examining the legal Environment

Abstract

Translate

Top of Form

Purpose

While the words diversity, disparate impact, and discrimination are commonly read and heard by working adults and professionals, they can at times be confusing and fearful to some managers. The purpose of this paper is to provide an overview of a specific aspect of US civil rights laws – the disparate impact theory. The authors provide an analysis based on the statute, case law interpreting, and applying the statute, administrative guidelines from the Equal Employment Opportunity Commission, as well as legal and management commentary. The paper illustrates the requirements of a plaintiff employee’s initial case based on the disparate impact theory. The challenging causation component which requires some degree of statistical evidence is given particular attention. Limitations to the paper are stated at the beginning; and recommendations to managers are explored and provided toward the end of the paper.

Design/methodology/approach

It is a legal paper which covers all the laws related to discrimination based on disparate impact and disparate treatment theories. Actual court cases up until this month and Americans laws related to this concept are reviewed and critically discussed.

Findings

The salient feature of disparate impact is that this legal theory allows a plaintiff job applicant or employee to sustain a case of illegal discrimination without providing any evidence of a discriminatory motive. As opposed to the disparate treatment liability is imposed based on disproportionate adverse results and not discriminatory intent.

Research limitations/implications

This paper deals with the disparate impact theory pursuant to Title VII of the Civil Rights Act. However, it must be pointed out that the disparate impact theory is also applicable to claims arising under the Americans with Disabilities Act and the Age Discrimination in Employment Act. Since the focus of this paper is Title VII federal and state constitutional issues, such as the applicability of the 14th Amendment’s Equal Protection clause that may arise in disparate impact cases involving government entities will not be addressed.

Practical implications

Managers and employees can protect themselves in the workplace from illegal discriminatory practices. Initially, employers and managers must be aware of the distinction between a disparate impact case and a disparate treatment case with the latter requiring evidence of intentional discrimination. Evidence, of course, can be direct or circumstantial or inferential. Whereas in a disparate impact case there is no intentional discrimination; and as such proof of discriminatory intent is not required. Rather, the employee has to present evidence that the employer’s neutral on-its-face employment policy or practice caused an adverse disproportionate impact on the employee as a member of a protected class.

Social implications

Human resources professionals and managers must become educated in diversity laws in order to provide an inclusive workplace for all employees and candidates. Employers have legitimate areas of concern in hiring and promoting employees; and the courts are cognizant of employer responsibilities; and thus the employers must be able to show how specific knowledge, skills, education, training, backgrounds, as well as height, weight, strength, and dexterity are legitimate qualifications that directly relate to successful job performance.

Originality/value

This is an original paper by the authors.

Less

Full Text

Translate

Top of Form

0:00 /0:00

1. Introduction

This paper is an examination of a specific aspect of US civil rights laws – the disparate impact theory of liability pursuant to Title VII of the US Civil Rights Act. The authors provide an analysis based on the statute, case law interpreting and applying the statute, administrative guidelines from the Equal Employment Opportunity Commission, as well as legal and management commentary. Title VII prohibits discrimination in employment based on race, color, national origin, religion, and sex. The paper provides a succinct overview of the seminal civil rights statute – Title VII as we differentiate the two major theories of liability– disparate treatment vs disparate impact. Once the plaintiff employee makes out an initial case of disparate or disproportionate impact, the burden of proof and persuasion shifts to the employer to come up with a job-related and business necessity justification for the policy or practice in question. As such, this critical employer defense will be explicated and illustrated. Next, the burden shifts back to the plaintiff employee to show that there exists another alternative which would cause less of a disproportionate impact. This “alternative” aspect of the law will also be covered.

The paper examines disparate impact topic such as the employer’s use of criminal background checks in hiring, credit checks, and other methods of testing and selection procedures. Next, we discuss the practical implications of the disparate impact theory for employers and managers; and then we supply pertinent recommendations to employers and managers. The recommendations will underscore the need to establish an appropriate corporate culture, including diversity education and training. The objectives are to avoid civil rights liability and to create a fair and just workplace.

