Title VII of the Civil Rights Act of 1964

By Bennett-Alexander, D.D., Hartman, L.P.

Edited by Paul Ducham

TITLE VII OF THE CIVIL RIGHTS ACT

What Is Prohibited under Title VII

Title VII prohibits discrimination in hiring, firing, training, promotion, discipline, or other workplace decisions on the basis of an employee or applicant’s race, color, gender, national origin, or religion. Included in the prohibitions are discrimination in pay, terms and conditions of employment, training, layoffs, and benefits. Virtually any workplace decision can be challenged by an applicant or employee who falls within the Title VII categories. (See Exhibit 2.6 , “Title VII Provisions.”)

Who Must Comply

Title VII applies to employers, unions, and joint labor and management committees making admission, referral, training, and other decisions, and to employment agencies and other similar hiring entities making referrals for employment. It applies to all private employers employing 15 or more employees, and to federal, state, and local governments. (See Exhibit 2.7 , “Who Must Comply.”)

Who Is Covered

Title VII applies to public (governmental) and private (nongovernmental) employees alike. Unlike labor laws that do not apply to managerial employees or wage and hour laws that exempt certain types of employees, Title VII covers all levels and types of employees. The Civil Rights Act of 1991 further extended Title VII’s coverage to U.S. citizens employed by American employers outside the United States. Non-U.S. citizens are protected in the United States but not outside the United States.

Undocumented workers also are covered by the law, but after the U.S. Supreme Court’s 2002 ruling in Hoffman Plastic Compounds, Inc. v. NLRB, the EEOC reexamined its position on remedies for undocumented workers. In Hoffman, the Court said that U.S. immigration laws outweighed the employer’s labor violations; therefore, the employee could not recover back pay for violations of the labor law. The EEOC had been treating undocumented worker claims of employment discrimination under Title VII like violations against any other worker. After Hoffman, the EEOC said that employment discrimination against undocumented workers is still illegal, and they will not ask their status in handling their discrimination claims, but Hoffman affected the availability of some forms of relief, such as reinstatement and back pay for periods after discharge or failure to hire.

Who Is Not Covered

Exemptions under Title VII are limited. Title VII permits businesses operated on or around Native American reservations to give preferential treatment to Native Americans. The act specifically states that it does not apply to actions taken with respect to someone who is a member of the Communist Party or other organization required to register as a Communist-action or Communist-front organization. The law permits religious institutions and associations to discriminate when performing their activities. For instance, a Catholic priest could not successfully sue under Title VII alleging Religious discrimination for not being hired to lead a Jewish synagogue. (See Exhibit 2.8 , “Employees Who Are Not Covered by Title VII.”) In the case of Petruska v. Gannon University, included at the end of the article, the employee was not able to effectively bring her claim for gender discrimination because of this limitation on religious claims.

Filing Claims under Title VII

Nonfederal employees who believe they have experienced employment discrimination may file a charge or claim with the EEOC. An employee filing such a claim is called a claimant or a charging party. Employers should be aware that it costs an employee only time and energy to go to the nearest EEOC office and file a claim. By law, the EEOC must in some way handle every claim it receives. To discourage claims and ensure the best defense when they arise, employers should ensure that their policies and procedures are legal, fair, and consistently applied. Regarding the ease of bringing EEO claims, there is good news and bad news for employers. The good news is that the vast majority of charges are sifted out of the system for one reason or another. For instance, in fiscal year 2007, of the 82,792 charges filed with the EEOC, 12.2 percent were settled, 17.8 percent had administrative closures (failure of the claimant to pursue the claim, loss of contact with the claimant, etc.), 59.3 percent resulted in findings of no reasonable cause, and reasonable cause was found in only 5.0 percent of the charges.

The bad news is that the EEOC’s success rate in litigation was 91.5 percent with a total monetary recovery of over $345.5 million. For years the EEOC’s success rate has been at least 90 percent. Those are not good numbers for employers tangling with the EEOC. The best defense is a good offense. Avoiding trouble in the first place lessens the chances of having to deal with the EEOC and therefore the chances of probably losing.

Nonfederal government employee claims must be filed within 180 days of the discriminatory event, except as noted in the next section involving 706 agencies. For federal employees, claims must be filed with their employing agency within 45 days of the event. In a significant U.S. Supreme Court case, National Railroad Passenger Corp. (Amtrak) v. Morgan, these deadlines were made a bit more flexible by the Court for harassment cases. In the Morgan case, the Supreme Court said that since on-the-job harassment is part of a pattern of behavior, if a charge is filed with the EEOC within the statutory period, a jury can consider actions that occurred outside the statutory period. That is, the violation is considered to be a continuing one, so the claimant is not limited to only evidence relating to the specific event resulting in the lawsuit. Note, however, that in May 2007, the U.S. Supreme Court held that it was not a continuing violation each time an employer issued a pay-check based on gender-based wage discrimination. In Ledbetter v. Goodyear Tire and Rubber Co., Inc., the Court rejected the paycheck accrual rule that would have allowed the employee to restart the statute of limitations each time she was paid. The Court distinguished Morgan by saying the act of wage discrimination was a discrete act rather than a pattern, and, thus, did not merit the same treatment as the harassment in the Morgan case.

The reason for the fairly short statute of limitations is an attempt to ensure that the necessary parties and witnesses are still available and that events are not too remote to recollect accurately. Violations of Title VII may also be brought to the EEOC’s attention because of its own investigation or by information provided by employers meeting their record keeping and reporting requirements under the law.

