Anti Discrimination Legislation

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					Supreme Court Cases: customer discrimination
• Dias vs Pan Am (1971) • Celio Diaz applied for a job as flight cabin attendant with Pan American Airlines in 1967. He was rejected because Pan Am had a policy of restricting its hiring for that position to females. Pan Am argued that customers preferred female flight attendants. • Court ruled customer preference was not a bona fide exception

Supreme Court Cases: Marriage, fertility
• UAW v. Johnson Controls (1991)
– Court rules illegal a company policy barring all women of childbearing age from jobs involving actual or potential exposure to lead in amounts exceeding OSHA recommended levels. Women who wanted to work in these positions were required to submit medical documentation of inability to bear children. – More generally, marital status must be shown to be a BFOQ and must apply equally to men and women

• G.E. vs Gilbert (1976)
– Pregnancy was excluded from company disability plan. Ruling stipulates that pregnancy must be treated the same as any other medical condition. – 1978 Pregnancy Discrimination Act

Supreme Court Cases: Seniority
• Franks vs Bowman Transportation (1976)
– If discrimination led protected groups to lose seniority, Court can give retroactive seniority

• Teamsters vs U.S. (1977)
– Retiractive seniority can only a[ply to discrimnatory behavior that occurred after the 1964 passage of Title VII

Supreme Court Cases: Physical Stuture
• Dothard vs Rawlinson (1977)
– After being denied employment as a correctional counselor because of inadequate weight, Dianne Rawlinson brought a class action against appellant corrections officials challenging the statutory height and weight requirements (5’-2” to 6’-10”; 120-300 lbs.). The standards excluded 41% of the female population but less than 1% of the male population. – The prison failed to show that workers outside the stature requirements could not meet the requisite strength requirements, and so they did not meet the standards of a legitimate BFOQ. However….

Supreme Court Cases: Physical Stuture
• Dothard vs Rawlinson (1977)
– … Alabama’s four maximum-security male penitentiaries did not classify or segregate inmates according to their offense or level of dangerousness. The estimated 20% of the male prisoners who are sex offenders are scattered throughout the system, and the facilities were essentially dormitories. The use of women as guards in "contact" positions under the existing conditions in Alabama maximum-security male penitentiaries would pose a substantial security problem, directly linked to the sex of the prison guard.

Supreme Court Cases: Layoffs
• Firefighters v. Stotts (1984) – Layoffs based on seniority are ok, even if they lay off protected groups disproportionately – Exception if low seniority was due to past discrimination

Supreme Court Cases: Pensions and Benefits
• City of Los Angeles v. Manhart (1978)
– Court ruled illegal the Department's pension plan was based on mortality tables and its own experience showing that female employees had greater longevity than male employees. The cost of a pension for the average female retiree was greater than for the average male retiree because more monthly payments had to be made to the female, and so women were charged 15% more for the pension. – Department had to reimburse the past extra payment

Supreme Court Cases: Pensions and Benefits
• Arizona Governing Committee vs. Norris (1983)
– Under the State’s retirement plan, employees had the option of receiving retirement benefits from one of several companies selected by the State, all of which pay lower monthly retirement benefits to a woman than to a man who has made the same contributions. – Court ruled that payments had to be equal. – OK for firm to pay out dollar value at retirement – OK for firm to pay into retirement plan that worker controls (401K).

Supreme Court Cases: Sexual Harassment
• Meritor Savings Bank vs Vincent (1986)
– After being fired by Meritor Savings Bank, Mechelle Vinson sued for damages saying that she had been subjected to sexual harassment that constituted a hostile working environment. Sidney Taylor, VP, had coerced her to have sexual relations, had touched her in public, exposed himself, … – Court ruled that sexual harassment is a violaton of Title VII if it is unwelcome and sufficiently severe or pervasive to alter the conditions or privileges of employment.

Supreme Court Cases: Sexual Harassment
• Harris vs Forklift Systems Inc (1993)
– Teresa Harris had worked for two years as rental manager. She filed a complaint alleging that the company's president, Charles Hardy, had created a hostile work environment by, among other things, calling her names and asking her to retrieve coins from his front pants pocket. A federal district court in Tennessee had found that Harris was not protected by Title VII since she had not suffered any psychological injury on the job. – Court ruled that it was not necessary to show psychological damage or that job performance had suffered. Furthermore, – The measure to be used in such cases was whether the harassment had the effect of altering the conditions of the working place, a condition or privilege of employment.

