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McReynolds v. Sodexho Marriott Services

June 27, 2002

CYNTHIA CARTER MCREYNOLDS, ET AL., PLAINTIFFS,
v.
SODEXHO MARRIOTT SERVICES, INC., DEFENDANT.



The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge

MEMORANDUM OPINION

In General Telephone Co. v. Falcon, *fn1 the Supreme Court ruled that "a Title VII class action, like any other class action, may only be certified if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23[] have been satisfied." Id. at 161. In accordance with that admonition, the parties in this case, a proposed class action brought under Title VII of the Civil Rights Act of 1964 ("Title VII"), as amended, 42 U.S.C. § 2000e, et seq., have submitted nearly 150 pages of pleadings and nine volumes of exhibits. Upon consideration of this comprehensive record, the Court concludes that plaintiffs have fulfilled the requirements of Fed. R. Civ. P. 23(b)(2) with respect to the liability phase of the case, and their motion for class certification will therefore be granted to that extent.

BACKGROUND

I. Sodexho's Organizational Structure

The ten named plaintiffs, who are also the proposed class representatives, are current and former employees of defendant Sodexho Marriott Services, Inc. ("Sodexho"). Sodexho is the largest food and facilities management corporation in North America, with approximately 110,000 employees at 5,000 different client worksites, and over $4.7 billion in revenue last year. Sodexho was formed on March 27, 1998, from the merger of Marriott Management Services ("MMS"), a division of Marriott International, Inc., and Sodexho U.S.A. ("SUSA"), a branch of the French corporation Sodexho Alliance, S.A. *fn2 At the time of the merger, MMS employed approximately three times as many people as SUSA. (Def. Ex. 2, Declaration of Diana Newmier ("Newmier Decl.") ¶¶ 4-5.)

The parties dispute the nature of Sodexho's organizational structure. However, because the allegations in the complaint are presumed true for purposes of a motion for class certification, In re Lorazepam & Clorazepate Antitrust Litigation, 202 F.R.D. 12, 14 (D.D.C. 2001), appeal denied, 298 F.3d 98 (D.C. Cir. 2002); Stevelman v. Alias Research Inc., 2000 WL 888385, at *1 (D. Conn. June 22, 2000) (citing Shelter Realty Corp. v. Allied Maintenance Corp., 574 F.2d 656, 661 n.15 (2d Cir. 1978)); Johnson v. Aronson Furniture Co., 1998 WL 641342, at *2 (N.D. Ill. Sept. 11, 1998) (citing Johns v. DeLeonardis, 145 F.R.D. 480, 482 (N.D. Ill. 1992)), the Court will assume the facts as set forth by plaintiffs.

According to the complaint, Sodexho is separated into six divisions - Corporate Services, Health Care, Campus Services, *fn3 School Services, Canada, and Laundry - of which the first four are the largest. (Complaint ¶ 17; Pl. Mem. at 3.) The primary responsibility of most employees in the Corporate Services, Health Care, Campus Services, and School Services divisions is to provide food and facilities management services to their clients, and the names of these divisions reflect the nature of the clients' businesses rather than the services that Sodexho provides to them. *fn4 (Pl. Mem. at 3; Def. Opp. at 6.) Laundry Services cleans linens and uniforms for health care and lodging clients. *fn5 Most Sodexho employees work on the premises of their clients. These positions are known as "in-unit" or "operations" jobs. (Complaint ¶ 18.) The highest in-unit position is the Director or General Manager of a client facility. (Id.) The promotional pool for managerial positions is company-wide, and managers apply for and receive promotions across divisions. (Pl. Ex. 4, Deposition of Henry Watkis ("Watkis Dep.") at 67-68.) However, each division maintains its own human resources department, and most promotion decisions are made and reviewed entirely within each unit. (Def. Ex. 1, Declaration of Ollie Lawrence ("Lawrence Decl.") ¶¶ 21-23.) *fn6

A smaller group of Sodexho employees works at its corporate offices and other locations as supervisors or in areas such as sales, human resources, or finance. Managers in these areas are said to work "above the unit," and "generally have greater authority and receive higher salary, benefits, and perquisites than General Managers." (Answer ¶ 19.) In fact, General Managers typically report directly to an above-the-unit manager known as a District Manager. (Id.)

