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Chicago Teachers Union v. Board of Education City of Chicago

United States District Court, N.D. Illinois, Eastern Division

January 3, 2020

CHICAGO TEACHERS UNION, LOCAL 1, AMERICAN FEDERATION OF TEACHERS, AFL-CIO, TERRI FELLS, LILLIAN EDMONDS, and JOSEPHINE HAMILTON PERRY, individually and on behalf of all similarly situated persons, Plaintiffs,
v.
BOARD OF EDUCATION OF THE CITY OF CHICAGO, Defendant.

          MEMORANDUM OPINION AND ORDER

          HON. JORGE L. ALONSO, UNITED STATES DISTRICT JUDGE

         Plaintiffs, the Chicago Teachers Union, Local 1, American Federation of Teachers, AFL-CIO (“CTU”), Terri Fells, Lillian Edmonds, and Josephine Hamilton Perry, bring this class-action suit against defendant, the Board of Education of the City of Chicago (“the Board”), asserting claims of racial discrimination under Title VII of the Civil Rights Acts of 1964 and the Civil Rights Act of 1991, 42 U.S.C. §§ 2000e et seq. The parties have filed cross-motions for summary judgment, as well as Daubert motions to exclude the other's expert testimony. For the following reasons, defendant's motion is granted, plaintiffs' motion is denied, and the Daubert motions are denied as moot.

         BACKGROUND

         Defendant, the Board of Education of the City of Chicago (“the Board”), is the employer of all teachers and paraprofessionals in the Chicago Public Schools (“CPS”) system. (Pls.' LR 56.1 Resp. ¶ 8, ECF No. 249.) Plaintiff CTU is a labor organization and the exclusive bargaining representative of all CPS teachers and paraprofessionals. (Id. ¶ 3.) The individual plaintiffs, Terri Fells, Lillian Edmonds, and Josephine Hamilton Perry, are African-Americans who were working as teachers in CPS schools when they received layoff notices in the summer of 2011. (Id. ¶ 5-7.) Plaintiffs bring this suit on behalf of all African-American teachers and paraprofessionals who received similar layoff notices in 2011. (2d Am. Compl. ¶¶ 9, 94-96, ECF No. 167-1; see Apr. 28, 2017 Mem. Op. & Order, ECF No. 165 (defining class).)

         The Board, via CPS administrators, determines how many teachers to employ in its individual schools based essentially on enrollment projections. (Def.'s LR 56.1 Resp. ¶¶ 1-2, ECF No. 258.) Each spring, a certain number of “quota positions” are allocated to each school based on the school's enrollment projections for the following school year. (Id. ¶ 4; Pls.' LR 56.1 Resp. ¶¶ 20, 23.) Additionally, a certain number of “instructional and programmatic positions, ” such as, for example, special education or bilingual education positions, are allocated to each school based on formulas created by the Illinois State Board of Education, which depend on the number of students in each school needing special education, bilingual education, or other such additional support. (Def.'s LR 56.1 Resp. ¶ 4; Pls.' LR 56.1 Resp. ¶ 25.) Further, each school is allocated a certain amount of discretionary funding derived from federal programs, based on the number of students receiving free or reduced lunch in the school. (Def.'s LR 56.1 Resp. ¶ 4; Pls.' LR 56.1 Resp. ¶ 26.) The school's principal can use this funding to create additional positions, or for any other purpose, at his or her discretion. (Def.'s LR 56.1 Resp. ¶ 4; Pls.' LR 56.1 Resp. ¶ 34.)

         Toward the end of each school year, each CPS principal receives a packet of information from the CPS budget office, including a letter providing the number of quota positions and amount of discretionary funding the school has been allocated for the coming school year. (Pls.' LR 56.1 Resp. ¶ 32.) If the school is allocated fewer positions and/or less discretionary funding than in prior years, the principal may be forced to close positions. Depending on factors such as past performance and applicable seniority rules, the principal makes an initial determination as to which individuals will be retained for the upcoming year and which will be bumped from their positions. (Id. ¶¶ 35-36.) The Board's Workforce Planning Department reviews the principal's initial decisions in order to ensure that they comply with the collective bargaining agreement between the Board and CTU. (Id. ¶ 37.)

         In the spring of 2011, due to a range of factors, the Board was facing a budget deficit of $724 million, and the Board's senior administrators held several meetings to determine how to address it. (Id. ¶¶ 10-14.) Among the options presented was altering the formula for calculating quota positions so as to require schools to make do with fewer teachers, but chief executive officer Jean-Claude Brizard rejected this suggestion, which would have increased class sizes. (Id. ¶ 14.)[1]In 2011, CPS followed the same process it had followed the previous year for adjusting the number of positions and amount of funding allocated to particular schools. (Id. ¶ 31). As a result, in the summer of 2011, the Board sent 1, 470 layoff notices to 1, 077 teachers and 393 paraprofessionals. (Id. ¶ 38.)

