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McLAURIN v. NATIONAL RAILROAD PASSENGER CORP.

March 30, 2004.

LEON McLAURIN, et al., Plaintiffs,
v.
NATIONAL RAILROAD PASSENGER CORPORATION ("AMTRAK"), Defendant



The opinion of the court was delivered by: EMMET SULLIVAN, District Judge

MEMORANDUM OPINION

I. Introduction

On November 2, 1999, this Court approved a final Consent Decree to resolve an employment discrimination class action involving African American management employees at Amtrak. The Consent Decree provides for a compensation study to be performed. If the compensation study shows that there are disparities between the salaries of African American managers and white managers to the detriment of African American managers, the Consent Decree provides for salary adjustments to be made.

  Currently, the compensation study has been completed and Amtrak has increased the salaries of some African American class members. The Class plaintiffs have filed a Motion for Enforcement of the Consent Decree. Amtrak claims that it has completed all that it agreed to do under the Consent Decree. In Page 2 addition, Amtrak has filed an uncontested Motion requesting that the Court accept its response to plaintiffs' motion under seal because it contains statistical analyses based on the financial history of persons who are not named plaintiffs.

  II. Factual Background

  Section IV.D. of the Consent Decree provides that Amtrak is to hire a third party consultant to study the compensation of Amtrak's management employees. In addition, the Consent Decree states:
If the compensation study shows that there are disparities in salaries between African American Management employees and white employees in comparable positions, to the disadvantage of African American Management employees, Amtrak will increase the compensation of African American Management employees to eliminate racial disparities.
§ IV.D.2.

  Amtrak hired Dr. Jessica Pollner to perform the compensation analysis. As permitted by the Consent Decree, Class Counsel met with Dr. Pollner as she was developing her analysis. Dr. Pollner used a multiple regression analysis to determine a "predicted salary" for each employee. Dr. Pollner then compared each employee's predicted salary to his or her actual salary. She found that 56% (238 of 427) of African American employees were paid less than their expected salaries and 44% (189 of 427) were paid more than their expected salaries. Moreover, 5.4% of Page 3 African Americans (28 of 427) were significantly underpaid at the 90% confidence level and 2.3% were significantly underpaid at the 95% confidence level. In the end, Dr. Pollner found that white management employees were paid about $455,000 per year more than their African American counterparts.

  Amtrak takes the position that the Consent Decree requires Amtrak to adjust only the compensation of those class members for whom the disparity between their salaries and their predicted salaries are statistically significant. Amtrak also takes the position that the Consent Decree requires it to adjust only the salaries of those few class members to the point where the discrepancies between their actual compensation and their predicted salaries are not statistically significant. Amtrak proposed to reduce the disparities by increasing the salary of 28 African American employees by an aggregate of $52,171 per year. This would not make their salaries equal to their predicted salary but it would make the difference between their actual salaries and their predicted salaries statistically insignificant.

  Class plaintiffs objected to Amtrak's position and hired their own expert, who came to contrary findings. Under plaintiffs' expert's analysis, 308 African American managers are underpaid a total of $1,289,000. Page 4

  III. Discussion

  A. All class members paid less than expected are entitled to adjustments sufficient to eliminate the overall disparity.

  It is well-settled that the "scope of a consent decree must be discerned within its four corners." United States v. Armour & Co., 402 U.S. 673, 682 (1971). Moreover, "the construction of a consent decree is essentially a matter of contract law." Citizens For A Better Environment v. Gorsuch, 718 F.2d 1117, 1125 (D.C. Cir. 1983). "Under general contract law, the plain and unambiguous meaning of an instrument is controlling, and the Court determines the intentions of the parties from the language used by the parties to express their agreement." See WMATA v. Mergentine Corp., 626 F.2d 959, 961 (D.C. Cir. 1980); see Lucas v. US Army Corps of Eng'rs, 789 F. Supp. 14, 16 (D.D.C. 1992)("Intent is construed by an objective standard and evidenced from the words of the contract itself.").

  1. Class-wide relief

  Plaintiffs argue that this suit was brought as a class action to address a pattern and practice of discrimination. Patterns of discrimination are usually fashioned out of relatively small disparities suffered by a large number of class members rather than a relatively small number of large disparities. Plaintiffs argue that when a pay discrimination violation is established in an employment discrimination class action, courts fashion remedies that benefit all class members, Page 5 not just those whose individual disparities are great. The Decree refers to "disparities," "salaries," "employees," and "positions" in the plural. Plaintiffs claim that the plural reference is consistent with the class purpose of the lawsuit and class-wide nature of the resolution sought through the Consent Decree.

  Plaintiffs maintain that the Consent Decree requires Amtrak to make salary adjustments necessary "to eliminate any racial disparities" not just statistically significant disparities. § IV.D.2. (emphasis added). Plaintiffs contend that courts determine whether an employer may be liable in a discriminatory pay case by measuring whether there are statistically significant disparities in compensation. If statistical significance is found, courts do not limit relief to elimination of the disparity. Rather, courts adjust compensation to the predicted compensation level based on the non-discriminatory variables in the analysis.

  Defendant argues that statistical significance is a commonly used method for separating irrelevant factors, or random differences, from differences that can be attributed to racial differences. See Rudebusch v. Highes, 2002 U.S. App. LEXIS 24713, at *54 (9th Cir. Dec. 9, 2002). Defendants maintain that the courts and literature agree that an interval around predicted value is the most appropriate way to assess a disparity and that the most commonly accepted interval is 0.05 or two standard Page 6 deviations (the 95% significance level.) Id. Defendant claims that it met its obligations under the Consent Decree when it followed Dr. Pollner's recommendation and adjusted the salary of 28 ...


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