EEOC Guidance On Use of Criminal History in Employment Decisions
[Readers: As you may have seen, the EEOC recently issued its policy guidance on the use of criminal history in employment decisions, particularly (though not exclusively) when used in the hiring process. Set forth below is an article by my colleagues Doug Christensen and Courtney DaCosta addressing this recent development. If you have questions about their analysis, don't hesitate to contact either of them (Doug: christensen.doug@dorsey.com, or 612.340.8875; Courtney: dacosta.courtney@dorsey.com, or 612.492.6017).
I hope you find the analysis below helpful. Regards, Roy]
When Is a Proscription on Convictions an Impermissible Predilection? EEOC Issues New Guidance on the Use of Criminal History in Employment
By: Douglas R. Christensen and Courtney J. DaCosta
Earlier this week, the United States Equal Employment Opportunity Commission (“EEOC”) issued updated Enforcement Guidance (“Guidance”) regarding the circumstances under which employers permissibly may, under Title VII of the Civil Rights Act of 1964 (“Title VII”), rely on arrest and conviction records in employment decisionmaking. See EEOC, Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964 (April 25, 2012), http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm. The Guidance, while clarifying the agency’s position on this issue, also portends additional burdens for employers who need or want to consider applicants’ and employees’ criminal records.
The EEOC issued its Guidance in the midst of its ongoing Eradicating Racism and Colorism from Employment (“E-RACE”) initiative and on the heels of prominent enforcement actions involving allegations of race discrimination relating to the use of criminal history information. The most recent of those actions was venued in Minnesota and resulted in a $3.13 million settlement between the EEOC and Pepsi Beverages. See EEOC, Pepsi to Pay $3.13 Million and Made Major Policy Changes to Resolve EEOC Finding of Nationwide Hiring Discrimination Against African Americans (Jan. 11, 2012), http://www.eeoc.gov/eeoc/newsroom/release/1-11-12a.cfm. The Guidance is the EEOC’s first on this issue in more than 20 years.
Use of Criminal History Information in Employment Carries Pros and Cons
According to one recent survey, more than nine out of ten employers require at least certain applicants to submit to a criminal background check. See Soc’y of Human Res. Mgmt., Background Checking: Conducting Criminal Background Checks (Jan. 22, 2010), http://www.shrm.org/research/surveyfindings/articles/pages/backgroundcheckcriminalchecks.aspx.
This practice may be advisable for a number of reasons, including promotion of workplace safety; prevention of meritorious negligent hiring claims; and compliance with requirements imposed by federal, state, or local law. However, the use of criminal history information in employment can be frought with legal risks, chief among them potential liability for discrimination under Title VII, the federal statute that prohibits workplace discrimination on the basis of race (as well as color, national origin, sex, and religion).
Disparate Impact Concerns Dominate EEOC’s Guidance
The EEOC’s Guidance focuses principally on circumstances under which an employer’s consideration of criminal history information will have a prohibited disparate impact on applicants and employees on the basis of race. African American and Hispanic men, the EEOC observes, are arrested and convicted at rates disproportionate to their prevalence in the U.S. population. For this reason, an employer’s facially neutral practice of disqualifying for employment all or certain applicants who have a criminal record, or a certain type of criminal record, may have the effect of discriminating against African American and Hispanic individuals.
EEOC Frowns on Reliance on Arrest Information
As a preliminary matter, the EEOC’s Guidance strongly cautions against the use of arrest records in employment decisions under almost all circumstances. According to the EEOC, the fact that an applicant has been arrested in the past is insufficient evidence to support a conclusion that he in fact engaged in the conduct for which he was arrested. However, according to the EEOC, an employer may make an employment decision based on the conduct that led to the arrest “if the conduct makes the individual unfit for the position in question.” For example, a pharmaceutical company theoretically could deny employment in a sales representative position to an applicant whose criminal background check revealed that she had been arrested for dealing in prescription drugs.
Unfortunately, the EEOC’s Guidance does not indicate what steps, if any, the employer must take to determine whether the individual in question actually engaged in the conduct underlying his or her arrest. Particularly in the case of new job applicants, employers generally will have very limited ability to assess the validity of the arrest and the applicant’s culpability for the alleged conduct. For this reason, and given the EEOC’s obvious skepticism of the use of arrest records in hiring and employment, most employers would be wise to forgo this practice altogether.
Reliance on Conviction Records Can Be Permissible if Circumscribed
Employers have much greater leeway under the EEOC’s Guidance to consider conviction records in hiring and employment decisions. According to the EEOC, “a record of a conviction will usually serve as sufficient evidence that a person engaged in particular conduct, given the procedural safeguards associated with trials and guilty pleas.” The EEOC’s Guidance recommends that employers not, however, ask about criminal conviction history on job applications; instead, that inquiry should be reserved for a later stage of the hiring process. (It is worth noting that some states—but not Minnesota, in the case of private employers—separately prohibit inquiries regarding criminal history early on in the selection process).
If an employer’s selection criterion relating to conviction history has a statistically significant disparate impact on individuals of a certain race, the criterion will be deemed to violate Title VII unless it is “job related and consistent with business necessity.” In its recent Guidance, the EEOC opines that an employer may be able to justify a criminal-history-based selection criterion that has a disparate impact in one of two ways:
• First, the employer may validate the criterion in accordance with the Uniform Guidelines on Employee Selection Procedures, guidelines jointly promulgated in 1978 by the EEOC, the Civil Service Commission, the Department of Labor, and the Department of Justice. See 29 C.F.R. § 1607.1, et seq.