         Between 2001 and 2011, enrollment in CPS schools had declined by 7.6%. (Id. ¶ 17.) For African-American students, who were in large part clustered on Chicago's South and West Sides, the rate of decline was more than triple, 25.2%. (Id.) Of the 1, 470 individuals who received layoff notices in 2011, 630 were African-American. (Id. ¶ 38). Many of these 630 worked in predominantly African-American schools on the South and West Sides, where enrollment was declining most precipitously. (See Def.'s LR 56.1 Resp. ¶ 30.)

         Laid-off individuals received full pay and benefits through August 31, 2011. (Pls.' LR 56.1 Resp. ¶ 39.) Some tenured teachers were transferred to the Reassigned Teachers Pool, where they received full salary and benefits for ten months while working as substitute teachers. (Id. ¶ 40.) Other tenured teachers were not transferred to the reassigned teachers' pool, but they were given the opportunity to continue their employment as day-to-day substitute teachers, albeit at lower pay, with no guarantee of steady work. (Id. ¶ 42; see Def.'s LR 56.1 Resp. ¶ 15.) Of the 630 laid-off individuals, 335 had found other full-time positions with the Board by September 1, 2011, sometimes in the same school where they had previously worked, and therefore suffered no loss of pay or benefits. (Pls.' LR 56.1 Resp. ¶¶ 44-46.) Another thirty-four voluntarily retired prior to September 1, 2011. (Id. ¶ 46.)

         ANALYSIS

         “The Court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Wackett v. City of Beaver Dam, 642 F.3d 578, 581 (7th Cir. 2011). A genuine dispute of material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Court may not weigh conflicting evidence or make credibility determinations, but the party opposing summary judgment must point to competent evidence that would be admissible at trial to demonstrate a genuine dispute of material fact. Omnicare, Inc. v. UnitedHealth Grp., Inc., 629 F.3d 697, 705 (7th Cir. 2011); Gunville v. Walker, 583 F.3d 979, 985 (7th Cir. 2009); see Modrowski v. Pigatto, 712 F.3d 1166, 1167 (7th Cir. 2013) (court must enter summary judgment against a party who “‘does not come forward with evidence that would reasonably permit the finder of fact to find in [its] favor on a material question'”) (quoting Waldridge v. American Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994)). The Court construes all evidence and draws all reasonable inferences in the light most favorable to the nonmoving party. Chaib v. Geo Grp., Inc., 819 F.3d 337, 341 (7th Cir. 2016). The Court applies these “ordinary standards for summary judgment” in the same way whether one or both parties move for summary judgment; when the parties file cross-motions, the Court treats each motion individually, “constru[ing] all facts and inferences arising from them in favor of the party against whom the motion under consideration is made.” Blow v. Bijora, Inc., 855 F.3d 793, 797 (7th Cir. 2017); see Reeder v. Carter, 339 F.Supp.3d 860, 869-70 (S.D. Ind. 2018).

         Title VII makes it “an unlawful employment practice for an employer-(1) to . . . discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, sex, or national origin; or (2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities . . . because of such individual's race, color, religion, sex, or national origin.” 42 U.S.C. § 2000e-2(a). Unlawful employment practices under this section are of two types: (1) “intentional discrimination (known as ‘disparate treatment')” and (2) “practices that are not intended to discriminate but in fact have a disproportionately adverse effect on minorities (known as ‘disparate impact').” Ricci v. DeStefano, 557 U.S. 557, 577 (2009). Under a disparate treatment theory, “‘the most easily understood type of discrimination, '” id. (quoting Int'l Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n.15 (1977)), the plaintiff must prove “that an employer had a discriminatory motive for taking a job-related action.” Ernst v. City of Chi., 837 F.3d 788, 794 (7th Cir. 2016). Under a disparate impact theory, by contrast, an employer may be liable for “facially neutral practices that, in fact, are ‘discriminatory in operation, '” regardless of intent. Ricci, 557 U.S. at 577-78 (quoting Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971)).

         Plaintiffs claim that defendant's 2011 layoffs violated Title VII under both disparate impact and disparate treatment theories. The Court will take each theory in turn.