You should be aware that the filing process is different for federal employees, although the EEOC is seeking to make it conform more closely to the nonfederal employee regulations. Federal employees are protected by Title VII, but the procedures for handling their claims simply follow a different path.

State Law Interface in the Filing Process

Since most states have their own fair employment practice laws, they also have their own state and local enforcement agencies for employment discrimination claims. Most of these agencies contract with the EEOC to be what is called a “706” agency (named for section 706 of the act). On the basis of a work-sharing agreement with the EEOC, these agencies receive and process claims of discrimination for the EEOC in addition to carrying on their own state business. Title VII’s intent is that claims be conciliated if possible. Local agencies serve as a type of screening process for the more serious cases. If the complaint is not satisfactorily disposed at this level, it may eventually be taken by the EEOC and, if necessary, litigated. State and local agencies have their own procedures, which are similar to those of the EEOC.

If there is a 706 agency in the employee’s jurisdiction, the employee has 300 days rather than 180 days within which to file. If an employee files his or her claim with the EEOC when there is a 706 agency in the jurisdiction, the EEOC defers the complaint to the 706 agency for 60 days before investigating. The employee can file the complaint with the EEOC, but the EEOC sends it to the 706 agency, and the EEOC will not move on the claim for 60 days. In further explaining the process, reference will only be made to the EEOC as the enforcing agency involved.

Proceeding through the EEOC

Within 10 days of the employee filing a claim with the EEOC, the EEOC serves notice of the charge to the employer (called respondent or responding party ). Title VII also includes antiretaliation provisions. It is a separate offense for an employer to retaliate against an employee for pursuing rights under Title VII. Noting that retaliation claims had doubled since 1991, in 1998 the EEOC issued retaliation guidelines to make clear its view on what constitutes retaliation for pursuing Title VII rights and how seriously it views such claims by employees. In fiscal year 2007, retaliation claims were, by far, the third largest percentage of claims filed under Title VII, with race at 37.0 percent, gender at 30.1 percent, and retaliation at 28.3 percent.

Mediation

Hot. That is the best way to describe the EEOC’s approach to mediation. In response to complaints of a tremendous backlog of cases and claims that went on for years, in recent years the EEOC has adopted several important steps to try to streamline its case-handling process and make it more efficient, effective, and less time-consuming for employees filing claims. Primary among the steps is its adoption of mediation as an alternative to a full-blown EEOC investigation. In furtherance of this, the EEOC has begun several different programs involving mediation. In 1999 it launched the expanded mediation program discussed in the next paragraph. In 2003, in recognition that many private sector employers already have extensive mediation programs set up to handle workplace issues, the EEOC began a “referral-back” program. Private sector employment discrimination claims are referred back to participating employers for mediation by the employer’s own mediation program to see if they can be resolved without going any further. The same year, the EEOC ushered in a pilot program to have local fair employment practice offices mediate claims on the EEOC’s behalf. In response to the EEOC’s finding that there were more employees willing to mediate than there were employers willing to do so, the EEOC instituted “universal mediation agreements,” under which employers agree to have their claims mediated by the EEOC when discrimination charges are filed. As of the end of fiscal year 2007, the EEOC had signed universal agreements to mediate with 154 national/regional corporations and 1,115 local employers. National universal mediation agreements have been signed with such employers as Ford Motor Company; Huddle House, Inc.; Ryan’s Restaurant Group, Inc.; and Southern Company. This was a 15 percent increase in agreements over just the previous year.

Generally, the way mediation works is that after a discrimination charge is filed by the employee and notice of the charge is given to the employer, the EEOC screens the charge to see if it is one that is appropriate for mediation. If it is appropriate for mediation, the EEOC will offer that option to the parties. Complex and weak cases are not offered mediation. The agency estimates that it offers mediation to 60 to 70 percent of its incoming workload of 80,000 cases per year. Of those, about 15 percent are actually mediated. Both parties are sent letters offering mediation, and the decision to participate is voluntary for both parties. Each side has 10 days to respond to the offer to mediate. If both parties elect mediation, the charge must be mediated within 60 days for in-house mediation or 45 days for external mediation. The EEOC has expanded its mediation program to allow a request for mediation at any stage of the administrative process, even after a finding of discrimination has been issued.

If the parties choose to mediate, then during mediation they will have the opportunity to present their positions, express their opinions, provide information, and express their request for relief. Any information disclosed during this process is not to be revealed to anyone, including EEOC employees. If the parties reach agreement, that agreement is as binding as any other settlement agreement. From 1999, when it’s mediation program was fully implemented, to 2007, the EEOC conducted over 98,000 mediations, with 69 percent, over 68,000 charges, being successfully resolved, with a satisfaction rate of over 90 percent.

EEOC Investigation

If the parties choose not to mediate the charge or if the mediation is not successful, the charge is referred back to the EEOC for handling. The EEOC investigates the complaint by talking with the employer and employee and any other necessary witnesses as well as viewing any documents or even visiting the workplace. The average time for an investigation is about 182 days.

EEOC’s Determination

After appropriate investigation, the EEOC makes a determination as to whether there is reasonable cause or no reasonable cause for the employee to charge the employer with violating Title VII. Once there has been an investigation and a cause or no-cause finding, either party can ask for reconsideration of the EEOC’s decision.

