E.E.O.C. VICTORIA THOMAS, APPELLANT, v. FEDERICO F. PENA, SECRETARY, DEPARTMENT OF TRANSPORTATION, AGENCY. Appeal No. 01945798 Agency No. 91-132 Hearing No. 340-92-7083X December 12, 1996 DECISION INTRODUCTION Appellant timely initiated an appeal to the Equal Employment Opportunity Commission (EEOC) from a final decision of the agency concerning her complaint of unlawful employment discrimination, in violation of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000e et seq. This appeal is accepted by the Commission pursuant to the provisions of EEOC Order No. 960. ISSUE PRESENTED The issue presented is whether appellant was discriminated against because of her sex (female) when she was excluded from a Pay Demonstration Project implemented by the agency in June 1989, at the Los Angeles Federal Aviation Administration facilities. BACKGROUND At the time in question, appellant was employed by the Federal Aviation Administration ("FAA") as an Aviation Safety Assistant (Typing), GS-6, at a facility in the Los Angeles region. Pursuant to the provisions of 5 U.S.C. §4703(a), the Office of Personnel Management ("OPM") was authorized by the U.S. Congress to conduct and evaluate demonstration projects to experiment with new and different personnel management concepts. The projects could include compensation levels and incentives. No more than ten demonstration projects could be in effect at the same time, with no more than 5,000 participating employees in any one project. The record reflects that, in 1988, the public perception was that the FAA did not have enough air traffic controllers to safely serve the general and commercial air traffic throughout the United states. The FAA was in fact experiencing difficulties with lower than normal staffing at a number of complex air traffic control facilities in a variety of position classifications including air traffic controllers, aviation safety inspectors, engineers and other positions. Because of the low staffing levels, employees were not permitted to move between facilities because they were critically needed where they were; annual leaves were cancelled; high employee turnover rates were experienced; and low employee morale was a problem. These difficulties were most serious at the most complex air traffic facilities, referred to by the agency as Level 5 facilities. Facility levels range from Level 1, the least complex which include airports open only during daylight hours which operate without instrument guided traffic, to Level 5, which include high volume radar intensive airports. The record establishes that the FAA had tried several methods to alleviate employee retention problems at Level 5 facilities with only limited success.1 As a result, officials at FAA and the Department of Transportation ("DOT") contacted officials at OPM about designing a Pay Demonstration Project (the "Project") for the FAA to test the effectiveness of recruitment and retention of personnel through pay incentives. Unions representing FAA employees, including the American Federation of Government Employees, the National Air Traffic Controllers Association and Professional Airways Systems Specialists also participated in the development of the Project. The category of eligible positions were identified as hard-to-staff, safety-critical positions. The Project was not intended to operate as a cost-of-living allowance; rather, it was intended to: stabilize employment at the target facilities; secure more experienced employees in safety-related positions; obtain higher levels of full-performance level employees; and recruit, retain and motivate a well-qualified work force at hard-to-staff facilities. The Project focused both on Level 5 facilities where there were problems of recruitment and retention with critical and chronic staffing shortages and on employees in primary safety occupations or positions essential to the operation of those facilities. The facilities chosen were in the Los Angeles, New York City, Chicago and Oakland regions. The following positions were initially selected: Airway Facilities Sector Manager; Assistant Sector Manager; Supervisory Computer Operator; Computer Operator; Supervisory General Engineer; General Engineer; Supervisory Engineering Technician; Engineering Technician; Mechanical Engineer; Supervisory Electronics Engineer; Electronics Engineer; Supervisory Air Traffic Control Specialist; Air Traffic Control Specialist; Aviation Cabin Safety Specialist; Supervisory Aviation Safety Inspector; and Aviation Safety Inspector. As discussed below, the position of Civil Engineer was later added with OPM approval after implementation of the Project. Under the Project, persons in those positions at the covered facilities were paid a 20% bonus above their annual salaries. As implemented, the Project covered approximately 2,132 employees at an estimated project cost in excess of $20 million for each year, or in excess of $100 million should the project continue in effect for the five year maximum span allowable by 5 U.S.C. §4703(b). Prior to implementation, a public hearing on the Project was held in Chicago on December 14, 1988. At the hearing, there was testimony to the effect that the inclusion of some employees and the exclusion of others would have a detrimental effect on the morale and productivity of the excluded employees at the covered facilities. An Air Traffic Manager at a Los Angeles facility testified at the hearing and later sent a letter seeking the inclusion of administrative and clerical employees. A letter was also sent by the Division Manager of Flight Standards seeking inclusion of clerical employees in the Los Angeles region.2 It was noted that the excluded occupations were primarily filled by women. The final plan for the Project was published in the Federal Register on March 10, 1989, and became effective on June 18, 1989. Appellant sought EEO counseling on November 7, 1989, and filed a formal EEO complaint on February 6, 1990.3 Appellant timely requested a hearing before an EEOC Administrative Judge ("AJ"). On June 27, 1994, the AJ issued a recommended decision finding discrimination. At the hearing, testimony was offered as to the criteria for selecting the positions to be covered by the Project. The category of eligible safety related positions were limited to positions which were also traditionally hard-to-staff. See, e.g., Hearing Transcript ("HT") at 113, 167. Neither the FAA nor DOT ever specifically sought the inclusion of any clerical or most administrative positions. However, as noted above, the exclusion of such positions had been brought to the attention of OPM at least by