         I. DISPARATE IMPACT

         On their disparate impact claim, plaintiffs initially bear the burden of making out a prima facie case of discrimination by showing that the “tests in question select [employees for layoff] in a racial pattern significantly different from that of the pool” of employees generally. See Albemarle Paper Co. v. Moody, 422 U.S. 405, 425 (1975). To meet this burden, plaintiffs must identify a specific employment practice and show that it causes “‘observed statistical disparities, '” i.e., introduce “‘statistical evidence of a kind and degree sufficient to show that the practice in question has caused the exclusion of [employees] because of their membership in a protected group.'” Puffer v. Allstate Ins. Co., 675 F.3d 709, 717 (7th Cir. 2012) (quoting Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 994 (1988)); see Adams v. City of Indianapolis, 742 F.3d 720, 733 (7th Cir. 2014) (“Disparate-impact plaintiffs are permitted to rely on a variety of statistical methods and comparisons to support their claims.”). If plaintiffs succeed in establishing a prima facie case, then the burden shifts to defendant “to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity.” 42 U.S.C. § 2000e-2(k)(1(A)(i); see Griggs, 401 U.S. at 432 (“Congress has placed on the employer the burden of showing that any given requirement must have a manifest relationship to the employment in question.”) If defendant satisfies this requirement, then “the burden shifts back to the plaintiff to show that an equally valid and less discriminatory practice was available that the employer refused to use.” Puffer, 675 F.3d at 717; see 42 U.S.C. § 2000e-2(k)(1(A)(ii), (C).

         A. Prima Facie Case

         To meet their burden of stating a prima facie case, plaintiffs have proffered the expert testimony of Dr. Jonathan Walker, who finds that a disproportionate number of African-American teachers and paraprofessionals, as compared with teachers and paraprofessionals of other racial groups, received layoff notices in 2011, and the disparity cannot be explained by chance.

         The Board has proffered its own expert, Dr. David Blanchflower, who finds that most of the 630 class members, despite receiving layoff notices in 2011, did not ultimately suffer an adverse employment action because they voluntarily retired or found new positions in CPS schools (sometimes the very same school) before their pay or benefits changed. When considering only those class members who lost pay or benefits after receiving a layoff notice, Dr. Blanchflower found, “the African American variable is statistically insignificant.” (Pls.' LR 56.1 Resp. ¶ 49.)

         Each side has moved to exclude the other's expert testimony under Federal Rule of Evidence 702, arguing that the other's expert is unable to assist the trier of fact because he uses the wrong number of injured class members to assess whether the layoff had a disparate impact on African-American teachers and paraprofessionals. Further, the Board argues that, because Dr. Walker's testimony is inadmissible, plaintiffs do not state a prima facie case of employment discrimination.

         In support of its arguments, the Board argues that the layoff notice itself did not have a sufficiently concrete impact on the terms and conditions of the class members' employment to rise to the level of an adverse employment action that falls within the scope of Title VII's prohibitions. In fact, the layoff notice, per se, did not interrupt any class member's pay or benefits, and more than half of the class members never experienced any interruption or reduction in pay or benefits.

         As the Seventh Circuit has explained, “not everything that makes an employee unhappy is an actionable adverse action.” Nichols v. S. Ill. Univ.-Edwardsville, 510 F.3d 772, 780 (7th Cir. 2007) (citing O'Neal v. City of Chi., 392 F.3d 909, 911 (7th Cir. 2004)). An adverse employment action is typically “a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibility, or a decision causing a significant change in benefits.” Lewis v. City of Chi., 496 F.3d 645, 653 (7th Cir. 2007). To be actionable under Title VII, an adverse employment action must “materially alter the terms or conditions of employment, ” Porter v. City of Chi., 700 F.3d 944, 954 (7th Cir. 2012), and it must be “more disruptive than a mere inconvenience or an alteration of job responsibilities, ” Nagle v. Vill. of Calumet Park, 554 F.3d 1106, 1120 (7th Cir. 2009) (citing Crady v. Liberty Nat'l Bank & Trust Co., 993 F.2d 132, 136 (7th Cir. 1993)). For example, “‘a purely lateral transfer, that is, a transfer that does not involve a demotion in form or substance'” and that involves “‘no reduction in pay and no more than a minor change in working conditions, '” does not subject the employer to liability under Title VII. O'Neal, 392 F.3d at 911-12 (quoting Herrnreiter v. Chi. Hous. Auth., 315 F.3d 742, 744-45 (7th Cir. 2002)).

