By Cate Berenato

On May 11, 2015, in the published civil case Brown v. Nucor Corp., the Fourth Circuit held that a South Carolina district court erred in decertifying a class of workers who claimed that their employer, Nucor Corporation and Nucor Steel Berkeley (“Nucor”), engaged in discriminatory job promotion practices under Title VII of the Civil Rights Act of 1964 (“Title VII”). Though the district court believed that the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes (“Wal-Mart“) allowed it to reconsider the class’s certification, the Fourth Circuit disagreed.

Workers Sue Nucor but the District Court Determined They Do Not Meet the Requirements for Class Certification

Nucor is a steel plant in South Carolina. Statistics gathered from the plant’s change-of-status forms filed between 1999 and 2003 showed that Nucor had only one black supervisor, though seventy-one of its 611 employees were black. Additionally, the workers’ evidence showed that Nucor managers failed to respond to complaints of discrimination and retaliation, ignored a promotion policy by giving supervisors discretionary promotion power, and allowed supervisors to repeatedly call black workers derogatory names and display racist symbols.

The workers sued Nucor under Title VII, which prohibits employers from discriminating against employees because of race. The workers claimed that Nucor’s supervisors disparately treated black workers when making promotion decisions. They also claimed that Nucor’s promotion practices disparately impacted black workers.

In 2007, the South Carolina district court denied the workers’ motion for class certification for their discriminatory promotion and hostile work environment claims. The Fourth Circuit reversed and remanded because the workers satisfied the requirements of Federal Rule of Civil Procedure 23.  While the district court originally recertified  the promotions class, it revoked this certification based on its reading of Wal-Mart. The district court stated that under Wal-Mart’s heightening of Federal Rule of Civil Procedure 23(a)(2)’s commonality requirement, the workers did not have “significant proof” that Nucor “operated under a general policy of discrimination” or that the class members suffered from a common injury.

Commonality and Standard of Review

The issue in this case was whether the Nucor workers presented “a common question of employment discrimination through evidence of racism in the workplace.” The standard of review was abuse of discretion.

The Class Established Commonality Under Rule 23(a)(2)

A district court can reexamine a class certification if the controlling legal authority has dramatically changed. While the Fourth Circuit stated that Wal-Mart qualified as a dramatic change, it decided that the district court abused its discretion when it decided the Nucor workers had not met  Rule 23(a)(2)’s commonality requirement. It noted that “the district court had no grounds to revisit the question of predominance” under Rule 23(b).

Rule 23(a)(2) states that a class action is valid if there are questions of law or fact common to the class. The Nucor workers established commonality based on (1) statistical evidence, (2) evidence of a general policy of discrimination and a common injury, and (3) proof that Nucor supervisors exercised discretion in a common manner.

In this case, the workers’ statistics were significant for racial discrimination. Nucor’s change-of-status forms revealed that only one black employee of Nucor’s 611 employees was in a supervisory role. This was statistically significant at 2.54 standard deviations “from what would be expected if race were a neutral factor.”

The workers demonstrated a class-wide injury. Though the district court stated that the Wal-Mart Court did not find a class-wide injury among the 12,500 class members representing 235 Wal-Mart stores, the Fourth Circuit noted that Nucor was just a single plant and the workers’ class included only 100 members. Nucor’s “centralized, circumscribed environment . . . increase[d] the uniformity of shared injuries” and the “consistency with which managerial discretion [was] exercised.”

The workers provided evidence of a general policy of discrimination. The evidence included management tolerance of “bigoted epithets and monkey noises broadcast across the plant radio system, emails with highly offensive images . . . a hangman’s noose . . . and abundant racist graffiti in locker rooms.”

The workers demonstrated that Nucor supervisors had a “common mode of exercising discretion” in promotion decisions. At Nucor, employees could bid on positions available in other departments, but managers had to approve the change of status. The workers provided substantial evidence that the department heads impeded the upward mobility of black workers and that the general manager ignored promotion discrimination complaints. One of the department heads even stated, “I don’t think we’ll ever have a black supervisor while I’m here.”

Commonality Established and Case Remanded

The workers established commonality under Rule 23(a)(2). The Fourth Circuit vacated the district court’s decertification and remanded the case. Judge Agee dissented because the majority allegedly did not afford “substantial deference” to the district court or to Wal-Mart.

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