Preferences in hiring and promotion: courts impose heightened scrutiny.

On May 6, 1993, the Fourth Circuit Court of Appeals issued its decision in Maryland Troopers Ass'n, Inc. v. Evans,(1) holding that the Maryland State Police had discriminated against non-blacks by complying with the terms of a court-approved consent decree entered into with the Coalition of Black Maryland State Troopers, in violation of the Equal Protection Clause of the 14th amendment and Title VII of the Civil Rights Act of 1964 (Title VII). This and other similar cases(2) are indicative of a significant shift in the judicial treatment of claims of so-called "reverse discrimination." These cases strongly suggest that employers who give preferential treatment in employment opportunities based on race, color, national origin, and/or sex to remedy apparent past discrimination and diversify their work forces should review those employment decisions to ensure compliance with the law.

This article discusses the legal standards courts now are using to assess the legality of "affirmative action" plans that extend preference in hiring and promotion. It also examines the challenges facing employers called on to defend legally such preferences.

Title VII Prohibitions

Title VII makes it unlawful for an employer "1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin; or 2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's race, color, religion, sex or national origin."(3) The U.S. Supreme Court described this prohibition in 1989 as "...the simple but momentous announcement that sex, race, religion, and national origin are not relevant to the selection, evaluation, or compensation of employees."(4) Put another way, Title VII prohibits employers from taking race, color, national origin, religion, or sex into consideration when making decisions on employment actions, regardless of their motives, unless an exception to the statute, such as preference to remedy past discrimination (affirmative action) or the Bona Fide Occupational Qualification (BFOQ) exception, permitting such consideration is applicable.(5)

Congress emphasized the impermissibility of considering these factors, other than in accordance with an affirmative action plan or as a BFOQ, in its 1991 amendment to Title VII. which provided that a violation is shown when an employee demonstrates that "race, color, religion, sex, or national origin was a motivating factor,"(6) in an employment action. Thus, the previously available defense that the employer would have made the same decision absent consideration of the forbidden factor has been eliminated.(7)

New Remedies for Intentional Discrimination

Employers who give preference in employment actions based on race, color, national origin, religion, or sex are using the forbidden factors intentionally. Congress, in its 1991 amendment to Title VII, raised the financial stakes for employers accused of intentional discrimination, thereby increasing the importance of ensuring that any preference extended is lawful.

Before passage of the Civil Rights Act of 1991, Title VII's remedies were limited to employment matters. Its design placed the burden on employers to put the victims of illegal discrimination in the employment position they would have occupied absent the discrimination. Available remedies for victims of illegal discrimination included reinstatement, back pay, and other measures, as well as injunctive relief to prevent further discrimination by the employer.

The amended statute retains these remedies and adds limited compensatory (and for defendants who are private employers, punitive) damages to remedy the effects of the emotional distress associated with employment discrimination. These damages are limited to $300,000 per plaintiff for employers with 500 or more employees and lesser amounts for those employing fewer people.(8) The statute also provides a fight to have such damages determined by a jury.(9) The combination of compensatory damages and the right to have the matter decided by a jury increases the uncertainty and potential expense of litigation under Title VII.(10)

The Affirmative Action Exception

Title VII does not require employers to engage in affirmative action. Title VII expressly provides that nothing in the statute shall be interpreted to require employers to extend preference to remedy imbalances between the numerical representation of a particular group in the employer's work force and the numerical representation of that group in the community or community's work force.(11) Using this language, in part, as statutory support, the Supreme Court held in 1979 that Title VII did not prohibit race-conscious steps by employers to eliminate manifest racial imbalances in traditionally segregated job categories.(12)

Although this decision was criticized as being contrary to the plain language of Title VII,(13) it formed the basis for the adoption, and judicial approval, of preferential hiring and promotional programs. The Supreme Court, in 1987, denoted a similar exception to the 14th amendment's command that States (and thus State and local governments in their role as employers) accord U.S. citizens equal protection.(14)

