Charlene Eggers v. Wells Fargo Bank, N.A. , 899 F.3d 629 ( 2018 )

United States Court of Appeals
For the Eighth Circuit
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No. 16-4376
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Charlene Eggers, Estate of Richard Eggers
lllllllllllllllllllll Plaintiff - Appellant
Richard Eggers, individually and on behalf of a putative class of similarly situated
individuals, Deceased
lllllllllllllllllllll Plaintiff
v.
Wells Fargo Bank, N.A.
lllllllllllllllllllll Defendant - Appellee
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Appeal from United States District Court
for the Southern District of Iowa - Des Moines
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Submitted: October 16, 2017
Filed: August 13, 2018
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Before SMITH, Chief Judge, MURPHY and COLLOTON, Circuit Judges.*
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SMITH, Chief Judge.
*
Chief Judge Smith and Judge Colloton file this opinion pursuant to 8th Cir.
Rule 47E.
Richard Eggers (“Richard”) sued Wells Fargo Bank, N.A., alleging the bank
violated the Age Discrimination in Employment Act (ADEA) in terminating his
employment. The district court1 granted Wells Fargo’s motion for summary judgment.
We affirm.
I. Background
In 2005, Richard, then age 61, applied to work at Wells Fargo. On the job
application, Wells Fargo required applicants to answer whether they had ever been
convicted of any crime involving dishonesty or breach of trust. He answered “No,”
and a name-based background check revealed no prior conviction. Wells Fargo
subsequently hired Richard for its Home Mortgage division.
In 2010, Wells Fargo switched to a more sophisticated FBI fingerprint-based
background check. The bank then ordered Richard’s division to undergo rescreening
with the new system. Richard authorized the rescreen, and again he indicated that he
had no prior convictions for crimes involving dishonesty or breach of trust. However,
the new background check showed that Richard had a fraud conviction under Iowa
law in 1963 and served two days in jail.
Under federal law, Richard’s prior conviction bars him from working for Wells
Fargo. Referred to as “Section 19,” 12 U.S.C. § 1829(a)(1)(A) prohibits, inter alia,
“any person who has been convicted of any criminal offense involving dishonesty or
a breach of trust” from becoming or continuing as an employee of any institution
insured by the Federal Deposit Insurance Corporation (FDIC). The statute provides
stiff penalties for employer violators, including daily fines of up to $1,000,000 per
day and/or five years’ imprisonment. Id. § 1829(b). Individuals with prior
disqualifying convictions under Section 19 may apply for employment waivers with
1
The Honorable Charles R. Wolle, United States District Judge for the Southern
District of Iowa.
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the FDIC. In addition, banking institutions wishing to hire—or to continue to
employ—Section 19-disqualified individuals also may sponsor waiver applications.
Disqualified individuals may not begin or continue employment with the FDIC-
insured institutions prior to obtaining waivers. Section 19 expressly precludes the
FDIC from granting a waiver to individuals disqualified due to certain enumerated
offenses for at least ten years. All offenses older than ten years are treated the same
as each other. See id. § 1829(a)(2)(A). In other words, Section 19 mandates that a 40-
year-old conviction for a crime involving dishonesty or breach of trust disqualifies
a person from FDIC-institution employment the same as does an 11-year-old
conviction.
Upon learning of Richard’s disqualification under Section 19, Wells Fargo
acted to comply with the statute. The bank first offered him leave time to obtain a
waiver, but he refused. Wells Fargo then terminated his employment. Richard then
applied to the FDIC for a Section 19 waiver, which was granted. Wells Fargo offered
to reinstate Richard to his prior position in the Home Mortgage division. He refused
the reinstatement offer and opted to sue the bank, alleging employment discrimination
in violation of the ADEA. He alleged Wells Fargo violated the ADEA by (1) refusing
to sponsor Section 19 waivers and by (2) failing to provide job applicants and
employees with pre-screening notice of the opportunity to obtain waivers.
Specifically, Richard contended that these two practices created a disparate impact
against older workers.
After two years of litigation, Wells Fargo moved in the district court for
summary judgment. By then, Richard had died, and his widow, Charlene Eggers, had
been substituted as the party plaintiff. The district court conducted a hearing on the
summary judgment motion after briefing by the parties. It then issued a ruling in favor
of Wells Fargo. The court, “[n]ow finally fully informed, . . . conclude[d] [that]
plaintiff[] ha[s] no viable theories for recovery, nor [has she] disclosed or discovered
facts supporting [the] pleaded claims of age . . . discrimination.” Eggers v. Wells
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Fargo Bank, N.A., No. 4:14-cv-00394-CRW-SBJ, slip op. at 3 (S.D. Iowa Oct. 27,
2016), ECF No. 173. The court noted that Eggers “cited [no] legal authorities nor
discovered evidence supporting [the] age discrimination claims, whether
characterized as intentional discrimination or disparate impact results.” Id. at 5.
Further, the court observed that “any bank or other financial institution wisely would
prefer for its customers to be served by employees who were not pre[v]iously persons
convicted of crimes of dishonesty. When [Wells Fargo] learned of the conviction[],
its sound business decision was to terminate . . . .” Id. at 4. The district court then
granted Wells Fargo’s summary judgment motion and dismissed Eggers’s lawsuit.