Overall, this paper deals with the disparate impact theory pursuant to Title VII of the Civil Rights Act. However, it must be pointed out that the disparate impact theory is also applicable to claims arising under the Americans with Disabilities Act (Raytheon Co. v. Hernandez, 2003; Harper, 2016; Travis, 2012), the Age Discrimination in Employment Act (Rudolph A. Karlo v. Pittsburg Glass Works, LLC, 2017; Meacham v. Knolls Atomic Power Laboratory, 2008; Smith v. City of Jackson, 2005; Harper, 2016), and the Fair Housing Act (Ko, 2016; Sacherm Lindsey, 2010). Also, since the focus of this paper is on Title VII, federal and state constitutional issues, such as the applicability of the 14th Amendment’s Equal Protection clause that may arise in disparate impact cases involving government entities will not be addressed.

2. Overview of Title VII

Title VII of the Civil Rights Act protects certain groups of employees from illegal discrimination regarding all the “terms and conditions” of employment based on the protected categories or characteristics of race, color, religion, national origin, and sex. Title VII, moreover, recognizes two types of legal actions by aggrieved employees against their employers: disparate treatment and disparate impact. Disparate treatment is intentional discrimination based on the protected categories of the statute (Equal Employment Opportunity Commission, 2010a; Cavico and Mujtaba, 2014). In a disparate treatment case, the employee is purposefully being treated differently to his or her detriment because of his or her race, etc. Consequently, evidence of a discriminatory motive against the employee is required. The employer can defend a disparate treatment case by showing that it had a legitimate, non-discriminatory reason for the job-action, for example, not hiring an applicant or discharging an employee. However, the employee can then show that the employer’s reason was fake or a pretext to mask a discriminatory motive (Cavico and Mujtaba, 2014).

In a disparate impact case, at times called “adverse impact,” evidence of purposeful intent to discriminate is not required. As succinctly stated by the US Supreme Court: “In evaluating a disparate-impact claim, courts focus on the effects of an employment practice, determining whether they are unlawful irrespective of motivation or intent” (Peggy Young v. United Parcel Service, Inc., 2015, p. 289). Several rationales can be given to support the disparate impact theory, for example, to avoid the “easy evasion” of Title VII by means of neutral but exclusionary employment practices (Olatunde, 2014, p. 140); to disclose and to redress “hidden discrimination” (Johnson, 2013, pp. 437-438); to eliminate “structural inequality” stemming from past discrimination as well as unequal educational opportunity (Olatunde, 2014, p. 140); to further effect the “opening of doors” to equal opportunity by reaching the discriminatory results of neutral employment practices (Pettinato, 2014, pp. 866-867); and to redress “discrimination in the workforce in forms subtler than in the past” by compelling employers to justify employment practices that have a discriminatory effect (Rosenthal, 2013, pp. 2159-2160). Disparate impact lawsuits can arise in a variety of employment settings, hiring or promotion standards, educational requirements, and employment selection tests. First, it is necessary to explicate the plaintiff job applicant’s or employee’s initial case.

3. Disparate impact: employee’s Initial case

Disparate impact as a legal doctrine was first solidified in case law by the US Supreme Court case (Griggs v. Duke Power, 1971), where facially neutral, but mostly irrelevant, pre-employment standard of a high school diploma and/or aptitude tests for hire or transfer, administered by the employer, had a disparate and adverse impact on African-American applicants. The court articulated the public purpose of the “disparate impact” doctrine: to correct past societal wrongs against minorities; and in ruling against the employer, the court stated: “It was to achieve equality of employment opportunities and remove barriers that have operated in the past to favor an identifiable group of white employees over other employees. Under the Act, practices, procedures, or tests neutral on their face, and even neutral in terms of intent, cannot be maintained if they operate to ‘freeze’ the status quo of prior discriminatory employment practices” (Griggs, 1971, pp. 429-430). When explaining the justification for the “disparate impact” theory, the court stated: “[…] good intent or absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as ‘built-in headwinds’ for minority groups and are unrelated to measuring job capability” (Griggs, 1971, p. 433). In total, 20 years later, the Civil Rights Act (1991) was enacted, and this law included a provision codifying the prohibition on disparate impact discrimination articulated in the Griggs case (Ko, 2016). The 1991 statute indicated that “an employee could prove his/her case by showing that an individual practice or group of practices resulted in a disparate impact on the basis of race, color, religion, sex, or national origin, and that the employer had failed to demonstrate that such a practice was required by business necessity” (Muffler et al., 2010, p. 5).

