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ARNOLD v. POSTMASTER GEN.

August 13, 1987

Clyde J. Arnold, Jr., et al., Plaintiffs,
v.
Postmaster General, Defendant; Charles Ray Netherton, et al., Plaintiffs, v. Postmaster General, Defendant



The opinion of the court was delivered by: RICHEY

 This class action arises out of plaintiffs' challenge to the senior-first rule ("Rule") of the United States Postal Service's Career Path Policy ("CPP" or "Policy"). Pursuant to the senior-first rule, the Postal Service directs the most senior and oldest level 23 postal inspectors from the cities, towns and hamlets across the land to transfer to New York City and thirteen other major metropolitan areas. *fn2" Directing the most senior level 23 postal inspectors to transfer to major metropolitan areas adversely affects the older postal inspectors because the cost of living and housing in New York City and the other thirteen major metropolitan areas is significantly higher than in non-major metropolitan areas. Defendant knew that the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621-634, prohibits them from implementing policies, such as the Career Path Policy and its senior-first rule, that discriminate against persons because of their age. Nevertheless, defendant began to systematically transfer the most senior and oldest level 23 postal inspectors to major metropolitan areas on December 1, 1980.

 Plaintiffs successfully advance two theories in support of their claim that the senior-first rule violates the ADEA. First, plaintiffs establish that the senior-first rule had a disparate impact on postal inspectors 40 years of age and older. In its defense, defendant unpersuasively argues that the senior-first rule was implemented out of an alleged business necessity to alleviate the shortage of experienced postal inspectors in major metropolitan areas. Plaintiffs convincingly rebut defendant's alleged business necessity defense correctly arguing that defendant's need for experienced postal inspectors could be met by using a non-discriminatory random system.

 Plaintiffs' second claim is that the senior-first rule results in the disparate treatment of postal inspectors 40 years of age and above. Plaintiffs' statistical and antedotal testimony clearly raises an inference of discrimination on the basis of age. Defendant fails to proffer a legitimate, nondiscriminatory business reason for reassigning the most senior and older level 23 postal inspectors to the largest and most expensive cities. But, even if defendant's reason was legitimate and nondiscriminatory, plaintiffs proved that defendant's reason was a pretext to hide its discriminatory animus toward older postal inspectors.

 In addition to specifically addressing plaintiffs' two theories of disparate impact and disparate treatment, defendant contends that some of the plaintiffs waived their rights to challenge the senior-first rule under the ADEA when they were arbitrarily transferred under the Career Path Policy. Defendant says that these plaintiffs waived their rights by agreement. Plaintiffs properly assert that no such agreement was made and even if an agreement was made, it is void and unenforceable.

 Finally, defendant moves to dismiss plaintiffs Brady and Rittiner for failing to comply with the ADEA's notice requirements.

 By Order of this Court, the trial was bifurcated into a liability phase and a remedy phase. On May 20-22, 1987, the Court heard the liability phase of this case. Upon thorough consideration of the record, including the testimony, the exhibits, and the Court's judgment as to the credibility of the witnesses herein, the Court certifies this case as a Rule 23(b)(2) class action, grants defendant's motion to dismiss plaintiffs Brady and Rittiner as class representatives, but denies defendant's motion to dismiss Brady and Rittiner as class members, and finds that the plaintiffs did not waive their rights under the ADEA when they were transferred pursuant to the senior-first rule. More importantly, the Court finds that plaintiffs have proved that the senior-first rule violates the ADEA under both a theory of disparate impact and disparate treatment. Accordingly, the Court will issue an order of even date herewith consistent with the Opinion herein.

 A. The United States Postal Inspection Service

 There are approximately 1900 postal inspectors located in the United States and Puerto Rico responsible for protecting the United States mail, postal employees and mail system. These postal inspectors are part of the Postal Inspection Service, which is the law enforcement and audit arm of the United States Postal Service. See 39 U.S.C. §§ 404(a)(7) & 2008(d). Incident to its power to investigate criminal offenses, the Postal Inspection Service is charged with enforcing approximately 65 separate statutory sections of the United States Code. See Defendant's Exhibit ("DX") 3.

 The Postal Inspection Service is administered by the Chief Postal Inspector, who reports directly to the Postmaster General. From 1979 through 1985, Kenneth Fletcher was Chief Postal Inspector until replaced by Charles Clauson, who holds the position today. Reporting to the Chief Postal Inspector are Assistant Chief Postal Inspectors, who oversee Regional Chief Postal Inspectors. Each region is comprised of Divisions headed by an Inspector-in-Charge. In 1982, the 17 Divisions were reorganized to form 39 Divisions. Each division is further divided into domiciles.

