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08/04/87 Ann B. Hopkins, v. Price Waterhouse; Ann B.

August 4, 1987

ANN B. HOPKINS, APPELLANT

v.

PRICE WATERHOUSE; ANN B. HOPKINS,

v.

PRICE WATERHOUSE, APPELLANT 1987.CDC.336 DATE DECIDED: AUGUST 4, 1987



UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

Appeal from the United States District Court for the District of Columbia, Civil Action No. 84-3040.

APPELLATE PANEL:

Edwards and Williams, Circuit Judges, and Joyce Hens Green,* District Judge.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE GREEN

In Hishon v. King & Spalding, 467 U.S. 69, 81 L. Ed. 2d 59, 104 S. Ct. 2229 (1984), the Supreme Court ruled for the first time that decisions concerning advancement to partnership are governed by Title VII, 42 U.S.C. ยง 2000e, and must therefore be made without regard to race, sex, religion, or national origin. This case, the first challenge to a partnership denial to reach us since Hishon, presents several novel and important questions that arise from the application of federal employment discrimination law to collegial bodies such as partnerships. Following a five-day trial, the District Court found that Price Waterhouse, one of the nation's largest accounting firms, had discriminated against plaintiff Ann Hopkins by permitting stereotypical attitudes towards women to play a significant, though unquantifiable, role in its decision not to invite her to become a partner. The court concluded that Hopkins was entitled to an award of backpay from the date she should have been elected partner until the date of her resignation seven months later, but ruled that, notwithstanding the parties' agreement to defer consideration of damages until after a decision on the issue of liability, Hopkins' failure to present any evidence as to the amount of compensation she was due barred her from recovering all damages save attorneys' fees. The trial court further found that Hopkins had failed to establish that she had been constructively discharged following Price Waterhouse's failure to make her a partner, and thus declined to award her backpay for the period subsequent to her resignation or to order Price Waterhouse to invite her to become a partner. The parties cross-appealed. *fn1 For the reasons set forth below, we affirm the District Court's determination of liability, but reverse its judgment as to the appropriate relief and remand for further proceedings on this issue. I. A. Background

Price Waterhouse is a professional partnership specializing in auditing, tax, and management consulting services, primarily for private corporations and government agencies. The firm is known colloquially as one of the nation's "big eight" accounting firms; at the time this suit commenced, it had 662 partners working in 90 offices across the country. Price Waterhouse is managed by a Senior Partner and Policy Board elected by all the partners. New partners are regularly drawn from the ranks of the firm's senior managers through a formal nomination and review process that culminates in a partnership-wide vote. There are no formal limits on the number of persons who may be made partners in any one year. Hopkins v. Price Waterhouse, 618 F. Supp. 1109, 1111 (D.D.C. 1985).

Plaintiff joined Price Waterhouse as a manager in August 1978 and began working in its Office of Government Services in Washington, D.C. She specialized in preparing, securing, and managing contracts for large-scale computer-based systems designed specifically for government agencies. Plaintiff had previously worked at Touche Ross, another large accounting firm where her husband was also employed, but left because that firm's rules prohibited both husband and wife from being considered for partnership. Shortly after her departure, plaintiff's husband became a partner at Touche Ross. In order to hire her, Price Waterhouse waived one of its own rules that barred employment of anyone whose spouse was a partner in a competing firm. In 1981, however, the firm advised plaintiff that, because of her husband's position at Touche Ross, she would not be eligible for partnership at Price Waterhouse. She threatened to resign and the matter was resolved only because Hopkins' husband left Touche Ross to set up his own consulting firm. Plaintiff was nominated for partnership a year later, in August 1982.

