Tag Archives: race discrimination

February 16, 2015

Lessons From a $15M Discrimination Verdict

A Colorado federal jury reportedly awarded $15 million last week to 11 workers who claimed they had been subject to workplace harassment, discrimination and retaliation because of their race and national origin. Ten of the 11 current and former workers who sued their employer, a trucking and mail-sorting company at Denver International Airport, were black men. Three had been born in the United States and the remaining seven were from Mali, Guinea and Brazil. Their allegations included that racist comments pervaded the workplace, that they were discriminated in work assignments, layoffs and pay and were segregated into certain unfavorable job categories and shifts, and that they faced retaliation after complaining about the harassment and discrimination.

Although we do not know exactly which facts or claims persuaded the jury to award this large sum, the fact that the jury awarded $13 million dollars for punitive damages suggests that it believed the company’s actions (or inactions) were particularly bad.

What can you learn from this significant discrimination verdict? Even if the verdict is later reversed or reduced, you can learn what not to do when managing a racially and ethnically diverse workforce.

Ignoring Complaints and Promoting the Harassers

The workers in this case alleged that they complained internally about racist comments and slurs made by supervisors, leads and co-workers and that nothing was done. Examples of some supposed comments directed toward the workers were “lazy, stupid Africans,” “go back to your f***ing country,” “they need to fire all the n***ers here” as well as regular use of the N-word. Instead of stopping the comments, management supposedly turned a deaf ear and even promoted some of those who made the slurs.

Don’t ignore inappropriate comments when you hear them. It is up to you to stop racial and ethnic slurs immediately and take action to ensure they are not pervasive in your workplace. If an employee complains about discriminatory name-calling and threats, you need to investigate the report and take appropriate action. Be sure to confirm—in writing—that you met with the accuser(s) to discuss the results of your investigation, and ensure there is no retaliation. Then follow-up again to ensure things have improved. Doing so will demonstrate your commitment to a workplace free from discrimination and harassment – so long as you are prepared to take action against those who violate your policies.

Failing to Enforce EEO and Harassment Policies

You likely have an Equal Employment Opportunity and a Harassment policy in your employee handbook, but they do no good if you fail to enforce them. Review your policies, train your supervisors on them and enforce them uniformly and consistently.

Retaliating Against Those Who Complain or Their Supporters

The eleventh worker who sued the trucking company in this case was a white man who offered support for the African workers and provided evidence supporting their allegations. After being terminated from his job, he alleged his firing was in retaliation for his support.

Retaliation is within company control and in many cases, is preventable. Train your supervisors not to treat an employee who has complained of discrimination or harassment, or who has participated in a charge or lawsuit, differently than other employees are treated. Carefully analyze any adverse decision that would affect such an employee and make sure your decision is based on legitimate business reasons and is well-documented, in case you have to defend a retaliation complaint.

Fifteen Million Reasons To Do It Right

You don’t want to end up in front of a jury defending your employment practices, but if you find yourself in that position, you want to be able to show a jury you did everything you could to prevent discrimination and harassment in your workplace. If you don’t take those actions, a jury may very well punish you for it.

April 16, 2014

EEOC Loses Kaplan Credit Check Appeal

By Brad Cave

In 2010, the Equal Employment Opportunity Commission (EEOC) sued Kaplan Higher Education Corporation, claiming that Kaplan’s use of credit reports had a disparate impact on black applicants. The trial court threw out the EEOC’s suit because it used an invalid method for determining the race of Kaplan’s applicants. The EEOC appealed, and lost again. In a stinging opinion, the Sixth Circuit Court of Appeals agreed with Kaplan and rejected the methodology promoted by the EEOC’s expert witness. The Sixth Circuit’s opinion dooms the agency’s background check disparate impact lawsuit against Kaplan and slaps the EEOC for suing a private employer “for using the same type of background check that the EEOC itself uses.” The ruling also illustrates the EEOC’s failure to show that an employer’s use of neutral background checks results in a disparate impact on African-American applicants. EEOC v. Kaplan Higher Educ. Corp., No. 13-3408 (6th Cir. April 9, 2014).

Credit Checks Aimed At Preventing Employee Abuses

Kaplan is a for-profit test preparation and higher education provider. Because some Kaplan students receive financial aid, some Kaplan employees have access to students’ financial information, including information that is subject to the U.S. Department of Education confidentiality regulations. Years ago, Kaplan discovered that some of its financial-aid officers had stolen aid payments and some executives had engaged in self-dealing by hiring relatives as vendors for the company. To help stop these abuses, Kaplan began conducting credit checks on applicants for senior-executive positions as well as accounting, financial aid and other positions where employees have access to company or student financial information. Neither Kaplan nor its credit check vendor provided or linked the applicant’s race with the applicant’s credit report.

