United States District Court for the District of Columbia
March 30, 2004.
LEON McLAURIN, et al., Plaintiffs,
NATIONAL RAILROAD PASSENGER CORPORATION ("AMTRAK"), Defendant
The opinion of the court was delivered by: EMMET SULLIVAN, District Judge
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
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
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
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
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
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,
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
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
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 class members who
were underpaid at the 90% confidence level to within the 90% confidence
level. Defendant asserts that this eliminated any
statistically-identified racial disparity.
In evaluating the four corners of this Consent Decree, the Court finds
that Amtrak's decision to provide relief to only those employees who are
underpaid to a statistically significant degree and only to the point
that the disparity is no longer statistically significant is not
supported by the plain meaning of the Consent Decree. Most strikingly,
the Court has found no mention of statistical significance in the Consent
Decree. While Amtrak claims that statistical significance is a commonly
accepted method for separating irrelevant factors, the fact remains that
there is no contemplation of statistical significance in the Consent
Decree. In writing this Consent Decree, the parties vigorously negotiated
the terms. To allow a party to benefit from stringent terms not
explicitly included in the Consent Decree, even if they are commonly used
in other cases, would be improper.
Here, 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." The plain
meaning of that provision provides that any African American employee who
makes less than her white counterpart should have her salary increased so
that the two employees receive the same salary, not merely a
salary that is no longer statistically significantly different. As the
Consent Decree speculates, the natural way to accomplish this is to
determine the predicted salary for a certain position using the data for
white employees, and then adjust the salary of any African American
employee who does not receive at least the same salary.*fn1 Thus, to
the extent that this has not been done, the Court GRANTS IN PART the
Motion for Enforcement of the Consent Decree.
B. The Court will not Substitute the Analysis of Plaintiffs'
Expert for that of Defendant's Expert
The Consent Decree provides:
Within 60 days of the revisions to the job
descriptions, as set forth in Section IV(E) of
this Decree, Amtrak shall hire an outside
consultant to perform a study . . . Class Counsel
shall have the opportunity to meet with the
consultant before the consultant completes his or
her report to discuss the factors the consultant
intends to take into account in analyzing the
appropriateness of salaries, how the consultant
intends to take those factors into account, and
how the consultant will identify comparable
Def. Mot. App. A. Consent Decree § IV.D.1. Defendant hired Dr.
Jessica Pollner, and, as provided in the Consent Decree, Class
Counsel met with Dr. Pollner. Dr. Pollner considered Class Counsel's
positions on several issues. Plaintiffs then hired Dr. Richard Stanley to
perform an analysis of the issue. Dr. Stanley used a similar multiple
regression analysis but saw three "flaws" in Dr. Pollner's analysis.
Plaintiffs ask that the Court instruct Amtrak to use Dr. Stanley's
Although the parties could have negotiated to each have their own
expert perform an analysis and submit the analyses to the Court, that was
not what the parties bargained to do. For the Court to overlook this
bargained-for-exchange would be to make the terms of the Consent Decree
meaningless. Thus, plaintiffs did not reserve the right to have their own
expert's opinion considered, and the Court refuses to substitute Dr.
Stanley's analysis for that of Dr. Pollner.
While the Court is unwilling to substitute the analysis of plaintiff's
expert for that of the expert specified in the Consent Decree, the Court
will consider the issues plaintiffs raised with Dr. Pollner's analysis.
1. Plaintiffs claim that Dr. Pollner used two "tainted"
In her analysis, Dr. Pollner controlled for several factors, including
EEO category, tenure, tenure squared, job title, SBU, region, an
employee's initial salary, and an employee's salary
band and zone. Plaintiffs believes that Dr. Pollner improperly
controlled for two "tainted variables": an employee's initial salary and
an employee's salary band and zone.
"A `tainted variable' is one whose value is affected by discrimination
and has the effect of concealing disparities due to discrimination."
Butler v. Home Depot, 1997 Dist. LEXIS 16296, at *37 (N.D. Cal.
Aug. 29, 1997).
Defendant asserts that, as stated in Dr. Pollner's declaration, "The
methodology utilized in the Final Report follows a generally accepted
standard among statisticians for studies of disparities in compensation."
