Fourth Circuit Orders Racial Class Action Claim at Steel Plant to Proceed

Nearly eight years after the lawsuit was first filed, the Fourth Circuit ordered in Brown v. Nucor Corporation that workers claiming systemic racial discrimination in a South Carolina steel plant’s promotion decisions be permitted to proceed as a class action.

The Nucor steel plant in South Carolina employs just over 600 workers in six production departments. There were a total of 71 black employees at the plant, but only one black supervisor. In support of their class action claims, the workers presented 27 job change forms relating to promotions (several additional years’ worth of these forms had been lost or destroyed by Nucor.) Statistical evidence presented by the workers’ experts showed a disparity of 2.54 standard deviations in hiring decisions relative to a “race-neutral” perspective; specifically, black employees were promoted only 7.94% of the time despite submitting 19.24% of the applications. The workers also provided 16 affidavits (11 of which came from employees in the same department) from employees stating that supervisors used racial epithets (e.g. “bologna lips,” “yard ape,” and “porch monkey”) and played songs like “Dixie” and “High Cotton” over the plant speaker system. One white supervisor also testified that his department manager said, “I don’t think we’ll ever have a black supervisor while I’m here.”

In 2007, the district court denied the plaintiffs’ motion for class certification. After the workers appealed, the Fourth Circuit reversed and ordered the district court to certify the class. Brown v. Nucor Corp., 576 F.3d 149 (4th Cir. 2009) (“Brown I”). Following the Supreme Court’s 2011 decision in Wal-Mart Stores, Inc. v. Dukes, however, in which the Court clarified that workers must now present “significant proof” that the employer “operated under a general policy of discrimination,” and decertified a class of 1.5 million members from roughly 3,400 stores nationwide, the district court again decertified the class (while allowing the workers’ class. The workers appealed.

In a contentious 2-1 decision, the Fourth Circuit again vacated the decision to decertify. According to the majority, the workers’ case in Brown differed from Wal-Mart in three significant ways. First, whereas the plaintiffs in Wal-Mart sought to certify a class of “unprecedented” dimensions, the Brown plaintiffs “shared common spaces, were in regular physical contact with other departments, could apply for promotions in other departments, and were subject to hostile plant-wide policies and practices[,]” and “all of [their] evidence concerns a single connected facility.” Second, in contrast to the theory rejected by the Supreme Court in Wal-Mart that a “corporate culture” of discretion that led to subconscious bias in hiring decisions was sufficient for class action purposes, the majority in Brown ruled that the workers presented “substantial evidence” of what it called “unadulterated, consciously articulated, odious racism throughout the [] plant, including affirmative actions by supervisors and a widespread attitude of permissiveness of racial hostility.” Third, the anecdotal evidence of the workers in Brown was more widespread than in cases like Wal-Mart. In Wal-Mart, for example, the plaintiffs presented only 120 affidavits total, excluding over 3,000 of the company’s stores and 14 entire states in the process. By contrast, the majority explained, the 16 affidavits presented for 100 class members in Brown was much closer to cases like Teamsters, in which the Supreme Court permitted a class action to proceed due, in part, to the fact that there was approximately one anecdote per eight class members. Combined with the fact that promotion decisions all had to be ratified by the plant’s general manager (a white man named Ladd Hall), the court ordered that the class be certified.

Judge Agee vigorously dissented. On the statistical point, he noted there was “‘nothing magical about two or three standard deviations,’” and that the workers had failed to connect this statistical disparity in promotions to anything legally significant. The judge argued that Wal-Mart required decertification of the class because there was decentralized, discretionary decision-making at the local departmental levels, not the type of uniformity necessary to bring a class action. He noted that there were no affidavits two of the six departments. Regarding the “I don’t think we’ll ever have a black supervisor” comment, the judge also explained that, unlike the individual harassment context, “plaintiffs likely cannot prove a class-wide policy with a single comment, no matter how bigoted the comment may be.” (Emphasis added).

Given the potential widespread impact of the case, and the extensive attempts to narrow the scope of its decision in Wal-Mart, it would not be surprising to see the Supreme Court grant further review on the class certification issue.

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