the date of the public hearing in December 1988. At appellant's EEO hearing, the former head of OPM's Office of Systems Innovation and Simplification, which developed and approved the Project, testified that had the FAA and DOT sought inclusion of clerical and most administrative positions, it "was very doubtful that OPM would have approved;" had FAA and DOT insisted on inclusion, it was "possible that there would have been no Project." HT at 214, 220. Similarly, a former Supervisory Personnel Management Specialist for DOT testified that, while the Project was in the design stage, OPM made it clear that OPM was not interested in creating a situation where the FAA would be giving bonuses to people holding occupations that required only qualifications common to those required by other agencies, i.e. OPM had no desire "to test whether or not people . . . would move from one agency to another" for additional pay. HT at 83. Rather, OPM wished to focus on whether the FAA could recruit more successfully, and retain more effectively, those occupations for which the alternative employers were in the private sector and not in other public agencies. Appellant offered into evidence statistics reflecting that, in the Los Angeles region, 57 position classifications were excluded from the Project as non-safety related.4 Of these positions, 75.7% were filled by female employees and 24.3% by male employees. As to the position classifications identified as safety related, but not included in the Project, 50.5% were filled by females and 49.5% were filled by males. (With one exception, these position classifications were Air Traffic ("AT") Assistant, AT Trainee or AT Supervisor positions). As for the positions included in the Project, 21% were filled by females and 79% were filled by males. Appellant noted that many of the clerical and administrative positions were hard-to-staff positions and she contended that these positions supported the FAA's mission of safety. Appellant noted that up to 5,000 participants were permitted by statute, but that the Project covered only approximately 2,132 participants. She contended that the costs of including clerical and administrative positions would not have been excessive ("[L]ook at how much money they [the Project participants] make. Twenty percent on top of that is pretty much [while twenty] percent on top of our salaries isn't all that much." HT at 119.) She asserted that the decision to include certain supervisory personnel and a Civil Engineer position, as discussed below, evidenced discrimination. She also contended that despite knowledge of the adverse impact the Project would have on females, no attempt was made to implement the Project in a less discriminatory alternative manner. Appellant offered testimony to the effect that she and other administrative and clerical personnel were demoralized, demeaned and degraded by exclusion from the Project. As noted above, the agency maintained that clerical and administrative positions were excluded from the Project because such positions were common to other Federal agencies in the area and neither OPM, the FAA nor DOT wished to negatively impact other agencies by offering incentives to persons holding position classifications which were not unique to the FAA. In addition, the FAA contended that while such positions were related to the mission of safety, they were not safety critical positions. As to the exclusion of the AT positions, the FAA noted that while these positions were safety related, the FAA had decided to abolish AT positions prior to implementation of the Project and, therefore, was not concerned with recruitment or retention of persons holding AT positions. Appellant protested the inclusion of certain supervisory position classifications and contended that such positions neither had a history of being hard-to-staff nor were directly safety related. The agency responded that only those supervisors and managers in the same occupational categories as employees covered by the Project were included. The agency contended that the selected supervisory positions were safety related because the supervisors had to have the same knowledge, skills and training as their subordinates in order to monitor and evaluate their subordinates' performance. In addition, OPM and the FAA were concerned about 'pay inversion,' i.e. creating a situation where subordinates are paid more than their supervisors. It was believed that a failure to include selected supervisory positions would result in a shortage of supervisors if the acceptance of a supervisory position required the employee to take a substantial pay cut. (The record reflects that when regional office supervisory personnel sought to be included in the Project, OPM and the FAA did not permit their inclusion on grounds that regional office supervisors are not involved in safety issues "on a real time basis." HT at 252.) Pursuant to the provisions of 5 U.S.C. §4703, a position classification can be included in the Project after implementation, provided OPM's approval is obtained. The record reflects that the FAA sought and obtained OPM approval to include a Civil Engineer position after implementation of the Project. Appellant challenged the decision to include the Civil Engineer position, noting that it was a newly created position and, accordingly, had no history of being hard-to-staff. The FAA responded that it sought to include the newly created Civil Engineer position in the Project because, like General and Electrical Engineers which were already included in the Project, it was safety related and the recruitment pool was primarily from the public sector rather than other Federal agencies. The FAA further noted that the newly created Civil Engineer position was filled by a woman. The Recommended Decision In her recommended decision, the AJ found that appellant established a prima facie case of disparate treatment discrimination because she was a member of a protected class (female), she was excluded from the Project implemented at a facility where she was employed, and the agency "was aware that female employees filled the excluded positions, discussed this issue, and persisted with its plans over objections . . . that the decision deleteriously affected female employees." Accordingly, the AJ found the evidence "sufficient to raise an inference of discriminatory animus based on gender." The AJ held that the legitimate nondiscriminatory reasons offered by the agency for its actions "were unsubstantiated, speculative, and failed to hold up under scrutiny." Specifically, the AJ found that the inclusion of certain managerial and