Until late 1998, Sodexho organized its salaried positions by grades, which ranged from 40 to 64. Most in-unit managers occupied grades in the 40s, while General Managers held grades 51 to 53, and District Managers held grades 51 to 54. Most General Managers were grade 51, and most District Managers were grade 52 or 53. (Pl. Ex. 9, Expert Report of Bernard Siskin ("Siskin Rep.") at Tables 1-2.) In late 1998, Sodexho reclassified its salaried positions using a broader band system, and multiple grades under the former system were collapsed into a single band. That system is still in effect today. In-unit managers now occupy bands 75 to 77; lower out-of-unit employees hold bands 85 to 88; and above-the-unit positions are bands 89 to 95. (Siskin Rep. at 2.)

II. Sodexho's Promotion Policies and Practices

Sodexho is a corporate giant, and as a result, its personnel decisions are largely decentralized. As defendant notes, "each manager at Sodexho has discretion to decide what criteria to apply in making decisions involving promotions and other personnel actions." (Def. Opp. at 12-13; see Def. Ex. 28, Deposition of Cynthia Carter McReynolds ("McReynolds Dep.") at 46-54.)

In 1994, in response to "a multi-million dollar discrimination suit," MMS implemented a formal system for salaried positions called the Marriott Career Management System ("MCMS"). (Pl. Ex. 13.) Under MCMS, employees in any division could apply for job vacancies throughout the country with the consent of their supervisor. This posting process applied company-wide, and employees could apply for jobs in other divisions. *fn7 (Pl. Ex. 12, Deposition of William Anstee ("Anstee Dep.") at 28, 133; Pl. Ex. 16, Deposition of George Koenig ("Koenig Dep.") at 90-91.) This system survived the 1998 merger, and in 2000, Sodexho modified its posting system using a web-based program so that employees could immediately apply for job vacancies without their supervisors' consent. (Pl. Ex. 19, Deposition of Dolores Coe ("Coe Dep.") at 201-02; Complaint ¶ 20.) This system is known as "Career Center" or "Talent Point." (Id.) In other material aspects, the promotion system has not changed since 1994.

However, MCMS's role in the promotion practices is somewhat unclear. A February 23, 1999 Sodexho internal memorandum summarized the problems with MCMS that existed at the time. In particular, the memo noted that the system was "[v]iewed as customer unfriendly, not time efficient to use," and that there was "[n]o adequate system for follow up to candidates who post." (Pl. Ex. 18, at 2.) The company's own statistics bear this out. In 1998, for instance, 5,215 positions were posted on MCMS, but only 1,671 were filled, while 2,595 were closed or deleted. (Id. at 3.) Moreover, at the time of the 1999 memorandum, Sodexho was still trying to determine "[w]hat positions should be posted [and h]ow long [positions should] be posted for." (Id.)

Irrespective of how an employee applies for a promotion, defendant's promotion decision-making process is decentralized and allows unfettered managerial discretion. (Def. Opp. at 12.) According to William Anstee, Sodexho's witness on its promotion process, the hiring manager has complete discretion to decide whom to interview for each position. (Anstee Dep. at 81.) There are no company rules or guidelines regarding the promotion process, and there are no requirements to take any notes during the interview process, to rank applicants, or to explain the selection. (Id. at 90-92.) After a hiring manager makes his selection, he "would take that decision to whoever their boss was [and] say, hey, I've selected candidate A. . . . And then the district manager along with the human resource manager [puts] together an offer if that, indeed, was what it was." (Id. at 92.) In short, Sodexho has "no company guidelines or fixed criteria or anything . . . to follow in making those decisions." (Id. at 182.)

III. Plaintiffs' Allegations of Discrimination

Plaintiffs challenge these promotion practices as they relate to high-level managerial positions at or above the level of an above-the-unit manager. (Complaint ¶ 22.) Specifically, they contend that the system for filling vacant managerial slots is characterized by three common elements: (1) positions are filled without being posted at all; (2) when jobs are posted, favored employees are preselected for the positions; and (3) when "more than one person is actually considered for an opening, hiring managers have virtually total discretion in their promotion decisions because they are not given job-related or objective criteria and are not required to document the reasons for their decisions, making them unreviewable." (Pl. Mem. at 7.) Plaintiffs allege racial discrimination under both disparate treatment and disparate impact theories, and seek to certify a class

of all African-Americans who are or were salaried employees of Sodexho [] at any time from March 9, 1998, to the present, and who have held or sought to obtain (1) an upper-level managerial, supervisory, or professional position (above-the-unit or comparable level of responsibility) or (2) a job that would lead to such a position, and who have been, continue to be, or may in the future be adversely impacted by Sodexho's racially discriminatory policies and practices affecting promotions or advancement. (Pl. Mot. at 1.)

