Chi. Teachers Union v. Bd. of Educ. of Chi.

14 F.4th 650

CHICAGO TEACHERS UNION, Terri Fells, Lillian Edmonds, and Josephine Perry, Individually and on Behalf of all Similarly Situated Persons, Plaintiffs-Appellants,

v.BOARD OF EDUCATION OF THE CITY OF CHICAGO, Defendant-Appellee.

No. 20-1167

United States Court of Appeals, Seventh Circuit.

Argued September 15, 2020

Decided September 22, 2021

Robin B. Potter, Attorney, Fish Potter Bolanos, PC, Chicago, IL, for Plaintiff Chicago Teachers Union, Local No. 1, American.

Robin B. Potter, Attorney, Fish Potter Bolanos, PC, Chicago, IL, Randall D. Schmidt, Attorney, Mandel Legal Aid Clinic, Chicago, IL, for Plaintiffs-Appellants Terri Fells, Lillian Edmonds, Josephine Hamilton Perry.

Allison E. Czerniak, Attorney, Cary E. Donham, Attorney, J. Timothy Eaton, Attorney, John F. Kennedy, Attorney, Taft Stettinius & Hollister LLP, Chicago, IL, Thomas Arthur Doyle, Attorney, Chicago Board of Education, Chicago, IL, for Defendant.

Before Flaum, Rovner, and Wood, Circuit Judges.

Rovner, Circuit Judge.

Citing an alleged budget deficit, the Board of Education of the City of Chicago ("the Board") laid off approximately 1,077 teachers and 393 paraprofessional educators in the summer of 2011. The Chicago Teachers Union and a class of teachers (collectively "CTU") filed suit against the Board alleging that the layoffs discriminated against African American teachers and paraprofessionals in violation of Title VII of the Civil Rights Acts of 1964 and the Civil Rights Act of 1991, 42 U.S.C. §§ 2000e et seq. The district court granted summary judgment in favor of the Board on the parties’ cross-motions for summary judgment. CTU appeals, but we affirm.

I.

During the 2010-2011 school year, the Board concluded that it would need to eliminate certain teaching and paraprofessional positions for the upcoming 2011-2012 school year. This conclusion was based on a significant projected budget deficit for the upcoming 2011-2012 school year as well as declining enrollment in a number of Chicago public schools. Senior members of the Board met several times in May 2011 to consider options for reducing the proposed budget deficit. Ultimately, the Board instituted a series of spending cuts—$107 million in Central Office spending, $27 million in operations, and $86.7 million in program reductions.

Most relevant here, however, was the Board's decision to close 1,077 teaching and 393 paraprofessional (1,470 total) positions for the upcoming school year based on declining enrollment at certain Chicago Public School ("CPS") schools. In the 2010-2011 school year, the Chicago school district was divided into 29 geographic "Areas." The majority of African American students attended schools corresponding geographically to the south and west sides of Chicago, which were also the schools with declining enrollment. Specifically, in the decade leading up to the 2010-2011 school year, the number of students enrolled in CPS schools dropped by 7.7% overall—from 437,618 to 404,151—but the number of African American students declined by 25.2%—from 224,494 to 168,020. These declining enrollment numbers loosely correlated with census data showing that the population of African Americans in the City of Chicago declined from 1,065,009 to 887,608 (16.7%) from 2000 to 2010.

As it had in past years, the Board decided which positions to eliminate and which CPS employees to lay off based on projected enrollment numbers. The Board laid off faculty and staff from three types of positions: 1) quota positions; 2) instructional or programmatic positions; and 3) discretionary fund positions. Quota positions are allocated to each school based on its student enrollment. Instructional or programmatic positions, which covered specialized curriculum such as bilingual education, were also staffed based on projected enrollment. Finally, discretionary fund positions, which were based on federal Title I appropriations and supplemental general state aid appropriations from the Illinois State Board of Education, were tied to the number of students eligible for free or reduced lunch, a number that dropped with declining enrollment.