supervisory positions that were primarily administrative in nature and not safety-critical demonstrated that the agency "could have extended the same discretion to include the position[] filled by" appellant. The AJ found "unpersuasive" the agency's 'pay inversion' rationale because not all facilities in the Los Angeles region were included in the Project and, thus, "a pay inversion was inevitable within the Los Angeles area." The AJ found "particularly unsupported" the agency's contention that it did not include clerical and administrative position because it did not wish to drain such positions from other agencies. The AJ found that the greater weight of the evidence reflected that the administrative and clerical positions performed by the excluded personnel were extremely specialized and not interchangeable generic positions readily filled by personnel from other agencies. Moreover, because "within ten miles of an included FAA facility there was an excluded FAA facility," the AJ found a "greater potential for draining or raiding personnel pertained to supervisory and managerial personnel within the FAA at the excluded facilities." Since "there were a finite number of administrative and clerical positions vailable at the FAA target sites, testimony that inclusion of incumbent clerical and administrative personnel in the Project would deterimentally affect other federal employers in the Los Angeles area was not credible." Rather, the AJ stated that the inclusion of administrative and clerical positions in the Project "would decrease the turnover in these positions, minimizing the potential for negative effects on other federal agencies." Insofar as the agency contended that the administrative and support positions had high turnovers but did not have "chronic" staffing problems, the AJ found this argument pretextual because the newly created entry level position of Civil Engineer was included without any history of being hard-to-staff. While the agency also had noted that other special Federal salary incentives were available for clerical employees, such as appellant, the AJ found this argument "undercut by testimony that similar incentives existed for positions included in the Project, such as engineers." Since the agency had made "adjustments" for certain included employees (such as discounting the Project pay by the amount of a special geographic allowance), the AJ found that "it could make them for the clerical employees" as well. In addition, since administrative positions did not receive special Federal salary incentives, the AJ found that this reason did not constitute a legitimate nondiscriminatory reason regarding such positions. The AJ stated that she found unpersuasive any argument regarding costs, because the "administrative and clerical [positions] were lower paid, less costly positions to include in the Project than were the supervisory and/or managerial positions that the agency opted to include." In addition, the AJ noted that "the Project was implemented for only 2,132 of the statutory maximum number of 5,000 employees, leaving considerable room to expand the included categories." Comparing the agency to the employers in Burns,5 where the selecting official stated that he refused to hire females for any Schedule B position, the AJ found "that the decision-makers' expressed intentions to implement the Project, knowing that administrative and clerical positions filled by female employees were excluded, comprises direct evidence of gender discrimination regarding the exclusion of [appellant] and that the agency incorporated an overtly discriminatory policy which adversely affected [appellant]." Accordingly, the AJ found that appellant established gender based disparate treatment discrimination. The AJ further found that appellant established a prima facie case of disparate impact discrimination. The AJ noted that the data revealed that females filled 75% of the excluded positions. Citing 29 C.F.R. §1607.4D.,6 the AJ found that the Project, while neutral on its face, imposed a substantially disproportionate burden on female employees. Accordingly, the AJ found that the agency bore "the burden of proving that the Project was implemented to exclude administrative and clerical positions because of business necessity or need and that no other practice or policy would serve the employer's needs without such a disproportionate impact on female employees." First, because the "Project [was] of an experimental nature, [the AJ held that] the agency cannot sustain its burden to prove that the administrative and clerical employees were excluded because of business necessity." Second, the AJ found that because the agency "had flexibility and discretion as to which positions [to include or exclude], appellant's position "could readily have been included without detriment to the Project." Third, the AJ held that the business goals of minimizing job turnover and maintaining staff in hard-to-fill positions "would not be jeopardized by including the administrative and clerical jobs in issue." Fourth, the AJ found that "the cost of including the clerical jobs would have been minimized if those employees were covered by other federal pay incentives [and if] they were not [so covered], then there was all the more reason to include them in the Project." Therefore, the AJ concluded that the agency failed to demonstrate by a preponderance of the evidence that the exclusion of administrative and clerical positions was a business necessity, and further found that the agency failed to prove that no less discriminatory alternative was available to implement the Project. The Final Agency Decision In its final decision, the agency found no discrimination. The agency found that appellant failed to establish a prima facie case of disparate treatment because she failed to show that similarly situated male employees (i.e. those holding the same job classifications) were included in the Project. The agency found that managerial positions with supervisory responsibilities over the included positions were not similarly situated to appellant's position. The agency noted that 25% of the non-safety related administrative and clerical positions not included in the Project were held by males and that other excluded positions (such as laborers, maintenance mechanics and maintenance mechanic helpers) were primarily occupied by males. The agency rejected the AJ's conclusion that because management knew that the non-safety related positions were held primarily by women and did not alter the coverage of the Project, that an inference of discriminatory animus was raised. First, the