WASHINGTON (CN) - In a scathing rebuke of a proposed class of black Lockheed Martin workers, a federal judge on Friday shot down a $22.8 million settlement proposal and refused to certify class-action claims of racial discrimination.
Citing U.S. Supreme Court precedent in the 2011 case Wal-Mart Stores Inc. v. Dukes, U.S. District Judge Ketanji Brown Jackson found that two Lockheed employees failed to show that a general policy of discrimination exists in the company's performance-review system.
Plaintiffs Vernon Ross and Debra Josey had claimed in a 2016 complaint that Lockheed's review process resulted in disparate outcomes for black employees, including lower pay, lower retention rates and fewer promotions.
But Jackson found their arguments unpersuasive, particularly as they relate to a proposed class of 5,500 black employees of Lockheed, a leader in the aerospace, defense, security and technologies industry.
"As was the case in Wal-Mart, plaintiffs have not identified any affirmative policy that had a demonstrably discriminatory intent or effect on African-American Lockheed employees," the 52-page ruling states.
The specific cases of Ross and Josey, among the thousands of proposed class members, failed to persuade Jackson of pervasive commonalities.
"Notably, even the anecdotal allegations of the two named plaintiffs fall short of giving rise to any belief that a common mode of discretionary decision making resulted in consistent race discrimination against the entire class," the judge wrote.
Jackson, however, saved her harshest criticism for the proposed settlement, raising doubts about its fairness.
The parties negotiated the settlement during an 11-day stretch, in person and over the phone.
Lockheed had agreed to pay $22.8 million to class members who opt into the settlement, which a claims administrator would distribute based on criteria to be determined later, after gathering information from class members.
The agreement would have prevented proposed class members from bringing any other race discrimination claims beyond those stemming from the defense giant’s performance-review system.
Jackson said it makes sense for Lockheed to have agreed to a settlement that "in one fell swoop" foreclosed other race discrimination claims, but she ripped the plaintiffs’ counsel for agreeing to those terms.
"It is shocking to this court that counsel for the putative class members would contend that a release this broad and consequential is a 'fair' bargain as it relates to the absent individuals whose potential legal claims are effectively extinguished by it," she wrote.
Jackson expressed additional concern about the proposed settlement's opt-out procedure, which would make those who don't respond to the class action ineligible to receive compensation from any settlement fund.
"That is exactly the sort of circumstance that raises legitimate questions about the fairness of a settlement agreement," the ruling states.
According to the ruling, thousands of Lockheed employees are expected not to respond, which Jackson found unpalatable.
"This settlement agreement effectively allows Lockheed to inoculate itself against any and all race discrimination and race-related benefits claims by a huge swath of its African-American employees for a price that hardly seems 'adequate,'" the ruling states.
Jackson also criticized Ross and Josey for failing to fully evaluate the claims that class members would relinquish, which she said suggests they were not acting to protect and advance the rights of the class.
"Plaintiffs have opted to bind their fellow class members indiscriminately and rely on a claims administrator to do the heavy lifting of sorting it all out on the back end," Jackson wrote.
The plaintiffs’ attorney, Charles Firth with Minneapolis-based Engelmeier & Umanah, responded to the ruling in an email.
"There are many outstanding aspects of this settlement, and we are particularly proud of the programmatic relief," Firth said. "We intend to carefully review the court’s concerns, and address them as soon as possible."
A spokesperson for Lockheed Martin said in an email that the company is aware of the ruling.
"We continue to be fully committed to diversity and inclusion in our workplace and are considering next steps," the statement said.
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