• Second, the employer may develop a “targeted screen” based on three factors articulated in a 1975 Eighth Circuit decision, Green v. Missouri Pacific Railroad, 523 F.2d 1290 (8th Cir. 1975): (1) the nature of the crime, (2) the time elapsed since the crime, and (3) the nature of the position sought. In most cases, according to the EEOC, the employer also should engage in an “individualized assessment” with respect to any individual disqualified by the targeted screen.
Unfortunately, both options have the potential to entail substantial burden and expense for employers. The process of having a selection criterion validated pursuant to the Uniform Guidelines on Employee Selection Procedures can be cumbersome and time-consuming, and it can have the inertial effect of locking employers into validated procedures that may not accommodate changing business needs.
Use of the Green factors in employment decisionmaking is unlikely to be problematic in and of itself and, in fact, many employers already do consider factors such as these, whether purposefully or simply as a matter of common sense. Potentially more troublesome is the EEOC’s suggestion that employers undertake an “individualized assessment” for any candidate whom the Green factors exclude. According to the EEOC, such an assessment could include, but need not necessarily include all of, the following evidence:
• The facts or circumstances surrounding the offense or conduct;
• The number of offenses for which the individual was convicted;
• Older age at the time of conviction, or release from prison;
• Evidence that the individual performed the same type of work, post conviction, with the same or a different employer, with no known incidents of criminal conduct;
• The length and consistency of employment history before and after the offense or conduct;
• Rehabilitation efforts such as education and training;
• Employment or character references and any other information regarding fitness for the particular position; and
• Whether the individual is bonded under a federal, state, or local bonding program.
Obviously, compilation and review of all of these data points is likely to be time-consuming, if not impossible, in the run of cases. The EEOC does note in its Guidance that “an employer may be able to justify a targeted criminal records screen solely under the Green factors” and that “Title VII thus does not necessarily require individualized assessment in all circumstances.” Given this Guidance, employers who elect not to engage in individualized assessments of candidates who are excluded by a selection criterion relating to conviction history, or who engage in only limited individualized assessments, should ensure that the selection criterion is narrowly tailored to the specific requirements of the position at issue.
Compliance with State or Local Law Is Not an Absolute Defense
As we noted above, federal, state, or local law may require the use of criminal history screening or make a clean criminal record a minimum requirement for certain positions, typically those that implicate safety or public health interests. Minnesota law, for one, includes many provisions of this nature. See Minn. House Research Dep’t, Criminal Background Check Statues: An Overview (Jan. 2010), http://www.house.leg.state.mn.us/hrd/pubs/bkgdchck.pdf.
The EEOC’s Guidance clarifies that, while adherence to a federal requirement of this nature will not violate Title VII, adherence to a similar state or local law may lead to Title VII liability due to the supremacy of federal law over state or local law. Employers who find themselves stuck between the rock of a state or local law prohibiting employment of individuals with certain criminal records and the hard place of potential disparate-impact liability should be sure to document thoroughly the reasons for their hiring and employment decisions based on criminal history and, if necessary, raise the conflict with appropriate state or local authorities.
EEOC and Dorsey Offer Suggested Best Practices
The EEOC’s Guidance sets forth a list of best practices for employers regarding the use of criminal arrest and conviction information:
• Eliminate policies or practices that exclude people from employment based on any criminal record;
• Train managers, hiring officials, and decisionmakers about Title VII and its prohibition on employment discrimination;
• Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct;
• Identify essential job requirements and the actual circumstances under which the jobs are performed;
• Determine the specific offenses that may demonstrate unfitness for performing such jobs;
• Determine the duration of exclusions for criminal conduct based on all available evidence;
• Record the justification for the policy and procedures;
• Note and keep a record of consultations and research considered in crafting the policy and procedures;
• Train managers, hiring officials, and decisionmakers on how to implement the policy and procedures consistent with Title VII;
• When asking questions about criminal records, limit inquiries to records for which exclusion would be job related for the position in question and consistent with business necessity; and
• Keep information about applicants’ and employees’ criminal records confidential. Only use it for the purpose for which it was intended.
We offer the following additional best practices to supplement the EEOC’s list:
• Consider, on a position-by-position basis, whether the benefits of criminal history screening are likely to outweigh the legal risks;
• Work with any third-party providers of criminal background reports to ensure that criminal history information not relevant to the position at issue is not communicated to decisionmakers in the first instance;
• Conduct individualized assessments of excluded candidates to the fullest extent possible under the circumstances;
• Document thoroughly the reasons for not selecting certain candidates based on screening factors or individualized assessments;
• Track applicant flow and selection data to assess on an ongoing basis whether a criminal history screen is having a disparate impact; and
• Remember that, while the issue of criminal history screening may come up most often in the hiring context, the EEOC’s Guidance is equally applicable to current employees.
Finally, it is worth noting that the EEOC’s Guidance does not carry the force of law and, therefore, will not automatically control in civil litigation under Title VII or similar state or local laws that prohibit employment discrimination. That said, the EEOC’s opinion on these matters is likely to be highly influential in the courts, and it will be the final word with respect to charges of discrimination filed under Title VII. While only time will tell the degree of influence the EEOC’s Guidance will have in the courts and at the state level, the prudent employer will take it to heart at this time.