agency found this argument more relevant to the issue of disparate impact than to disparate treatment. Second, the agency found that since "pay differences in the Federal government are tied to occupations and that some occupations are primarily staffed by women, the AJ's conclusion sweeps too broadly" and would raise an inference of discrimination in any decision based on position classification where the position is primarily staffed by one or the other gender. In any event, the agency found that it had articulated legitimate nondiscriminatory reasons for its decision to exclude appellant's position from the Project. The agency disagreed with the AJ's findings that the articulated reasons were pretextual. The agency reviewed its reason for including selected supervisory and managerial positions (such as 'pay inversion,' safety relatedness and fear of creating a staffing shortage in such positions) and found no evidence of pretext. The agency found that no legitimate demonstration project purpose would be fulfilled "by simply paying 20% more than another Federal agency for a [clerical or administrative] position common to all Federal agencies," noting that appellant's GS-11 Administrative Officer position would, if vacant, "be filled from competitive status employees, not from employees from the private sector." The agency discounted the AJ's criticism of it for including the Civil Engineer position, finding that recruitment for this position was primarily from the private sector and noting that it was filled by a female. The agency found no pretext in its exclusion of AT positions. While AT positions were held approximately equally by males and females, the agency noted that these positions were being abolished and, accordingly, found that no legitimate demonstration project purpose would be served by testing recruitment and retention allowances for such positions. The agency found the AJ's citing of Burns to be inappropriate since the Project was neutral on its face. With respect to discrimination based on disparate impact, the agency found that a prima facie case was established since the exclusion of administrative and clerical positions from the Project had a disparate impact upon females. However, the agency found that the AJ misstated the agency's burden of proof. Because the facts giving rise to the complaint arose before enactment of the Civil Rights Act of 1991, the agency found that the applicable burden of proof was that set forth in Wards Cove.7 Accordingly, while the agency had the burden of producing evidence of a business justification for the exclusion of administrative and clerical positions from the Project, the burden of persuasion remained with appellant. Since the agency articulated a business justification for excluding administrative and clerical employees from the Project, appellant could only prevail by establishing that other selection criteria without a similar disproportionate impact on females would serve the agency's legitimate interest and that the agency refused to adopt them. The agency found that no legitimate demonstration project purpose would have been served by paying 20% more to administrative and clerical employees recruited primarily from, or in competition with, other Federal agencies. Accordingly, since appellant offered no alternative other than their inclusion in the Project, the agency found that appellant neither offered evidence of the existence of less discriminatory criteria that would have met the agency's legitimate needs nor any evidence that the agency refused to adopt such criteria. Contentions on Appeal Appellant, through her counsel, timely appeals the final agency decision. Appellant argues that a prima facie case of disparate treatment was established since she is a member of a protected class and was excluded from the Project. The brief reviews the reasons articulated by the agency and, for the same reasons noted by the AJ, finds them pretextual. The brief further argues that "the FAA, DOT and OPM clearly knew of the adverse impact on its female employees prior to implementation and could have taken steps to implement less discriminatory alternatives to meet the same goal;" since they did not do so, appellant argues that there is direct evidence of their discriminatory intent to initiate "an overtly discriminatory policy." Appellant further argues that she established disparate impact discrimination within the parameters of the Wards Cove decision. In its comments on the appeal, the agency notes that the challenged action was "taken pursuant to the statutory authority of OPM after review prior to implementation by two Congressional committees," and that appellant never alleged that OPM did not comply with the requirements of the Administrative Procedure Act8 when implementing the Project or that the manner in which the Project was implemented was inconsistent with the terms authorized by OPM after notification and review by Congress. The agency argues that the Commission lacks subject matter jurisdiction since it has no lawful authority to modify the Project or to award damages. The agency cites Riddle v. U.S. Postal Service, EEOC Appeal No. 01852896 (April 3, 1987), where the Commission upheld the rejection of an allegation that Postal Police Officers were discriminated against on the basis of race because they were not entitled to hazardous duty retirement, whereas Postal Inspectors were so entitled. In addition, the agency argues that, as a creation of Congress under Article I of the Constitution, the Commission has no power to overturn either a Federal statute or validly-promulgated regulation by another Federal agency such as OPM or to award damages against an agency for complying with its terms as the FAA and DOT were legally bound to do. The remainder of the agency's brief reviews the recommended decision and final agency decision, and contends that the final agency decision correctly found no disparate treatment or disparate impact discrimination. The agency takes particular objection to the AJ's statement that because the "Project [was] of an experimental nature, the agency cannot sustain its burden to prove that the administrative and clerical employees were excluded because of business necessity." The agency contends that this rationale "would mean that no demonstration project (even though authorized by federal statute) could ever meet the 'business necessity' standard." Since every Federal agency "has one or more occupational categories . . . numerically unbalanced by sex, race, age, etc.," the agency argues that "every future pay demonstration would have to be designed