         More to the point, defendant argues that, under Ajayi v. Aramark Business Services, 336 F.3d 520, 524-26 (7th Cir. 2003), a notice of a particular employment action does not trigger Title VII liability if the employment action is never implemented. In Ajayi, the plaintiff received “a memorandum stating that her position was being eliminated and that she would be demoted two weeks later, ” but she was never actually demoted. Id. at 531. The Seventh Circuit held that there was no adverse employment action, explaining that “[a]n unfulfilled threat, which results in no material harm, is not materially adverse.” Id. According to defendant, this case is no different for those class members who found employment in CPS schools before September 1, 2011; they suffered no more than a “threat” of “material harm” that never actually occurred. Because they suffered no material harm, the argument goes, they should not be counted with the other class members in the disparate impact analysis.

         Plaintiffs respond that the reasoning of Ajayi does not apply here, in the context of a discriminatory layoff, because, ordinarily, a “wrongful-discharge claim accrues-and the limitations period begins to run-when the employer notifies the employee he is fired, not on the last day of his employment.” See Green v. Brennan, 136 S.Ct. 1769, 1782 (2016) (citing Delaware State Coll. v. Ricks, 449 U.S. 250, 258-59 (1980) (where college instructor learned of denial of tenure and was simultaneously given a one-year terminal contract, claim accrued when he was informed of denial of tenure, not when the one-year contract expired) and Chardon v. Fernandez, 454 U.S. 6, 8 (1981) (citing Ricks)). By defendant's logic, an employee who receives a layoff notice pursuant to a discriminatory process has no claim unless and until he experiences some “material harm, ” which may or may not be visited upon him-but that is inconsistent with the Supreme Court's admonition that, in determining when a claim accrues, the “‘proper focus is upon the time of the discriminatory acts, not upon the time at which the consequences of the acts bec[o]me most painful.'” Ricks, 449 U.S. at 458 (quoting Abramson v. Univ. of Hawaii, 594 F.2d 202, 209 (9th Cir. 1979)). According to plaintiffs, if an employee is notified of impending termination, then the matter of whether the termination is actually carried out is a matter of the employee's damages; it does not affect whether he has suffered an adverse employment action.

         Defendant replies that Ricks and like cases are distinguishable because they address when a claim accrues for statute of limitations purposes, not whether there has been an adverse action sufficient to incur Title VII liability. But at least two federal appellate courts have found the Ricks line of cases persuasive in the adverse action context. In Shultz v. Congregation Shearith Israel of City of New York, the Second Circuit, relying on Ricks, Chardon, and Green, held that a notice of termination may be an adverse employment action, even where the termination decision is rescinded before it is put into effect:

The Supreme Court's conclusion that a discrimination claim accrues upon notice of termination, rather than upon the implementation of that decision, necessarily implies that the notification of termination qualifies as an adverse employment action. The Supreme Court has not directly addressed whether a rescinded termination constitutes an adverse employment action. But the conclusion that the notice of termination itself gives rise to a claim follows ineluctably from the Court's rulings regarding the limitations period, because a limitations period ordinarily commences when the plaintiff has a complete and present cause of action.
If the claim accrues at the time of notification of termination, however, rescission of the notice at a point after the cause of action has accrued cannot eliminate the adverse employment action that has already occurred, and negate an accrued claim for relief. Accordingly, we conclude that the notice of termination itself constitutes an adverse employment action, even when the employer later rescinds the termination.

867 F.3d 298, 305-06 (2d Cir. 2017) (internal quotation marks and citation omitted). The Second Circuit explained that the employer's decision to rescind the termination can “come into play in connection with the calculation of damages, ” but it cannot nullify a claim that has already accrued. Id. at 306. The court recognized that its ruling was “based on the facts of [the] case, ” in which an employee received a notice of termination that was rescinded two weeks later, but that its decision might be different in other circumstances. For example, the court recognized that termination, i.e., “complete termination of the employment relationship, ” is different from other types of adverse employment actions. Id. at 307 (distinguishing termination from, for example, disciplinary counseling). A terminated employee naturally “experience[s] the dislocation of losing her employment” and is forced to assess and undertake measures to recoup the loss, which, “even under the most optimal circumstances . . . is likely to give rise to bad feelings and anxiety.” Id. (internal quotation marks omitted).

         In Singletary v. Howard University, the D.C. Circuit agreed, holding that “the mere notice of termination is a cognizable adverse employment action regardless of whether the employer follows through” because “wrongful discharge claims accrue . . . at the time the employer notifies the employee that she is fired, not later on the last day of her employment.” 939 F.3d 287, 300 (D.C. Cir. 2019) (citing Schultz, 867 F.3d at 305-06, Green, 136 S.Ct. at 1782, and Almond v. Unified Sch. Dist. No. 501, 665 F.3d 1174, 1177 (10 Cir. 2011) ...


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