The opinion of the court was delivered by: Judge Joan H. Lefkow
Twelve construction workers filed this putative class action against Walsh Construction Company ("Walsh"), alleging that Walsh discriminates against black employees in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. ("Title VII"), and the Civil Rights Act of 1866, 42 U.S.C. § 1981, as amended. Before the court is plaintiffs' motion to certify four classes under Federal Rule of Civil Procedure 23(b)(2) and (b)(3). For the following reasons, plaintiffs' motion for class certification [#128] is granted in part and denied in part.*fn1
I. Walsh Construction Company
Walsh is a construction company that does business throughout the United States and employs thousands of laborers during any given year. From 2000 to 2009, Walsh employed approximately 2,610 journeymen and 175 foremen on 262 construction projects in the Chicago area.*fn2
The typical construction project is managed independently, with little oversight from Walsh's corporate office. Usually, a project manager or business group leader selects a superintendent. The superintendent supervises foremen, and either the superintendent or the foremen hire journeymen and assign their tasks. Foremen supervise the journeymen, who are usually assigned to crews that have specialized responsibilities such as pouring concrete or directing trucks. The number of employees who work on a crew and the amount of work vary among job sites.
Walsh does not have a policy for hiring journeymen, and decisions regarding hiring are left to the discretion of the superintendents and foremen. Neither does Walsh have a policy regarding layoffs. Layoffs are common at Walsh and in the rest of the construction industry.
Superintendents and foremen also have the discretion to assign overtime work. Pursuant to Walsh's collective bargaining agreement with the laborers' union, the union may designate certain laborers as union stewards. Stewards have the right of first refusal for any overtime.
Overtime is voluntary, which means that journeymen have the right to reject overtime that is offered.
Walsh's official employment policy prohibits discrimination or harassment based on race. (See Walsh Employee Handbook at 13.) Walsh provides anti-discrimination training to its superintendents and foremen through the Human Resources Department.
II. Plaintiffs' Allegations and Motion for Class Certification
The named plaintiffs, Wallace Bolden, Gregory Chism, Donald Duncan, Lindell Epps, James Gage, Marvin Green, Terrance Jackson, Joe Jones, Eddie Lucas, Guy Sutton, Jackie White, and Zelma White, all of whom are black, were journeymen or foremen at Walsh. Although plaintiffs worked on various construction sites during their tenure at Walsh, most were employed on a project known as "Skybridge," which was a commercial and residential building project that began in 2000. When Skybridge first began, John Taheny was the superintendent and Robert Kuna was the foreman. Skybridge was temporarily shut down for financial reasons, and during this time Taheny and Kuna worked on another residential building project known as Park Place. When Skybridge resumed, Jim Grumber was the project superintendent, Arthur Crummie was a carpenters' foreman and plaintiff Jackie White was a laborers' foreman. Taheny, Kuna, Grumber, and Crummie are white. Plaintiffs Chism, Gage, and Lucas were employed in Walsh's roving concrete crew, referred to as the Concrete Laborers Division, which poured concrete at various construction sites. Robert DeBoer, who is white, supervised the concrete crew.
Between February 2002 and January 2003, each plaintiff filed a charge of discrimination with the EEOC alleging discrimination on the basis of race. (Compl. Ex. A, Plaintiffs' EEOC Charges.) The EEOC determined that there was reasonable cause to believe that Walsh had discriminated against each plaintiff, as well as other black employees, through its hiring and layoff practices and by harassing black employees and subjecting them to different terms and conditions of employment. (See Compl. Ex. B, EEOC Determinations for Named Plaintiffs; Pls.' Ex. 2, EEOC Investigative Memorandum.) The EEOC concluded that the evidence did not support the conclusion that Walsh discriminated against black employees by paying lower wages or denying overtime or bonuses. (See Pls.' Ex. 2, EEOC Investigative Memorandum.)
Asserting both disparate treatment and disparate impact theories of liability, plaintiffs' complaint alleges that Walsh discriminates against black employees through its hiring, firing, job assignment, and compensation practices. Plaintiffs also allege that the working conditions at Walsh amounted to a hostile work environment.
The parties conducted extensive expert and non-expert discovery before plaintiffs filed their motion for class certification. Plaintiffs' expert, Stan V. Smith, conducted a statistical analysis of time card data provided by Walsh to determine whether Walsh's allegedly discriminatory behavior had a common impact on the putative class members. He examined time card data for employees in the Chicago area that include an employee's race, position (such as journeyman or foreman), the job and job location, union membership and position, and designation of hours as regular, overtime, or double time. Smith concluded that Walsh hires fewer black employees and that black employees work fewer hours, receive less overtime, receive fewer promotions, and are terminated more often than non-black employees. Walsh hired its own expert, Robert Topel, who concluded that Smith had erred by concluding that the relevant labor market is the entire black population in Cook County rather than the population of qualified blacks living in the Chicago Metropolitan area. Topel also concluded that Smith's analysis of the time card data is fundamentally flawed because it compares black employees to all non-black employees, rather than performing comparisons between blacks, whites, and Hispanics. Walsh has filed a motion to strike Smith's expert report and testimony, which the court grants in part and denies in part in a companion opinion and order. As explained therein, Smith's conclusions regarding Walsh's hiring and termination practices, the decline in the number of hours worked by black employees, and his calculation of "hedonic damages" are inadmissible under the Federal Rules of Evidence and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993). Walsh's motion to strike is denied with respect to Smith's analysis of the disparities in hours worked, compensation received, and promotions from journeyman to foreman.