Def. Mot. App. B., Ex. 2, ¶ 5. Defendant points out that plaintiffs
never allege that Dr. Pollner's report failed to meet the standards
"generally accepted . . . by compensation specialists," the criteria
specified in the Consent Decree.
A. Initial Salary
Plaintiffs claim that the use of initial salary is improper because it
fails to acknowledge the discrimination in pay at the starting salary.
Plaintiffs assert that controlling for this variable would result in the
systematic deflation of predicted salaries for African American
Plaintiffs maintain that even if initial salary were not a tainted
variable, its use would be suspect without some type of reasonable
adjustment for the passage of time.
In response, defendants argue that initial salary is not a
per se tainted variable. Initial salary is often influenced by
factors not included in the compensation study, including education and
prior experience. Dr. Pollner noted that "Initial salary is also a strong
determinant of current compensation" and "initial salary cannot be
overlooked when modeling current compensation." Def. Mot. App. B, ¶
11. She further concluded that "Dr. Stanley's hypothesis that the initial
salary difference is the result of discriminatory behavior is not
supported by the data." Id. at ¶ 12.
It appears to the Court that the Consent Decree anticipated this issue.
Section IV.D.1 of the Consent Decree states that the compensation study
"shall consider, if appropriate, the experience, prior salary . . . of
each employee." The Court finds it unlikely that if the parties
considered prior salary or initial salary to be a per se
"tainted variable," this reference would have been included in the
B. Band and Zone
All Amtrak employees fall into a band on the compensation scale. The
higher an employee's band, the higher the employee's salary. Plaintiffs
contend that controlling for "band and zone" was inappropriate.
During the first two years of the Consent Decree, Amtrak reduced the
number of job titles it used and reassigned job titles to new bands and
zones. Currently, most of the employees with the same job title are in
the same band. Plaintiffs claim
that controlling for band and zone for these employees is
superfluous. However, plaintiffs claim that where job titles are assigned
to multiple bands, it may be because there is a difference in
responsibility or it may be a product of racial discrimination.
Dr. Pollner believes that, in this case, band and zone is a
statistically appropriate variable. Def. Mot. App. B, ¶ 7. Dr.
Pollner explains that band and zone is not a tainted variable because
most employees with the same job title are assigned to the same band and
this variable is a significant predictor of salary. Id. at ¶ 8.
Further, defendant contends that job titles in different bands and zones
reflect a clear difference in job duties, not discrimination. Finally,
defendant notes that because the Consent Decree requires comparisons of
employees in "comparable positions" and comparable positions are defined
in terms of band and zone, it is necessary to include band and zone as a
factor in the compensation study. Def Mot. App. A, Consent Decree. Dr.
Pollner concluded that "Because it is necessary to compare
similarly-situated employees, it is my opinion that the inclusion of
band/zone is critical." Def. Mot. App. B, ¶ 10.
While plaintiffs attempt to argue that initial salary and band and zone
are not "appropriate" in this case, the Court finds that the four corners
of the Consent Decree delegated considerable discretion to the outside
consultant in conducting a compensation analysis using "generally
accepted factors relied on
by compensation specialists." Def. Mot. App. A. Consent Decree §
IV.D.1. Although plaintiffs disagree with some of Dr. Pollner's decisions
regarding the analysis, they have not alleged that her analysis
incorporates variables that are outside the generally accepted factors.
Class Counsel may well be correct that Initial Salary and Band and Zone
have been found to be inappropriate in other contexts. However, here, the
consultant considered Class Counsel's position and decided against it.
Because the parties contracted to put the discretion in a third party's
hands, the Court will not upset Dr. Pollner's decision to use initial
salary and band and zone absent an allegation that a variable used was
wholly outside of what is generally acceptable.
Thus, the Court DENIES IN PART the Motion for Enforcement of the
2. Dr. Pollner failed to account for race in calculating the
difference between predicted and actual salaries for each
When Dr. Pollner determined that African American employees were paid
less than their white counterparts, she controlled for race. However,
when Dr. Pollner determined the amount by which each individual was paid
more or less than predicted, she did not take race into account.
Plaintiffs claim that her omission of race as a variable in the second
calculation was in error.
By omitting race as a variable, Dr. Pollner did not, as the
plain language of the Consent Decree requires, compare the salaries
of African American managers with white managers in the same position.
Instead, she compared the salaries of African American management
employees with the salaries of all management employees,
including other African Americans.
