CLIENT ALERT: Please read this special message.

Small Classes Have Life Post-Dukes, 4th Circ. Ruling Shows

Law360—Aaron Vehling

A Fourth Circuit decision that recertified a class of black steelworkers who alleged racial bias in promotions gives the plaintiffs bar a look at the necessary commonality "glue" that will keep Title VII class actions alive in a post-Dukes landscape, including the importance of a small class size, attorneys say.

A starkly divided appellate panel on Monday vacated the lower court's decertification of a class of Nucor Corp. workers. The lower court had said the class members had failed to meet the commonality standards articulated in the U.S. Supreme Court's 2011 Wal-Mart v. Dukes decision.

However, the panel found that the Nucor suit’s class size and scope — about 100 workers in a single plant in South Carolina who demonstrated a common pattern of discrimination that prevents them from advancing in their careers — had a tough “glue” of commonality compared to the millions of workers across thousands of stores around the U.S. that would have comprised the class of women alleging gender bias in Dukes.

                                           *             *             *

Seven black employees at Nucor’s plant in Huger, South Carolina, sued the company in a federal court in that state in August 2004 on behalf of a proposed class of more than 100 past and present black employees at the plant. They said the plant systemically practiced racial discrimination in its employment and promotion and subjected the workers to a hostile work environment.

The case went through a class certification cycle more than five years ago, when the district court originally rejected certification. In 2009, the Fourth Circuit vacated that decision, and on remand the lower court certified two classes, a promotions class involving disparate treatment and disparate impact claims and the hostile work environment class.

In 2012, Nucor was partially successful in its second bid for the lower court to reconsider certification. The company convinced the court to decertify the promotions class in light of the Dukes decision a year earlier. But the lower court left the hostile work environment class intact, which led to Nucor’s first bid for appeal. The appeals court denied that bid without elaboration.

The promotions class battle subsequently went back to the Fourth Circuit, where on Monday the majority of the panel ruled that the district court “fundamentally misapprehended” the reach of Dukes and its application to the workers’ promotions class. Among the reasons was the vast difference in the scale of Dukes compared to this case.

Dukes involved a sex discrimination claim concerning 1.5 million class members with various jobs and experiences in more than 3,000 stores across the U.S. Nucor, however, involves about 100 members in a single plant who showed evidence of a centralized policy of restricting advancement of black workers, according to the opinion.

                                           *             *             *

Paul W. Mollica, of counsel at Outten & Golden LLP, said the majority panel’s decision also shows that there’s still room for Title VII class actions even in the post-Duke’s era, especially because of the disparity in scale.

The evidence showed that 15 years ago, before the plaintiffs first brought their charge to the EEOC, there was one black manager at the Nucor plant, even though there was a substantial black workforce, a dynamic Mollica said Title VII was designed to fix.

“This is historically what Title VII class actions were all about,” he said. “There remains a very significant role for Title VII for preventing and correcting and providing remedies.”

Not just the size of the class and the single plant played into the panel majority’s opinion, though. The scope of the claims within those efficient confines also thickens the glue, it found.

Part of the majority’s finding of commonality and predominance in the promotions class relied on anecdotal evidence from the hostile work environment class claims, including widespread racial epithets and derisive comments about African-Americans, employees fashioning nooses and an incident of someone donning a faux Ku Klux Klan hood, among other things.

Building off that, the panel found the plaintiffs had shown that promotions class members were denied movement up the ladder because promotions decisions were made in the context of a racially hostile work environment.

Judge G. Steven Agee, who strongly strongly dissented from the majority opinion, disagreed, finding that there could be a metaphorical wall separating incidents of racism from the employment decisions of managers in disparate departments. Therefore, he said, Dukes’ rigorous Rule 23 commonality standard applies to the promotions class.

                                           *             *             *