In order to establish an initial case pursuant to the disparate impact theory the plaintiff employee must demonstrate the employer has a policy, practice, or rule, which on its faces appears neutral, adversely, and disproportionately affects members of a protected class of employees or job applicants as opposed to non-class members (Equal Employment Opportunity Commission, 2010a; Eissenstat, 2016; Castillo, 2016). Seiner (2013, pp. 301-302) emphasizes two initial important pleading points for employee plaintiffs: first, clearly identify the particular policy that is in question, that it was implemented by the employer, as well as the timing of the practice used; second, to clearly and specifically assert the protected class that has been disproportionately and adversely impacted (e.g. “female workers”) and that the plaintiff is a member of that class. However, proof of an intent to discriminate is not required in a disparate impact case (Cavico and Mujtaba, 2014). Moreover, disparate impact can be found even if the “bottom line” result of the employer’s hiring policy or practice is racially or otherwise balanced (EEOC, Supreme Court in the 1980s; Connecticut v. Teal, 1982). That is, even if a group as a whole is ultimately treated fairly that fact is not a defense to an individual applicant or employee who is pursuing an individual discrimination claim. Johnson (2013, p. 462) explains the rationale behind Connecticut v. Teal (1982): “Employers are liable under the disparate impact doctrine when they use a process that improperly assesses candidates’ productivity[…]. (T)he disparate impact doctrine serves to ensure that rewards are distributed on the basis of actual merit, ability, and productivity rather than arbitrary distinctions […]. In this conceptualization, the disparate impact remedy provides protections for all workers who are adversely affected by practices that do not accurately assess future performance.”

As in any lawsuit, causation is a required condition to a disparate impact claim; that is, proof by the plaintiff is required that the employer’s challenged policy or practice caused the disproportionate adverse impact resulting in discrimination (Spivey v. Beverly Entertainment, 1999; Ko, 2016; Eissenstat, 2016). Disparate impact thus contains a causation requirement, that is, the aggrieved party must produce evidence that the “facially neutral standard caused the significantly discriminatory hiring pattern” (Wheeler v. Commonwealth of Pennsylvania Department of Labor and Industry, 2012, pp. 20-21). To demonstrate causation, “the plaintiff must present statistical evidence of a kind and degree sufficient to show that the practice in question has caused exclusion of applicants for jobs or promotions because of the membership in a protected group” (Wheeler v. Commonwealth of Pennsylvania Department of Labor and Industry, 2012, p. 21). As such, disparate impact claims require “system analysis” and evidence of “statistically significant disparities” (Stephen Manley v. National Prosource, Inc., 2013, pp. 24, 37). However, Smith (2014) pointed out that “courts in disparate impact cases – including but not limited to those challenging employers’ criminal records policies – have increasingly interpreted the standard plaintiffs must prove far more stringently, demanding that they provide a statistical analysis that is more closely tied to the employment practice at issue in the litigation” (p. 205). To illustrate, in the federal appeals court case of Bozorgmehr Pouyeh v. Bascom Palmer Eye Institute (2015), the court upheld the dismissal of the plaintiff’s disparate impact case for lack of statistical evidence. In the case, the plaintiff, a graduate of a foreign medical school claimed that the defendant’s residency program of foreign medical schools had a disparate impact based on national origin, but the court ruled that there was no statistical evidence of a disproportionate adverse impact on foreign-born, medical school graduates (Bozorgmehr Pouyeh v. Bascom Palmer Eye Institute, 2015). The court pointed out the following:

[…] (Plaintiff) did not allege any facts in his complaint, such as statistics, sufficient to show the practice of not hiring graduates of foreign medical schools has resulted in prohibited discrimination […]. Instead, he stated he know of only one other immigrant Iranian doctor, who applied and not obtained a residency position; however, he did not provide any information about that individual’s background. Even if accepted as true, that fact is insufficient to show the alleged practice of not hiring graduates of foreign medical institutions resulted in prohibited discrimination, since it gives no insight into statistical info

(Bozorgmehr Pouyeh v. Bascom Palmer Eye Institute, 2015, pp. 22-23).