On a number of occasions in recent years, the Supreme Court has attempted to define the limits of the license it granted employers in 1979 to adopt preferences based on the very factors the consideration of which Title VII proscribes.(15) It is these limits that have put employers, such as the Maryland State Police, into the legal quandary of defending steps taken to eliminate apparent past discrimination against one group from legal challenges mounted by another group that claims the employer's discrimination remedy amounts to new acts of discrimination.(16)

The Elements of Proof for Lawful Preference

An employer who wishes to defend successfully a preference in employment based upon race, color, national origin, religion, and/or sex in order to remedy apparent past discrimination must be prepared to demonstrate two things factually. First, the employer must prove a strong basis for concluding that it apparently discriminated in the past against the specific group or groups being extended the preference.(17) Second, the employer must prove that the preference given was "narrowly tailored" to remedy the apparent past discrimination against the group being favored.(18)

In addition, it is important that an employer who extends a preference in hiring and promotion be in a position to take advantage of the safe haven provided by 42 U.S.C. 2000e-12(b)(1). This section provides that in "any action or proceeding based on any alleged unlawful employment practice, no [employer] shall be subject to any liability or punishment for or on account of the commission by such [employer] 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 [Equal Employment Opportunity] Commission...."

This provision, read in concert with the Equal Employment Opportunity Commission (EEOC) guidelines on voluntary affirmative action,(19) provides a substantial insurance policy against legal liability for an employer if a court determines that the employer's grant of preference violates Title VII.(20) To enjoy this protection, the employer must extend, at a minimum, preference pursuant to a written, dated affirmative action plan that follows the EEOC guidelines discussed hereafter.

Evidence of Apparent Past Discrimination

It is not necessary for an employer to confess actual acts of discrimination in order to justify lawful preferences. Instead, many employers base the adoption of remedial preferences on statistical comparisons that establish apparent past discrimination. The process by which such a comparison is made is part of a "reasonable self-analysis" under the EEOC guidelines,(21) and the steps taken in such an analysis, as well as the results, must be made a part of the written, dated affirmative action plan.

In making such a comparison, it is essential that the employer compare the representation of the group in question in the employer's specific job category with the group's representation in the relevant, qualified work force (RQW).(22) Half of this equation is fairly simple. A police department can determine rather quickly the percentage of its police officers who are female, for example. Precisely determining the RQW often is more problematic.(23)

The critical concept of the RQW arises in two other instances in Title VII litigation--evaluation of allegations of disparate impact and determination of whether past discrimination has been remedied (requiring that a Title VII-based preference be terminated). In each circumstance, a statistical comparison is made between the race, color, national origin, sex, or religion composition of an employer's work force and the like composition of the relevant, qualified work force.

An error in delimiting the RQW frequently renders the comparison equally erroneous. For example, in Hammon v. Barry,(24) the continuing legality of a preference for hiring blacks as District of Columbia fire fighters was evaluated. To accomplish this, a determination had to be made regarding whether the effects of past discrimination favoring whites had been eradicated. The District Court compared the black/white composition of the District's firefighters (37%) with the black/white composition of the population of the District (76%) and concluded that the effects of past discrimination had not been eliminated.

The Court of Appeals, in reversing this judgment, held that the relevant, qualified work force consisted of "persons 20 to 28 years of age in the Washington metropolitan area, not just within the confines of [the city limits of] the Nation's capital." The Court of Appeals noted that 1980 census data indicated that only 29.3% of the statistically relevant population was black. Consequently, the Court of Appeals held that the effects of past discrimination against blacks by the District in hiring firefighters had been eliminated.(25)

To justify granting a preference in hiring or promoting a particular group,(26) the employer must identify a "manifest imbalance" between the percentage of that group in its work force and that of the RQW. This apparently signifies something greater than a mere numerical short-fall.