Supreme Court Cases: Sexual Harassment
• Burlington Industries, Inc. v. Ellerth (1998) – From March 1993 until May 1994, Kimberly Ellerth was a salesperson in one of Burlington’s divisions in Chicago. She alleges, she was subjected to constant sexual harassment by her supervisor, one Ted Slowik. – According to Slowik’s supervisor, his position was “not considered an upper-level management position,” and he was “not amongst the decision-making or policy-making hierarchy.” Ellerth did not argue that the supervisor or other higher managers were aware of Slowik’s actions. – an employee who refuses the unwelcome and threatening sexual advances of a supervisor, yet suffers no adverse, tangible job consequences, can recover against the employer without showing the employer is negligent or otherwise at fault for the supervisor’s actions.

Other Stipulations
• • • • • Advertising jobs Education Arrest and conviction records Credit rating Age: comes under the Age Discrimination in Employment Act. People over 40 covered. • State protective laws covering hours, lifting weights, occupations, …superseded by Title VII

Title VII as a response to discrimination in internal labor markets The Act and subsequent court cases have created a manual on what firms can and cannot do in hiring, compensation, promotion, and other conditions and privileges of employment. Example: Handout from SHRM on legal questions in interviews

Anti Discrimination Legislation
Affirmative Action: Executive Order (1965, 1968, 1971) Requires that contractors take • "affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, sex, or national origin." • 1971: "set numerical goals and timetables … to correct deficiencies."

Affirmative Action coverage and requirements
• Federal contractors, subcontractors and educational institutions • 50+ workers and/or $50,000+ in contracts
– Firms must compare their own mix of workers by occupation against the mix in the labor market (local for less skilled, national for more skilled) – Identify underrepresentation – Set goals and timetables – Good Faith Effort

Affirmative Action Enforcement • Office of Federal Contract Compliance (OFCC)
– Reviews plans vs. statistical data on relevant populations – Checks for Good Faith Effort to make progress on goals – Penalties
• • • • Back pay and mandated corrections Delayed contracts Debarments Federal court ordered plans with contempt of court possible for noncompliance

Supreme Court Cases: Voluntary quotas
• Bakke vs University of California at Davis (1978)
– UC Davis reserved 16 of 100 slots in the medical school for minorities – Bakke had higher GPA and MCAT scores than some admitted minorities
– Supreme Court ruled that absent evidence of past discrimination, ongoing quotas violate Title VII. – Note: quotas may be mandated as a corrective action in cases where discrimination is found. – Minority status can be used as a factor in admission

Supreme Court Cases: Voluntary quotas
• Steelworkers vs Weber (1979)
– Only 2% of Kaiser Aluminum’s skilled craft workers were Black, even though the population around Kaiser’s plants were 39% Black. – Kaiser entered into a master collective bargaining agreement including an affirmative action plan, reserving for black employees 50% of the openings in in-plant craft training programs until the percentage of black craft workers matched that in the local workforce. – Several more junior Black workers received training ahead of more senior White workers.

Supreme Court Cases: Voluntary quotas
• Steelworkers vs Weber (1979)
– Brian Weber, one of those white production workers, instituted a class action suit alleging discrimination against Whites. – Supreme Court overturned lower court rulings favoring Weber because
• Title VII does not prohibit voluntary race‐conscious affirmative action where it is necessary “to eliminate conspicuous racial imbalance in traditionally segregated job categories” • the affirmative action plan was voluntarily adopted by private parties to eliminate traditional patterns of racial segregation, and Weber was represented in the negotiation by his union. • Plan was temporary to correct imbalances • Plan did not displace incumbents • Plan did not unduly impede majority

Supreme Court Cases: Voluntary promotion preferences
• Johnson vs Santa Clara County Transportation Agency (1987)
– Transportation Agency created an affirmative action plan to bring about representation equal to the labor force proportions of women, minorities, and disabled. While program was justified as redressing past harm to groups facing discrimination, the Agency had not been accused of discriminatory practice. – Paul Johnson applied for a promotion to a skilled craft worker category. Although he scored highest on the evaluation process, the promotion went to Diana Joyce. – Johnson sues alleging violation of Title VII.

Supreme Court Cases: Voluntary promotion preferences
• Johnson vs Santa Clara County Transportation Agency (1987) • Supreme Court rules against Johnson
– voluntary sex‐conscious affirmative action does not violate Title VII where it is necessary to eliminate a “manifest imbalance that reflects underrepresentation of women in ‘traditionally segregated job categories’ – Plan recognized gender as only one of several factors in decisions about hiring and promotion. – temporary means to overcome past discrimination against workers based on sex. – The Agency Plan did not unnecessarily trammel male employees' rights or create an absolute bar to their advancement.

Texas 5th District on Admissions Preferences
• Hopwood vs. Texas (1996)
– Cheryl Hopwood, a white female, alleged that she was denied admission to the University of Texas Law School despite being better qualified than many admitted minority candidates. – 5th Circuit ruled that race cannot be used explicitly as a factor in admissions. – U.of Texas changed admissions policies. Fdor undergraduates, they admit the top 10% of each high school class. For Law, preference for lower income applicants – Because U.of Texas no longer maintained the policy, Supreme Court refused to rule on the case.