Similarly, in the federal district court case of Stephanie Davis v. Infinity Insurance Co. (2016, p. 22), the federal district court ruled that merely stating that a promotion plan that favored bi-lingual employees “‘disproportionately’ favors one group over another is not a fact”; rather, the plaintiff needed to identify the specific employment practice that allegedly had the disproportionate impact and then show causation by offering statistical evidence sufficient to demonstrate that the challenged practice resulted in prohibited discrimination.

Yet there is another problem in disparate impact causation analysis as some courts require evidence of a “practically significant” disparity as well as a “statistically significant” disparity (Ko, 2016; Eissenstat, 2016). Ko (2016, p. 871) explains the difference: “Statistical significance measures the likelihood that a certain disparity is due to random chance instead of some other factor. Statistical significance, on the other hand, will also be practically significant. But not always. In some cases, statistically significant disparities may ‘have little or no real-world importance’. Thus, the courts’ answer to the question […] can either doom or save claims with a high level or statistical significance gut a low level of practical significance.” It is beyond the purpose of the paper to provide any in-depth statistical analysis except to point out that Ko (2016) and Eissenstat (2016) examine the topic extensively; and they relate that the federal courts of appeal are split on this distinction and that neither Congress nor the courts have provided much guidance on this critical issue. Stenger (2015, p. 413) adds that “judges must determine whether to assign weight to such statistical analyses, but they have done so in an arbitrary and unpredictable manner.”

Also, to complicate matters, the Equal Employment Opportunity Commission has a “four-fifths” guideline for practical significance which maintains that a selection rate of any group protected by Title VII or other relevant anti-discrimination statute which is less than four-fifths of the rate for the group of the highest rate generally will be regarded as evidence of disparate adverse impact (Ko, 2016; Eissenstat, 2016). However, Ko (2016), Eissenstat, (2016), and Stenger (2015) pointed out that the courts are split on the EEOC rule with some courts rejecting it, others using it, and some using it as an approximate standard for disparate impact. Stenger (2015, pp. 421-22), in addition, relates: “Though the Supreme Court has labeled the four-fifths rule as nothing more than a rule of thumb for the courts, it has also noted that EEOC guidelines deserve a measure of respect.” Eissenstat (2016), in reviewing the pertinent case law, nevertheless argues for the application of the EEOC rule, explaining that “although heavily criticized, the four-fifths rule advocated by the EEOC is the best available test to meet this standard […] The test then performs the important function of evaluating the overall negative consequences of the disparity. In other words, it determines whether the impact of the disparity is sufficiently large to concern the court” (p. 671). One federal district court did note regarding the EEOC’s four-fifth’s rule that “a violation of the four-fifth’s rule […] may demonstrate adverse impact, particularly when coupled with other statistical evidence of adverse impact” (Bruce Smith v. City of Boston, 2015, p. 200). In the preceding case, the district court ruled that minority police officers sustained an initial case of racially disparate impact caused by the city’s promotional exam for lieutenants and that the city could not demonstrate a business necessity for the exam since it could not show that a higher exam score resulted in better performance (Bruce Smith v. City of Boston, 2015, p. 200).