The EEOC’s Q&A document regarding the Guidance is available here:
ttp://www.eeoc.gov/laws/guidance/qa_arrest_conviction.cfm
The EEOC’s press release relating to the Guidance is available here:
Discrimination on the Basis of Color, Quirky Question # 134
My company is planning a reduction in our workforce, which largely consists of African-Americans. I understand that when a company conducts a mass layoff, it should make sure the layoff does not disproportionately affect older workers, women or men, or employees of a particular race, or else the company risks being accused of discrimination. But doesn’t the law also protect employees from discrimination based on color? If so, do we also need to worry about letting go a disproportionate number of “dark-skinned” or “light-skinned” employees? How would we even go about measuring this? I know our African-American workforce consists of a broad spectrum of skin tones.
Joel’s Analysis:
[Readers: Quirky Question # 134 was posed to my colleague Joel O’Malley. Joel’s analysis is set forth below. If you have any comments, do not hesitate to contact Joel at 612.492.6727 or at omalley.joel@dorsey.com. Additional information about Joel is available at http://www.dorsey.com/omalley_joel/. If you have any questions or comments, please send me a note at ginsburg.roy@dorsey.com. Regards, Roy]
You raise a good question about whether a “disparate impact” claim can successfully allege discrimination based on color. While intriguing in theory, I think for practical reasons such a claim could not succeed, so I do not believe that you need to agonize over your employees’ varying skin tones when planning your reduction in force. To reach my conclusion, it is best to begin with a brief summary of anti-discrimination law.
As you note in your question, anti-discrimination law prohibits discrimination against individuals in certain protected classes, based on characteristics such as age, sex, race, national origin, or color. Employees generally can assert discrimination claims under two legal theories: disparate treatment and disparate impact. Disparate treatment claims alleging race, sex, age, or national origin discrimination typically involve an employee in the protected class claiming her employer intentionally treated her less favorably than persons outside of the employee’s protected class. For example, a female employee might sue claiming her employer denied her a promotion, instead advancing a less-deserving male coworker. In such a scenario, the distinction between the allegedly disfavored plaintiff and the favored coworker is based on a clear and evident difference—the employees’ sex.
Disparate impact claims do not allege intentional discrimination, but rather encompass the type of scenario you describe here – a facially-neutral policy (e.g., a reduction in workforce based on financial or business reasons) that disproportionately affects individuals in a protected class. For example, a female employee might sue after a mass layoff claiming that the group of terminated employees included too many females, while too few female employees were spared termination.
Cases involving alleged color discrimination are relatively rare, and typically are brought under a disparate treatment theory. In color-based cases, the aggrieved employee can be – and often is – the same race, sex, age, and national origin as the allegedly favored coworkers and the allegedly discriminatory supervisor. That employee, however, claims she is, in the employer’s eyes, “too dark” or “too light” in color. The cases, while different than those involving other protected classes, are straightforward. To determine the merits of such cases, the court must, among other things, compare the relative skin tones of an individual plaintiff and a limited number of her coworkers.
As an example, in one older case, a light-skinned Pakistani employee sued his Pakistani employer, claiming darker-skinned Pakistani employees were favored. Ali v. Nat’l Bank of Pakistan, 508 F. Supp. 611 (S.D.N.Y. 1981). Another, more recent case involved a light-skinned Native-American employee claiming that her employer favored darker-skinned Native-American employees. Nettle v. Cent. Okla. Am. Indian Health Council, Inc., 2009 U.S. App. LEXIS 14470 (10th Cir. July 1, 2009) (unpublished). In yet another case, an employer defended itself against an employee claiming that light-skinned employees were favored, by arguing that it had in fact replaced the dark-skinned plaintiff with a darker-skinned worker. Brack v. Shoney’s, Inc., 249 F. Supp. 2d 938 (W.D. Tenn. 2003). The congressional discussions leading to the enactment of the anti-discrimination laws specifically noted the laws’ applicability to cases like these, expressly noting the law would apply when, for example, an employer refused to hire an African-American because her skin pigmentation was “too dark,” even if the employer was also an African-American. See Cong. Rec., Feb. 8, 1964, at H-2552-2555.
Unlike these intentional discrimination cases, there do not appear to be any published court decisions involving claims that an employer’s facially-neutral practice or policy had a disparate impact on persons of a particular color. In theory, such a claim could exist, like the previous example of a female worker suing her employer following a mass layoff. In your situation, a dark-skinned African-American employee could argue your company’s layoffs, while ostensibly based on neutral criteria, resulted in the termination of too many darker-skinned employees, while too few darker-skinned employees remained employed.
Perhaps the chasm between theory and reality with these color-based disparate impact cases stems from the practicality of enforcing a claim. First, there is the problem of classifying skin-tone. Even scientists have a difficult enough time categorizing the wide variety of skin pigmentation in the human race – first using the complicated 36-tone Von Luschan chromatic scale, then more recently using the six-tiered Fitzpatrick scale (primarily for grading sunburn risk). We cannot expect an employer to do much better. While it is relatively simple to determine whether an employee is male or female, of one race or another (though the idea of race does have its complexities), or to determine in the disparate treatment context whether a single plaintiff is darker or lighter than a few allegedly favored coworkers, categorizing large numbers of employees based on skin tone is not a “black or white” question.
