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Abdul-Baaqiy v. Federal National Mortgage Association

United States District Court, D. Columbia.

December 11, 2015


          For Saddiq Abdul-Baaqiy, Plaintiff: David A. Branch, LEAD ATTORNEY, LAW OFFICE OF DAVID BRANCH & ASSOCIATES, PLLC, Washington, DC USA.

         For Federal National Mortgage Association (Fannie Mae), Defendant: Frank R. Volpe, LEAD ATTORNEY, SIDLEY AUSTIN LLP, Washington, DC USA; Wendy M Lazerson, LEAD ATTORNEY, PRO HAC VICE, Palo Alto, CA USA; Y. Angela Lam, LEAD ATTORNEY, PRO HAC VICE, SIDLEY AUSTIN LLP, Chicago, IL USA; Damien G. Stewart, FANNIE MAE, Washington, DC USA.


         ROSEMARY M. COLLYER, United States District Judge.

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          Plaintiff Saddiq Abdul-Baaqiy filed this class action lawsuit against Federal National

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Mortgage Association alleging that (1) he was subjected to a pattern and practice of race discrimination through disparate treatment and (2) he is representative of a class that was subjected to personnel policies and practices that have a disparate impact on African Americans. He asserts race discrimination claims under 42 U.S.C. § 1981 and the D.C. Human Rights Act, D.C. Code § § 2-1401 et seq. Federal National Mortgage Association moves (1) to dismiss the D.C. Code claim for lack of subject matter jurisdiction because the alleged discrimination occurred in Virginia and not in the District of Columbia; (2) for summary judgment on all claims based on the practice of " forced ranking" ; and (3) to strike the class action allegations. As explained below, the motion will be granted in part and denied in part.

         I. FACTS

         The Federal National Mortgage Association (Fannie Mae) is a Government Sponsored Enterprise headquartered in Washington, D.C. Fannie Mae employed Plaintiff Saddiq Abdul-Baaqiy, an African American, from 1996 through 1999 and from 2001 through 2011. Mr. Abdul-Baaqiy worked in Fannie Mae's D.C. office in 1996 through 1999 and again when he resumed employment in 2001. Fannie Mae transferred him to its office in Virginia in September 2004. Opp'n [Dkt. 24], Ex. P (Pl. Decl.) ¶ 2. In this latter position, Mr. Abdul-Baaqiy was a software developer with the title " Application Developer Analyst II."

         In December 2008, Fannie Mae implemented a new performance review policy that imposed a quota for the number of high performance reviews that managers could award in each department, allegedly resulting in poor reviews for employees who actually met performance objectives. Am. Compl. [Dkt. 13] ¶ ¶ 2, 6. This " forced ranking" policy required that managers evaluate employees " relative to their peers," so that only 5% percent of employees would receive a " Significantly Exceeds Expectations" rating, 25% percent would receive a " Fully Meets Plus" rating, 50% would receive a " Fully Meets" rating, and 20% would receive an unsatisfactory rating of " Fully Meets Minus/Significant Issues" or lower. Mot. to Dismiss and for Partial Summ. J. [Dkt. 20] (MTD/Partial MSJ), Ex. 3 (2008 Ratings Distribution) & Ex. 4 (FAQs on 2008 Ratings Distribution).

         On September 10, 2009, Fannie Mae CEO Mike Williams sent a message to employees announcing a different performance evaluation policy. Id., Ex. 5 (Williams Letter). Mr. Williams noted that " a number of employees and managers have raised important concerns about the performance review process, especially the guidance that 20 percent of employees should fall into the bottom two rating categories." Id. The modified 2009 policy changed the percentages of employees for each performance level, directing that 5-10% receive a " Significantly Exceeds Expectations" rating, 15-25% percent receive an " Exceeds Expectations" rating, 55-75% receive a " Meets Expectations" rating, and 5-10% receive ratings of " Does Not Meet Expectations." Id.

         Under the 2009 policy, managers were required to evaluate employees by using a four step process consisting of divisional planning, pre-calibration preparation, calibration, and post-calibration. Opp'n [Dkt. 24], Ex. C (Calibration Overview). Calibration sessions are management fora led by Fannie Mae leaders (or the most senior level manager) for the purpose of assisting managers in evaluating the relative performance of employees before finalizing a rating. Id. Prior to a calibration session, managers were instructed to prepare draft assessments and initial ratings. Id., Ex. D

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(Session Leaders Preparation Guide). Managers were instructed to articulate how each employee was performing as compared to their peers, even when the employee had met or was on course to meet all goals. Id., Ex. I (Year-End Process: FAQs).

         Mr. Abdul-Baaqiy received satisfactory performance reviews throughout 2008. He contends that he was affected by the " forced ranking" policy when he received poor evaluations starting in mid-2009 until he was terminated for supposed performance deficiencies in April 2011. Specifically, Steven Gonsalves, a Caucasian man, began supervising Mr. Abdul-Baaqiy in April 2009. After three months, Mr. Gonsalves gave Mr. Abdul-Baaqiy an " off track" mid-year performance rating, but did not provide any comments to support or justify the " off track" rating. Id., Ex. A (2009 Mid-Year Review). An email chain indicates that Plaintiff may have been rated as " off track" due to the division manager's need to meet distribution targets. See id., Ex. L (June/July 2009 Email Chain). A Fannie Mae employee by the name of Les Zimmerman[1] sent an email to Plaintiff's second line supervisor, Malcom Blundell, on June 29, 2009 with the subject line " IR2[2] Mid-Year Performance Rankings__20% Off Track." Mr. Gonsalves, among others, was copied on the email. Mr. Zimmerman stated:

As you would expect, not everyone on this list [of 6 employees] is [identified] because of their performance against goals. Several made this list as a result of the requirement to have 20%. So, they ended up ranking below their IR2 [project] peers. . . . We discussed that the IR2 staff is among the best in Fannie Mae, working on a critical and extremely challenging project with the highest visibility.