 Except for the period between 1970 and 1984, postal inspectors have been recruited from within the Postal Service, and after 1984 have been required to have a college degree. See DX 7. Postal Inspection Service regulations require postal inspectors to relocate when lawfully and legitimately dictated by the needs of the Service. See DX 10. To be hired, each postal inspector must state that he or she is willing to relocate pursuant to a lawful policy to anyplace in the continental United States, Puerto Rico, Alaska and Hawaii. See DX 7 & 11A-2. Importantly, these relocation requirements do not mention the Age Discrimination in Employment Act or that a transfer policy, such as the senior-first rule, must comply with the ADEA, or that signing such statements constitutes a waiver of any rights under the ADEA. See id.

 After 11 weeks of training in Potomac, Maryland, see DX 7, postal inspectors spend one year as a level 17 postal inspector. They then spend one year at level 19 and two years at level 21 before being promoted to level 23. *fn3" The primary difference between level 21 and level 23 does not stem from familiarity with the various tasks postal inspectors perform, but from the procedure by which postal inspectors are assigned work. Level 21 postal inspectors receive miscellaneous assignments spanning four functional areas, which include fraud and prohibited mailings, audit, external crimes (crimes committed against the Postal Service by non-employees), and internal crimes (crimes committed against the Postal Service by employees). Thus, level 21 postal inspectors are familiar with all four functional areas. Level 23 postal inspectors, however, specialize in one functional area, and receive assignments only in that one area.

 B. The United States Postal Inspection Service's Career Path Policy

 In response to a shortage of experienced postal inspectors in the fourteen major metropolitan areas, particularly New York City, the United States Postal Inspection Service instituted the Career Path Policy on December 1, 1980. See Plaintiffs' Exhibit ("PX") 16. The Policy has three means of effecting five year reassignments to major metropolitan areas -- voluntary level 23 lateral reassignments, voluntary level 21 lateral reassignments and involuntary directed transfers of the most senior level 23s in the nation. See PX 16. Plaintiffs challenge only this latter component of the Policy otherwise known as the senior-first rule because it transfers the older postal inspectors first. To fully understand why the senior-first rule violates the ADEA and why defendant does not have a legitimate need for the senior-first rule it is necessary to consider the aspects of the Career Path Policy not challenged by plaintiffs.

 The first aspect of the Policy not challenged here is the voluntary level 23 lateral reassignment. A voluntary level 23 lateral reassignment occurs when a level 23 postal inspector volunteers to serve five years in a major metropolitan area with a vacancy. If more than one level 23 postal inspector bids on a given vacancy, the postal inspector who bid for the vacancy first is awarded the lateral reassignment, regardless of the relative seniority of the competing bidders. See PX 16.

 The second aspect of the Career Path Policy which is not challenged is that permitting voluntary level 21 lateral reassignments. If a vacancy is not filled by a voluntary level 23 lateral reassignment, the Postal Inspection Service advertises the vacancy among level 21 postal inspectors. Level 21 postal inspectors may then volunteer for a lateral reassignment as a level 21 postal inspector or bid on a level 23 vacancy. See Defendant's Proposed Findings of Fact ("DF") para. 38. When more than one level 21 postal inspector bids on a level 23 vacancy, the most qualified bidder is reassigned. See PX 16.

 The third aspect of the Career Path Policy that is being challenged here can be described as follows. If a vacancy is not filled by a voluntary level 21 or level 23 lateral reassignment, the Postal Inspection Service directs the most senior eligible level 23 postal inspector in the nation to serve five years in the major metropolitan area with the vacancy. See PX 16. Although level 23 postal inspectors specialize in one of four functional areas, the senior postal inspector's area of expertise is not considered when directing transfers. Seniority is the sole consideration in the directed transfers under attack in the case herein. As indicated, plaintiffs challenge this senior-first rule of the directed transfer component of the Policy.

 The Career Path Policy has certain exemptions which are also not challenged here. These exemptions are relevant because they determine whether a postal inspector is subject to the senior-first rule. Whether a postal inspector is eligible to receive a directed transfer depends on whether he or she appears on the directed transfer list of level 23 postal inspectors or is exempt from that list. All level 23 postal inspectors are ranked on the directed transfer list in order from the most senior to the least senior with the following exceptions: 1) postal inspectors within five years of retirement eligibility are permanently exempt; 2) postal inspectors appointed before December 15, 1980 are permanently exempt (this would have exempted all 39 named plaintiffs but for the fact that this exemption was not created until September 23, 1985, after this litigation began); 3) postal inspectors who have physically relocated to a new residence as a result of an official reassignment or promotion are temporarily exempt for two years, and if reassigned to Hawaii, Alaska, or Puerto Rico, are temporarily exempt for three years; 4) postal inspectors currently assigned to major metropolitan areas are temporarily exempt as long as they are assigned to the major metropolitan area; and 5) postal inspectors who have served five years in a major metropolitan area at level 23 or level 24 are permanently exempt. See PX 16. As postal inspectors become exempt or their temporary exemptions expire, the composition of the pool of postal inspectors eligible for directed transfers changes. Consequently, the exemptions cause a particular postal inspector's rank on the directed transfer list to change from day to day.