using . . . quotas" or have "no defense to any legal challenge in which the complainants establish that [their protected class] has been disproportionately impacted." ANALYSIS AND FINDINGS Jurisdiction The Commission must first address the agency's argument that the Commission has no jurisdiction to review appellant's claim that the agency violated Title VII by excluding administrative and clerical positions from the Project. In Riddle, supra, the class agent alleged in pertinent part that Postal Police Officers were discriminated against on the basis of their race (Black) because they were not entitled to hazardous duty retirement, as were Postal Inspectors. Because the entitlement to hazardous duty retirement is governed by Federal Law and OPM regulations, and the U.S. Postal Service has no authority to rescind or modify such laws or regulations, the Commission found that this allegation was not within the purview of 29 C.F.R. §1613.601(a) which defined a class as a group who have allegedly been adversely affected "by an agency personnel management policy or practice which the agency has authority to rescind or modify." The Commission first notes that pursuant to the provisions of 29 C.F.R. §1613.212, agencies shall provide for the acceptance of individual complaints from any aggrieved employee or applicant "who believes that he or she has been discriminated against by that agency." There is no requirement that the individual demonstrate that the agency has the authority to rescind or modify the challenged policy or practice. In any event, the Commission finds this agency argument to be unpersuasive. The FAA and DOT sought to be one of the ten possible pay demonstrations that OPM was entitled to conduct. The FAA and DOT clearly were instrumental in designing the Project, particularly in determining which facilities and which position classifications would be covered by the Project. Appellant has standing to allege that the FAA and DOT either deliberately designed the Project in a manner which would discriminatorily preclude a protected class from inclusion or that the Project resulted in an illegal disparate impact. Insofar as the agency argues that the Commission has no authority to order modification of the Project, the Commission finds that it is not precluded from reviewing the matter and determining whether the Project was designed and implemented in a nondiscriminatory manner. See, e.g., Thierjung v. Department of Defense, EEOC Request No. 05880664 (November 2, 1989) (Although the Commission is without authority to second-guess the merits of a decision to revoke a security clearance, the Commission is not precluded from determining whether the requirement that an individual have a security clearance in order to occupy a particular position was applied in a discriminatory manner.) Disparate Treatment Claims Turning to the merits of appellant's complaint, we are presented with the issue of whether the agency subjected her to disparate treatment on the basis of her sex. In any proceeding, either judicial or administrative, involving a charge of discrimination, it is the burden of the complainant to initially establish that there is some substance to her allegation of discrimination. In order to accomplish this burden, the complainant must establish a prima facie case of discrimination. McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973); Furnco Construction Co. v. Waters, 438 U.S. 567 (1978). This means that the complainant must present evidence such that, were it not rebutted, the trier of fact could conclude that unlawful discrimination did occur. At all times appellant retains the ultimate burden of persuasion, and it is her obligation to show by a preponderance of the evidence that the agency acted on the basis of a prohibited reason. St. Mary's Honor Center v. Hicks, 113 S.Ct. 2742, 2749 (1993) (citing United States Postal Service Board of Governors v. Aikens, 460 U.S. 711, 716 (1983) and Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 253 (1981)). Once appellant has established a prima facie case, the burden of production shifts to the agency to produce evidence sufficient "to allow the trier of fact rationally to conclude" that the agency's action was not based on unlawful discrimination. Id. at 257. Once the agency has articulated such a reason, the question becomes whether the proffered explanation was the true reason for the agency's action, or merely a pretext for discrimination. Although the burden of production, i.e., "going forward," may shift, the burden of persuasion, by a preponderance of the evidence, remains at all times on the complainant. Disparate treatment such as is alleged in the present case is the most easily understood type of discrimination. The employer simply treats some people less favorably because of their race, color, national origin, sex, religion, disability, age or in reprisal for prior EEO activity. See International Brotherhood of Teamsters v. United States, 431 U.S. 324 (1977). In order to establish a prima facie case of sex discrimination, appellant must show that: (1) she is a member of a protected group; and (2) a similarly situated employee not in her protected group was treated more favorably. See Flowers v. Crouch-Walker Corp., 552 F.2d 1277, 1282-83 (7th Cir. 1977). Here, appellant has shown that she is a member of the protected group by virtue of her sex (female). The agency maintains that she cannot sustain her burden of establishing a prima facie case of discrimination because she is unable to demonstrate that any similarly situated employee not in her protected group was treated more favorably, e.g. that any male within her occupational category participated in the Project. However, a prima facie case is not the equivalent of a finding of discrimination. It is simply proof of actions taken by the agency from which discriminatory animus may be inferred, because experience has proven that in the absence of any other explanation, it is more likely than not that those actions were bottomed on impermissible considerations. Furnco, supra. The elements for establishing a prima facie case are not inflexible and must necessarily vary with the factual circumstances and bases of discrimination alleged. In the instant case, appellant has shown that 79% of persons receiving the benefit of participation in the Project are male while approximately 75% of persons excluded from participation in the Project are female. The Commission finds that, in the absence of any other explanation, such a showing would permit an inference of a discriminatory animus toward females. Accordingly, the Commission