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Civil Rights Act of 1991.

CAPITOL CORRIDORS

Civil Rights Act of 1991

The body of law governing an employer's responsibility not to discriminate against individuals on the basis of race, color, religion, sex, national origin or disabilities is a complex one. While certain basic statutes prescribe employer behavior, the courts have a significant role in determining the intent and scope of these laws. Title VII of the Civil Rights Act of 1964 is the principal law for establishing equal employment opportunity. Of the above mentioned protected classes, only discrimination on the basis of disabilities is not covered by this title. The Americans with Disabilities Act (ADA) prohibits such discrimination, but as we shall see below, Title VII and the new Civil Rights Act of 1991 do work in conjunction with the ADA. Remedies for racial discrimination can also be sought under Section 1981 of the civil Rights Act of 1866.

The Civil Rights Act of 1991, hereinafter referred to as "CRA," is primarily a series of amendments to Title VII of the Civil Rights Act of 1964, but it does have ramifications for Section 1981 actions and ADA related actions.

At the outset, it should be noted the basic threshold of Title VII has not been changed. It applies to employers who have 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding year.

Second, the debate blurred the relationship between quota cases and damages. The two issues are not directly connected. To understand this, it is necessary to keep in mind there are really two kinds of discrimination under Title VII. The first is known as disparate treatment, or intentional discrimination. The second is known as disparate impact, or unintentional discrimination. The punitive and compensatory damages added by the CRA apply only to disparate treatment or intentional discrimination cases.

Finally, this summary is not intended to be an all inclusive review of all of the terms of the CRA. Volumes will certainly be written as the law is interpreted by the courts and others.

Intentional Discrimination

Intentional discrimination cases are the cases most business owners are likely to encounter. These typically occur when an individual alleges he/she was not hire, not given a promotion, or fired because of race, sex or other protected class. The Equal Employment Opportunity Commission (EEOC) has primary enforcement responsibility in such cases. Sexual harassment is considered an intentional discrimination allegation. Under old law, the remedies under Title VII were economic in nature, such as reinstatement and back pay. these remedies are frequently referred to as "make whole" relief.

The CRA creates the opportunity to receive additional damages in the form of compensatory and punitive damages. The section providing these damages immediately follows Section 1981. The significance is that while Title VII provided the remedies for discrimination on the basis of race, color, religion, sex or national origin, individuals alleging many forms of race discrimination may obtain unlimited compensatory and punitive damages under Section 1981. The new damages provision, referred to as Section 1977A of the Revised statutes, or 42 USC 1981A, is intended to provide damages if the complaining party cannot secure unlimited damages under Section 1981. For most intents and purposes, this includes all other protected classes under Title VII but for victims of race discrimination.

The new punitive damages under the CRA are recoverable only if the complaining party demonstrates the business engaged in a discriminatory practice with malice or with reckless indifference to the federally protected rights of an aggrieved individual.

Compensatory damages shall not include back pay, interest on back pay, or any other type of relief already permitted under Title VII.

Compensatory damages are for future pecuniary losses, emotional pain, suffering inconvenience, mental anguish, loss of enjoyment of life and other non-pecuniary losses. The combined total of the compensatory and punitive damages for cases brought under the new Section cannot exceed:

* $50,000 if the employer has more

than 15 and fewer than 101

employees in each of 20 or more

calendar weeks in the current or

preceding calendar year. (The

weekly definition applies to the

other categories below.) * $100,000 if the employer has

more than 100 and fewer than

201 employees. * $200,000 if the employer has

more than 200 and fewer than

501 employees. * $300,000 if the employer has

more than 500 employees.

It is important to keep in mind these awards apply only to intentional discrimination cases.

The CRA permits a complaining party to request a trial by jury if seeking compensatory or punitive damages. Under old law, cases were heard by a judge. The judge cannot tell the jury about the damage caps during the trial.

Disparate Impact

The quota debate involved disparate impact cases. The quota argument followed from the assertion that the burden of proof created for employers under the CRA, in disparate impact cases, was such that the only way employers could be sure of meeting the requirements was to hire "by the numbers." A disparate impact case is a statistical case. Employer intent is not required to establish discrimination. It alleges discrimination because a particular job group within a company has too few or too many women, minorities or members of ethnic or religious groups as compared with their representation in the work force or population.

Under the CRA, a disparate impact case is established if the complaining party demonstrates the employer uses a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex or national origin and the employer fails to demonstrate the challenged practice is job related for the position in the question and consistent with business necessity.

With respect to demonstrating that a particular employment practice caused a disparate impact, the complaining party shall demonstrate that each particular challenged employment practice causes a disparate impact, except that if the complaining party can demonstrate to the court that the elements of the employer's decision making process are not capable of separation for analysis, the decision making process may be analyses as one employment practice.