There is no dispute that Hopkins was qualified for partnership consideration. She was exceptionally successful in garnering business for the firm, winning contract awards with the Department of State and the Farmers Home Administration worth an estimated $34 to $44 million to Price Waterhouse. The firm's Senior Partner, Joseph Connor, characterized one of these contracts -- a world-wide computerized system capable of handling all State Department financial transactions -- as a "leading credential" that enabled the firm to win similar business from other federal agencies. The District Court expressly found that none of the other candidates considered for partnership in 1983 had generated more business for Price Waterhouse than plaintiff. 618 F. Supp. at 1112. In addition, she billed more hours than any of the other candidates under consideration.

The partners in OGS formally initiated the admission process for plaintiff by nominating her for partnership in August 1982. In support of her candidacy OGS submitted a flattering appraisal of her work, highlighting her "outstanding performance" in connection with the State Department project, and strongly urging her admission to the partnership. The appraisal stated in part:

In her five years with the firm, she has demonstrated conclusively that she has the capacity and capability to contribute significantly to the growth and profitability of the firm. Her strong character, independence and integrity are well recognized by her clients and peers. Ms. Hopkins has outstanding oral and written communication skills. She has a good business sense, and ability to grasp and handle quickly the most complex issues, and strong leadership qualities., Plaintiff's Exhibit ("Pl.Ex.") 15.

After a local office such as OGS nominates one of its senior managers for partnership, Price Waterhouse circulates the nominee's name and the accompanying appraisal of his or her work to all partners, who are invited to comment on the candidate. Those partners who have worked closely or extensively with a candidate submit "long-form" evaluations, while those whose contact has been more limited submit "short-forms." Partners are asked to rank individual nominees against all other candidates in 48 categories; to indicate whether the individual should be admitted, rejected, or placed on hold; and to provide written comments explaining their recommendations. The Admissions Committee, an arm of the firm's Policy Board, reviews each candidate's personnel file and occasionally interviews individual partners who have commented on a given candidate. The Committee then prepares a summary of the evaluations and makes its own recommendations to the Policy Board, providing a short written statement explaining any recommendation to hold or reject a candidate. The Policy Board in turn votes on whether the candidate should be included on the partnership ballot, held for reconsideration, or rejected. The Board can override the recommendations of the Admissions Committee and evaluates candidates not only on the basis of their individual merit, but also in terms of the firm's business needs. Those candidates who receive the Board's approval are placed on the ballot for a partnership-wide election; those who are not included are informed of the Board's reasons for rejecting or postponing their candidacies.

Plaintiff was the only woman among the 88 candidates nominated for partnership in August 1982. Of these, 47 were invited to join the partnership, 21 were rejected outright, and the remaining 20 -- including plaintiff -- were placed on hold. Seventeen of the 19 men placed on hold were renominated the following year (the other two had been placed on two-year holds), and of these, 15 were ultimately admitted. OGS, however, did not renominate plaintiff. Of the thirty-two partners who submitted evaluations and comments on her candidacy, fully a fourth opposed her admission; another three partners recommended that she be held for reconsideration; and eight others stated that they lacked a sufficient basis upon which to form an opinion. 618 F. Supp. at 1113. Many of the comments from evaluating partners centered on Hopkins' apparent difficulties with staff, and both supporters and opponents of her candidacy characterized her as sometimes overly aggressive, unduly harsh, impatient with staff, and very demanding.

A number of these complaints about plaintiff's lack of "interpersonal skills" were couched in terms of her sex. One critic suggested that Hopkins needed to take a "course at charm school." Pl. Ex. 21. A supporter sought to excuse her behavior by speculating that "she may have overcompensated for being a woman." Defendant's Exhibit ("Def. Ex.") 31. A member of the Admissions Committee investigated a reference in Hopkins' personnel file about her use of profanity and testified that "several . . . partners" regarded her language as "one of the negatives." Transcript of Trial ("Tr.") 321. One supporter felt compelled to defend her on this subject, arguing that "many male partners are worse than Ann (language and tough personality)"; this partner believed that the concerns over her profanity arose only "because she is a lady using foul language." Id. Another supporter opined that Hopkins initially came across as "macho," but concluded that "if you get around the personality thing she's at the top of the list or way above average." Still another supporter wrote that plaintiff "had matured from a tough-talking, somewhat masculine hard-nosed mgr. to an authoritative, formidable, but much more appealing lady partner candidate." Pl. Ex. 21.