 II. PROCEDURAL HISTORY

 Three groups of plaintiffs filed requests for administrative relief with defendant and later with the Equal Employment Opportunity Commission ("EEOC"). The Court will describe those three groups and their status. This description is set forth so that the chronology of this case can be understood, but the net effect is that all three groups are part of the certified class in this case.

 Almost two years after the implementation of the Career Path Policy in December of 1980, Charles Netherton filed a class action on behalf of himself and other similarly situated Postal Inspectors in the United States District Court for the Middle District of Florida. See Netherton v. United States Postal Service, Civil Action 82-504-ORL-CIV-R (filed Sept. 28, 1982 M.D. Fla.). Upon filing the lawsuit, Mr. Netherton moved for a temporary restraining order to enjoin the Postal Service from directing him to transfer to New York City. On October 1, 1982, Mr. Netherton's motion was denied in that court. Subsequently, defendant filed a motion to dismiss or for summary judgment, which on June 17, 1983, was also denied. The Netherton case was then stayed pending the conclusion of plaintiffs' administrative proceedings before the Equal Employment Opportunity Commission ("EEOC").

 In July of 1983 the complaints examiner issued a decision in the Netherton case recommending that the Career Path Policy violated the ADEA. On August 30, 1983, the Postal Service rejected the recommendation of the complaints examiner and found that the Policy did not violate the ADEA. A motion to lift the stay was filed by defendant on September 6, 1983 and denied on October 12, 1983. On September 20, 1983, the Netherton plaintiffs filed a consolidated appeal with the EEOC of the Postal Service's final decision.

 On March 25, 1985, the EEOC dismissed the Netherton plaintiffs' appeals because the United States District Court for the Middle District of Florida had retained jurisdiction over their claims. Defendant then moved to dismiss the second group of plaintiffs' appeals to the EEOC. Defendant's motion is still pending before the EEOC. Cf. Grubbs v. Butz, 514 F.2d 1323 (D.C. Cir. 1975) (any action taken pursuant to a regulation is independent of an employee's right to file a civil action and can be simultaneous with the civil action).

 During this time, postal inspectors Arnold, Bell, D. Brown, Garland, LeBlanc, Nelson and Syverson filed administrative complaints challenging the senior-first rule as a violation of the ADEA. In September of 1984, the complaints examiner again issued a recommended decision that the Policy violated the ADEA. Again, the Postal Service rejected the complaints examiner's recommendation. On October 29, 1984, this second group of postal inspectors appealed the Postal Service's final decision to the EEOC. That appeal is still lying dormant before the EEOC. Cf. Grubbs v. Butz, 514 F.2d 1323 (D.C. Cir. 1975) (any action taken pursuant to a regulation is independent of an employee's right to file a civil action and can be simultaneous with the civil action).

 Meanwhile, a third group of plaintiffs, Bottita, R. Brown, Hill, Hoffman, Hurlbut, Jones, Kamm, Kennerson, Lingle, Manning, Martinez, McClelland, Parkinson, Post, Reinardy, Scott and Thompson, also filed administrative complaints contesting the senior-first rule on the ground that it violates the ADEA. In a decision dated May 20, 1985, the Postal Service cancelled the Administrative complaints of this third group of plaintiffs. These plaintiffs' subsequent appeals to the EEOC are also still pending. Cf. Grubbs v. Butz, 514 F.2d 1323 (D.C. Cir. 1975) (any action taken pursuant to a regulation is independent of an employee's right to file a civil action and can be simultaneous with the civil action).

 On June 11, 1985, the Netherton plaintiffs moved the United States District Court for the Middle District of Florida to dismiss their case without prejudice. Defendant opposed plaintiffs' motion and moved to lift the stay. On June 25, 1985, plaintiffs' motion to dismiss was denied and defendant's motion to lift the stay was granted. On or about September 4, 1985, defendant moved the United States District Court for the Middle District of Florida to certify the Netherton case as a class action. That motion remained pending until the parties consented to a conditional class certification at the May 18, 1987 pretrial conference before this Court.

 On August 13, 1985, the second and third groups of plaintiffs filed suit in the United States District Court for the District of Columbia. See Arnold v. United States Postal Service, 649 F. Supp. 676 (D.D.C. 1986). Four additional plaintiffs joined the second and third groups of plaintiffs in the Arnold lawsuit -- Rittiner, Brady, Jas and Cyryt. Defendant's ...


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