This system is discriminatory, according to plaintiffs, because high-level managers at Sodexho are predominantly white, and white employees are pre-selected for and promoted to managerial positions at the expense of more qualified African-American applicants, who receive no response to their job inquiries. To support this argument, plaintiffs offer both statistical and anecdotal evidence, including the testimony of a senior-level white manager who charges that Sodexho has intentionally discriminated against African-American employees in its promotion practices.

Although the parties have extensively briefed the merits of plaintiffs' Title VII claims at this class certification stage, an abbreviated survey of the plaintiffs' evidence that is relevant to the instant motion is set forth below. As noted, this evidence is the traditional combination of "anecdotal evidence of discrimination in combination with statistical evidence of minority under-representation." Allen v. Chicago Transit Authority, 2000 WL 1207408, at *10 (N.D. Ill. 2000).

A. Anecdotal Evidence of Discrimination

Plaintiffs offer numerous anecdotes of discrimination from the testimony of high-level Sodexho officials. For example, they cite the testimony of Sodexho's top official for equal employment opportunity, who stated that the number of African-American promotions "indicated a problem" and "would be considered low" (Pl. Mem. at 15; Watkis Dep. at 202-03); the President of Sodexho's Health Care Division, who, in describing the lack of women among the 100 District Managers in that unit, noted, "Well, you think that's bad, I think Henry [Richardson] is the only black one we have" (Pl. Mem. at 16; Pl. Ex. 26, Deposition of Kelly Hymes ("Hymes Dep.") at 312-13); the deposition testimony of a named plaintiff, who recalled the statement of a Sodexho Human Resources Manager at a conference that there was no point in training other Human Resources Managers to recruit more African Americans, because "our district managers won't hire [black people]," a statement with which others at the conference -including a Corporate Vice President - allegedly agreed (Pl. Mem. at 18-19; Pl. Ex. 28, Deposition of Tasha Hardy ("Hardy Dep.") at 163, 208-09); and the comment of Brenda Hendrickson, an African-American supervisor at the company, that it is "common practice at Sodexho for white managers to refer to African Americans as 'you people' or similar phrases." *fn8 (Pl. Mem. at 20; Pl. Ex. 7, Deposition of Brenda Hendrickson ("Hendrickson Dep.") at 113-14, 117-19.)

Plaintiffs also offer the testimony of Kelly Hymes, a white former District Manager, who testified to episodes of preselection of white managers by white decision-makers, the use of the posting process as a "formality," and the derogatory statements about African-Americans attributed to a white upper-level manager, who allegedly said that "African Americans were genetically inferior to whites, and genetically most of the criminals in the world were African Americans, and that they didn't deserve to have promotions." (Pl. Mem. at 19; Hymes Dep. at 95-101, 179, 184.)

In addition, plaintiffs contend that Sodexho has ignored warnings to remedy this discrimination, but instead, it has tried to cover it up. For example, plaintiffs allege that beginning in 1995, MMS executives were made aware of the lack of African-American above-the-unit managers by members of the company's diversity roundtable group, but did nothing to remedy the problem. (Pl. Ex. 8, Deposition of Chip Moss ("Moss Dep.") at 200-02.) They also cite the deposition testimony of Ellen Early, a putative class member, who stated that a white Sodexho executive refused to let her look at the company's workforce composition data during a Sodexho diversity meeting. "[T]he executive said to me that he could not fax the information to me. And when I stated why, he said, well, because the numbers really don't look very good . . . . He said, we're not - we're not letting any of this out . . . ." (Pl. Ex. 25, Deposition of Ellen Early ("Early Dep.") at 242-43.)