No-Reasonable-Cause Finding

After investigation, if the EEOC finds there is no reasonable cause for the employee’s discrimination complaint, the employee is given a dismissal and notice of rights, often known as a right-to-sue letter. If the employee wants to pursue the matter further despite the EEOC’s conclusion that Title VII has not been violated, the employee is now free to do so, having exhausted the administrative remedies. The employee can then bring suit against the employer in federal court within 90 days of receiving the notice. (See Exhibit 2.9 , “The Procedure for Bringing a Claim within the EEOC.”)

Reasonable-Cause Finding

If the EEOC finds there is reasonable cause for the employee to charge the employer with discrimination, it will attempt to have the parties meet together and conciliate the matter. That is, the EEOC will bring the parties together in a fairly informal setting with an EEO investigator.

The EEO investigator sets forth what has been found during the investigation and discusses with the parties the ways the matter can be resolved. Often the employee is satisfied if the employer simply agrees to provide a favorable letter of recommendation. The majority of claims filed with the EEOC are adequately disposed of at this stage of the proceedings. If the claim is not adequately disposed of, the EEOC can take the matter further and eventually file suit against the employer in federal district court.

Judicial Review

If no conciliation is reached, the EEOC may eventually file a civil action in federal district court. As we have seen, if the EEOC originally found no cause and issued the complaining party a right-to-sue letter, the employee can take the case to court, seeking judicial review. Title VII requires that courts give EEOC decisions de novo review. A court can only take a Title VII discrimination case for judicial review after the EEOC has first disposed of the claim. Thus, in opening scenario 1, Jack cannot immediately file a discrimination lawsuit against his employer because Jack has not yet gone through the EEOC’s administrative process and exhausted his administrative remedies.

Upon going to court, the case is handled entirely new, as if there had not already been a finding by the EEOC. Employees proceeding with a no-reasonable-cause letter are also free to develop the case however they wish without being bound by the EEOC’s prior determination. If a party is not satisfied with the court’s decision and has a basis upon which to appeal, the case can be appealed up to, and including, the U.S. Supreme Court, if it agrees to hear the case. Before we leave the area of judicial review, we need to discuss a matter that has become important in the area of employees’ pursuing their rights under Title VII and having the right to judicial review of the EEOC’s decisions.

In recent years, mandatory arbitration agreements have gained tremendously in popularity. Previously confined almost exclusively to unions and the securities industry, these agreements are entered into by employees with their employers when they are hired and stipulate that any workplace disputes will be disposed of by submitting them to arbitration rather than to the EEOC or the courts.

The appeal of mandatory arbitration clauses is that they greatly decrease the time and Resources parties would spend by fighting workplace legal battles in court. There are at least two major drawbacks for employees: (1) When they are trying to obtain employment, potential employees generally feel they have little choice about signing away their rights to go to court and (2) once a case goes to arbitration, the arbitrator’s decision is not subject to judicial review by the courts unless the decision can be shown to be the result of fraud or collusion, is unconstitutional, or suffers some similar malady. This means that the vast majority of arbitration awards, many rendered by arbitrators with no legal background or grounding in Title VII issues, remain intact, free from review by the courts. It also means that while employers gain the advantage of having fewer cases in court, employees have the disadvantage of essentially having the courts closed to them in Title VII cases, even though Title VII provides for both an administrative process and judicial review.

With few downsides for employers, mandatory arbitration agreements have become so popular with employers that they are now fairly routine. Employees who come to the EEOC intending to file claims of employment discrimination are told that they cannot do so because they have entered into a mandatory arbitration agreement with their employer, which requires them to seek redress through arbitration, not the EEOC or the courts.

Two recent U.S. Supreme Court cases have decided important issues in this area. In Circuit City v. Adams, the Supreme Court held that mandatory arbitration clauses requiring arbitration of workplace claims, including those under Title VII, are enforceable under the Federal Arbitration Act. In EEOC v. Waffle House, Inc., the Court held that even though an employee is subject to a mandatory arbitration agreement, since the EEOC is not a party to the agreement, the agreement does not prevent the EEOC from pursuing victim-specific relief such as back pay, reinstatement, and damages as part of an enforcement action.

So, the EEOC claims clearly can be the subject of mandatory arbitration, but this does not prevent the EEOC from bringing its own enforcement action against the employer and even asking for victim-specific relief for the employee. An employer can avoid a Title VII court case by requiring mandatory arbitration of workplace claims, but still may have to contend with the EEOC bringing suit on its own.

Legislation to overturn Circuit City and only permit voluntary arbitration agreements was introduced in both the House and Senate shortly after the decision, but did not pass. Perhaps this was, at least in part, because the Supreme Court gave further indication of how it will view mandatory arbitration agreements in a later Circuit City case. In its initial decision, the Supreme Court required the Circuit City case to be remanded to the lower court for actions not inconsistent with its ruling. On remand, the court of appeals applied the Federal Arbitration Act and ruled that the employer’s mandatory arbitration agreement was unconscionable and unenforceable because it was offered on a take-it-or-leave-it basis, did not require the company to arbitrate claims, limited the relief available to employees, and required employees to pay half of the arbitration costs. When the court of appeals’ decision came back to the Supreme Court for review, the Court declined to hear it, leaving the court of appeals’ refusal to enforce the mandatory arbitration agreement intact.

