Federal courts seldom pause on the second stage of the McDonnell Douglas burden-shifting test, whee the employer proffers its allegedly legitimate, non-discriminatory reason for taking adverse action against an employee. But in this case, the D.C. Circuit holds that it is not enough for the employer to simply advance a facially-neutral process without showing how it was specifically applied to the employee. This case could have special application in promotion and other processes involving large numbers of people and subjective criteria.
Figueroa v. Pompeo, No. 18-5064 (D.C. Cir. May 10, 2019): Plaintiff Figueroa alleged that he was denied a promotion in the Foreign Service because of his Latino ethnicity.
For the promotion process, selection boards are convened to "evaluate the [applicants'] files based on substantive criteria called 'core precepts.' They consist of six performance areas: leadership skills, managerial skills, interpersonal skills, communication and foreign language skills, intellectual skills, and substantive knowledge."
The court elaborated that the "core precepts" included "purely subjective" criteria.
"According to the [agency's] chart, an evaluator assessing leadership skills must assess the officer's innovation, decisionmaking, teamwork, openness to dissent, community service, and institution building. Others appear more objective. As an example, the evaluator considering substantive knowledge will observe the officer's application of job knowledge, institutional knowledge, technical skills, professional expertise, and knowledge of foreign cultures. But the chart reveals that even the more objective precepts involve purely subjective determinations."
Candidates who were deemed low- or mid-ranked under these evaluative criteria did not advance in the process. The selections boards award fresh annual reviews year to year that ignore the candidate's rankings in prior years.
In response to the plaintiff's lawsuit, the agency submitted the following record to establish a facially-neutral basis for the failure to promote:
"The Secretary has produced an eight-page chart outlining the Department's core precepts, and Figueroa does not dispute its admissibility. The Secretary also has provided declarations from board members stating that they followed the precepts in considering Figueroa's file. The Secretary also proffers Figueroa's ultimate evaluation in 2008: mid-ranked."
The district court considered this proffer sufficient to shift the burden to Figueroa, and granted summary judgment when the plaintiff - who was proceeding without counsel (pro se) - supposedly failed to create a genuine dispute of material fact about pretext.
The D.C. Circuit reverses in part. First, it summarily affirms summary judgment on the employee's theory that the annual review process had a disparate impact on Latino applicants. While acknowledging that there were statistical disparaties in promotion rates for Latino applicants, "even if the record evidence indicates a substantial disparity, the evidence does not demonstrate how the annual refresh, as opposed to other aspects of the promotion process, leads to the disparity."
Second, it vacates summary judgment on the plaintiff's disparate treatment (intentional discrimination) claim. The panel holds that simply asserting that the candidates who were promoted under a facially-neutral policy "were better qualified than Figueroa" is not enough to meet the second-stage burden of production. "An employer cannot satisfy its burden of production with insufficiently substantiated assertions."
The panel elaborates at least four factors that underlie the second-stage burden of production:
"First, the employer must produce evidence that a factfinder may consider at trial (or a summary judgment proceeding). Second, the factfinder, if it "believed" the evidence, must reasonably be able to find that 'the employer's action was motivated by' a nondiscriminatory reason. That is, the employer must 'raise a genuine issue of fact as to whether the employer intentionally discriminated against the' employee. Third, the nondiscriminatory explanation must be legitimate. In other words, the reason must be facially 'credible' in light of the proffered evidence .... [Finally], as the fourth factor, the evidence must present a 'clear and reasonably specific explanation.'" [Citations omitted.]
After a lengthy discussion of the governing case law, the panel boils these factors down to the following standard:
"[W]e hold that an employer at the second prong must proffer admissible evidence showing a legitimate, nondiscriminatory, clear, and reasonably specific explanation for its actions. The evidence must suffice to raise a triable issue of fact as to intentional discrimination and to provide the employee with a full and fair opportunity for rebuttal. When the reason involves subjective criteria, the evidence must provide fair notice as to how the employer applied the standards to the employee's own circumstances."
Absent more of an explanation of how the criteria were applied to the plaintiff, the panel holds that the agency's proffer left Figueroa nothing to respond to. Especially with subjective standards, "we ... perceive an intolerable risk that a nefarious employer will use them as cover for discrimination." Here, "[n]one of the presented evidence sheds light on how the selection boards applied the core precepts to Figueroa's case. All we know is that the board determined Figueroa to be mid-ranked - which at most says he was not deficient in any relevant skill. But that fact does not explain why the boards deemed him less qualified than the highest-ranked candidates."
The panel even provides a witty comparison to law school examinations:
"We see a close analogy between this case and a context familiar to us and employment discrimination lawyers: grading in a law school exam. The grading criteria are clear and unsurprising: writing style, quality of the case citations, and sophistication of the legal and factual analysis. But an eager law student who receives a B under the rubric needs more to understand, and perhaps challenge, her grade. Law students ordinarily are evaluated on a curve. The professor may believe a B student to be proficient, even excellent, on all three fronts yet, for some reason, not to be among the top of the pack. Perhaps the reason is benign; the curve was just too tight. But perhaps the professor had indigestion while reading her exam answers. The student is left only to speculate on whether her subjectively determined grade was reasonable or unfair. Unless provided with additional information (such as a model answer) that shows what differentiates her from the best, the student is unable to understand her professor's reasoning and muster a persuasive case for raising her mark."
Especially because Figueroa's records revealed no clear deficiencies, simply knowing the process that the agency used does not assist the plaintiff in determining why he fell short.
In response to the agency's argument that presenting additional evidence about the plaintiff would impose a substantial burden in a process involving hundreds of applicants, the panel notes:
"First, the individuals assigned by the Department to evaluate candidates for promotion must make judgments about the relative talents of large numbers of employees .... Because the Secretary has elected to run a highly individualized evaluation system, the employee and the factfinder justifiably expect a somewhat particularized explanation. Second, the burden of production under McDonnell Douglas does not depend on the employer's size. Third, we expect that large employers will finds ways to manage. For instance, the Department in 2016 implemented a policy retaining the evaluation notes of board members for one year."
On remand, the district court is directed to "revisit Figueroa's summary judgment cross-motion. Under the McDonnell Douglas framework, an employee who proves her prima facie case is entitled to a presumption that the employer discriminatorily mistreated her. The presumption dissipates only if the employer meets its burden of production. Here, the District Court did not determine whether Figueroa made a prima facie case [because defendant conceded it for purposes of the motion.]"