finds that under the factual circumstances of this case, appellant has met her burden of establishing a prima facie case of discrimination based on sex. Therefore, the Commission finds that the burden of production has shifted to the agency to articulate a legitimate, nondiscriminatory explanation for its actions. The Commission notes that the agency's burden of production is not a heavy burden. The agency need not, at this point, present evidence sufficient to establish its actual motivation. Rather, the agency need only present evidence sufficient to raise a genuine issue of material fact as to whether it discriminated against appellant. Burdine, 450 U.S. at 254. The agency must, however, "frame the factual issue with sufficient clarity so that the plaintiff will have a full and fair opportunity to demonstrate pretext. The sufficiency of the defendant's evidence should be evaluated by the extent to which it fulfills these functions." Id. In the instant case, the agency proffered as its primary explanation that the Project was intended to address the public's perception that the nation's air traffic was being deleteriously affected by the lack of skilled personnel, and the actual difficulties the FAA was experiencing in retaining persons in safety related occupations at its most complex facilities. The FAA maintained that all position classifications chosen to participate in the Project were safety related and hard-to-staff. The agency stated that the AT positions (which were filled by an approximately equal number of females and males) were excluded from the Project because, while they were safety related, the FAA was in the process of abolishing those positions. The agency maintained that administrative and clerical positions did not meet the criteria for inclusion in the Project. The FAA, DOT and OPM contended that the purpose of the Project was to test whether a financial incentive would assist the FAA in the recruitment and retention of employees in safety related positions experiencing staffing shortages and that the inclusion of administrative, clerical or other non-safety related employees would not accomplish that purpose. Consequently, the burden returns to appellant to prove, by a preponderance of the evidence, that the agency's proffered explanation is either unworthy of belief or is so unsupported by the record that it is more likely a ruse designed to conceal a discriminatory motivation. Burdine, supra, at 256; Miles v. M.N.C. Corp., 750 F. 2d 867, 870 (11th Cir. 1985); Krodel v. Young, 748 F.2d 701, 708-711 (D.C. Cir. 1984); Bohrer v. Hanes Corporation, 715 F.2d 213, 218 (5th Cir. 1983); B. Schlei & P. Grossman, Employment Discrimination Law 1314 (1983). The preponderance of the evidence is that degree of relevant evidence that a reasonable person, considering the record as a whole, would accept as sufficient to find that a contested fact is more likely to be true than untrue. 5 C.F.R. §1201.56(c)(2). Appellant asserted that the agency's articulated reasons were pretextual. As noted above, appellant argued that: the selected supervisory positions included in the Project were neither directly safety related nor hard-to-staff; the Civil Engineer position had no history of being hard-to-staff; many of the clerical and administrative position classifications required specialized training and were hard-to-staff; and that exclusion of the AT positions (which were filled by an approximately equal number of females and males) demonstrated bias. After careful review of the record, the Commission finds that appellant fails to prove, by a preponderance of the evidence, that she was subjected to disparate treatment because of her sex. In finding that appellant was not a victim of discrimination, the Commission reverses the finding of the AJ. In this regard, the Commission first notes that while the AJ found that the agency's articulated reasons "were unsubstantiated, speculative, and failed to hold up under scrutiny," the AJ did not find incredible the testimony of any particular witness. In general, the Commission will not disturb the credibility determination of an AJ. However, while the Commission has consistently held that credibility determinations require more deference than other findings of fact, see Universal Camera Corp. v. NLRB, 340 U.S. 474, 496 (1951), it has also stressed that such deference is not automatic and will be deferred to only to the extent it is based on personal observation of the demeanor and conduct of the witness at the hearing, rather than the inherent logic or consistency of the testimony. Watkins v. U.S. Postal Service, EEOC Request No. 05910636 (September 19, 1991). An Administrative Judge should not substitute her judgement for that of the agency with regard to analyzing the agency decision. An employer's stated legitimate reason must be reasonably articulated and nondiscriminatory, but does not have to be a reason that the trier of fact would act on or approve. See Wrenn v. Gould, 808 F.2d 493 (6th Cir. 1987). An employer is entitled to make his own business judgements. The reasonableness of the employer's decision may of course be probative of whether it is pretext. The trier of fact must understand that the focus is to be on the employer's motivation, not its business judgement. Loeb v. Textron, Inc., 600 F.2d 1003, 1012 n. 6 (1st Cir. 1979). Here, the AJ erroneously substituted her own business judgement for that of the agency. Specifically, the Commission finds that the agency articulated legitimate nondiscriminatory reasons for its decision to include selected supervisory positions in the Project, both because of the 'pay inversion' problem and because such positions are directly safety related. The Commission finds that the AJ erred in finding that these positions were not safety critical. Rather, it has not been shown that the agency unreasonably determined that should such first level supervisors fail to do their job, a catastrophe may occur resulting in death or serious injury, which was not true of secretarial or other administrative positions, including second level supervisory positions at regional offices. Since all FAA facilities could not be included in the Project, the fact that a 'pay inversion' would exist viz a viz other personnel at other facilities is irrelevant. While the AJ found that the "agency used its discretion to include [these positions] and could have extended the same discretion to include" appellant's position, the Commission disagrees that the decision was purely "discretionary" in nature and finds no similar motivation for the agency to include clerical or other administrative