Perhaps also, at least in part in response to mandatory arbitration agreements, the EEOC stepped up its mediation programs in order to provide employers with an alternative between litigation and mandatory arbitration. Since 1991 the EEOC had been moving in the direction of mediation, but the issue heated up after the Supreme Court decisions on mandatory arbitration. The EEOC’s subsequent litigation alternatives heavily favoring mediation included plans aimed squarely at employers, with its adoption of the national uniform mediation agreements (NUMAs) and referral-back programs. As discussed earlier, the NUMAs specifically commit employers to mediation of Title VII claims, while the referral-back programs allow employers to use their own in-house ADR programs to attempt to settle such claims.

Remedies

If the employee wins the case, the employer may be liable for back pay of up to two years before the filing of the charge with the EEOC; for front pay for situations when reinstatement is not possible or feasible for claimant, for reinstatement of the employee to his or her position; for retroactive seniority ; for injunctive relief, if applicable; and for attorney fees. Until passage of the Civil Rights Act of 1991, remedies for discrimination under Title VII were limited to make-whole relief and injunctive relief.

The Civil Rights Act of 1991 added compensatory damages and punitive damages as available remedies. Punitive damages are permitted when it is shown that the employer’s action was malicious or was done with reckless indifference to federally protected rights of the employee. They are not allowed under the disparate/adverse impact or unintentional theory of discrimination (to be discussed shortly) and may not be recovered from governmental employers. Compensatory damages may include future pecuniary loss, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses. (See Exhibit 2.10 , “Title VII Remedies.”)

There are certain limitations on the damages under the law. Gender discrimination (including sexual harassment) and religious discrimination have a $300,000 cap total on nonpecuniary (pain and suffering) compensatory and punitive damages. There is no limitation on medical compensatory damages. The cap depends on the number of employees the employer has (see Exhibit 2.11 , “Compensatory and Punitive Damages Caps”). Juries may not be told of the caps on liability. Since race and national origin discrimination cases also can be brought under 42 U.S.C. § 1981, which permits unlimited compensatory damages, the caps do not apply to these categories. In 2001, the U.S. Supreme Court ruled that though compensatory damages are capped by the law, the limitations do not apply to front pay. Also, as previously discussed, the U.S. Supreme Court’s Hoffman decision foreclosed the ability of undocumented workers to receive post-discharge back pay, and the EEOC rescinded its policy guidance suggesting otherwise.

With the addition of compensatory and punitive damages possible in Title VII cases, litigation increased dramatically. It is now more worthwhile for employees to sue and for lawyers to take the cases. The possibility of money damages also makes it more likely that employers will settle more suits rather than risk large damage awards. Again, the best defense to costly litigation and liability is solid, consistently applied workplace policies.

Jury Trials

The Civil Rights Act of 1991 also added jury trials to Title VII. From the creation of Title VII in 1964 until passage of the 1991 Civil Rights Act 27 years later, jury trials were not permitted under Title VII. Jury trials are now permitted under Title VII at the request of either party when compensatory and punitive damages are sought.

There is always less predictability about case outcomes when juries are involved. Arguing one’s cause to a judge who is a trained member of the legal profession is quite different from arguing to a jury of 6 to 12 jurors, all of whom come with their own backgrounds, prejudices, predilections, and little knowledge of the law. Employers now have even more incentive to ensure that their policies and actions are well reasoned, business-related, and justifiable—especially since employees have even more incentive to sue.

Exhibit 2.6

Exhibit 2.7

Exhibit 2.8

Exhibit 2.9

Exhibit 2.10

DISPARATE TREATMENT

OK, so we exhaust our administrative remedies and decide to file a claim in court for our discrimination claim. Since cases will be our vehicle for viewing Title VII, we will speak of the parties as plaintiff and defendant. In alleging discrimination, an employee plaintiff may use either of two theories to bring suit under Title VII: disparate treatment or disparate impact. The suit must fit into one theory or the other to be recognized under Title VII. A thorough understanding of each will help employers to make sounder policies that avoid litigation in the first place and enhance the workplace in the process.

Disparate Treatment

Disparate treatment is the Title VII theory used in cases of individual and obvious discrimination. The plaintiff employee (or applicant) bringing suit alleges that the defendant employer treats the employee differently than other similarly situated employees. Further, the employee alleges that the reason for the difference is the employees’ race, religion, gender, color, or national origin. Disparate treatment is considered intentional discrimination, but the plaintiff need not actually know that unlawful discrimination is the reason for the difference. That is, the employee need not prove that the employer actually said that race, gender, and so on was the reason for the decision. In disparate treatment cases, the employer’s policy is discriminatory on its face.

As you will see in McDonnell Douglas Corp. v. Green, included at the end of the article, the U.S. Supreme Court has come up with a set of indicators that leaves discrimination as the only plausible explanation when all other possibilities are eliminated. (See Exhibit 2.12 , “Disparate Treatment.”) That is, in order to make out a prima facie case of disparate treatment discrimination, the employee must show that (1) the employee belongs to a class protected under Title VII; (2) he or she applied for and was qualified for a job for which the employer was seeking applicants; (3) despite his or her qualifications, the applicant was rejected and, after the rejection, the position remained open; and (4) the employer continued to seek applicants with the rejected applicant’s qualifications.

The effect of the McDonnell Douglas inquiries is to set up a legal test of all relevant factors that are generally taken into consideration in making employment decisions. Once those considerations have been ruled out as the reason for failure to hire the applicant, the only factor left to consider is the applicant’s membership in one of Title VII’s prohibited categories (i.e., race, color, gender, religion, or national origin).

