Workplace Labor Update - “Pattern and Practice” Discrimination Claim Unavailable to Individual Claimants

The U.S. Court of Appeals for the Fourth Circuit, with jurisdiction over federal courts in Maryland, Virginia, North Carolina and South Carolina, recently has held that individual claimants do not have a non-class cause of action for pattern or practice discrimination under Title VII. In Lowery v. Circuit City Stores 77 F.E.P. Cases 1319 (4th Cir, 1998), the appellate court largely rejected a jury verdict which had awarded over $275,000 in compensatory and punitive damages to two individual claimants, and nearly $4 million in attorney's fees and costs. In its initial incarnation, the case involved claims of racial discrimination brought by eleven African-American current and former employees of Circuit City. The plaintiffs sued individually and on behalf of all African-Americans employed at the Richmond, Virginia headquarters of the company. The claimants alleged that Circuit City engaged in a pattern or practice of racial discrimination and that Circuit City specifically discriminated against plaintiffs Renee Lowery and Lisa Peterson on account of their race. Although originally certified as a class action, the trial court decertified, meaning abolished, the class because of what it deemed problems of fairness and efficiency. Notwithstanding the decertification of the class action, the district court held that the eleven plaintiffs would be able to produce evidence at trial of an alleged pattern or practice of discrimination. At trial, the majority of the plaintiffs' case focused on an alleged pattern or practice of discrimination resulting from Circuit City's unstructured management practices with regard to promotion. At the close of the trial, the jury awarded plaintiffs Lowery and Peterson more than $275,000 in compensatory and punitive damages. In addition, the district court imposed a broad permanent injunction which, among other things, prohibited Circuit City from engaging in any act or practice that discriminated against any African-American employee and required Circuit City to develop within 90 days a program of diversity management. The injunction established specific requirements which the mandated promotion programs must meet, and the trial court retained jurisdiction over the case for at least five years and thereafter for as long as required to carry out its order. In addition, the district court awarded nearly $4 million to the plaintiffs for attorney's fees and costs. In doing so, the court relied on its finding that the plaintiffs had succeeded on their pattern or practice claim, noting that the plaintiffs had obtained "excellent results" in their civil rights suit and that their attorneys should recover a full compensatory fee. Not surprisingly, Circuit City appealed from the entirety of the above awards. In pointedly limiting the trial court's decision and award, the Fourth Circuit held that "individuals do not have a private, non-class cause of action for pattern or practice discrimination" under the applicable civil rights statutes. Finding that the plaintiffs, with the exception of Lowery and Peterson, failed to offer direct or even circumstantial evidence of individual discrimination, the appeals court reversed the award of attorney's fees, as well as the injunctive relief the district court had ordered. In support of its holding, the Fourth Circuit noted that, unlike in a class action, individual plaintiffs do not litigate common questions of fact, but the discrete issue of whether an employer discriminated against the plaintiff in a specific instance. The court held that while evidence of a pattern or practice of discrimination might be enough to prove a class action claim of discrimination, and may be "useful and relevant" in proving an individual claim of discrimination, such evidence alone cannot establish a case of individual disparate treatment. In addition, the court noted that class action and individual claims differ in the nature of their remedies. Where relief typically sought in class action suits is injunctive-i.e. affirmative action plans, altering of seniority systems or relief like that imposed in the trial court-in private, non-class disparate treatment cases, plaintiffs seek to remedy individual harm typically through such remedies as reinstatement, hiring, backpay, and damages. Following Circuit City, it is clear that individual claimants cannot state a claim for relief for class-wide discrimination in the absence of class certification due to the divergent nature of such claims and remedies. However, the Fourth Circuit did not hold that evidence of a pattern or practice is irrelevant to an individual claim of discrimination; rather, the court specifically stated that such evidence could be used to state a prima facie case of discrimination. Thus, even though precluded from stating broad, class-action type claims, plaintiffs arguably may be entitled to broad, class-type discovery, in pursuing their individual discrimination claim. Undoubtedly, this question, not addressed by the appellate court but of great relevance to employers, will require further examination by the courts.