Impact of Hopwood

U of Texas freshman Admissions
Black Hispanic Asian White Pre-Hopwood 4% 14% 15% 65% Post-Hopwood3% 14% 20% 61%

Supreme Court: University Admissions
• Grutter v. Bollinger (2003)
– Barbara Grutter, a white Michigan resident with a 3.8 GPA and 161 Law School Admissions Test (LSAT) score, was rejected by the University of Michigan Law School. She alleged that the university had discriminated against her on the basis of race in violation of the equal protection clause of the Fourteenth Amendment to the United States Constitution and Title VII of the Civil Rights Act of 1964. – Court rule that Title VII "does not prohibit the law school's narrowly tailored use of race in admissions decisions to further a compelling interest in obtaining the educational benefits that flow from a diverse student body."

Supreme Court: University Admissions • Gratz v. Bollinger (2003)
– The University of Michigan used a 150-point scale to rank applicants, with 100 points needed to guarantee admission. The University gave "underrepresented" ethnic groups, including African-Americans, Hispanics, and Native Americans, an automatic 20-point bonus on this scale, while a perfect SAT score was worth only 12 points. – Jennifer Gratz and Patrick Hamacher, both white residents of Michigan, applied for and were denied admission to the University of Michigan’s undergraduate program in liberal arts. – Court ruled that, because the University's use of race in its current freshman admissions policy is not narrowly tailored to achieve respondents' asserted compelling interest in diversity, the admissions policy violates the Equal Protection Clause of the Fourteenth Amendment.

EEOC enforcement

In 1973, sexrelated discrimination complaints rose to 32% for the first time

Claudia Goldin, Understanding the Gender Gap: An Economic History of American Women, 1990

Title VII of the Civil Rights Act of 1964 (Title VII) The Americans with Disabilities Act of 1990 (ADA) The Age Discrimination in Employment Act of 1967 (ADEA) The Equal Pay Act of 1963 (EPA)

Types of EEOC case resolutions
• Administrative Closure Charge closed for failure to locate charging party, charging party failed to respond to EEOC communications, charging party refused to accept full relief, closed due to the outcome of related litigation, charging party requests withdrawal of a charge without receiving benefits or having resolved the issue, no statutory jurisdiction. • Merit Resolutions Charges with outcomes favorable to charging parties that include negotiated settlements, withdrawals with benefits, successful conciliations, and unsuccessful conciliations. • No Reasonable Cause EEOC determines no reasonable cause to believe that discrimination occurred based upon evidence obtained in investigation. The charging party may exercise the right to bring private court action.


The "rapid charge processing" program introduced by EEOC Commissioner Eleanor Holmes Norton in 1977 sought quick settlement of cases prior to full investigation. This program relied on no-fault settlement agreements with the agency in return for payment of some money or other benefit to the charging party. Allowed EEOC to focus on large class action suits Large external impact as lesson to ther firms Her successor Clarence Thomas implemented a full investigation policy. All charges were to be fully investigated to a determination of "reasonable cause" to believe that there had been a violation of the law or a "no reasonable cause" determination. Emphasis shifts to individual cases with identifiable victims. Small external impact

Mediation: has been widely praised by both charging parties (i.e., employees) and respondents (i.e., employers) as an effective and efficient way to resolve their employment discrimination disputes and increasing the likelihood that the parties can continue an employment relationship.

EEOC Budget and FTEs: Constraints on enforcement
Fiscal Year 2001 2002 2003 2004 2005 2006 2007 Budget, millions $317 311 322 325 327 327 *323 Full-time workers 2,899 2,766 2,578 2,455 2,353 **2,343 NA

*Proposed **As of Dec. 2005 SOURCES: Office of Management and Budget, Office of Personnel Management Washington Post, June 14, 2006

Enforcement of Affirmative Action
•Debarments rarely used: 27 in first 20 years of Affirmative Action
– Most reinstated within one year

•Staffing is too small to investigate all firms, although most checks are electronic

Impact on Hiring and Qualifications
Average skill in the absence of hiring preferences would be μ in each sector. Suppose instead that Federal Contractors have a preference for hiring protected classes (P). They lower hiring standards qP for P and only hire white males (WM) if they are atypically strong, (qWM or higher). NonFederal sector hires everyone who does not get a job in the Federal Contractor Sector, and so average white male skills there are also higher

Federal Contractors

NonFederal Contractors




μP μWM


Should have average qualifications of white males exceeding that of other groups in the Federal Contractor sector. Same will be true in the noncontractor sector as Federal Contractors will bid away the best protected class workers away from noncontractors. Does this happen? Evidence is mixed