The McDonnell Douglas Court recognized that there would be scenarios under Title VII other than failure to rehire involved in that case (i.e., failure to promote or train, discriminatory discipline, and so on) and its test would not be directly transferrable to them, but it could be modified accordingly. For instance, the issue may not be a refusal to rehire; it may, instead, be a dismissal. In such a case, the employee would show the factors as they relate to dismissal.

If an employer makes decisions in accordance with these requirements, it is less likely that the decisions will later be successfully challenged by the employee in court. Disparate treatment cases involve an employer’s variance from the normal scheme of things, to which the employee can point to show he or she was treated differently. Employers should therefore consistently treat similarly situated employees similarly. If there are differences, ensure that they are justifiable.

Think carefully before deciding to single out an employee for a workplace action. Is the reason for the action clear? Can it be articulated? Based on the information the employer used to make the decision, is it reasonable? Rational? Is the information serving as the basis for the decision reliable? Balanced? Is the justification job related? If the employer is satisfied with the answers to these questions, the decision is probably defensible. If not, reexamine the considerations for the decision, find its weakness, and determine what can be done to address the weakness. The employer will then be in a much better position to defend the decision and show it is supported by legitimate, nondiscriminatory reasons.

Legitimate, Nondiscriminatory Reason Defense

Even if the employee establishes all four of the elements of the prima facie case of disparate treatment, it is only a rebuttable presumption. That is, that alone does not establish that the employer discriminated against the employee. There may be some other explanation for what the employer did. As the Court stated in McDonnell Douglas, the employer may defend against the prima facie case of disparate treatment by showing that there was a legitimate, nondiscriminatory reason for the decision involving the employee. That reason may be virtually anything that makes sense and is not related to Title VII criteria. It is only discrimination on the basis of Title VII that is protected. For instance, Title VII does not protect the category of jerks. If it can legitimately be shown that the action was taken because the employee was acting like a jerk, then regardless of Title VII, there is no protection. However, if it turns out that the only jerks terminated are those of a particular race, gender, ethnicity, and the like, then the employer is still violating Title VII.

But even if the employer can show a legitimate, nondiscriminatory reason for the action toward the employee, the analysis does not end there. The employee can then counter the employer’s defense by showing that the legitimate, nondiscriminatory reason being shown by the employer is a mere pretext for discrimination. That is, that while on its face the employer’s reason may appear legitimate, there is actually something discriminatory going on. For instance, in McDonnell Douglas, the employer said it would not rehire Green because he engaged in unlawful activity. This is a perfectly reasonable, legitimate, nondiscriminatory reason. However, if Green could show that the employer had rehired white employees who had engaged in similar unlawful activities, then McDonnell Douglas’s legitimate, nondiscriminatory reason for the treatment of Green would appear to be a mere pretext for discrimination since white employees who engaged in similar activities had been rehired despite their activity, but Green, black, had not.

The BFOQ Defense

Employers also may defend against disparate treatment cases by showing that the basis for the employer’s intentional discrimination is a bona fide occupational qualification (BFOQ) reasonably necessary for the employer’s particular business. This is available only for disparate treatment cases involving gender, religion, and national origin and is not available for race or color. BFOQ is legalized discrimination and, therefore, very narrowly construed by the courts.

To have a successful BFOQ defense, the employer must be able to show that the basis for preferring one group over another goes to the essence of what the employer is in business to do and that predominant attributes of the group discriminated against are at odds with that business. (See Exhibit 2.13 , “BFOQ Test.”) For instance, it has been held that, because bus companies and airlines are in the business of safely transporting passengers from one place to another, and driving and piloting skills begin to deteriorate at a certain age, a maximum age requirement for hiring is an appropriate BFOQ for bus drivers and pilots. The evidence supporting the qualification must be credible, and not just the employer’s opinion. The employer also must be able to show it would be impractical to determine if each individual member of the group who is discriminated against could qualify for the position.

As you can see from Wilson v. Southwest Airlines Company, included at the end of the article, not every attempt to show a BFOQ is successful. Southwest argued that allowing only females to be flight attendants was a BFOQ. However, the court held that the essence of the job of flight attendants is to be able to assist passengers if there is an emergency, and being female was not necessary for this role. Weigh the business considerations in the case against the dictates of Title VII, and think about how you would decide the issue.

Make sure that you understand the distinction the court made in Southwest Airlines between the essence of what an employer is in business to do and how the employer chooses to do it. People often neglect this distinction and cannot understand why business owners cannot simply hire whomever they want (or not, as the case may be) if it has a marketing scheme it wants to pursue. Marketing schemes go to the “how” of the employer’s business, as in how an employer chooses to conduct his or her business or attract people to it, rather than the “what” of the business, which is what the actual business itself is in business to do. Getting passengers safely from one point to another is the “what” in Southwest. How the airline chose to market that business of safely transporting customers is another matter and has little to do with the actual conduct of the business itself. Perhaps the Playboy Club bunnies will make it clearer.

After the success of Playboy magazine, Playboy opened several Playboy clubs in which the servers were dressed as Playboy bunnies. The purpose of the clubs was not to serve drinks as much as it was to extend Playboy magazine and its theme of beautiful women dressed in bunny costumes into another form for public consumption. Playboy magazine and its concept were purely for the purpose of adult male entertainment. The bunnies serving drinks were not so much drink servers as they were Playboy bunnies in the flesh rather than on a magazine page. That is what the business of the clubs was all about. Though it later chose to open up its policies to include male bunnies, being female was a defensible BFOQ for being a bunny server in a Playboy club because having female bunnies was what the club was in business to do.