To demonstrate the ultimate disproportionate and adverse impact of the specific policy, practice, or rule, the employee, as noted, usually uses statistical type of evidence, for example, hiring and discharge categories and rates as well as comparisons between protected and non-protected class members (Equal Employment Opportunity Commission, 2010a; Castillo, 2016). Once the appropriate statistical and/or practical standard can be ascertained as a matter of law the plaintiff employees or applicants can show by statistical evidence that the selected applicants for hire or promotion significantly differ from those of the protected group members in the pool of applicants (Equal Employment Opportunity Commission, 2010a; Cavico and Mujtaba, 2014). Of course, the plaintiff employee’s statistical evidence can always be challenged by the employer, typically by the employer presenting its own statistics, or attacking the plaintiff’s statistical evidence, for example, by asserting that the sample is too small (Castillo, 2016). To illustrate, in the federal district court case of Gregory W. Mims v. Tennessee Valley Authority Board of Directors (2015), the plaintiffs, African-American applicants who were passed over for promotions to lineman foreman positions alleged that the testing procedures, which included an interview, had an illegal disparate impact. The plaintiffs provided statistical evidence of a disproportionate impact based on African-Americans of working age in all the TVA states; however, the employer successfully countered that evidence by introducing statistical evidence based on a consideration of qualified applicants, and “[…] when only qualified applicants were considered, whites and African-Americans were represented approximately equally in TVA promotions” (Gregory W. Mims v. Tennessee Valley Authority Board of Directors, 2015, pp. 18-19) (emphasis in original). The defendant employer’s presenting contrary statistical evidence was thus critical to the case. Once this case of disparate impact is established the next issue to be resolved is the presence of a defense for the employer.

4. The employer’s “business necessity” burden

If the plaintiff employee establishes his or her initial case of adverse and disproportionate impact the burden of proof and persuasion then shifts to the employer to affirmatively show that the policy, practice, or rule is rational, legitimate, and job-related for the position at issue and is consistent with business necessity (Civil Rights Act, 1991); Albermarle Paper Co. v. Moody, 1975; Hayes v. Shelby Memorial Hospital, 1984; Equal Employment Opportunity Commission, 2010a; Ko, 2016; Eissenstat, 2016; Castillo, 2016; Cavico and Mujtaba, 2014). However, Smith (2014, p. 208) pointed out that “the statutory language in Title VII does not provide any more guidance on what employers have to do in order to satisfy the business necessity defense; it merely states that they must show that the challenged practice is job-related for the position in question and consistent with business necessity.” Nonetheless, an initial key factor is whether the test or selection measure produces information that is related to the particular job in question (Karpa, 2014). For example, in the Court of Appeals case of Stacy Ernst v. City of Chicago (2016) the court ordered a new trial based on evidence that the city of Chicago’s physical strength and skills test for paramedics was sufficiently job-related and thus a proper validation of job skills due to problems with the reliability of validity of the study.

Even if an employment test or other selection measure causes a disparate adverse impact it nonetheless will be deemed valid and legal if it was created, designed, and implemented by professionally accepted methods and personnel and it is related to and/or predictive of significant aspects of the job or position (Castillo, 2016; Cavico and Mujtaba, 2014). The practice, moreover, must be necessary for the efficient conduct of the employer’s business (Castillo, 2016; Cavico and Mujtaba, 2014). As Ko (2016, p. 903) relates: “This requires, in most cases, a case-by-case evaluation of all the evidence. For example, education and height requirements may be justified by business necessity in some cases but not in others.” Wu (2012, p. 1222) adds that business necessity “[…] affirmative defense analysis essentially focused on two different, but related, questions, first, the defendant must establish sufficient job validity: is the skill being tested actually necessary for satisfactory job performance? Second, the defendant must prove sufficient content validity; is the test in place actually related to this skill”?

To illustrate, in a leading Supreme Court disparate impact decision, Dothard v. Rawlinson (1977), the court ruled that the state of Alabama’s height and weight requirements for employment in the state’s prison system had a discriminatory impact on female applicants. Specifically, the court ruled that the plaintiff female applicant who wanted to be a correctional counselor and who was rejected because she did not meet the minimum 120-pounds weight requirement suffered a discriminatory impact; and the court also ruled that the state prison system could not show a business necessity for its height and weight requirements (Dothard v. Rawlinson, 1977). To compare, in the case of Gregory W. Mims v. Tennessee Valley Authority Board of Directors (2015), the federal district court held that even if the plaintiff African-American applicants for line foreman positions could show a disparate impact caused by the testing procedure which included an interview, the “[…] TVA can demonstrate that its emphasis on a subjective interview serves a legitimate, non-discriminatory business objective: it allows TVA management to have ‘face time’ with each candidate and observe the candidates’ responses to situational questions that require quick and decisive thinking” (p. 19).

