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Employee Relations Law Journal 55 Vol. 33, No. 2, Autumn 2007

Can Employers Use Gender in Hiring Decisions: The Discrimination Bona Fide Occupational Qualifi cation

Applied to Health Care

Thomas N. Shorter, Christine Liu McLaughlin, and Tom O’Day

The authors suggest that the “consumer privacy” bona fi de occupational qualifi cation may soon apply to more and more instances within the health care fi eld and, potentially, beyond.

T he Wall Street Journal always offers thought-provoking articles, but one advertisement/article titled “Companies that Mirror Their Consumers Can Gain a Competitive Advantage” was especially intrigu- ing. 1 Is that general premise true in the field of health care? Amazingly, the marketplace has found a niche for matching patients with physi- cians and other providers of the same race. For instance, http://www. findablackdoctor.com offers African American patients—or patients of any other race—the opportunity to locate an African American physician in their area. The founder of the Web site, Dr. Dina Strachan, stated: “The purpose of this web site is to give an option to people who think [race] is important. It’s the same way some women feel more comfort- able with a female gynecologist.” 2 Dr. Strachan’s comment that the idea behind her Web site is not far removed from a woman seeking a female gynecologist shows the potential for the consumer preference argument in the context of health care. Just how far reviewing courts will go to protect consumer preferences remains to be seen.

TITLE VII OF THE CIVIL RIGHTS ACT: STATUTORY BFOQs

Title VII of the Civil Rights Act of 1964 states: “It shall not be an unlawful discrimination practice for an employer to hire and employ employees…on the basis of his religion, sex, or national origin in those certain instances where religion, sex or national origin is a bona fi de occupational qualifi cation reasonably necessary to the normal opera- tion of that particular business or enterprise . . . .” 3 The fi nal clause is

Thomas N. Shorter is a shareholder in the Employment, Health Care and Education Practice Groups in the Madison offi ce of Godfrey & Kahn, S.C. Christine Liu McLaughlin is a shareholder in the Labor & Employment Law Practice Group in the fi rm’s Milwaukee offi ce. Tom O’Day is an attorney in the fi rm’s Labor and Employment Practice Group in Milwaukee. The authors can be reached at [email protected] , [email protected] , and [email protected] , respectively.

Vol. 33, No. 2, Autumn 2007 56 Employee Relations Law Journal

known as the “business necessity” standard. Arguments in support of a consumer preference bona fi de occupational qualifi cation (BFOQ) are rooted in the belief that consumer desires and demands necessitate some consideration in the name of profi table business.

Such arguments that equate consumer demands with legal discrimi- nation have historically been rejected. Title VII itself was passed in response to open discrimination in restaurants, theatres, and similar establishments. Racial discrimination in restaurants, despite demands from consumers, was a large part of why Title VII was passed in the fi rst place. Gender, however, was treated differently than race in Title VII. The business necessity standard does not include race as a potential characteristic that is subject to a BFOQ. Only religion, sex, and national origin made the cut. By the literal terms of the statute, there are no racial BFOQs.

Despite the fact that sex is one of the characteristics open to the business necessity/consumer preference argument, it too had a rough start of it in reviewing courts. In 1971, in Diaz v. Pan American World Airways , Pan American refused to hire male fl ight cabin attendants. 4 The male fl ight cabin attendants took them to court. The issue before the court was whether, for purposes of cabin attendants, being female was a BFOQ “reasonably necessary” to the normal operation of the fl ights. Pan Am advanced two main arguments: a consumer preference and a business convenience argument. General experience, customer feed- back, and psychological evidence supported the preference for female cabin attendants. The trial court hearing the evidence agreed that Pan Am passengers overwhelmingly preferred female cabin attendants. The evidence was suffi cient to justify such discrimination.

The Fifth Circuit disagreed, adopting the Equal Employment Opportunity Commission (EEOC) recommendation that the BFOQ exceptions in Title VII be interpreted narrowly. The word “ necessary to business operations” was important to the court. They rejected the idea that mere business convenience could justify discrimination. The court instead applied a “business essence” test which has been used by courts ever since. “Discrimination based on sex is only valid when the essence of the business operation would be undermined by not hiring members of one sex exclusively.” 5

“It would be totally anomalous if we were to allow the prefer- ences and prejudices of the customers to determine whether the sex discrimination was valid. Indeed, it was, to a large extent, these very prejudices (Title VII) was meant to overcome. Thus, we feel that cus- tomer preference may only be taken into account when it is based on the company’s inability to perform the primary function or service it offers.” 6 The court, applying their new test, rejected Pan Am’s argu- ments and male cabin attendants were soon fl ying the skies. The Diaz test and precedent has been a formidable hurdle for businesses to overcome ever since.

Can Employers Use Gender in Hiring Decisions

Employee Relations Law Journal 57 Vol. 33, No. 2, Autumn 2007

THE GENDER BFOQ

Federal regulations regarding gender BFOQs are more detailed than other kinds of BFOQs. Federal regulations specifi cally forbid an employer from refusing to hire a person of a certain gender because of co-worker, client, or customer preferences. 7 The regulations also contain an exception for the purpose of authenticity or genuineness as an actor or actress. 8 This exception, however, is only for gender—not for national origin, religion, or race.