Due to the large number of comments concerning her interpersonal skills, the Admissions Committee recommended that Hopkins' candidacy be held for at least a year. The Policy Board concurred, noting that although plaintiff had "a lot of talent," she needed "social grace." Pl. Ex. 20. Shortly thereafter, plaintiff met with the firm's Senior Partner, Joseph Connor, to discuss the Board's decision, and he urged her to undertake a Quality Control Review, which would allow her to work with more partners, demonstrate her skills, and allay concerns about her ability to deal with staff. Prior to that meeting, Thomas Beyer, the head partner at OGS and perhaps Hopkins' most fervent supporter, discussed with her problems the Board had identified with her candidacy and the steps she might take to enhance her partnership prospects. Beyer advised her "to walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry." 618 F. Supp. at 1117.

Four months after she embarked on her Quality Control Review, however, the partners at OGS decided not to propose Hopkins for partnership. During the year following her initial nomination, Hopkins lost the support of two of these partners, who had come to strongly oppose her candidacy. Although candidates have on occasion been admitted despite the opposition of partners in their home offices, plaintiff's supporters at OGS felt that in view of the strong criticisms her earlier nomination had drawn, she could not possibly become a partner without the unanimous endorsement of her local office partners. Beyer advised plaintiff that it was very unlikely that she would ever be admitted to the partnership. He told her that she could remain at Price Waterhouse as a senior manager, but one of the OGS partners who opposed her candidacy advised her to resign. That advice was consistent with the regular practice and custom at Price Waterhouse, where candidates rejected for partnership routinely left. Hopkins resigned in January 1984 and set up her own consulting firm.

B. Proceedings Below

The District Court had no difficulty finding that plaintiff had presented a prima facie case of sex discrimination: she was a qualified partnership candidate, she was rejected, and Price Waterhouse continued to seek partners with her qualifications. 618 F. Supp. at 1113 (citing Cooper v. Federal Reserve Bank, 467 U.S. 867, 875, 104 S. Ct. 2794, 81 L. Ed. 2d 718 (1984); Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 253, 67 L. Ed. 2d 207, 101 S. Ct. 1089 (1981)). The court went on to find, however, that Price Waterhouse's consideration of Hopkins', or any other candidate's, interpersonal skills was a legitimate business inquiry, and that plaintiff's management style "provided ample justification for the complaints that formed the basis of the Policy Board's decision." 618 F. Supp. at 1114. The trial judge found that a number of the criticisms leveled at Hopkins because of her treatment of staff were in fact genuine. Id. In addition, the trial court concluded that the opposition of the two OGS partners to Hopkins' renomination was likewise based on genuine reservations about her management style rather than any animosity towards her because of her sex. Id. Finally, the District Court rejected Hopkins' contention that Price Waterhouse treated her differently than male candidates with abrasive or aggressive personalities. The trial judge concluded that the firm had legitimate, nondiscriminatory business reasons for admitting two such candidates identified by plaintiff, and dismissed evidence she proffered as to the two other male candidates as "fragmentary" and otherwise insufficient proof of disparate treatment. *fn2 Id. at 1115 & n.6.