Second, even if scientists (and employers) could perfect the practice of color-grading, doing so at the workplace or in the courts seems rather distasteful. In fact, despite Congress’s apparent approval of color-based discrimination claims, several courts, even in disparate treatment cases, have cautioned the judiciary to be wary of “the unsavory business of measuring skin color and determining whether the skin pigmentation of the parties is sufficiently different to form the basis of a lawsuit.” See Sere v. Bd. of Trs. of the Univ. of Ill., 628 F. Supp. 1543 (N.D. Ill. 1986); see also Franceschi v. Hyatt Corp., 782 F. Supp. 712 (D.P.R. 1992) (noting that courts have “shied away from grappling with cases that deal with subtle degrees of intra-racial discrimination”); Walker v. I.R.S., 713 F. Supp. 403 (N.D. Ga. 1989) (observing the “genuine and substantial” difficulties in comparing skin pigmentation).
An additional problem with color-based disparate impact claims is the lack of a legal demarcation instructing an employer how to test the lawfulness of a facially-neutral practice. For sex, the employer can easily determine whether men or women are disproportionately impacted. Likewise, determining race or national origin represented in the workforce may be accomplished without much difficulty. Even age – which, like color, exists in the workplace in a broad range – contains a bright-line cutoff under federal law, with individuals age 40 and older afforded protected from discrimination. In contrast, skin color does not have any clear cutoff.
Without such a cutoff, we cannot expect employers to ensure employees throughout the skin-tone spectrum are equally affected or disaffected by an employment practice. Courts in age-based disparate impact cases have declined to accept employees’ requests for a protection against such “subgroup” discrimination. For example, in EEOC v. McDonnell Douglas Corp., 191 F.3d 948 (8th Cir. 1999), employees claimed that a workforce reduction, while not disproportionately affecting employees age 40 and older, disproportionately affected employees age 55 and older. The Eighth Circuit Court of Appeals rejected this argument. The court explained that “if disparate-impact claims on behalf of [age] subgroups were cognizable . . . , the consequence would be to require an employer engaging in a [reduction in force] to attempt what might well be impossible: to achieve statistical parity among the virtually infinite number of age subgroups in its workforce.” Id. at 951. Given courts’ reluctance to allow a disparate impact claim based on an age subgroup, courts would likely also recognize the analogous difficulties with a color-based theory. Certainly the Eighth Circuit’s reasoning applies to color-based disparate impact lawsuits: it may well be impossible for an employer implementing a neutral practice or policy to achieve parity among various categories of skin tone (be they six or thirty-six distinct subgroups) in its workforce.
For all of these reasons, I am skeptical as to whether a legitimate color-based disparate impact case could ever be properly pled in court. In sum, then, continue to test for whether your company’s layoff has a disproportionate impact on employees with respect to age (forty and older), gender, race, and national origin. But there is little reason, and inherent practical difficulty, in also testing for color-based disparate impact.
Ricci v. DeStefano, Supreme Court Ruling In Adverse Impact Case
Ricci v. DeStefano, Supreme Court Holds Employer Liable for Trying to Avoid Claims of Adverse Impact Discrimination
On June 29, the United States Supreme Court issued its highly-anticipated and highly-divisive decision in the “white firefighters case,” Ricci v. DeStefano, 557 U.S. __ (2009). This 5-4 decision may have significant implications for both “disparate impact” and “disparate treatment” discrimination claims.
Disparate-treatment claims present the traditional case of intentional discrimination. Disparate-impact claims attack a neutral policy or practice that has a disproportionately negative impact on the basis of race, gender, or some other statutorily-protected characteristic. Notably, disparate-impact claims do not require proof of an intent to discriminate. In Ricci, the Supreme Court held that actions influenced by race or some other protected characteristic, even if taken in a good-faith effort to avoid possible disparate-impact claims, will subject an employer to claims for disparate-treatment discrimination except in very narrow circumstances.
Justice Kennedy delivered the majority opinion in Ricci v. DeStefano, joined by Chief Justice Roberts and Justices Alito, Scalia, and Thomas. The majority held that actions taken to avoid possible disparate-impact discrimination claims – even if taken in good faith and with good cause – are nonetheless subject to disparate-treatment discrimination claims if the actions were influenced by race or some other protected characteristic.
The majority set a high standard (which the dissent described as “enigmatic”) for this sort of defense, stating: “[B]efore an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action.”
The Facts
Ricci involved a challenge to the refusal by the City of New Haven, Connecticut (“City”) to certify the results of a promotion examination because the test-passage results displayed a disparate impact on non-white applicants.
Under the City’s contract with the firefighters’ union, applicants for lieutenant and captain positions were screened using written and oral examinations. These examinations were developed by industrial/organizational consultants specializing in designing promotional examinations for police and fire departments.
The City administered the promotion examination to 118 firefighters who desired promotion. Of the 76 candidates who completed the lieutenant examination (43 whites, 19 blacks, and 15 Hispanics), 34 candidates passed – 25 whites, six blacks, and three Hispanics. The pass rate for white candidates was 58.1%, 31.6% for black candidates, and 20% for Hispanic candidates. The top ten candidates were eligible for immediate promotion to lieutenant, and all were white. Of the 41 candidates who completed the captain examination (25 whites, eight blacks, and eight Hispanics), 22 candidates passed – 16 whites, three blacks, and 3 Hispanics. The pass rate for white candidates was 64%, but only 37.5% for black and Hispanic candidates. The top nine candidates eligible for immediate promotion to captain were seven whites and two Hispanics.