If an employer demonstrates that a specific employment practice does not cause the disparate impact, the employer shall not be required to demonstrate that such practice is required by business necessity.

It was the issue of what constitutes business necessity and job related that was the source of contention during the two years of debate over this legislation. The CRA does not define those terms. The courts are given that responsibility. The compromise was to not define those terms in the statute. In a special legislative history, the parties to the compromise agree that "the terms |business necessity' and |job related' are intended to reflect the concepts enunciated by the Supreme Court in Griggs v. Duke Power, 401 U.S. 424 (1972), and in the other Supreme Court decision prior to Wards Cove Packing v. Antonio, 490 U.S. 642."

The debate really began when the Court issued a decision in Wards Cove Parking Co. v. Antonio which essentially placed the employer in a favorable position with respect to the burden of proof. Original proponents of the CRA drafted statutory language that supposedly restored the Griggs standard of proof. Opponents asserted the language went beyond Griggs. As the debate continued and compromises were offered, the debate shifted to what statutory language would accurately codify the reasoning in Griggs. None of the parties could agree on words to describe the standard. The result is it is left to the courts. For that reason, we do not believe we can undertake to describe what the standard means for a business confronted with a disparate impact allegation.

A disparate impact case may also be established if the complaining party demonstrates there is an alternative employment practice to the alleged discriminatory practice and the employer refuses to adopt such alternative practice.

Modifying or Reversing Other Court Decisions

In addition to these two central points, the CRA does modify or reverse several recent Supreme Court decisions considered to have been decided in favor of employers.

To reverse Patterson v. McLean Credit Union, a 1989 decision, the CRA bars racial harassment and other forms of racial bias that occur after a person is hired. The court had ruled that Section 1981, which prohibits racial discrimination in contracts, applied only to hiring decisions. (Note: Section 1981 protection is separate from Title VII and applies on an individual basis, therefore the 15 employee threshold does not apply to Section 1981 actions.)

To reverse the 1989 decision of Martin v. Wilks, the CRA spells out rules under which third parties could challenge a consent decree in an anti-discrimination case. The settlements usually involve affirmative action plans in which employers who have engaged in past discrimination agree to give preference for some period to minorities or women.

The CRA makes clear an employer may not make an employment decision based in any way on race, color, religion, sex or national origin, regardless of whether other factors also motivated the decision. This is in response to the 1989 decision, Price Waterhouse v. Hopkins.

The CRA allows workers, challenging a seniority system as discriminatory, to wait until the adverse impact of the system is felt to bring a lawsuit. This reverses the court's 1989 ruling in Lorance v. AT&T, which tied the time to bring a lawsuit to a company's adoption of the policy. Unrelated to a court ruling, the CRA bars the adjustment, or "norming," of test scores by racial or other classifications.

Americans with Disabilities Act (ADA)

Because the ADA ties its remedies for employment discrimination based on disabilities to Title VII of the Civil Rights Act of 1964, individuals alleging discrimination under the ADA are also eligible for compensatory and punitive damages.

Under the CRA, damages may not be awarded in an ADA employment discrimination case when the business demonstrates good faith efforts, in consultation with the person with the disability who has informed the business that accommodation is needed, to identify and make a reasonable accommodation that would provide such individual with an equally effective opportunity and would not cause an undue hardship on the operation of the business.

Sexual harassment

The CRA does not create a new cause of action for sexual harassment; rather, it provides for additional damages. Sexual harassment is already a form of sexual discrimination under Title VII. The current interpretation of sexual harassment by the EEOC is unwelcome verbal or physical sexual conduct that is a term or condition of employment. There are two types of sexual harassment, "quid pro quo" and "environmental."

The quid pro quo type of harassment occurs when submission to verbal or physical conduct of a sexual nature, unwelcome sexual advances or requests for sexual favors made, either explicitly or implicitly, a term or condition of an individual's employment. For example, if a manger states an applicant will "be hired for the position" if the applicant will go out with the manager on a date. Or, if a manager states an employee's performance review is coming up and a date with the manager would be "beneficial" to the employee.

The environmental type of harassment occurs when the unwelcome conduct unreasonably interferes with an individual's job performance or creates an intimidating, hostile or offensive working environment, even if it does not lead to any tangible or economic job consequences. The theory is every employee has the right to work in an environment free from discriminatory intimidation, ridicule and insult.

The standards for what constitutes sexual harassment are being shaped by the court decisions. CRA does not address those standards.

Expert Fees

In addition to attorney fees, under the new CRA, a plaintiff can also recover the fees for the use of experts.

Effective Date

Effective upon enactment.
COPYRIGHT 1991 National Society of Public Accountants
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Capital Corridors
Publication:The National Public Accountant
Article Type:Column
Date:Dec 1, 1991
Words:1958
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