II. Discussion
Eggers alleges that the district court, in granting summary judgment to Wells
Fargo: (1) ignored Eggers’s identified discriminatory employment practices; (2)
conflated disparate treatment and disparate impact law in holding that Eggers failed
to make out a prima facie case of disparate impact under the ADEA; and (3)
incorrectly concluded that Wells Fargo’s blanket refusal to sponsor waivers and to
provide notice of opportunity for Section 19 waivers was a reasonable factor other
than age. We disagree and address each argument in turn.
We review the district court’s grant of summary judgment de novo. Torgerson
v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc). “Summary
judgment is not designed to weed out dubious claims, but to eliminate those claims
with no basis in material fact.” Wilson v. Myers, 823 F.2d 253, 256 (8th Cir. 1987)
(citation omitted). “Summary judgment is proper ‘if the pleadings, the discovery and
disclosure materials on file, and any affidavits show that there is no genuine issue as
to any material fact and that the movant is entitled to judgment as a matter of law.’”
Torgerson, 643 F.3d at 1042 (quoting Fed. R. Civ. P. 56(c)(2)). “Facts must be
viewed in the light most favorable to the nonmoving party only if there is a genuine
dispute as to those facts.” Id. (quoting Ricci v. DeStefano, 557 U.S. 557, 586 (2009)).
“‘Mere allegations, unsupported by specific facts or evidence beyond the nonmoving
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party’s own conclusions, are insufficient to withstand a motion for summary
judgment.’ We may affirm a district court’s grant of summary judgment on any basis
supported by the record.” Menz v. New Holland N. Am., Inc., 507 F.3d 1107, 1110
(8th Cir. 2007) (first quoting Thomas v. Corwin, 483 F.3d 516, 527 (8th Cir. 2007),
then citing Tenge v. Phillips Modern Ag. Co., 446 F.3d 903, 906 (8th Cir. 2006)).
Under the disparate impact theory of employment discrimination, an
employer’s practice may be “fair in form but discriminatory in practice.” Wards Cove
Packing Co. v. Atonio, 490 U.S. 642, 645 (1989) (citation omitted). “The ADEA
makes it ‘unlawful for an employer to . . . discriminate against any individual with
respect to his compensation, terms, conditions, or privileges of employment, because
of such individual’s age.’” Onyiah v. St. Cloud State Univ., 684 F.3d 711, 719 (8th
Cir. 2012) (quoting 29 U.S.C. § 623(a)(1)) (ellipsis in original). “[T]he scope of
disparate-impact liability under ADEA is narrower than under Title VII.” Smith v.
City of Jackson, 544 U.S. 228, 240 (2005). To establish a disparate impact claim
under the ADEA,
[a] plaintiff . . . must first establish a prima facie case . . . by identifying
a specific employment practice and then presenting statistical evidence
of a kind and degree sufficient to show that the practice in question
caused the plaintiff to suffer adverse employment action because of his
or her membership in a protected group [(employees age 40 or older)].
Evers v. Alliant Techsystems, Inc., 241 F.3d 948, 953 (8th Cir. 2001) (citing Watson
v. Fort Worth Bank & Trust, 487 U.S. 977, 994 (1988)). “[T]he burden then shifts to
the employer to produce evidence demonstrating a legitimate business reason for the
challenged practice.” Id. (citing Watson, 487 U.S. at 997–98).
A legitimate business reason under the ADEA is any “reasonable factor[] other
than age” (RFOA). 29 U.S.C. § 623(f)(1). “Congress took account of the distinctive
nature of age discrimination, and the need to preserve a fair degree of leeway for
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employment decisions with effects that correlate with age, when it put the RFOA
clause into the ADEA, ‘significantly narrow[ing] its coverage.’” Meacham v. Knolls
Atomic Power Lab., 554 U.S. 84, 102 (2008) (alteration in original) (quoting City of
Jackson, 544 U.S. at 233). The RFOA exemption is an affirmative defense. Id. at 97.
“[I]n cases involving disparate-impact claims[,] . . . the RFOA provision plays its
principal role by precluding liability if the adverse impact was attributable to a
nonage factor that was ‘reasonable.’” City of Jackson, 544 U.S. at 239. The focus of
the RFOA defense
is that the factor relied upon was a “reasonable” one for the employer to
be using. Reasonableness is a justification categorically distinct from the
factual condition “because of age” and not necessarily correlated with
it in any particular way: a reasonable factor may lean more heavily on
older workers, as against younger ones, and an unreasonable factor
might do just the opposite.
Meacham, 554 U.S. at 96.
1. Employment Practices at Issue
Eggers alleges that the district court misidentified the Wells Fargo employment
policies that she challenges. She argues that the misidentification of the policies
constituted reversible errors. Eggers challenges two policies: “(1) Wells Fargo’s
practice of refusing to sponsor team members’ and new hires’ Section 19 waiver
applications and (2) Wells Fargo’s practice of refusing to provide its team members
and applicants with pre-screening notice of the opportunity to obtain Section 19
waivers.” Appellant Br. at 21.