B. Statistical Evidence of Minority Under-representation

The parties devote much of their time to jousting over the merits of the analyses of their respective statistical experts. While this Circuit has not squarely addressed the standard for evaluating the parties' competing statistical evidence on a motion for class certification, it has recognized that a trial court should accept plaintiff's statistical evidence as true at this stage. See, e.g., Wagner v. Taylor, 836 F.2d 578, 594 (D.C. Cir. 1987) (accepting as true plaintiff's proferred statistics for purpose of motion for class certification, and holding that "[p]laintiffs seeking class certification are not required to prove the merits of their cases, but their presentations must be specific enough to allow the court to discern at least a rough outline of a class that properly can be certified"); Gonzalez v. Brady, 136 F.R.D. 329, 333 (D.D.C. 1991) (accepting plaintiffs' statistics as true for purposes of the Rule 23 inquiry). Moreover, the Second Circuit has considered this issue and held that, while "[a] district court must ensure that the basis of the expert [statistical] opinion is not so flawed that it would be inadmissible as a matter of law, . . . [it] may not weigh conflicting expert evidence." In re Visa Check/Mastermoney Antitrust Litigation, 280 F.3d 124, 135 (2d Cir. 2001). In short, "this sort of statistical dueling is not relevant to the certification determination." *fn9 Caridad v. Metro-North Commuter Railroad, 191 F.3d 283, 292 (2d Cir. 1999) (internal quotation omitted). This doctrine has been adopted by other courts around the country. See, e.g., DeLoach v. Philip Morris Cos., 2002 WL 559453, at *13 (M.D.N.C. Apr. 3, 2002); Wilfong v. Rent-A-Center, Inc., 2001 WL 1728985 (S.D. Ill. Dec. 27, 2001). Nonetheless, an examination of the statistics proferred by plaintiffs is pertinent to the question of class certification. *fn10 Wagner, 836 F.2d at 592-94.

Plaintiffs' statistical expert, Dr. Bernard Siskin, conducted two separate analyses of Sodexho's promotion system. In his first study, he analyzed promotions between grades and bands. Siskin noted that as of January 2001, only 10 of 306 District Managers (3.3 percent) were African-American, despite the fact that 13.3 percent of Unit and General Managers were black. (Siskin Rep. ¶ 3.) Moreover, only 18 out of 692 above-the-unit jobs, or 2.6 percent, were held by African Americans as of September 2000. (Pl. Ex. 43.) Examining Sodexho workforce composition data since 1995 *fn11 and controlling for race and seniority, Siskin found that African Americans received 143 fewer promotions than they would have in a non-discriminatory system. (Siskin Rep. ¶ 7.) Siskin determined that the likelihood of this occurring without race being a factor was less than one in 82.7 billion. (Id. ¶ 33.) He also concluded that African-American employees were stuck at the lowest levels of management for their seniority. "If African American and white management employees who were similarly situated with respect to seniority had been equally likely in the year 2001 to be at a given band, there would be 174 more African Americans at bands 76 and 77, 27 more African Americans at bands 88 and 89, and 42 more African Americans at bands 90 and above." (Id. ¶ 24.) Siskin found the standard deviations for these disparities to be 8.58, 4.42, and 5.40, respectively. *fn12 (Id.) Next, Siskin examined the effect of these disparities on salaries, and determined that the typical African-American Sodexho employee received $4,934 per year less than his white counterpart, at a standard deviation of 6.16. (Id. ¶ 40.)

Finally, Siskin found that Sodexho segregates its employees by race. Plaintiffs' statistics indicate that 596 of Sodexho's 878 units have no black managers, and that nearly two-thirds of all African-American managers in the remaining 282 units are concentrated in fewer than ten percent of those accounts. (Watkis Dep. at Exs. 34, 37.) Siskin determined that black managers are two-to-three times as likely as white managers to report to an African-American District Manager (Siskin Rep. ¶ 39), and that the statistical evidence supports testimony that African-American managers are disproportionately assigned to "black accounts." *fn13 (Id. ¶ 4; Hymes Dep. at 389-90.)

In his second study, Siskin also examined within-band promotions. With the addition of this new data, Siskin found that the shortfall in promotions for African Americans nearly doubled, rising from 143 to 265. *fn14 (Siskin Supp. Rep. ¶ 6.) Siskin also analyzed the study of plaintiff's statistical expert, Dr. Joan Haworth, who had examined Sodexho's promotion of African-American employees by division. Siskin found that there was a shortfall in each division, and that even though these shortfalls varied from division to division, the disparity was statistically insignificant. Siskin therefore concluded that the discrimination was company-wide, and that the level of bias did not statistically vary by division. (Id. ¶¶ 22-23.) "In sum," Siskin wrote, "the pattern of shortfalls in each division is consistent with a common promotion process, and hence supports the argument that there is a common discriminatory company-wide promotion process." (Id. ¶ 23.)

C. The Allegations of the Named Plaintiffs

In addition to their classwide allegations of discrimination, each of the ten named plaintiffs has set forth individual claims of racial discrimination in the complaint. Although concentrated primarily in the Health Care unit, the named plaintiffs also represent the Education, School Services, and Corporate Services divisions of Sodexho. *fn15 In addition, while most of the named plaintiffs worked for Sodexho in the District of Columbia, Virginia and Maryland, one was employed in California, and another is a resident of Georgia. All of the named plaintiffs worked at MMS ...


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