For example, by 1991, the Maryland State Police had achieved a 17.1% representation of blacks in the trooper ranks, compared to the 18.8% of Maryland high school graduates between the ages of 21 and 59 in 1980 who were black. This 1.7% shortfall was not sufficient to support continuation of preference.(27) Conversely, in Steelworkers v. Weber,(28) the representation of blacks in the employer's job category at issue was 1.83%, compared to black representation in the work force of 39%.(29)

Narrowly Tailored Remedial Steps

If a preference is lawful, it must be "narrowly tailored" to remedy the specific apparent discrimination that has been detected, and no more. This concept is termed "reasonable action" under the EEOC guidelines.(30)

In Hayes v. North State Law Enforcement Officers Ass'n,(31) the key factors of this process were listed as "1) the efficacy of alternative race-neutral policies; 2) the planned duration of the policy; 3) the relationship between the numerical goal and the percentage of minority group members in the relevant population or work force; 4) the flexibility of the policy, including the provision of waivers if the goal cannot be met; and 5) the burden of the policy on innocent third parties." The court stated, "The essence of the 'narrowly tailored' inquiry is the notion that explicit racial preferences, if available at all, must be only a 'last resort' option. Without evidence that the City considered race-neutral alternatives to achieve diversity, or that the use of a non-discriminatory policy would not achieve its goal, we simply cannot hold that the City's promotion policy was narrowly tailored."(32)

A reasonable review of non-preferential alternatives and conclusions as to why they alone are unlikely to remedy the apparent past discrimination are essential components to a lawful preferential plan. Such nonpreferential alternatives would include targeted recruiting, community outreach programs, and skill training programs. These alternatives also include taking the necessary steps to make sure the employer's work place is receptive, and known to be receptive, to persons of all races, colors, national origins, and both sexes.

So that preferences do not become "institutionalized," courts require realistic time limitations to be included in preferential plans. In Detroit Police Officers Ass'n v. Young,(33) the court, in declaring the continuation of a consent decree unlawful, noted the plan had been in effect for almost 19 years. The court stated, "Limiting the duration of a race-conscious remedy which clearly impacts adversely upon the plaintiffs is a keystone of a narrowly tailored plan as may be seen by recent Supreme Court decisions."(34) It also is important to note that it is impermissible to use a preference to preserve numerical balance once the effects of past discrimination have been eliminated.

Employers also must structure preferential plans that have a realistic relationship to statistics that established discrimination apparently occurred. For example, where 16% of the RQW is Hispanic, an employer might set as a target a 16% representation in its work force and seek to achieve this representation with a goal of 30% of its new hires being Hispanic.

It would be improper, however, for the employer who has identified a manifest imbalance only in regard to Hispanics to create a preference that favors all minorities. The remedy selected must have a direct relationship to the specific apparent past discrimination detected.(35)

An employer also must build elements of flexibility into a preferential plan to prevent compelled hiring or promotion of unqualified candidates. Provisions should be made for waiving numerical goals in the event an insufficient number of qualified candidates in the group receiving preference can be identified.(36)

An employer also must structure a preferential plan to permit some persons who are not in the group receiving the preference to succeed as well. This consideration relates to the limitation of the burden placed on innocent third parties. Even in aggressive plans, at least half of the positions at issue have remained available for persons not receiving preference.(37)

Conclusion

The judicial climate for employers' use of preferential treatment has changed dramatically.(38) An employer considering adoption of a preferential plan should seek competent legal assistance to assess critically the proposed plan for legal defensibility.

Employers presently extending preferences should critically assess their current plans and seek the legal protection provided through the use of a written, dated plan in compliance with EEOC guidelines.(39) These employers also should consider the following statement from United States v. City of Miami:(40)

"Work force parity may never be achievable because of shifting demographics and imbalances in the numbers of qualified applicants for various jobs due to differing ambitions, education, language requirements, physical characteristics, etc. of persons in the favored groups. If there is work force disparity that cannot be attributed to past discriminatory employment practices..., such disparity is no reason for keeping in force [a] consent decree."(41)

Endnotes

1 993 F.2d 1072 (4th Cir. 1993).

2 See, e.g., Hayes v. City of Charlotte, 10 F.3d 207 (4th Cir. 1993); Detroit Police Officers Ass'n v. Young, 989 F.2d 225 (6th Cir. 1993); Billish v. City of Chicago, 989 F.2d 890 (7th Cir. 1993), cert. denied, 114 S.Ct. 290 (1994).