EEOC Alleges Kaplan’s Credit Checks Screen Out More African-Americans

Consistent with its efforts to target employers who use background check policies to screen applicants, the EEOC sued Kaplan alleging that Kaplan’s use of credit checks resulted in more African-Americans being rejected than whites, creating a disparate impact in violation of Title VII. To support its claim, the EEOC hired industrial and organizational psychologist Kevin Murphy to analyze Kaplan’s credit check data and offer an expert opinion based on the statistics. However, because the credit check information did not include the applicant’s race, Murphy and his team needed another method to determine race. They created a process that the EEOC called “race rating” in which a team of five “race raters” reviewed drivers’ license photos for a portion of the applicants to visually identify their race. Despite having credit information for 4,670 applicants, Murphy based his “expert” analysis on only 1,090 applicants, of whom 803 had been racially classified using Murphy’s “race rating” process.

“Homemade Methodology” Rejected by Court

The Sixth Circuit wholeheartedly rejected Murphy’s “race rating” process, stating that “[t]he EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself.” The Court upheld the exclusion of Murphy’s testimony not only due to his faulty methodology, but also because the group of 1,090 applicants in Murphy’s statistical analysis was not representative of the applicant pool as a whole. Of Kaplan’s entire pool of 4,670 applicants, only 13.3% of the applicants were rejected on the basis of credit checks, but Murphy’s smaller pool of applicants had a fail rate of 23.8%. The Court found that Murphy’s unrepresentative sample might not equate to the respective fail rates of black versus white applicants and therefore, was an unreliable method for the EEOC to show disparate impact.

EEOC’s Own Background Check Policy Contradicts Its Attack on Private Employers For Use of Credit Checks

Although not central to the exclusion of the EEOC’s expert, the Court put the EEOC’s own background check policy front and center. Through the discovery process, Kaplan had successfully obtained information on the EEOC’s background check policies and pointed to the agency’s personnel handbook which states “[o]verdue just debts increase temptation to commit illegal or unethical acts as a means of gaining funds to meet financial obligations.” To address those potential concerns, the EEOC runs credit checks for 84 of the 97 positions within the agency. The Court highlighted the disconnect between the EEOC attacking Kaplan for a credit check policy that the agency used itself.

Future EEOC Challenges to Employer Use of Credit Checks

The Kaplan decision is the latest in a string of EEOC losses in class actions alleging disparate impact based on an employer’s use of a neutral background check process. The EEOC seems unable to provide evidence to support a finding that African-Americans, Hispanics or other groups are being rejected for employment at higher rates than whites based on background checks. In addition, the EEOC’s own use of credit checks in hiring will be used against it in any future similar lawsuits. Although it remains to be seen whether the EEOC will back off of its systemic enforcement efforts related to the use of background checks, the trend for employers is positive.

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July 29, 2013

The Battle Over Background Checks Continues — State AGs Accuse EEOC of “Gross Federal Overreach”

By Mark Wiletsky

Is it discriminatory if an employer does not hire anyone with a particular criminal conviction, regardless of that person’s race, gender, religion, or other protected characteristic? According to the EEOC’s April 2012 Enforcement Guidance, it might be. But in a July 24, 2013 letter sent to EEOC Commissioner Jacqueline Berrien and the four EEOC Board Members, nine state Attorneys’ General (AGs) disagree. The AGs chastise the EEOC for filing recent lawsuits against BMW Manufacturing Co., LLC and Dolgencorp (Dollar General), in which the EEOC alleges that these employers violated Title VII’s disparate impact prohibition by using a bright-line screening policy that rejected all individuals with past convictions in certain categories of crimes, such as murder, assault, reckless driving and possession of drug paraphernalia.

The letter then criticizes the EEOC’s April 2012 Enforcement Guidance on Arrest and Conviction Records, stating that the EEOC’s policy guidance incorrectly applies the law and constitutes an unlawful expansion of Title VII. The AGs argue that if Congress wishes to protect former criminals from employment discrimination, it can amend the law, but it is not the EEOC’s role to expand the protections of Title VII under the guise of preventing racial discrimination.

The Republican state AGs from Colorado, Montana, Utah, Kansas, Nebraska, West Virginia, Alabama, South Carolina and Georgia joined in this missive to say “enough is enough” on the EEOC’s background check lawsuits. Citing the burden on businesses to undertake more individualized assessments of an applicant’s criminal history, the AGs urge the EEOC to rescind its April 2012 Enforcement Guidance and dismiss the lawsuits against Dollar General and BMW. Not likely, but it may get the attention of federal lawmakers who may try to rein in the EEOC’s position on this issue.

Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

July 1, 2013

Affirmative Action by State University Requires Strict Scrutiny and No Workable Race-Neutral Alternatives

By Jude Biggs

In a highly anticipated opinion regarding the future of affirmative action, the U.S. Supreme Court ruled that to avoid violating the Equal Protection Clause, the University of Texas’ consideration of race in its admissions process must meet a strict scrutiny standard where its affirmative action efforts are narrowly tailored to meet its diversity goal. Fisher v. University of Texas at Austin, No. 11-345 (U.S. June 24, 2013). Because the Fifth Circuit Court of Appeals gave the University substantial deference in deciding whether its affirmative action plan was narrowly tailored to meet its stated goal, the Supreme Court vacated the lower court’s decision in favor of the University and sent the case back to the lower court with instructions to apply the tougher strict scrutiny standard.

Rejected Caucasian Applicant Alleges School Violated Constitution by Considering Race

In 2008, Fisher applied for admission to the University of Texas at Austin. Fisher, who is white, was denied admission. For years, the University had considered race as one of various factors in its undergraduate admissions process. Under the affirmative action plan in place when Fisher applied, the University remained committed to increasing racial minority enrollment on campus but did not assign a numerical value based on race for each applicant. Instead, the University included an applicant’s race as one of numerous components that made up the applicant’s Personal Achievement Index. When Fisher was rejected, she sued the University and various school officials alleging that the University violated the U.S. Constitution’s Equal Protection Clause by considering race.

Affirmative Action Survives, But Is Narrowed

The federal district court and the Fifth Circuit appellate court upheld the University’s admissions plan. The Fifth Circuit, however, gave substantial deference to the University, both in the definition of its compelling interest in creating diversity in its student body and in deciding whether its affirmative action plan was narrowly tailored to meet its goal. When the Supreme Court agreed to hear this case, supporters of affirmative action worried that the more conservative court would rule that consideration of race under affirmative action programs was unconstitutional.

The Fisher decision, however, does not actually decide the constitutionality issue but instead defines the standard by which courts must evaluate a program that considers race as a factor. The Court explained that the University must meet the demanding burden of strict scrutiny and remanded the case to the Fifth Circuit to analyze whether the University has offered sufficient evidence to prove that its admissions policy meets that scrutiny. The Court stated that “the reviewing court must ultimately be satisfied that no workable race-neutral alternatives would produce the educational benefits of diversity.”

Justice Thomas: “Use of Race is Categorically Prohibited”

Justice Clarence Thomas joined in the majority’s decision, agreeing that strict scrutiny should apply to the University’s use of race in its admission program. Writing a separate concurring opinion, however, he went further, stating that he would hold that a state’s use of race in higher education admissions decisions is categorically prohibited by the Equal Protection Clause. Justice Thomas would overrule the 2003 Supreme Court decision in Grutter v. Bollinger, which upheld the use of race as one of many “plus factors” in an admissions program, and abolish the use of race as a factor in affording educational opportunities. He finds that there is no compelling interest that could justify what he calls racial discrimination. He states that there is no doubt that the University’s discrimination injures white and Asian applicants who are denied admission because of their race, but he also believes that those who are admitted under the “discriminatory admissions program” suffer even more harm, stamping them with a “badge of inferiority.”

Justice Thomas’ views differ from those of retired Justice Sandra Day O’Connor, who wrote in 2003 in Grutter, that “classroom discussion is livelier, more spirited, and simply more enlightening and interesting” when students are exposed to the “greatest possible variety of backgrounds.” Justice O’Connor also stated that the Court expected that after 25 more years, the use of racial preferences would no longer be needed. Today, some might say American universities have reached the point when affirmative action is no longer needed; others, however, do not believe the United States has achieved the promise of true equality.

Whether Justice Thomas’ view is adopted or whether Justice O’Connor’s views remain in force in the future – at least for awhile – remains to be seen.

Will Fisher Be Revisited Again?

The Fifth Circuit now must apply the strict scrutiny standard to the evidence provided by the University of Texas to determine whether its consideration of race meets Equal Protection muster. No matter the outcome, it is likely the “losing” party will seek review of that decision by the U.S. Supreme Court. We know how Justice Thomas will rule, but the question remains, will enough other justices join him to throw out any consideration of race in state affirmative action programs?

Private Employers Not Bound by This Decision

Because the Equal Protection clause applies only to state actors (providing that no state shall deny to any person the equal protection of the laws), the analysis of whether an affirmative action program violates the Equal Protection clause does not apply to private companies or organizations. That said, there could be a spillover effect. Generally, discrimination in the workplace is governed by Title VII and analogous state laws. It is unclear whether individuals who feel they have suffered reverse discrimination by a private employer’s affirmative action or diversity efforts will leverage the narrowing scope of affirmative action in the public sector. It is likely private sector litigants will point to Justice Thomas’ concurring opinion to try to abolish any consideration of race in the employment context as discriminatory, and others will point to Justice O’Connor’s rationale for affirmative action. So stayed tuned!