Plaintiffs now seek to certify the following classes:
"Hostile Work Environment Class," comprising all blacks employed by Walsh at any time between June 1, 2001, and the present. "Hire, Re-Hire and Promotion Class," comprising all blacks employed by Walsh at any time during the period June 1, 2001, [through] the present, who were denied hire, re-hire/re-call, promotions or deprived of the ability to pursue promotions because of their race. "Work Hours and Compensation Class," comprising blacks employed by Walsh at any time during the period June 1, 2001, through the present, who were denied opportunities to work, not afforded overtime hours or not afforded premium pay hours, because of their race. "Layoff and Termination Class," comprising all blacks, employed by Walsh at any time during the period June 1, 2001, [through] the present, who were laid off or terminated because of their race. (Pls.' Mot. for Class Cert. at 2--3.) Although plaintiffs' proposed class definitions include no job or geographic limitations, plaintiffs now represent that the classes may be limited to the Chicago Metropolitan area and to blacks who were employed as journeymen. (Pls.' Resp. to Walsh's Mot. to Supp., Dkt. #162.) Plaintiffs request that the court either certify all classes under Rule 23(b)(3) or bifurcate the proceedings and certify a hybrid class under Rule 23(b)(2) for equitable relief and Rule 23(b)(3) for damages.
REQUIREMENTS FOR CLASS CERTIFICATION*fn3
A party seeking to certify a class action must meet two conditions. First, the movant must show the putative class satisfies the four prerequisites of Rule 23(a): (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation. Fed. R. Civ. P. 23(a); Oshana v. Coca-Cola Co., 472 F.3d 506, 513 (7th Cir. 2006); Rosario v. Livaditis, 963 F.2d 1013, 1017 (7th Cir. 1992). Second, the action must qualify under at least one of the three subsections of Rule 23(b). Fed. R. Civ. P. 23(b); Rosario, 963 F.2d at 1017; Hardin v. Harshbarger, 814 F. Supp. 703, 706 (N.D. Ill. 1993). Here, plaintiffs seek certification under Rule 23(b)(2) or (b)(3). Rule 23(b)(2) requires a finding that "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole." Fed. R. Civ. P. 23(b)(2). Rule 23(b)(3) requires a finding that "questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed. R. Civ. P. 23(b)(3).
Courts retain broad discretion in determining whether a proposed class meets the Rule 23 certification requirements. Keele v. Wexler, 149 F.3d 589, 592 (7th Cir. 1998). "Plaintiffs bear the burden of showing that a proposed class satisfied the Rule 23 requirements, but they need not make that showing to a degree of absolute certainty." Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 811 (7th Cir. 2012) (internal citation omitted). "It is sufficient if each disputed requirement has been proven by a preponderance of evidence." Id. (citation omitted). The court must "carefully apply the requirements of Rule 23(a) to Title VII class actions," Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 160, 102 S. Ct. 2364, 72 L. Ed. 2d 740 (1982), and "precise pleadings" are needed, because without specificity the court cannot define the class or determine the adequacy of representation, and the employer does not know how to defend. Id. at 160--61 (citation omitted).
I. Whether there are Questions of Law or Fact Common to the Class
Walsh vigorously disputes that plaintiffs have satisfied Rule 23(a)(2)'s commonality requirement.*fn4 It argues that plaintiffs cannot meet the commonality requirement because their claims are premised on the alleged illegality of myriad employment decisions made by numerous managers at hundreds of construction sites. Thus, concludes Walsh, the viability of each class members' claim will turn on individual, as opposed to class-wide, issues of fact and law.
For the commonality requirement to be met, "there must exist 'questions of law or fact common to the class.'" Keele, 149 F.3d at 594 (quoting Fed. R. Civ. P. 23(a)(2)). A single common question is enough.*fn5 Ross v. RBS Citizens, N.A., 667 F.3d 900, 908 (7th Cir. 2012) (citing Wal-Mart Stores, Inc. v. Dukes, --- U.S. ----, 131 S. Ct. 2541, 2556, 180 L. Ed. 2d 374 (2011)). Plaintiffs must show that class members "have suffered the same injury." Falcon, 457 U.S. at 157. "What matters to class certification . . . is . . . the capacity of a classwide proceeding to generate common answers apt to drive the resolution of litigation." Ross, 667 F.3d at 908 (quoting Wal-Mart, 131 S. Ct. at 2551 (emphasis in original)).*fn6 Application of the commonality requirement must be measured against the "important development in the law"*fn7 expressed in Wal-Mart.*fn8 There, the Court concluded that neither a disparate impact nor a disparate treatment sex discrimination claim met the commonality requirement. As distilled by Circuit Judge Posner in McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc., --- F.3d ----, 2012 WL 592745, at *5 (7th Cir. Feb. 24, 2012), Wal-Mart holds that if employment discrimination is practiced by the employing company's local managers, exercising discretion granted them by top management (granted them as a matter of necessity, in Wal-Mart's case, because the company has 1.4 million U.S. employees), rather than implementing a uniform policy established by top management to govern the local managers, a class action by more than a million current and former employees is unmanageable; the incidents of discrimination complained of do not present a common issue that could be resolved efficiently in a single proceeding. Fed. R. Civ. P. 23(a)(2).
The Seventh Circuit in McReynolds ruled that the commonality requirement was met where an employer had a company-wide "teaming policy," which delegated to local brokers the formation of broker teams, and an "account distribution policy," which awarded accounts based on past revenue generation by brokers. It decided that whether the policies cause racial discrimination and whether they are justified by business ...