Another example of a legitimate business necessity would be drug testing of police officers (Ko, 2016, p. 904). To compare, the city of North Miami Beach, Florida dropped its swimming requirement for police officers due to a perceived disparate impact on black and Haitian-American applicants and also because the city feared it could not sustain a business necessity defense because of the relatively few numbers of drowning in recent years as well as a dire need for police officers. However, the city would provide free swimming lessons to recruits and officers (Tallahassee Democrat, 2004). In the case of Arthur L. Lewis v. City of Chicago, Illinois (2010, p. 213), the Supreme Court ruled that African-American firefighter applicants in the city of Chicago had a “cognizable claim” of disparate impact discrimination based on the city’s practice of selecting applicants who scored 89 or above on a written examination; but the Supreme Court referred the case back to the lower federal courts to adjudicate the city’s alleged business necessity defense. The business necessity, defense, therefore, is one that is premised on the fact that an employment requirement, although it results in discrimination, is necessary for the successful performance of essential job functions. However, even if the employer can legitimately assert a business necessity defense there may be still one more legal and practical hurdle for the employer to surmount.

5. The employee’s “other alternatives” rejoinder

If the employer does sustain its burden of demonstrating the policy, practice, or rule is a business necessity and job-related the plaintiff employee nevertheless can make a rebuttal argument. The employee thus can attempt to demonstrate that the employer had available alternative tests or selection measures and the employer could have used one of them that would have had a less harmful impact on the protected employees or job applicants (Equal Employment Opportunity Commission, 2010a; Castillo, 2016; Cavico and Mujtaba, 2014). A recent case that illustrates the “other alternatives” doctrine is the Court of Appeals case of Ronnie Jones v. City of Boston(2016). The court in a very logical step-by-step analysis found the following: first, that the city of Boston’s police department had a legitimate business need to test police officers for drugs in the interest of achieving a drug-abstaining police force. Second, the hair drug test had a disproportionate and disparate impact on black police officers. Third, the officers presented evidence that another alternative test that used a hair drug test followed by a urinalysis regimen for those officers who had tested positive was a reasonable alternative that would have caused less disparate impact. Fourth, the police department refused to use the alternative test (Ronnie Jones v. City of Boston, 2016). As such, since there were facts in dispute the court ruled that the case must go to a jury to determine if the alternative proposal of a hair test combined with urinalysis would “[…] equally have met the Department’s needs” (Ronnie Jones v. City of Boston, 2016, p. 35). To further illustrate whether an alternative selection procedure is legally viable is the Court of Appeals case of Lopez v City of Lawrence, Mass. (2016) where black and Hispanic applicants contended that the promotion exams for police sergeants created a disparate impact. The court, however, first ruled that there was a business necessity for the exams as they were sufficiently representative of important aspects of job performance; and then as to the plaintiffs’ assertions that there were better and thus preferred selection alternatives the court rejected these contentions due to a lack of evidence, saying neither a “scattershot listing of alternatives” nor the fact that alternatives “exist in the abstract” was sufficient evidence to reverse the lower court ruling that the defendant city refused to adopt an available alternative (Lopez v. City of Lawrence, Mass, 2016, p. 44).

In the following sections of the paper, the authors will discuss major problem areas arising under disparate impact law and practice – background checks, particularly criminal background checks, credit checks, and employment tests and other selection procedures – as well as a 2009 Supreme Court case which has greatly complicated for employers this already difficult area of employment law.

6. Criminal background checks

Criminal background checks are another problematic area of the law for employers since they can trigger the disparate impact theory. However, many statutes – federal, state, and local – mandate criminal background checks for security and safety reasons. Moreover, many jurisdiction – state and local – now prohibit the employer from even asking about a job applicant’s criminal background in the initial job application. These laws are colloquially called the “ban-the-box” movement with the “box” referring to the box on an application where an applicant must check off whether he or she has been arrested and/or convicted of a crime (Cavico et al., 2014). The federal courts as well as the Equal Employment Opportunity Commission have ruled on the disparate impact theory in the context of criminal background checks.