After reviewing the test results, City officials became concerned that recognition of the test results might subject the City to claims of disparate-impact race discrimination. The City’s concern was not misplaced. Even the majority acknowledged that “[t]he racial adverse impact here was significant.” In fact, the results fell far short of the “80% Rule” recognized by the Equal Employment Opportunity Commission (“EEOC”). See 29 C.F.R. § 1607.4(D) (a selection rate that is less than 80% “of the rate for the group with the highest rate will generally be regarded by the Federal enforcement agencies as evidence of adverse impact”). This EEOC rule also has been recognized as a “rule of thumb for the courts.” See Watson v. Fort Worth Bank & Trust, 478 U.S., 995-96, n. 3 (plurality opinion). The City’s attorney also advised that there were significant legal risks of disparate-impact claims if the test results were certified.
The City held a series of public hearings on whether to recognize or set aside the results. Some firefighters argued the tests should be discarded because the results showed the tests were discriminatory against non-white candidates. This group threatened a disparate-impact race discrimination lawsuit if promotions were made based on the results. Another group of firefighters contended the examinations were neutral and fair, and threatened a disparate-treatment race discrimination lawsuit if the City relied on the statistical disparity to reject the test results and deny promotions to the high scorers. The atmosphere was highly charged politically, and, as the Court recognized, these hearings were “rancorous.” The City’s Civil Service Board deadlocked on whether to certify the test results, which had the effect of throwing out the examination results.
A group of 17 white firefighters and one Hispanic firefighter who passed the examinations but were not promoted sued the City (and certain officials, collectively referred to as the City to avoid confusion), alleging that the City intentionally discriminated against them on the basis of race, in violation of Title VII and the Equal Protection Clause of the Fourteenth Amendment. The City countered with the argument, bolstered by existing lower-court precedent, that it had a “good faith belief” that it would have violated the disparate-impact provision of Title VII had it certified the test results, and therefore could not be held liable for disparate-treatment discrimination. The District Court granted summary judgment to the City and the Second Circuit affirmed. At the Supreme Court, the U.S. Solicitor General sided with the City. Nonetheless, the Supreme Court reversed. Indeed, the majority did not even remand, but instead ordered that summary judgment be entered in favor of the plaintiffs.
The Court’s Legal Analysis
The claims before the Court included both a statutory disparate-treatment discrimination claim under Title VII, as well as a constitutional claim under the Equal Protection Clause of the Fourteenth Amendment. Following well-established precedent, the Court avoided the constitutional issue by first addressing the statutory claim. See Escambia County v. McMillan, 466 U.S. 48, 51 (1984) (per curiam) (“[N]ormally the Court will not decide a constitutional question if there is some other ground upon which to dispose of the case”).
However, the majority’s opinion seems to suggest that there could be constitutional limitations on disparate-impact claims. The standard which the majority adopted for its interpretation of Title VII was imported directly from the Court’s prior Equal Protection caselaw. In his concurring opinion, Justice Scalia was even more blunt in calling into question the constitutional validity of the disparate-impact provisions of Title VII, stating, for example, that “if the Federal Government is prohibited from discriminating on the basis of race, . . . then surely it is also prohibited from enacting laws mandating that third parties . . . discriminate on the basis of race” through Title VII’s disparate impact provisions, which “place a thumb on the scales, often requiring employers to evaluate the racial outcomes of their policies, and to make decisions based on (because of) those racial outcomes.” Assuming such constitutional limitations might be recognized in some future case, this obviously would prove a limitation on future Congressional action to limit or reverse Ricci, which Justice Ginsburg in her dissent (joined by Justices Stevens, Souter, and Breyer) essentially predicted, stating: “The Court’s order and opinion, I anticipate, will not have staying power.”
After dodging the constitutional issue, the issue before the Court, as viewed by the majority, was how to reconcile the disparate-treatment provisions of Title VII, which prohibit the use of race (or other protected characteristics) as a factor in employment decisions, with the disparate-impact provisions, which specifically contemplate consideration of race (or other protected characteristics). “Our task,” the majority wrote, “is to provide guidance to employers and courts for situations when these two prohibitions could be in conflict absent a rule to reconcile them.” The conclusion the majority reached was that “under Title VII, before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action” (emphasis added).
The Court found that the City’s decision not to certify the results was “because of the statistical disparity based on race – i.e., how minority candidates had performed when compared to white candidates,” and thus was prohibited disparate-treatment discrimination. The Court expressly rejected the City’s and the Solicitor General’s argument that an employer trying to comply with Title VII’s disparate-impact provisions does not engage in prohibited discrimination on the basis of race, noting that this argument improperly focused on the City’s ultimate objective, rather than its conduct in pursuing that objective. “The City rejected the test results solely because the higher scoring candidates were white,” the Court noted. Therefore, “[t]he question is not whether that conduct was discriminatory but whether the City had a lawful justification for its race-based action.”
Next, the Court examined whether “the purpose to avoid disparate-impact liability excuses what otherwise would be prohibited disparate-treatment discrimination.” The Court drew upon standards developed in the application of the Equal Protection Clause in cases involving government actions to remedy past racial discrimination (including race-based affirmative action). In such cases, governmental remedial actions “are constitutional only where there is a ‘strong basis in evidence’ that the remedial actions were necessary.”
“The standard leaves ample room for employers’ voluntary compliance efforts, which are essential to the statutory scheme and to Congress’s efforts to eradicate workplace discrimination. . . . And the standard appropriately constrains employers’ discretion in making race-based decisions: It limits that discretion to cases in which there is a strong basis in evidence of disparate-impact liability, but it is not so restrictive that it allows employers to act only when there is a provable, actual violation.”