positions. Similarly, the Commission is unpersuaded that the subsequent inclusion of the Civil Engineer position established pretext. The Commission notes that the agency never relied on an argument regarding the cost of including additional positions in the Project. Rather, it was appellant who stressed the issue of costs when observing that clerical and administrative positions were lower paid and thus less costly positions to include in the Project. The FAA, DOT and OPM personnel consistently maintained that OPM had no interest in developing a pay demonstration project addressing the recruitment or retention problems faced by agencies with respect to clerical personnel, in part because other Federal salary incentives exist for clerical and secretarial employees. Similarly, the fact that the Project did not include the statutory maximum number of employees is not probative with respect to whether the agency discriminatorily excluded certain occupational categories.9 Disparate Impact Appellant also argues that the Project has a disparate impact on female employees. It is well recognized that Title VII prohibits not only overt discrimination, but also practices that are fair in form but discriminatory in practice. Also, any facially neutral employment practice may be deemed violative of Title VII without evidence of the employer's subjective intent to discriminate as is required in a disparate treatment case. Griggs v. Duke Power Co., 422 U.S. 405 (1975). A disparate impact action asserts that the employment practice, although neutral on its face, operates to exclude members of a protected class. International Brotherhood of Teamsters v. United States, 431 U.S. 324, 335 n. 15 (1977). In order to prove disparate impact, a complainant must carry the initial burden of establishing a prima facie case of discrimination by showing "that the facially neutral standard in question affects those individuals [within the protected group] in a significantly discriminatory pattern." Dothard v. Rawlinson, 433 U.S. 321, 329 (1977). To do so, appellant must show that it is the application of the particular employment practice which has created the disparate impact under attack. Griggs, supra. Once the complainant has made a prima facie showing of disparate impact, the respondent has the opportunity to dispute the complainant's demonstration by showing that the employment practice at issue did not cause the disparate impact or that such practice is "job related for the position and consistent with business necessity." Civil Rights Act of 1991, Section 105(a), 42 U.S.C. § 2000e-2(k)(1)(b)(ii).10 Proof of business necessity includes a showing that no acceptable policies or practices are available which would serve the employer's interests without such disproportionate impact upon a particular group. Robinson v. Lorillard, 444 F.2d 791 (4th Cir. 1971). See also Bauer v. Bailar, 647 F.2d 1037, 1042 (10th Cir. 1981). Should the respondent be successful in proving a business necessity for the disputed practice, the complainant can still prevail if he or she can show that there is a less restrictive alternative available which would reduce or eliminate the disparate impact. Griggs, supra. We find, similar to the AJ and the agency, that appellant has established a prima facie case of sex discrimination under the disparate impact theory, i.e. that a facially neutral employment practice has a disproportionate impact on a protected group (female) of which she is a member. Accordingly, we turn to the issue of whether the agency has shown that the exclusion of administrative and clerical positions was justified by a business necessity or need and that no other practice or policy would serve its needs without such a disproportionate impact on female employees. We find that the agency has met its burden of establishing that administrative and clerical positions were excluded from the Project because such positions were not directly safety related and because the purpose of the Project was not to address recruitment or retention problems in administrative or clerical positions, problems which are common to all Federal agencies and not unique to the FAA. Rather, the Project was designed to address the FAA's need to recruit and retain persons qualified to hold positions directly affecting the safety of complex air traffic facilities. We find that appellant has failed to demonstrate that criteria existed for the selection of positions for inclusion in the Project which would serve the agency's legitimate needs without a similar disproportionate impact on females. Other than the blanket inclusion of all positions at a covered facility ("we should have only one class of people and . . . by dividing into who would receive and who would not, we were creating haves and have nots"), appellant has not offered any indication that such other criteria exist. HT at 12. CONCLUSION Based upon a review of the record herein, the Commission finds that appellant was not subjected to discrimination based on her sex and it is the decision of the Commission to AFFIRM the final agency decision. STATEMENT OF RIGHTS-ON APPEAL RECONSIDERATION (M0795) The Commission may, in its discretion, reconsider the decision in this case if the appellant or the agency submits a written request containing arguments or evidence which tend to establish that: 1. New and material evidence is available that was not readily available when the previous decision was issued; or 2. The previous decision involved an erroneous interpretation of law, regulation or material fact, or misapplication of established policy; or 3. The decision is of such exceptional nature as to have substantial precedential implications. Requests to reconsider, with supporting arguments or evidence, MUST BE FILED WITHIN THIRTY (30) CALENDAR DAYS of the date you receive this decision, or WITHIN TWENTY (20) CALENDAR DAYS of the date you receive a timely request to reconsider filed by another party. Any argument in opposition to the request to reconsider or cross request to reconsider MUST be submitted to the Commission and to the requesting party WITHIN TWENTY (20) CALENDAR DAYS of the date You receive the request to reconsider. See 29 C.F.R. §1614.407. All requests and arguments must bear proof of postmark and be submitted to the Director, Office of Federal Operations, Equal Employment Opportunity Commission, P.O. Box 19848, Washington, D.C. 20036. In the absence of a legible postmark, the request to reconsider shall be deemed filed on the date it is received by the Commission. Failure to file within the time period will result in dismissal of your request