3 42 U.S.C. 2000e-2(a)(1991).

4 Price Waterhouse v. Hopkins, 109 S.Ct. 1775, 1784 (1989).

5 The exception permitting consideration of race, color, national origin, religion, and/or sex to remedy apparent past discrimination by an employer is the subject of this article. It was created by judicial interpretation of Title VII. See Sheet Metal Workers v. EEOC, 478 U.S. 421, 480 (1986), and cases cited therein. The only other exception is part of the Title VII statute, the bona fide occupational qualification (BFOQ) exception. 42 U.S.C. sec. 2000e-2(e)(1991).

The BFOQ exception permits employers to consider the "...religion, sex, or national origin [of an employee] in those certain instances where religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of [the] particular business...." 42 U.S.C. sec. 2000e-2(e)(1991). The BFOQ exception does not permit the consideration of race or color.

This exception is quite difficult to use in practice. In International Union, UAW v. Johnson Controls, 111 S.Ct. 1196 (1991), for example, the employer, a manufacturer of electric storage batteries, sought to limit the exposure to toxic lead of its female employees who were able to bear children, in order to prevent injury to the unborn. In assessing this intended use of the exception, the Supreme Court ruled that manufacture of batteries, not protection of the unborn, was the business of Johnson Controls and therefore that protection of the unborn could be in no way necessary to the operation of the business. The Court noted that "[f]ertile women, as far as appears in the record, participate in the manufacture of batteries as efficiently as anyone else. Johnson Controls' professed moral and ethical concerns about the welfare of the next generation do not suffice to establish a BFOQ of female sterility."

6 42 U.S.C. 2000e-2(m) (1991).

7 One court has ruled that choosing a particular individual from a group of "equally qualified" candidates based on the individual's race or color for the purpose of achieving faculty diversity was an employment action in which one or more of Title VII's forbidden criteria was a motivating factor. Consequently, such a choice violated Title VII. United States v. Bd. of Educ. of the Tp. of Piscataway, 832 F.Supp. 836 (D.N.J. 1994). The U.S. Department of Justice, Civil Rights Division, as amicus in support of the school board's appeal, argues that racial diversity is a permissible objective under Title VII, even when not in direct response to past discrimination.

8 42 U.S.C. 1981a(b)(3)(1991).

9 42 U.S.C. 1981a(c)(1991).

10 The provisions of the amended statute have not been given retroactive effect. See Landgraf v. USI Film Products, 114 S.Ct. 1522 (1994); McKnight v. General Motors Corporation, 114 S.Ct. 1826 (1994).

11 The specific language states, "Nothing contained in this subchapter shall be interpreted to require any employer...to grant preferential treatment to any individual or to any group because of the race, color, religion, sex, or national origin of such individual or group on account of an imbalance which may exist with respect to the total number or percentage of persons of any race, color, religion, sex, or national origin employed by any employer ... in comparison with the total number or percentage of persons of such race, color, religion, sex, or national origin in any community, State, section, or other area, or in the available work force in any community, State, section, or other area." 42 U.S.C. 2000e-2(j).

12 United Steelworkers of America, AFL-CIO-CLC v. Weber, 443 U.S. 193 (1979).

13 Id. at 216-19 (Burger, C.J., dissenting). See also, Johnson v. Transportation Agency, Santa Clara County, California, 480 U.S. 616, 657-77 (1987) (Scalia, J., dissenting).

14 Johnson v. Transportation Agency, Santa Clara County, California, 480 U.S. 616 (1987).

15 See United States v. Paradise, 480 U.S. 149 (1987); Johnson v. Transportation Agency, Santa Clara County, California, 480 U.S. 616 (1987).

16 It now is clear that preferences based on race or color, and probably ethnicity, will be subjected to the highest level of judicial review. See City of Richmond v. J. A. Croson Co., 488 U.S. 469 (1989); Maryland Troopers Ass'n, Inc. v. Evans, 993 F.2d 1072 (4th Cir. 1993). The appropriate level of review for sex-based preferential treatment is in dispute. Compare Brunet v. City of Columbus, 1 F.3d 390 (6th Cir. 1993), with Coral Constr. Co. v. King County, 941 F.2d 910 (9th Cir. 1991), cert. denied, 112 S.Ct. 875 (1992).