The Court emphasized also that Title VII does not prohibit employers “from considering, before administering a test or practice, how to design that test or practice in order to provide a fair opportunity for all individuals, regardless of their race.”
Applying the new standard to the facts of the case, the Court noted the City was faced with a prima facie case of disparate-impact liability, which it characterized as “a threshold showing of a significant statistical disparity, and nothing more,” because the disparities fell well below the 80% disparate-impact rule set by the EEOC. But the Court remarked that the statistics were far from a strong basis in evidence that the City would have been liable under Title VII had it certified the results. That is because the City could be liable for disparate-impact discrimination only if the examinations were not job related and consistent with business necessity, or if there existed an equally valid, less-discriminatory alternative that served the City’s needs but that the City refused to adopt.
The Court found no strong basis in evidence to establish the test was deficient in either respect. Finally, the Court clarified the scope of its holding that a “strong basis in evidence” can be a defense to a claim of discrimination: “ If, after it certifies the test results, the City faces a disparate-impact suit, then in light of our holding today it should be clear that the City would avoid disparate-impact liability based on the strong basis in evidence that, had it not certified the results, it would have been subject to disparate-treatment liability.”
Concurring Opinions And Dissent
The concurring opinions and dissent provide some insight into how the debate is likely to evolve in the future. Justice Scalia’s concurrence characterized the majority as holding “that Title VII not only permits but affirmatively requires [remedial race-based actions] when a disparate-impact violation would otherwise result.” This, he contended, amounts to government-compelled race-based discrimination, which “seemingly” would violate the Equal Protection Clause. In other words, as the dissent pointed out, Justice Scalia apparently would invalidate Title VII’s disparate-impact provisions as unconstitutional. At a minimum, Justice Scalia suggested, the use of statistics in discrimination cases should be “simply an evidentiary tool used to identify genuine, intentional discrimination – to ‘smoke out,’ as it were, disparate treatment.”
Justice Ginsburg vigorously dissented, joined by Justices Stevens, Souter, and Breyer. Justice Ginsburg argued that the Court should have considered the factual and legal contexts underlying the case, including historically-pervasive race discrimination in fire departments and Title VII’s approval of employer-driven remedial measures. The dissent urged that Title VII’s disparate-treatment and disparate-impact provisions “must be read as complementary,” such that “[a] reasonable endeavor to comply with [Title VII] and to ensure that qualified candidates of all races have a fair opportunity to compete is simply not what Congress meant to interdict.” The dissent suggested a better standard would be that an employer who discards a “device” based on statistically disparate results does not violate the disparate-treatment provisions if it had “good cause to believe the device would not withstand examination for business necessity.”
The hotly-contested decision promises to be controversial, and is likely to draw the attention of Congress and the EEOC in the future. It also promises to remain in the spotlight in the near future because Judge Sonia Sotomayor, President Obama’s first nominee to the Supreme Court, was one of the Second Circuit Judges who joined in the opinion the Supreme Court reversed.
Practical Take-Aways
Ricci involved a public employer in the relatively-unusual context of a written promotional examination. It is possible that the case ultimately may be limited in its impact, given this relatively-uncommon factual basis. There is nothing in the multiple opinions produced at the Supreme Court, however, or in the widespread the attention the case has received, to suggest that scenario is likely. Instead, the Court’s reasoning seems to extend much further, and the case is likely to affect all employers in any of a number of circumstances where there may be a conflict between potential disparate-impact and disparate-treatment discrimination claims. At least, that seems to be the clear intent of the majority. With this in mind, the following are a few practical “take-aways” from the decision.
• Reductions in Force. In today’s economic recession, reductions in force are quite common. The U.S. Bureau of Labor Statistics reported that through May of this year, there have been 13,544 “mass layoffs,” defined as involving at least 50 employees. Most employers do some sort of adverse-impact analysis as part of their process for selecting employees to be released. Under Ricci, any employer who changes its initial list of employees for layoff based on an adverse-impact analysis runs an increased risk of disparate-treatment discrimination claims from those employees not originally selected for layoff but who, because of some “adjustment” based on the adverse-impact analysis, ultimately lose their jobs. An employer in that circumstance would have to be able to meet the “strong basis in the evidence” test articulated in Ricci to avoid liability, which might be very difficult to do. Bear in mind, the Supreme Court in Ricci actually ordered summary judgment in favor of the plaintiffs. It is also noteworthy that the Equal Protection case from which the majority imported the “strong basis in the evidence test,” Wygant v. Jackson Bd. of Educ., 476 U.S. 267 (1986) (plurality), was itself a reduction-in-force case. In Wygant, the Supreme Court invalidated as unconstitutional a school district’s plan to layoff non-minority teachers while retaining minority teachers with less seniority. In short, employers will have to be much more thoughtful at the outset in developing their layoff criteria, and then much less willing to make adjustments based on adverse-impact analyses. It also may behoove employers to have any such adverse-impact analysis conducted by or under the direction of their attorneys, with the idea that such analysis and the advice based upon it will be subject to attorney-client or work-product privileges.
• Other policies, practices, procedures, and criteria. The holding in Ricci extends to any circumstance in which a policy, practice, procedure, test, or criteria are used that might be the subject of a disparate-impact claim. As with the development of reduction-in-force criteria, employers will have to invest much more time, attention, and thought into such employment practices and procedures, because their ability to modify their ultimate decisions may be more constrained after the fact. Ricci holds that once a process has begun, an employer may not deviate from that process or set aside the results unless there is a “strong basis in evidence” to believe that the process would not survive a disparate-impact lawsuit.