In its summary judgment order, the district court stated:
To circumvent [Wells Fargo’s] choice to terminate or not further
employ persons convicted of crimes of dishonesty, the plaintiff[] ha[s]
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added several theories: (1) [Wells Fargo] should have given notice or
helped the plaintiff[] seek and obtain exemptions from the FDIC; (2)
[Wells Fargo] should not have required [Eggers] to be fingerprinted and
rescreened; (3) and [Wells Fargo] should itself have applied to the
FDIC to obtain exemptions from the Section 19 collateral consequence
of the employees’ convictions.
Eggers, slip op. at 4 (emphases added). The court then concluded that Eggers “ha[s]
neither cited legal authorities nor discovered evidence supporting [the] age
discrimination claims, whether characterized as intentional discrimination or
disparate impact results.” Id. at 5.
Eggers’s argument fails. The district court identified exactly the two policies
Eggers challenged. Her contention on this issue is without merit, and we find no
error.
2. Prima Facie Case
Eggers next faults the district court for concluding that she failed to establish
a prima facie case of disparate impact discrimination under the ADEA. The district
court found that Richard was disqualified for the job he held due to federal law. See
id. at 3 (“[A]ll of the plaintiffs have been convicted of disqualifying crimes of
dishonesty and therefore were lawfully not hired, or were terminated when [Wells
Fargo] learned of each disqualification.”). Eggers argues that the district court’s
reliance on EEOC v. Con-Way Freight, Inc., 622 F.3d 933 (8th Cir. 2010), was
misplaced. Eggers contends that the court should have relied on Green v. Mo. Pac.
R.R. Co., 523 F.2d 1290 (8th Cir. 1975), for guidance. We disagree.
In Green, the plaintiff alleged employment discrimination based on the
employer’s policy of disqualifying all job applicants with a conviction for any crime
other than a minor traffic offense. 523 F.2d at 1292. We held that the company’s
“sweeping disqualification” violated Title VII because it could not meet the business
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necessity test, the second prong of the McDonnell Douglas2 framework. Id. at
1296–98. Green’s holding flowed directly from our decision in Carter v. Gallagher,
452 F.2d 315, 326 (8th Cir.), cert. denied, 406 U.S. 950 (1972), where the en banc
court struck down a similar rule that an employer may not on its own institute a policy
of “treat[ing] [a] conviction as an absolute bar to employment.” Id. at 1297 (quoting
Carter, 452 F.3d at 326). In Con-Way Freight, a Title VII disparate treatment case,
we held that a plaintiff could not establish a prima facie case of discrimination
because her “theft-related conviction render[ed] [her] unqualified for any position
with the [employer],” pursuant to company policy. 622 F.3d at 938. Unlike the
company in Green, Con-Way only barred persons with theft-related convictions from
employment with the company. See id. at 935.
Green and Con-Way Freight can be read together to say that in cases where an
employer’s policy is not a “sweeping disqualification,” such policies may preclude
a plaintiff from establishing a prima facie case of disparate treatment against her
employer. In contrast, in a disparate impact case where a company-initiated
disqualification policy is sweeping and overbroad, the policy not only does not bar
a plaintiff’s prima facie case; it also fails the business necessity test. But neither
Green nor Con-Way Freight addressed a statutorily mandated employment
disqualification. Thus, neither is directly on point. Here, federal law—not company
policy—triggers disqualification from employment.
Eggers insists that establishing job qualification is never a requirement in an
ADEA disparate impact case. However, even assuming that the Section 19
disqualification does not bar Eggers’s claim, Eggers failed to present statistical
evidence of any kind that the two challenged policies created a disparate impact
among Wells Fargo employees older than 40. See Mems v. City of St. Paul, Dept. or
Fire and Safety Servs., 224 F.3d 735, 740 (8th Cir. 2000) (“When statistical evidence
2
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).
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is offered to show causation, the evidence must be ‘of a kind and degree sufficient to
show that the practice in question has caused the exclusion of applicants for jobs or
promotions because of their membership in a protected group.’” (quoting Watson, 487
U.S. at 994)), abrogated on other grounds by Torgerson, 643 F.3d at 1059. Eggers
argues that she did not have the burden to produce statistical evidence in the district
court because Wells Fargo did not raise the issue in its opening brief in support of the
motion for summary judgment. But, to avoid summary judgment, Eggers was required
“to make a showing sufficient to establish the existence of an element essential to
[her] case” because “a complete failure of proof concerning an essential element of
[her] case necessarily renders all other facts immaterial.” Celotex Corp. v. Catrett,
477 U.S. 317, 322–23 (1986). Eggers failed to present sufficient evidence to support
an essential element.
Because Eggers failed to present any statistical evidence of a disparate impact,
and because we may affirm on any ground supported by the record, summary
judgment for Wells Fargo is appropriate for lack of a prima facie case.
III. Conclusion
Accordingly, we affirm the district court’s grant of summary judgment to Wells
Fargo.
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