Businesses have made efforts to equate consumer demands with business necessity despite the explicit regulations against doing so. In Fernandez v. Wynn Oil Co. , 9 a petro-chemical business working with Latin American clients refused to promote a female employee because company offi cials feared foreign countries would not deal with a representative of the company who was a woman. The Ninth Circuit, reversing the decision of the lower court, held that accommodating a foreign country’s sex discrimination is not a valid BFOQ. The court cited an EEOC decision stating that the need to accommodate racially discriminatory policies of other countries cannot be the basis for a valid BFOQ. 10

The court, noting the limited BFOQ business necessity exception and narrow interpretation of that exception, rejected the business’ conten- tion that the discriminatory practice was necessary to protect the essence of the business. The court ruled for the plaintiff and against the business. In general, courts and especially the EEOC have been hesitant to allow consumer preferences to drive discrimination against one gender over the other.

THE CONSUMER PREFERENCE COUPLED WITH PRIVACY BFOQ

The Consumer Privacy BFOQ has roots in the legislative his- tory of Title VII. In the fi nal stages of deliberation over the Act, one Congressman stated: “There are so many instances where the matter of sex is a bona fi de occupational qualifi cation. For instance, I think of an elderly woman who wants a female nurse.” 11 That comment gave rise to the argument that Title VII allowed discrimination based on consumer privacy concerns. The consumer preference argument is signifi cantly stronger in favor of businesses, and especially health care providers, when the preference is rooted in privacy concerns. Courts have held that nursing home attendants, hospital orderlies, and OB/GYN physi- cians all regularly handle issues that give rise to privacy concerns. In those circumstances, and in those courts, gender-based discrimination is acceptable.

The most recent surge of activity has been in the OB/GYN fi eld. These cases are just starting to make their way into court systems. The

Can Employers Use Gender in Hiring Decisions

Vol. 33, No. 2, Autumn 2007 58 Employee Relations Law Journal

typical scenario is a male suing for gender discrimination based on the employer’s perceived need to hire female OB/GYN physicians or nurses. An example of this type of case is found in Veleanu v. Beth Israel Medical Center . 12

A male OB/GYN physician brought a discrimination claim against Beth Israel, alleging that he was discriminated against on the basis of his gender because the hospital accommodated female patients who requested female doctors. The court distinguished Diaz and other con- sumer preference cases by noting the special circumstances of privacy concerns of health care patients. The court noted that “giving respect to a deep-seated feeling of personal privacy involving one’s own geni- tal area is quite a different matter from catering to the desire of some male airline passenger to have . . . an attractive stewardess.” 13 “Because such care implicates the patient’s privacy rights, personal dignity and self-respect, the court believes that healthcare presents unique circum- stances that may justify reasonable efforts to accommodate a patient’s expression of preference of doctor by gender and that female patients may have a legitimate privacy interest in seeking to have female doctors perform their gynecological examinations.” 14

The court found the male plaintiff failed to meet his burden of prov- ing discrimination and affi rmed the strength of the consumer privacy BFOQ.

ANALYSIS AND APPLICATION TO HEALTH CARE PROVIDERS

It is not as clear, however, that Diaz is as inapposite as the Veleanu court states. Pan American argued for a consumer preference BFOQ not because female stewardesses are more attractive than male stewards, but because people fl ying felt more comfortable and more relaxed with female stewardesses. The airline even offered psychological evidence that customers felt more comfortable with female stewardesses. In a way, the Veleanu court demeans the substance of the Diaz decision. The Veleanu court mischaracterized the argument in Diaz as simply a consumer preference for attractive stewardesses in order to more eas- ily distinguish their ultimate conclusion of law from that of the Diaz court.

If the Diaz case were heard in a contemporary court, and an airline argued along the lines of a business necessity BFOQ (supported with the same psychological evidence), would the employer come out with a victory? The answer is likely not. What truly distinguishes Veleanu from Diaz is the additional element of privacy. The consumer preference argument when coupled with a privacy element is much stronger and offers the ability for employers to satisfy consumer and patient demands within the framework of the law. In the context of health care, where

Can Employers Use Gender in Hiring Decisions

Employee Relations Law Journal 59 Vol. 33, No. 2, Autumn 2007

privacy is an overarching concern in almost every instance, the potential for a consumer preference BFOQ is at its greatest.

At this point, few courts have authorized the use of a Consumer Privacy BFOQ. Discrimination in favor of female OB/GYN physicians is not widely accepted by the courts. If a health care provider is willing to take a risk on the argument that a consumer privacy BFOQ does apply, it should have a carefully crafted policy in place. In addition, the health care provider should take measured steps to document the consumer’s preference as well as the basis for the privacy concerns. Like many areas of health care, the consumer privacy BFOQ is constantly growing and may soon apply to more and more instances within the health care fi eld and, potentially, beyond.

NOTES

1. Apr. 11, 2006, at B11.

2. Damon Adams, “Web Sites Let Patients Find Like-Minded Physicians,” American Medical News , Mar. 27, 2006, at A1.

3. 42 U.S.C. § 2000e-2(e)(1)(emphasis added).

4. Diaz v. Pan American World Airways, 442 F.2d 385 (5th Cir. 1971).

5. Id . at 388.

6. Id . at 387.

7. 29 C.F.R. § 1604.2(a)(1)(iii).

8. 29 C.F.R. § 1604.2(a)(2).

9. 653 F.2d 1273 (9th Cir. 1981).

10. Id . at 1277 (citing EEOC Decision No. 72-0697, CCH EEOC Decisions 1971, ¶ 6317, at 4569).

11. 110 Cong. Rec. 2718 (1964) (Statement of Rep. Goodell).

12. 98 Civ. 7455 VM, 2000 U.S. Dist. LEXIS 13948 (S.D.N.Y., Sept. 25, 2000).

13. Id . at #22.

14. Id . at #23–24.

Can Employers Use Gender in Hiring Decisions