• Limitations of statistics. Ricci makes clear that a statistical disparity, even if very significant, is not sufficient in itself to meet the “strong basis in the evidence” test. Employers also will have to consider carefully the other elements of a disparate-impact claim, namely whether (1) the criteria leading to the statistical disparity are job related and consistent with business necessity, and (2) there was an equally effective, less-discriminatory alternative that could have been adopted. Unless there is “substantial evidence” that these other elements of a disparate-impact claim could be met, then the employer would not be able to rely on this defense to a disparate-treatment claim. Unfortunately, there are no bright line tests to guide this analysis (like the 80% rule adopted by the EEOC).
• Limitations of advice of counsel. The City attorney gave advice and counsel to the City of New Haven about the risks of disparate-impact claims if it were to certify the test results. Ultimately, however, the City lost the case, and the fact that it had relied upon advice of counsel provided no safe harbor or defense. This is not to suggest that there is no benefit in seeking advice of counsel, only that counsel’s advice ultimately may only provide protection if the advice is correct, underscoring the importance of seeking the advice of an attorney with specialized expertise in the area.
• Possible new defense to disparate-impact claims. The majority offers reassurance at the end of its opinion about possible disparate-impact claims, stating that “it should be clear that the City would avoid disparate-impact liability based on the strong basis in evidence that, had it not certified the results [of the testing], it would have been subject to disparate-treatment liability.” It follows, therefore, that other employers could likewise “avoid disparate-impact liability” in any instance where, based on Ricci, they decline to alter their course of action notwithstanding a significant statistical adverse impact. This may provide employers with a powerful additional defense against disparate-impact claims. Ricci might make summary judgment on such claims more likely, or provide the basis for a helpful jury instruction if the case must go to trial.
• Possible defense not asserted in Ricci. The dissent argued, in part, that the case should have been remanded. One reason justifying remand, according to the dissent, would have been to give the defense an opportunity to assert a defense based on 42 U.S.C. § 2000e-12(b), which the defendants had not asserted. See footnote 9 of dissent. Section 2000e-12(b) provides:
“In any action or proceeding based on any alleged unlawful employment practice, no person shall be subject to any liability or punishment for or on account of (1) the commission by such person of an unlawful employment practice if he pleads and proves that the act or omission complained of was in good faith, in conformity with, and in reliance on any written interpretation or opinion of the [EEOC] . . . . Such defense, if established, shall be a bar to the action or proceeding, notwithstanding that (A) after such act or omission, such interpretation or opinion is modified or rescinded or is determined by judicial authority to be invalid or of no legal effect.”
As the dissent further noted, the EEOC guidelines set out in 29 C.F.R. §§ 1608.3 and 1608.4 might provide the basis for a defense under Section 2000e-12(b). These EEOC guidelines recognize that employers may “take affirmative action based on an analysis which reveals facts constituting actual or potential adverse action.” “If ‘affirmative action’ is in order,” as the dissent notes, “so is the lesser step of discarding a dubious selection device.” Since the defendants in Ricci never raised this defense, the majority did not consider this possible argument. While Ricci would preclude such a defense going forward, any employer facing a claim like that in Ricci based on acts that occurred prior to the Supreme Court’s decision in Ricci should be sure to assert a defense under 42 U.S.C. § 2000e-12(b) – it might prove effective.
Associational Discrimination, Quirky Question # 87
Some time ago, you wrote an analysis about discrimination on the basis of inter-racial marriage. We are confronting a slightly different problem. Several of our Caucasian employees have complained that they have been discriminated against because of their friendships with their African American co-workers. These individuals are not married to the African Americans and they have not even said they spend time with them away from work. But, they are claiming discrimination nonetheless. Similarly, they have complained that they are offended by some of the language used by some of their Caucasian co-workers with respect to minority employees who work at our company. Do they have a potential claim? Does Title VII reach claims brought by Caucasians who are complaining about treatment of minorities?
In the recent case of Barrett v. Whirlpool Corporation, No. 08-5307 (6th Cir. February 23, 2009), the appellate court examined a number of these issues. The case was before the appellate court following the grant of summary judgment to defendant Whirlpool. The three plaintiffs (Barrett, Melton and Nickens) claimed that their employer discriminated and retaliated against them in violation of Title VII on the basis of their friendships with and advocacy for certain African American co-workers.
The claims brought by plaintiffs involved some very ugly conduct by the plaintiffs’ co-workers, including grossly racist conduct. Some of this conduct was reported by the plaintiffs to their supervisors, but the company’s response was inadequate.
As the Sixth Circuit pointed out, “Title VII forbids discrimination on the basis of association with or advocacy for a protected party.” The court emphasized that Title VII protects individuals who, though not members of the protected class, are “victims of discriminatory animus toward [protected] third persons with whom the individuals associate.” For example, the appellate court previously had held that a Caucasian parent discriminated against because he had a bi-racial daughter stated a legitimate claim under Title VII. Similarly, as I’ve addressed in a prior Blog analysis, discrimination based on an individual’s inter-racial marriage also is prohibited by Title VII.
