs' arguments attacking Dr. Gebhardt's job analysis, validation study under the criterion method, and the process of determining the 935 passing score are unavailing and are rejected." Dist. Ct. Docket 604 at 2. Accordingly, the burden shifted back to the plaintiffs, who had to show that Chicago had rejected a substantially equally valid, but less discriminatory, alternative to the skills test. On this, the district court concluded that the plaintiffs offered assertions without evidence. The district court thus entered judgment for Chicago.

         The plaintiffs lost both trials. They now bring this appeal, which centers on three issues. First, they challenge the disparate-treatment jury instruction that the district judge gave in the jury trial. Second, the bench trial on disparate impact yielded a defense verdict on the statistical methods underlying the skills test, and the plaintiffs challenge those methods. Third, the plaintiffs argue cumulative error from a series of evidentiary rulings. We address these issues in turn.

         Discussion

         The Civil Rights Acts of 1964 and 1991, known collectively for our purposes as Title VII, prohibit two types of discrimination. Ricci v. DeStefano, 557 U.S. 557, 577 (2009). First, Title VII prohibits job-related actions that are motivated by intentional discrimination against employees, based on protected employee statuses such as race or sex. See id. (quoting 42 U.S.C. § 2000e-2(a)(1)). This is known as disparate treatment. Plaintiffs must prove that an employer had a discriminatory motive for taking a job-related action. Id. During the jury trial in this case, the plaintiffs argued that Chicago adopted its physical-skills entrance exam in an effort to reduce or eliminate the number of women it hired as paramedics.

         Second, Title VII prohibits employment practices that have a disproportionately adverse impact on employees with protected characteristics, even if the impact is unintended. See id. This is disparate impact. Employers can defend against a disparate-impact claim by demonstrating that the challenged practice is job-related for the employee's position and consistent with business necessity. 42 U.S.C. § 2000e-2(k)(1)(A)(i). Even if the employer establishes this, however, an employee can still prevail by proving that the employer has rejected an available alternative job practice that (1) results in a less disparate impact, and (2) serves the employer's legitimate needs. Ricci, 557 U.S. at 578 (citing 42 U.S.C. §§ 2000e-2(k)(1)(A)(ii), (C)). Chicago does not dispute that its skills test has an adverse impact on women. As Chicago admits, the passing rate for women is about 60% of the passing rate for men. The parties dispute, however, whether the test is job-related and consistent with business necessity.

         When reviewing claims that a business practice is insufficiently related to a business necessity, we bear in mind that "'[c]ourts are generally less competent than employers to restructure business practices, and unless mandated to do so by Congress they should not attempt it.'" Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 999 (1988) (quoting Furnco Constr. Corp. v. Waters, 438 U.S. 567, 578 (1978)).

         A. The Disparate-Treatment Claims: Jury Instruction 24

         The plaintiffs begin by appealing the jury instruction on their disparate-treatment claims. We review jury instruction challenges de novo. Lewis v. City of Chi. Police Dep't, 590 F.3d 427, 433 (7th Cir. 2009). District courts have substantial discretion in how to precisely word jury instructions, provided that the final result, read as a whole, is a complete and correct statement of the law. Id. We only reverse when jury instructions are so misleading or confusing that they prejudice a party. Id. Though we strive for common-sense readings of jury instructions, and we avoid nitpicking, we also recognize the importance of getting jury instructions right. See id. Even when a party fails to object to a jury instruction, a mistaken instruction is preserved for plain-error review if it impacts "substantial rights." Fed.R.Civ.P. 51(d)(2).

         In giving Jury Instruction 24, the district judge relied on our ruling in Matthews v. Wakesha County, 759 F.3d 821 (7th Cir. 2014). That case is distinguishable. There, Bernadine Matthews applied for employment as an Economic Support Specialist or Supervisor in Waukesha County, Wisconsin. Because she did not satisfy the minimum requirements for either job, she never received a job offer. Matthews eventually sued Waukesha County for racial discrimination. She argued that she should be allowed to bring a Title VII disparate-treatment claim based, not on evidence of racial discrimination against her in particular, but on statistics indicating that racial discrimination exists against blacks in general. This is the argument we rejected in Matthews, where we explained that she "would need to present evidence indicating that racial discrimination was the employer's standard operating procedure-the regular rather than unusual practice." Id. at 829. This is why we stated that "'evidence of a pattern or practice can only be collateral to evidence of specific discrimination against the plaintiff.'" Id. In Matthews, the plaintiff failed to present any disparate-treatment claim at all.

         In contrast, the plaintiffs in this case argue that Chicago created a new standard operating procedure, with the specific intention of reducing or removing women from among its new paramedic hires. They do not rely on generalized claims of statistical bias against women; instead, they argue that there was no legitimate professional or safety need for Chicago to implement this particular skills test. These arguments place Ernst and her fellow plaintiffs in a different category than Matthews. Whether or not they should win, they at least presented a proper disparate-treatment claim, as indicated by the district court's denial of summary judgment. At trial, the plaintiffs also presented enough evidence to at least support a correct instruction on disparate treatment.

         Here, the jury should have been instructed on the plaintiffs' burden of proving that Chicago was motivated by anti-female bias, when Chicago created the entrance exam that caused these plaintiffs not to be hired. See Ricci, 557 U.S. at 577. Instead, jurors were instructed on a different burden, which failed to address Chicago's motive for creating the skills test: "To determine that a Plaintiff was not hired because of her gender, you must decide that the City would have hired the Plaintiff had she been male but everything else had been the same." This instruction focused on gender as a factor in the specific decisions not to hire these five plaintiffs, without expressly stating the mandatory question: whether Chicago had an anti-female motivation for creating its skills test. The magistrate judge's version of Instruction 24 more accurately reflected Title VII's focus on whether there was a discriminatory motive behind Chicago's conduct. See id.

         This legal error would be enough to establish prejudice, but the record goes a step further. It shows that the jurors saw this instruction as the pivotal issue before them, particularly when they sent a note stating that "[t]he jury cannot deliberate further without a response to our question." Only four minutes after the district judge instructed them to take Instruction 24 at face value, they returned a defense verdict. Under these circumstances, we must remand the disparate-treatment claims for a new trial with proper instruction, namely, the magistrate judge's version of Jury Instruction 24.

         B. The Disparate-Impact Claims: Validating ...


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