The trial court's finding of liability rested instead on its determination that Price Waterhouse had discriminated against Hopkins by filtering her partnership candidacy through a system that gave great weight to negative comments and recommendations, despite evidence that those comments reflected unconscious sexual stereotyping by male evaluators based on outmoded attitudes towards women. Id. at 1118-19. The District Court found that comments based on sexual stereotypes were "part of the regular fodder of partnership evaluations," yet Price Waterhouse took no steps to discourage sexism, to heighten the sensitivity of partners to sexist attitudes, or to investigate negative comments to ascertain whether they were the product of such attitudes. Id. at 1119. The trial judge acknowledged that it was impossible to measure the precise role sexual stereotyping had played in the Policy Board's decision to deny Hopkins partnership, but found that the decision was in fact tainted by discriminatory evaluations that resulted from the firm's failure to root evident sexism from its evaluation system. Accordingly, the District Court determined that Price Waterhouse bore the burden of demonstrating by clear and convincing evidence that its decision would have been the same regardless of such discrimination -- a showing the firm was unable to make.

Having concluded that Hopkins was a victim of sexual discrimination, the trial judge went on to find that she was nevertheless not entitled to an order directing the firm to make her a partner. Applying the doctrine of constructive discharge to the professional partnership setting, the District Court determined that Hopkins' departure from Price Waterhouse was the result of neither intolerable working conditions nor any aggravating circumstances such as a firm history of discrimination or undue humiliation. Id. at 1121. Although one OGS partner suggested to plaintiff that she resign, the firm offered to retain her as a senior manager and several partners encouraged her to accept this option. Aside from her failed partnership bid, Hopkins had enjoyed an amicable and otherwise quite successful five years of employment with the firm. The trial court concluded that a discriminatory denial of partnership, without more, did not amount to a showing of constructive discharge and thus did not warrant the equitable relief Hopkins sought. Accordingly, the court denied her both backpay from the date of her resignation and a decree requiring that she be invited to join Price Waterhouse as a partner. The District Court also ruled that although plaintiff had demonstrated her entitlement to an award of backpay compensating her at the partnership salary for the period between her partnership denial and her resignation, she had failed to offer any evidence as to the amount of compensation she should receive. The trial judge acknowledged that this failure was due solely to a stipulation the parties filed in which they agreed to defer resolution of the backpay issue until after the court rendered its liability determination; because that stipulation was filed without the court's knowledge or approval, however, he deemed the issue closed and refused to accept any post-trial evidence on the question. The court therefore awarded Hopkins judgment in the amount of her attorneys' fees only.

The respective cross-appeals followed. II. A. The Liability Determination

Price Waterhouse mounts two attacks on the District Court's determination that it discriminated against Hopkins in violation of Title VII. First, the firm contends that there is no competent evidence supporting the lower court's finding that impermissible sexual stereotyping infected the partnership evaluation system. Second, Price Waterhouse argues that even if this finding is upheld, the liability determination still cannot stand because the lower court expressly found that Hopkins' behavior provided "ample justification" for the complaints about her lack of interpersonal skills, and that these complaints in turn constituted a legitimate, nondiscriminatory business reason for placing Hopkins' candidacy on hold. Thus, the firm submits that even if the evaluation process has not been purged of sexist attitudes, those attitudes were not responsible for the decision to hold Hopkins for further consideration, and therefore Hopkins has failed to establish any causation between the partnership's inappropriate treatment of female candidates and her own unsuccessful candidacy.

1. The District Court's Findings

As this court recently emphasized, appellate review of District Court findings in Title VII cases is necessarily narrow. Underwood v. District of Columbia Armory Board, 259 U.S. App. D.C. 465, 816 F.2d 769, 774 (D.C. Cir. 1987). In order to overturn a determination of liability, we must conclude that it is "'based on an utterly implausible account of the evidence.'" Id. (quoting Bishopp v. District of Columbia, 252 U.S. App. D.C. 156, 788 F.2d 781, 786 (D.C. Cir. 1986)). Faced with this formidable hurdle, Price Waterhouse eschews any intention of re-arguing its case on appeal: it purports to urge reversal not on the ground that the lower court's view of the evidence is implausible, but on the theory that there simply is no evidence supporting the District Court's finding of discrimination. Notwithstanding its disclaimer, however, defendant's attempt to demonstrate the absence of competent evidence proves, upon closer inspection, to be nothing more ...


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