In Barrett, the District Court had found that the plaintiffs’ associations with their African American co-workers fell short of providing Title VII protection because the plaintiffs provided no evidence that their friendships “constituted anything other than the casual, friendly relationships that commonly develop among co-workers but that tend to be limited to the workplace.” The appellate court, however, repudiated that formulation by the trial court. Instead, the Sixth Circuit adopted the analysis articulated by the Seventh Circuit that the degree of association is irrelevant – “the key inquiries should be whether the employee has been discriminated against and whether that discrimination was ‘because of’ the employee’s race.” (Relying on Drake v. 3M, 134 F.3d 878 (7th Cir. 1998) (white employee may sue under Title VII based on discrimination resulting from his friendship with black co-workers). The appellate court also cited to other decisions involving parallel factual patterns, including inter-racial dating, inter-racial parent-child relationship, inter-racial marriage, friendship with protected class employees, association with Hispanic community, and casual social relationships with African-American non-employees. In all of these contexts, the relevant courts found that Title VII reached the conduct in question.
The Sixth Circuit adopted the reasoning of the Drake court: “If a plaintiff shows that 1) she was discriminated against at work, 2) because she associated with members of a protected class, then the degree of association is irrelevant.” The court noted that the absence of a relationship outside of work should not “immunize the conduct of harassers who target an employee because she associates with African-American co-workers.” While reaching this conclusion, the court observed that the closer the relationship (e.g., marriage or paramour) between the individual outside the protected group and the member of the protected class, the greater the likelihood the Caucasian employee will be able to demonstrate discriminatory treatment based on the relationship. But, as the appellate court emphasized, this issue “goes to the question of whether the plaintiff has established a hostile work environment, not whether he is eligible for the protections of Title VII in the first place.”
Just as the Sixth Circuit found that discrimination based on association is a viable Title VII claim, the appellate court also examined the issue of whether the plaintiffs had advanced a viable claim based on their advocacy on behalf of protected class members. “As with the question of association, the key questions are whether Plaintiffs were discriminated against, and whether the reason for the discrimination was their advocacy for protected employees.”
The appellate court also examined the issue of whether the plaintiffs were victims of retaliation. This legal theory also potentially applied to the claims of the plaintiffs.
In short, as the Barrett case illustrates, there are at least three potential claims that your employees could bring: a) associational discrimination claims; b) advocacy discrimination claims; and c) retaliation claims. The viability of those claims will depend on the nature of underlying conduct engaged in by your company’s employees and the nexus, if any, between the associations or advocacy of your Caucasian employees and the adverse treatment they experienced. Here, the typical issues arising in any harassment or discrimination case will predominate: the nature of the conduct; its severity and frequency; whether your company had knowledge of the discriminatory behaviors; the positions (managerial or non-managerial) of those who engaged in the wrongful conduct; the effectiveness of your company’s response when confronted with the behavior; whether the employees availed themselves of the mechanisms your company provides to address discriminatory conduct; etc.
Interestingly, when evaluating these types of issues in the Bennett case, the Sixth Circuit found that although the claims asserted by the plaintiffs were cognizable, only one of the three plaintiffs had presented sufficient evidence to overcome the summary judgment determination of the lower court. Whether you can achieve the same success will depend on the unique facts of your case.
Discrimination Based on Inter-Racial Marriage, Quirky Question # 77
As I have suggested in other Blog analyses, employment issues often implicate at least two fundamental issues – what is legally permissible and what is right in a broader, ethical sense. Frequently, the legal and ethical analyses align but that is not always true. Sometimes, the law lags behind.
The starting point for my analysis, therefore, would be to ask you a question – if you assumed that Title VII did not prohibit discrimination based on inter-racial relationships, how would your company address this situation? I would hope that your response would be that your company would promptly and carefully investigate this situation, and if it determined that your managerial employee was treating your other employee unfairly or discriminatorily based on his inter-racial marriage, institute appropriate disciplinary action. Depending on the facts elicited in your company’s investigation, the appropriate discipline may well be discharge.
The Holcomb facts are interesting and highlight a few of the points I referenced above. In that case, Iona College terminated the employment of two of its three assistant basketball coaches. One of these coaches (Holcomb) was married to an African American woman. The other coach who was fired was African American. The one assistant coach who was retained, the most junior of the three, was Caucasian. As part of Holcomb’s allegations, he cited to a variety of crude racist comments made by one of the individuals involved in the decision to terminate him, the school’s former Athletic Director (since promoted to one of three Vice President positions at the college). Typical of many discrimination cases, several other individuals who had heard this individual make racially insensitive remarks also came forward with this evidence. Needless to point out, these well-publicized facts cannot be beneficial to Iona College.
In reversing the summary judgment grant, however, the Second Circuit emphasized that in a mixed motive case, the plaintiff is not required to prove that the employer’s stated reason was a pretext for discrimination. “A plaintiff alleging that an employment decision was motivated both by legitimate and illegitimate reasons may establish that the ‘impermissible factor was a motivating factor, without proving that employer’s proffered explanation was not some part of the employer’s motivation.’” (Citations omitted.) The appellate court concluded that Holcomb had come forward with sufficient evidence to present his case to the jury and that the jury could find that the College’s proffered reasons for its actions were not credible.
In Holcomb, the Second Circuit stated, “We hold, for the first time, than an employer may violate Title VII if it takes action against an employee because of the employee’s association with a person of another race.” As the appellate court pointed out, the Fifth, Seventh and Eleventh Circuits agree. Similarly, the Second Circuit observed that the District Courts within the circuit that had addressed this issue had determined that Title VII reached this type of discriminatory conduct.
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