Contrast this with Hooters restaurants, where Hooters asserted that its business is serving spicy chicken wings. Since males can serve chicken wings just as well as females, being female is not a BFOQ for being a Hooters server. However, if Hooters had said the purpose of its business is to provide males with scantily clad female servers for entertainment purposes, as it was with the Playboy clubs, then being female would be a BFOQ.

Disparate Impact

While disparate treatment is based on an employee’s allegations that she or he is treated differently as an individual based on a policy that is discriminatory on its face, disparate impact cases are generally statistically based group cases alleging that the employer’s policy, while neutral on its face (facially neutral), has a disparate or adverse impact on a protected Title VII group. If such a policy impacts protected groups more harshly than majority groups, illegal discrimination may be found if the employer cannot show that the requirement is a legitimate business necessity. This is why the police department’s policy fails in opening scenario 2. The 5-foot-4, 130-pound policy would screen out many more females than males and would therefore have to be shown to be job-related in order to stand. Statistically speaking, females, as a group, are slighter and shorter than males, so the policy has a disparate impact on females and could be gender discrimination in violation of Title VII. Actually, this has been found to be true of males in certain ethnic groups, too, such as some Hispanics and Asians, who statistically tend to be lighter and shorter than the requirement.

The disparate impact theory was established by the Supreme Court in 1971 in the Griggs v. Duke Power Co. case, included at the end of the article. Griggs is generally recognized as the first important case under Title VII, setting forth how Title VII was to be interpreted by courts. Even though the law became effective in 1965, it was not until Griggs in 1971 that it was taken seriously by most employers. Griggs has since been codified into law by the Civil Rights Act of 1991. In Griggs, the employer had kept a segregated workforce before Title VII, with African-American employees being consigned to the coal handling department, where the highest-paid coal handler made less than the lowest-paid white employee in any other department. The day after Title VII became effective, the company imposed a high school diploma requirement and passing scores on two general intelligence tests in order for employees to be able to move from coal handling to any other department. White employees working in the other departments of the company were grandfathered in and did not have to meet these new requirements. While the policy looked neutral on its face, the impact was to effectively keep the status quo and continue to keep blacks in coal handling and whites in the other, higher-paying, departments. The Supreme Court struck down Duke Power Company’s new requirements as a violation of Title VII due to its disparate impact on African Americans. Notice the difference between the theories in the Griggs case involving disparate impact and the McDonnell Douglas case involving disparate treatment.

Griggs stood as good law until 1989 when the U.S. Supreme Court decided Wards Cove Packing Co. v. Atonio. 17 In that case, the Court held that the burden was on the employee to show that the employer’s policy was not job related. In Griggs the burden was on the employer to show that the policy was job related. This increase in the employee’s burden was taken as a setback in what was considered to be settled civil rights law. It moved Congress to immediately call for Griggs and its 18-year progeny to be enacted into law so it would no longer be subject to the vagaries of whoever was sitting on the U.S. Supreme Court. The Civil Rights Act of 1991 did this.

Disparate impact cases can be an employer’s nightmare. No matter how careful an employer tries to be, a policy, procedure, or screening device may serve as the basis of a disparate impact claim if the employer is not vigilant in watching for its indefensible disparate impact. Even the most seemingly innocuous policies can turn up unexpected cases of disparate impact. (See Exhibit 2.14 , “Disparate Impact Screening Devices.”) Employers must guard against analyzing policies or actions for signs of intentional discrimination, yet missing those with a disparate impact. Ensure that any screening device is explainable and justifiable as a legitimate business necessity if it has a disparate impact on Title VII groups. This is even more important now that EEOC has adopted it’s new E-RACE initiative. The purpose of the initiative is to put a renewed emphasis on employers’ hiring and promotion practices in order to eliminate even the more subtle ways in which employers can discriminate, for instance on the basis of names, arrest or conviction records, credit scores, or employment and personality tests, all of which may have a disparate impact on people of color.

What Constitutes a Disparate Impact?

We have talked about disparate impact in general, but we have not yet discussed what actually constitutes a disparate impact. Any time an employer uses a factor as a screening device to decide who receives the benefit of any type of employment decision—from hiring to termination, from promotion to training, from raises to employee benefit packages—it can be the basis for disparate impact analysis. Recall that Title VII does not mention disparate impact. On August 25, 1978, several federal agencies, including the EEOC and the Departments of Justice and Labor, adopted a set of uniform guidelines to provide standards for ruling on the legality of employee selection procedures. The Uniform Guidelines on Employee Selection Procedures takes the position that there is a 20 percent margin permissible between the outcome of the majority and the minority under a given screening device. This is known as the four-fifths rule. Disparate impact is statistically demonstrated when the selection rate for groups protected by Title VII is less than 80 percent or four-fifths that of the higher-scoring majority group.

For example, 100 women and 100 men take a promotion examination. One hundred percent of the women and 50 percent of the men pass the exam. The men have only performed 50 percent as well as the women. Since the men did not pass at a rate of at least 80 percent of the women’s passage rate, the exam has a disparate impact on the men. The employer would now be required to show that the exam is a legitimate business necessity. If this can be shown to the satisfaction of the court, then the job requirement will be permitted even though it has a disparate impact. Even then the policy may still be struck down if the men can show there is a way to accomplish the employer’s legitimate goal in using the exam without it having such a harsh impact on them.