To reach its decisions about layoffs, the Board worked with the Office of Management and Budget to determine which quota positions would be eliminated per school using a formula based on projected enrollment. Like the quota positions, programmatic and instructional positions as well as discretionary funds for positions were eliminated using enrollment projections. Using 2011-2012 enrollment projections provided by the Demographics Department, the Office of Management and Budget created and disseminated a packet to each principal explaining its budgeting process. Principals also received a letter setting forth the number of quota, instructional, and programmatic positions allowed as well as the total discretionary funding allocated. If these numbers required fewer positions than the previous year, the principal then decided which positions to eliminate. This decision was based on the principal's own assessments as well as seniority and certification criteria set forth in the collective bargaining agreement ("CBA").

Before the 2011 layoffs, the Board employed approximately 27,240 Union members. Approximately 8,048 of these employees were African American, or roughly 30%. Around 1,470 Union members received layoff notices, and over 600 of those members were African American. Thus, although African American teachers or paraprofessionals comprised only 30% of total teachers or paraprofessionals, they made up over 40% of those who received layoff notices. Many of these individuals worked at the South and West side schools where enrollment had declined most sharply.

Under the CBA, teachers and staff receiving layoff notices received full pay and benefits through August 31, 2011. 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. Others were offered lower-paying substitute positions on a day-to-day basis. Of the 630 African American individuals who received layoff notices, 335 had found full-time positions with the Board by September 1, 2011 and therefore suffered no loss of pay or benefits. Another thirty-four voluntarily retired before September 1, 2011.

In December 2012, appellants filed suit against the Board, alleging that the 2011 layoff decisions disparately impacted African American teachers and staff in violation of Title VII of the Civil Rights Act of 1964 and the Civil Rights Act of 1991. 42 U.S.C. § 2000e et seq. 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. In May 2015, the district court certified the class, which it ultimately defined over the Board's objection as follows:

All African American persons employed as a tenured teacher or staff member, as defined by the collective bargaining agreement between the Chicago Teachers Union and the Board of Education of the City of Chicago, who received a layoff notice from the Board of Education pursuant to its "layoff policy in 2011."

Dkt. 165, p. 2.

The plaintiffs later amended their complaint to add a Title VII disparate treatment claim against the Board. After considerable back and forth, including the Board's unsuccessful attempt to add a counterclaim with its affirmative defenses, the parties filed cross-motions for summary judgment along with Daubert motions to exclude the other party's expert testimony.

The district court granted summary judgment in favor of the Board, and denied as moot both the motion to exclude the Board's expert, Dr. David Blanchflower, and the motion to exclude CTU's expert, Dr. Jonathan Walker. Although the parties disputed the admissibility of their respective experts’ reports and the question of whether there had been an adverse employment action at all (after accounting for the class members who ultimately suffered no loss of pay or benefits), the district court dismissed these issues as unnecessary to the outcome. Ultimately, the district court concluded that the class had failed to rebut the Board's legitimate business justification for the layoffs. Specifically, the court assumed that the report of CTU's expert, Dr. Walker, showing a statistically significant disparate impact on African American employees, was admissible, and that the report submitted by the Board's expert, Dr. Blanchflower, drawing a different conclusion was not. Nonetheless, the court concluded that the Board had demonstrated that tying the layoffs to declining enrollment was consistent with business necessity, and that CTU failed to provide evidence that the Board could have accomplished the same business objective in an equally efficient and less discriminatory way.

The court also relied on the business justification offered by the Board to conclude that CTU's disparate treatment claim failed on the merits. The district court thus sidestepped an argument between the parties as to whether the disparate treatment claim had been exhausted, given that CTU had not explicitly raised it in its Equal Employment Opportunity Commission (EEOC) charge. The district court thus granted summary judgment to the Board on all of CTU's claims.

II.

CTU appeals, arguing that it has presented sufficient evidence to withstand summary judgment on both its disparate impact and disparate treatment claims. We review the district court's judgment on cross motions for summary judgment de novo, drawing all reasonable inferences in favor of "the party against whom the motion at issue was made." Woodring v. Jackson Cty. Ind. , 986 F.3d 979, 984 (7th Cir. 2021) (quotations and internal citation omitted). Summary judgment is appropriate only when there are no genuine disputes of material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a) ;...