Plaintiffs claim that Dr. Pollner should have run a regression analysis
on only the non-African American employees to determine values for each
independent variable. Dr. Pollner could then have compared those values
to the variables of African American employees to determine predicted
salary. The methodology suggested by plaintiffs would have resulted in
predicted salaries that are $130,000 greater than what Dr. Pollner's
analysis provided. By including African Americans in the comparison
group, who are paid less than their white counterparts, Dr. Pollner
lowered the predicted salaries for African Americans and reduced the
disparities between actual salary and predicted salary. Pls. Mot Ex. C.
In response, defendant argues that Dr. Pollner controlled for factors
related to base salary across all management employees in order to
identify similarly situated employees and then conducted a regression
analysis of pay disparities between African American employees and
Caucasian employees. Def. Mot. App. B ¶ 6. Defendant notes that, as
explained in Dr. Pollner's Declaration, the problem with plaintiffs'
approach is that it assumed that all the statistical variables for
and Caucasian employees are identical. Id. at 1 19. Defendant
attempts to dispute plaintiffs' argument by alleging the Dr. Pollner used
a "statistically acceptable and commonly used approach."
The Court finds that the plain meaning of the Consent Decree requires
that a comparison be made between African American employees and their
white counterparts. To the extent that a comparison was made between
African American employees and all employees, the comparison must be
corrected to reflect the plain meaning of the Consent Decree. While other
methods of comparison may be commonly used, a comparison between African
American employees and their white counterparts is the method of
comparison that the parties agreed to in the Consent Decree. To the
extent that this has not been done, the Court GRANTS IN PART the Motion
to Enforce the Consent Decree.
C. The compensation adjustment need not reflect that some class
members are paid more than predicted, but should reflect the delay in
payment and Amtrak's partial adjustment to the 28 class members.
Plaintiffs aver that 308 African American employees are underpaid a
total of $1,289,000. The remaining 119 African American managers are paid
$842,000 more than their predicted salaries. Thus, the total compensation
disparity is $2,131,000.*fn2
Plaintiffs note that the adjustment should take into account the
fact that 28% of class members are earning more than their predicted
salary. Plaintiffs posit that since there will be no reductions in
salary, for African Americans as a group not to be "overpaid," the total
amount of adjustment should be $1,289,000 (or $842,000 less than the
total disparity of $2,131,000.)
Plaintiffs argue that the fairest way of taking "overpayments" into
account is to reduce the compensation adjustment of each underpaid
African American employee by the percentage of overpayment to other
African American employees. Thus, according to plaintiffs, the salary of
each underpaid African American employee should be increased only by a
percentage of which the salary fell short of the predicted amount.
Plaintiffs note that the adjustments were due October 1, 2002.
Plaintiffs assert that Amtrak should be required to make a lump sum
payment for each employee paid less as of February 15, 2002. The lump sum
should include an appropriate interest adjustment. Plaintiffs note that
the lump sum payments to the 28 individuals whose salaries have been
increased should be credited by the amount they have been paid.
The Court finds that the calculation method suggested by
Class Counsel was not contemplated by the Consent Decree and will
not be accepted by the Court. Moreover, this method leaves many African
American employees with less than their "predicted salary" and fails to
"eliminate racial disparities."
The Court finds that lump sum payments and an interest adjustment are
appropriate. The Court will direct that credit be given for any
adjustments already made to the salaries of some class members.
In sum, the four corners of this Consent Decree require that an
independent expert of defendant's choice perform a compensation analysis.
While plaintiffs were afforded an opportunity to consult with the expert,
the Consent Decree gave the expert considerable discretion in determining
the appropriate variables for the study. The expert exercised her
discretion in choosing to use initial salary and salary band and zone.
The Court will not upset her decision.
However, the Court will direct that the plain meaning of the Consent
Decree be followed. Each African American employee who is currently paid
less than her "predicted salary," as determined by comparing her current
salary to the current salary of white managers in the same position,
shall have her salary adjusted to make it equal to her "predicted
salary," not merely to the point where the difference is no longer
Thus, plaintiffs' Motion to Enforce the Consent Decree will be
GRANTED IN PART and DENIED IN PART.
Finally, defendant's uncontested Motion to File its Response Under Seal
will be GRANTED.
An appropriate Order accompanies this Memorandum Opinion.