for reconsideration as untimely. If extenuating circumstances have prevented the timely filing of a request for reconsideration, a written statement setting forth the circumstances which caused the delay and any supporting documentation must be submitted with your request for reconsideration. The Commission will consider requests for reconsideration filed after the deadline only in very limited circumstances. See 29 C.F.R. § 1614.604(c). RIGHT TO FILE A CIVIL ACTION (S0993) It is the position of the Commission that you have the right to file a civil action in an appropriate United States District Court WITHIN NINETY (90) CALENDAR DAYS from the date that you receive this decision. You should be aware, however, that courts in some jurisdictions have interpreted the Civil Rights Act of 1991 in a manner suggesting that a civil action must be filed WITHIN THIRTY (30) CALENDAR DAYS from the date that you receive this decision. To ensure that your civil action is considered timely, you are advised to file it WITHIN THIRTY (30) CALENDAR DAYS from the date that you receive this decision or to consult an attorney concerning the applicable time period in the jurisdiction in which your action would be filed. If you file a civil action, YOU MUST NAME AS THE DEFENDANT IN THE COMPLAINT THE PERSON WHO IS THE OFFICIAL AGENCY HEAD OR DEPARTMENT HEAD, IDENTIFYING THAT PERSON BY HIS OR HER FULL NAME AND OFFICIAL TITLE. Failure to do so may result in the dismissal of your case in court. "Agency" or "department" means the national organization, and not the local office, facility or department in which you work. If you file a request to reconsider and also file a civil action, filing a civil action will terminate the administrative processing of your complaint. RIGHT TO REQUEST COUNSEL (Z1092) If you decide to file a civil action, and if you do not have or cannot afford the services of an attorney, you may request that the Court appoint an attorney to represent you and that the Court permit you to file the action without payment of fees, costs, or other security. See Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000e et seq.; the Rehabilitation Act of 1973, as amended, 29 U.S.C. §§791, 794(c). The grant or denial of the request is within the sole discretion of the court. Filing a request for an attorney does not extend your time in which to file a civil action. Both the request and the civil action must be filed within the time limits as stated in the paragraph above ("Right to File A Civil Action"). FOR THE COMMISSION: Frances M. Hart Executive Officer Executive Secretariat Footnotes 1 FAA efforts had included: giving additional credit for promotion consideration to employees who have experience at a variety of facilities; a 'farm team' system of progression where surrounding facilities fed personnel into larger facilities; reorganization of facilities and job functions; revised classification standards and re-evaluation of positions; nationwide recruiting campaigns; cross-option recruitment program for air traffic control specialists; guaranteed return to a former facility; and guaranteed choice of duty assignments. 2 The record also reflects that a number of other FAA facilities sought to be included in the Project, including facilities in Atlanta, Boston, Detroit, Indianapolis, Minneapolis, Pittsburgh and Santa Barbara. 3 Initially, appellant and 19 other similarly situated females filed a class action complaint. On August 6, 1990, the petition for class certification was denied by an EEOC Administrative Judge for failure to satisfy the prerequisites of numerosity and adequacy of representation. See 29 C.F.R. §1613.601(b). Six individuals, including appellant, subsequently filed individual complaints. For hearing purposes, appellant's individual complaint was consolidated with another complaint. See Stiles v. Department of Transportation, EEOC Appeal No. 01945782 (_______________, 1996). In its appeal brief, the agency states that there are more than 70 complaints in the EEO process. 4 These positions include administrative assistants, clerk-typists, secretaries, technicians and others. 5 Burns v. Gadsen State Community College, 908 F.2d 1512, 1518 n. 9 (11th Cir. 1990). 6 The EEOC Uniform Guidelines on Selection Procedures, 29 C.F.R. §1607.4D., provides in pertinent part that: A selection rate for any race, sex, or ethnic group which is less than four-fifths (4/5) (or eighty percent) of the rate for the group with the highest race will generally be regarded by Federal enforcement agencies as evidence of adverse impact. 7 Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989). 8 5 U.S.C. §553 et seq. 9 The Commission disagrees with the AJ's statement that the decision to "implement the Project, knowing that administrative and clerical positions filled by female employees were excluded, comprises direct evidence of gender discrimination." Direct evidence is defined as evidence which, if believed, "will prove the particular fact in question without reliance upon inference or presumption." Caldwell v. Veterans Administration, EEOC Request No. 05920018 (March 12, 1992) citing Randle v. LaSalle Telecommunications, Inc., 876 F.2d 563, 569 (7th Cir. 1989). "Direct evidence of a discriminatory motive may manifest itself as a written or verbal policy or statement that on its face demonstrates a bias against a protected group." Id. However, the Project guidelines for inclusion were neutral on their face. The Commission accordingly analyzes this case under the tripartite McDonnell Douglas standards. 10 The treatment of disparate impact claims under Title VII has been altered by the enactment of the Civil Rights Act of 1991. Specifically, the 1991 Act provides that where an employee has demonstrated that a particular employment practice causes a disparate impact, both the burden of production and the burden of persuasion shift to the employer to show that the practice is job related and consistent with business necessity. This is in contrast to the scheme set forth in Wards Cove, supra at 659-60, where the burden of persuasion was held to remain with the plaintiff at all times. Appellant's complaint was filed prior to the effective date of the 1991 Act, but the Project continued in effect after enactment of the 1991 Act. The parties dispute whether the standards set forth in Wards Cove or the 1991 Act apply. Because the Commission finds that the outcome is the same under both standards, we need not address this issue here. See, e.g., Fisher v. Transco Services-Milwaukee, Inc., 979 F.2d 540 (10th Cir. (7th Cir. 1992); Murphy v. Derwinski, 990 F.2d 540 (10th Cir. 1993).