17 See City of Richmond v. J. A. Croson Co., 488 U.S. 469 (1989); Johnson v. Transportation Agency, Santa Clara County, California, 480 U.S. 616 (1987); Maryland Troopers Ass'n. Inc. v. Evans, 993 F.2d 1072 (4th Cir. 1993).

18 Id. See also, Billish v. City of Chicago, 989 F.2d 890 (7th Cir. 1993), cert. denied, 114 S.Ct. 290 (1994).

19 29 C.F.R. 1608.1 et seq.

20 State and local governments, in their role as employers, should use caution in their reliance on the EEOC guidelines. To the extent that the Equal Protection Clause of the 14th amendment conflicts with Title VII and/or the EEOC guidelines, State and local governments are bound by the requirements of equal protection.

21 See 29 C.F.R. 1608.4.

22 See Johnson v. Transportation Agency, Santa Clara County, California, 480 U.S. 616 (1987); Maryland Troopers Ass'n, Inc. v. Evans, 993 F.2d 1072 (4th Cir. 1993).

23 See Wards Cove Packing Co. v. Antonio, 109 S.Ct. 2115 (1989); Regner v. City of Chicago, 789 F.2d 534 (7th Cir. 1986).

24 828 F.2d 73 (D.C.Cir. 1987), cert. denied, 108 S.Ct. 2023 (1988).

25 Similarly, in Wards Cove Packing Co., Inc. v. Atonio, 490 U.S. 642 (1989), the Supreme Court reversed a finding of disparate impact, holding that the courts below had improperly defined the relevant, qualified work force for the jobs at issue. There, the Court stated, "Most obviously, with respect to the skilled noncannery jobs at issue here, the cannery work force in no way reflected 'the pool of qualified job applicants' or the 'qualified population in the labor force.' Measuring alleged discrimination in the selection of accountants, managers, boat captains, electricians, doctors, and engineers--and the long list of other 'skilled' noncannery positions found to exist by the District Court...--by comparing the number of nonwhites occupying these jobs to the number of nonwhites filling cannery worker positions is nonsensical. If the absence of minorities holding such skilled positions is due to a dearth of qualified nonwhite applicants (for reasons that are not petitioners' fault), petitioners' selection methods or employment practices cannot be said to have had a 'disparate impact' on nonwhites." 109 S.Ct. at 2122.

26 EEOC guidelines for voluntary affirmative action are found at 29 CFR 1608.3(b) et seq.

27 Maryland Troopers Ass'n, Inc. v. Evans, 993 F.2d 1072, 1078 (4th Cir. 1993).

28 443 U.S. 193 (1979).

29 Id. at 199.

30 See 29 C.F.R. 1608.4 (b).

31 10 F.3d 207 (4th Cir. 1993).

32 Id. at 217.

33 989 F.2d 225 (6th Cir. 1993).

34 Id. at 228.

35 See City of Richmond v. J.A. Croson Co., 109 S.Ct. 706 (1989).

36 See United States v. Paradise, 480 U.S. 149 (1987).

37 Id. See also, Steelworkers v. Weber, 443 U.S. 193 (1979).

38 In addition to the cases discussed previously, see Ensley Branch, N.A.A.C.P. v. City of Birmingham, 31 F.3d 1548 (11th Cir. 1994) (en banc).

39 An employer who determines that preferences no longer are appropriate should carefully examine how its personnel system is likely to operate once the preferences are removed. If the selection devices used, when preferences are stripped away, have a disparate impact on persons of a particular race, color, sex, national origin, and/or religion, then the employer must be prepared to demonstrate the "business necessity" of the selection device. See Brunet v. City of Columbus, 1 F.3d 390 (6th Cir. 1993).

40 2 F.3d 1497 (11th Cir. 1993).

41 Id. at 1508.