For example, suppose a store like Sears has a 75-pound lifting requirement for applicants who apply to work as mechanics in their car repair facilities. A woman sues for gender discrimination, saying the lifting requirement has a disparate impact on women because they generally cannot lift that much weight. The store is able to show that employees who work in the car repair facilities move heavy tools from place to place in the garage. The lifting requirement is therefore a legitimate business necessity. Though the lifting policy screens out women applying for jobs as mechanics at a higher rate than it does men, and, for argument’s sake, let’s say women only do 20 percent as well as men on the lifting requirement, thus not meeting the four-fifths rule, the employer has provided a legitimate, nondiscriminatory reason for the lifting policy. But suppose the applicant can counter that if the employer used a rolling tool cart (which is actually sold by Sears), then the policy would not have such a harmful impact on women and would still allow Sears what it needs. Even though Sears has given a legitimate, nondiscriminatory reason for its policy, it has been demonstrated that the policy can be made less harsh by using the cart.

The four-fifths rule guideline is only a rule of thumb. The U.S. Supreme Court stated in Watson v. Ft. Worth Bank and Trust 18 that it has never used mathematical precision to determine disparate impact. What is clear is that the employee is required to show that the statistical evidence is significant and has the effect of selecting applicants for hiring and promotion in ways adversely affecting groups protected by Title VII.

The terminology regarding scoring is intentionally imprecise because the “outcome” depends on the nature of the screening device. The screening device can be anything that distinguishes one employee from another for workplace decision purposes. It may be a policy of hiring only ex-football players as barroom bouncers (most females would be precluded from consideration since most of them have not played football); requiring a minimum passing score on a written or other examination; physical attributes such as height and weight requirements; or another type of differentiating factor. Disparate impact’s coverage is very broad and virtually any policy may be challenged.

If the device is a written examination, then the outcomes compared will be test scores of one group (usually whites) versus another (usually African Americans, or, more recently, Hispanics). If the screening device is a no-beard policy, then the outcome will be the percentage of black males affected by the medical condition, which is exacerbated if they shave, versus the percentage of white males so affected. If it is a height and weight requirement, it will be the percentage of females or members of traditionally shorter and slighter ethnic groups who can meet that requirement versus the percentage of males or majority members who can do so. The hallmark of these devices is that they appear neutral on their face. That is, they apply equally to everyone yet upon closer examination, there is a harsher impact on a group with Title VII protection.

Disparate Impact and Subjective Criteria

When addressing the issue of the disparate impact of screening devices, subjective and objective criteria are a concern. Objective criteria are factors that are able to be quantified by anyone, such as whether the employee made a certain score on a written exam. Subjective criteria are, instead, factors based on someone’s personal thoughts or ideas (i.e., a supervisor’s opinion as to whether the employee being considered for promotion is “compatible” with the workplace).

Initially it was suspected that subjective criteria could not be the basis for disparate impact claims since the Supreme Court cases had involved only objective factors such as height and weight, educational requirements, test scores, and the like. In Watson v. Fort Worth Bank, mentioned above, the Supreme Court, for the first time, determined that subjective criteria also could be the basis for a disparate impact claim.

In Watson, a black employee had worked for the bank for years and was constantly passed over for promotion in favor of white employees. She eventually brought suit, alleging racial discrimination in that the bank’s subjective promotion policy had a disparate impact upon black employees. The bank’s policy was to promote employees based on the recommendation of the supervisor (all of whom were white). The Supreme Court held that the disparate impact analysis could indeed be used in determining illegal discrimination in subjective criteria cases.

Disparate Impact of Preemployment Interviews and Employment Applications

Quite often questions asked during idle conversational chat during preemployment interviews or included on job applications may unwittingly be the basis for Title VII claims. Such questions or discussions should therefore be scrutinized for their potential impact, and interviewers should be trained in potential trouble areas to be avoided. If the premise is that the purpose of questions is to elicit information to be used in the evaluation process, then it makes sense to the applicant that if the question is asked, the employer will use the information. It may seem like innocent conversation to the interviewer, but if the applicant is rejected, then whether or not the information was gathered for discriminatory purposes, the applicant has the foundation for alleging that it illegally impacted the decision-making process. (See Exhibit 2.14 .) Only questions relevant to legal considerations for evaluating the applicant should be asked. There is virtually always a way to elicit legal, necessary information without violating the law or exposing the employer to potential liability. A chatty, untrained interviewer can innocently do an employer a world of harm.

For example, idle, friendly conversation has included questions by interviewers such as “What a beautiful head of gray hair! Is it real?” (age); “What an interesting last name. What sort of name is it?” (national origin); “Oh, just the one child? Are you planning to have more?” (gender); “Oh, I see by your engagement ring that you’re getting married! Congratulations! What does your fiancée do?” (gender). These questions may seem, or even be, innocent, but they can come back to haunt an employer later. Training employees who interview is an important way to avoid liability for unnecessary discrimination claims.