         The next day, Mr. Blundell responded, " Ron[3] directed me to rank you as a group and pick a bottom 20%. This I will do. I must say that you are a high performing team, and all of you are meeting my expectations at this point." Id. A few days later, on July 6, 2009, Mr. Blundell directed that the six employees on Mr. Zimmerman's list, including Mr. Abdul-Baaqiy, " are to be rated off track." Later that day, Mr. Gonsalves responded, " done." Id.

         For the 2009 year-end evaluation, Mr. Gonsalves prepared a draft performance review, indicating that Mr. Abdul-Baaqiy had completed every goal and noting that he timely completed assignments, was a " go-to" person for support, was an " advocate if not a champion" of standards compliance, and that he just needed to " soften" his approach in advocating compliance. Id., Ex. M (2009 Year End Review). Mr. Gonsalves also noted that in the early part of 2009, Mr. Abdul-Baaqiy attempted to take on responsibilities that exceeded his abilities, that after mid-year coaching he took on assignments more in line with his skills, although there were still some issues with quality and communication. Id. After Mr. Gonsalves met with Division Director Joe Jucha, he downgraded the performance review, changing the evaluation of three goals from " completed" to " off course." Id., Ex. O (Gonsalves Dep.). In his final 2009 year-end performance review, Mr. Gonsalves rated Mr. Abdul-Baaqiy as " Does

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Not Meet Expectations." Id., Ex. N (2009 Year End Review). In contrast with this rating, in a 2009 Accountability Survey Plaintiff's peers rated him at 4.28 and his managers rated him at 4.30 on a scale from a low of 1 to a high of 6. Id., Ex. V (2009 Accountability Survey).

         In 2010, Sabari Roy, an Asian woman, was assigned to supervise Mr. Abdul-Baaqiy. She issued Plaintiff an " off track" mid-year review at the end of July 2010. See id., Ex. S (Roy Dep.), Ex. 3 (2010 Mid-Year Review). At the end of 2010, Ms. Roy gave Mr. Abdul-Baaqiy a " Does Not Meet Expectations" rating. Roy Dep., Ex. 4 (2010 Year End Review). On January 25, 2011, Mr. Abdul-Baaqiy received a memorandum of concern. Roy Dep., Ex. 5 (2011 Mem. of Concern). Fannie Mae fired Mr. Abdul-Baaqiy in April 2011.

         On March 13, 2012, Mr. Abdul-Baaqiy filed a complaint alleging discrimination in D.C. Superior Court. See Abdul-Baaqiy v. Fed. Nat'l Mort. Ass'n, No. 2012 CA 002386 (D.C. S.Ct. 2012). The case was dismissed because he was required by Fannie Mae's Dispute Resolution Policy to arbitrate before proceeding to court. Under the Dispute Resolution Policy, arbitration is binding on Fannie Mae but not on the employee. MTD/Partial MSJ, Lam Decl. [Dkt. 20-14], Ex. A (Dispute Resolution Policy). Mr. Abdul-Baaqiy proceeded to arbitration, the parties conducted limited discovery, and the arbitrator held an evidentiary hearing. Lam Decl., Ex. D (Gonsalves Dep.), Ex. E (Hearing Transcript), Ex. F. (Roy Dep.), Ex. K (Abdul-Baaqiy Dep.). The arbitrator determined that the Dispute Resolution Policy was an enforceable contract that required Mr. Abdul-Baaqiy to arbitrate, see id., Ex. B (Order Compelling Arbitration) and he entered an award in favor of Fannie Mae, see id., Ex. C. (Award). Plaintiff rejected the Award. Id., Ex. G (Notice of Rejection of Arbitration Award).

Subsequently, Mr. Abdul-Baaqiy filed this suit against Fannie Mae, alleging:
Count I__race discrimination in violation of the Civil Rights Act of 1866, 42 U.S.C. § 1981; and
Count II__race discrimination in violation of the D.C. Human Rights Act, D.C. Code § § 2-1401 et seq. (DCHRA).

Am. Compl. [Dkt. 13]. Mr. Abdul-Baaqiy attempts to assert these claims on behalf of himself and " all African American employees, who were subject to Fannie Mae's forced ranking policies and practices which resulted in adverse personnel actions in lowered performance appraisals, discipline, including memorandum of direction and performance improvement plans, and termination from employment 2008 through 2011 based on their performance rating." Am. Compl. ¶ 24. The Complaint alleges that the forced ranking policy had a disparate impact on African Americans, in violation of both § 1981 and DCHRA:

This policy and practice had a disparate impact on African American employees because managers were forced to issue lower performance appraisals to a certain number of employees regardless of their performance. Fannie Mae's " forced ranking" policy and practice since 2008 has led to a disproportionate number of African American employees receiving discriminatory performance appraisals which led to loss of compensation and termination from employment under false assertions of poor performance. In addition, since 2008 Fannie Mae has carried out several mass ...

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