Conversation is not the only culprit. Sometimes it is job applications. Applications often ask the marital status of the applicant. Since there is often discrimination against married women holding certain jobs, this question has a potential disparate impact on married female applicants (but not married male applicants for whom this is generally not considered an issue). If the married female applicant is not hired, she can allege that it was because she was a married female. This may have nothing whatsoever to do with the actual reason for her rejection, but since the employer asked the question, the argument can be made that it did. In truth, employers often ask this question because they want to know whom to contact in case of an emergency should the applicant be hired and suffer an on-the-job emergency. Simply asking who should be contacted in case of emergency, or not soliciting such information until after the applicant is hired, gives the employer exactly what the employer needs without risking potential liability by asking questions about gender or marital status that pose a risk. That is why in opening scenario 3, Jill, as one who interviews applicants, is in need of training, just like those who actually hire applicants.

The Business Necessity Defense

In a disparate impact claim, the employer can use the defense that the challenged policy, neutral on its face, that has a disparate impact on a group protected by Title VII is actually job related and consistent with business necessity. For instance, an employee challenges the employer’s policy of requesting credit information and demonstrates that, because of shorter credit histories, fewer women are hired than men. The employer can show that it needs the policy because it is in the business of handling large sums of money and that hiring only those people with good and stable credit histories is a business necessity. Business necessity may not be used as a defense to a disparate treatment claim.

In a disparate impact case, once the employer provides evidence rebutting the employee’s prima facie case by showing business necessity or other means of rebuttal, the employee can show that there is a means of addressing the issue that has less of an adverse impact than the challenged policy. If this is shown to the court’s satisfaction, then the employee will prevail and the policy will be struck down.

Knowing these requirements provides the employer with valuable insight into what is necessary to protect itself from liability. Even though disparate impact claims can be difficult to detect beforehand, once they are brought to the employer’s attention by the employee, they can be used as an opportunity to revisit the policy. With flexible, creative, and innovative approaches, the employer is able to avoid many problems in this area.

Other Defenses to Title VII Claims

Once an employee provides prima facie evidence that the employer has discriminated, in addition to the BFOQ and business necessity defenses discussed, the employer may perhaps present evidence of other defenses:

• That the employee’s evidence is not true—that is, this is not the employer’s policy as alleged or that it was not applied as the employee alleges, employee’s statistics regarding the policy’s disparate impact are incorrect and there is no disparate impact, or the treatment employee says she or he received did not occur.

• That the employer’s “bottom line” comes out correctly. We initially said that disparate impact is a statistical theory. Employers have tried to avoid litigation under this theory by taking measures to ensure that the relevant statistics will not exhibit a disparate impact. In an area in which they feel they may be vulnerable, such as in minorities’ passing scores on a written examination, they may make decisions to use criteria that make it appear as if minorities do at least 80 percent as well as the majority so the prima facie elements for a disparate impact case are not met. This attempt at an end run around Title VII was soundly rejected by the U.S. Supreme Court in Connecticut v. Teal, included at the end of the article. Note that this is also very often the reason you hear someone say there are “quotas” in a workplace. They are there not because the law requires them—it doesn’t—but rather because the employer has self-imposed them to try to avoid liability. Not a good idea. The best policy is to have an open, fair employment process. Manipulating statistics to reach a “suitable” bottom-line outcome is not permitted, as shown in Teal, where the employer imposed such a scheme to try to counteract the fact that black employees did not pass a pen and paper test at sufficient rates and were therefore barred from further consideration for promotion even though they had been performing in the positions for two years. When the employees not allowed to be considered because of their test scores sued for discrimination based on disparate impact, the employer tried to defend by saying the bottom-line figures (resulting from whatever manipulation the employer did to the actual passage rates to take away the disparate impact) did not indicate a disparate impact; therefore, the employees could not sue. The Supreme Court rejected this argument and said it is the process of providing equal opportunity that the law protects, not equal employment, and that if a non-job-related screening device has a disparate impact on a protected group, it cannot be used, regardless of how the employer tries to neutralize its negative impact.

Teal demonstrates that Title VII requires equal employment opportunity, not simply equal employment. This is extremely important to keep in mind. It is not purely a “numbers game” as many employers, including the state of Connecticut, have interpreted the law. Under the Civil Rights Act of 1991, it is an unfair employment practice for an employer to adjust the scores of, or to use different cutoff scores for, or to otherwise alter the results of, an employment-related test on the basis of a prohibited category as was done in Teal.

Employers’ policies should ensure that everyone has an equal chance at the job, based on qualifications. The Teal employees had been in their positions on a provisional basis for nearly two years before taking the examination. The employer therefore had nearly two years of actual job performance that it could consider to determine the applicant’s promotability. Instead, an exam was administered, requiring a certain score, which exam the employer could not show to be related to the job. Of course, the logical question is, “Then why give it?” Make sure you ask yourself that question before using screening devices that may operate to exclude certain groups on a disproportional basis. If you cannot justify the device, you take an unnecessary risk by using it.

Management Tips

Since potentially all employees can bind the employer by their discriminatory actions, it is important for all employees to understand the law. This not only will greatly aid them in avoiding acts that may cause the employer liability, but it will also go far in creating a work environment in which discrimination is less likely to occur. Through training, make sure that all employees understand

• What Title VII is.

• What Title VII requires.

• Who Title VII applies to.

• How the employees’ actions can bring about liability for the employer.

• What kinds of actions will be looked at in a Title VII proceeding.

• That the employer will not allow Title VII to be violated.

• That all employees have a right to a workplace free of illegal discrimination.

Exhibit 2.11

Exhibit 2.12

Exhibit 2.13

Exhibit 2.14