6.1 Federal court cases

The two leading federal cases regarding the legality of criminal background checks in employment in relation to the disparate impact theory are the 1977 Eighth Circuit decision in Green v. Missouri Pacific Railroad and the 2007 Third Circuit decision in El v. Southeastern Pennsylvania Transportation Agency. In the Green case, the appeals court identified three factors that assess whether a criminal record exclusion is job-related and consistent with business necessity: the nature and severity of the offense; the amount of time elapsed since the offense or completion of the sentence; and the nature of job sought or held (Green v. Missouri Pacific Railroad, 1977). Specifically, in Green, the court ruled that the employer’s “absolute” policy of excluding any applicant convicted of a crime (except for minor traffic offenses) had a disparate impact against black applicants and could not be justified by business necessity (Green v. Missouri Pacific Railroad, 1977, p. 1292).

In the El case, the court emphasized the importance of careful factual analysis for criminal record exclusions, encompassing assessing risks and accurately distinguishing between applicants who pose an unacceptable level of risk and those who do not (El v. Southeastern Pennsylvania Transportation Agency, 2007). The court in El did uphold the dismissal of a transit driver when the employer discovered a 40-year-old conviction for second-degree murder, which occurred when the employee was 15. The court, however, expressed skepticism of the agency’s lifetime ban from employment due to the conviction; yet because the plaintiff employee produced no rebuttal evidence concerning the date of the crime and the current risk of maintaining the employee, the court felt constrained to support the employer (El v. Southeastern Pennsylvania Transportation Agency, 2007, pp. 247-248). The El case is also instructive because the court said that any guidelines emanating from the EEOC are entitled to “deference” but not “great deference” (El v. Southeastern Pennsylvania Transportation Agency, 2007, p. 244).

The Waldon v. Cincinnati Public Schools (2013) case is a very instructive federal case. In Waldon, the state of Ohio enacted legislation in 2007 which required criminal background checks of current school employees, even those employees whose duties did not involve the care, control, or custody of children. Moreover, an employee was disqualified for employment by the law for certain specified crimes, regardless of how far in the past the crimes occurred, and regardless of the relationship of the crimes to the employee’s present position and qualifications. There also was no opportunity for an employee to show rehabilitation. The legislation required termination. As such, two long-time employees, who were African-Americans and who both had records of excellent service, were discharged pursuant to this law based on their criminal records, which were decades old. The school district discharged a total of ten employees, nine of whom were African-Americans. The plaintiffs claimed that their civil rights were violated pursuant to Title VII and specifically alleged discrimination in the form of disparate impact. The school system argued that it was merely following the state law, which did not purport to discriminate; and thus it asked the federal district court to dismiss the case. The court, however, denied the motion to dismiss, stating clearly that it finds “no question” that the plaintiffs have adequately plead a case of disparate impact because a facially-neutral employment practice caused a disparate impact (Waldon v. Cincinnati Public Schools, 2013, pp. 9-10). The federal district court did say that a school district employment policy as applied to “serious recent crimes” could be justified by “business necessity” due to the “employees’ proximity to children” (Waldon v. Cincinnati Public Schools, 2013, p. 12). However, regarding the two employees in the case at bar, the court explained that the school district policy “operated to bar employment when their offenses were remote in time, when (one) Plaintiff’s […] offense was insubstantial, and when both had demonstrated decades of good performance. These plaintiffs posed no obvious risk due to their past convictions, but rather, were valuable and respected employees, who merited a second chance” (Waldon v. Cincinnati Public Schools, 2013, pp. 12-13). In closing, the court stated simply: “Title VII trumps state mandates” (Waldon v. Cincinnati Public Schools, 2013, p. 14).

To compare, in the federal district court case of Edmond v. Pikes Peak Direct Marketing (2013), the defendant employer was successful in getting a disparate impact case dismissed. In Edmond, the plaintiff job applicant, an African-American, claimed he was discriminated against based on the disparate impact theory because the defendant employer had a “blanket” “no-felons” hiring policy. However, the evidence indicated that the defendant did not in fact have such a broad disqualifying policy; and actually the application for employment explicitly stated that a conviction would not necessarily disqualify a person from employment. However, for positions involving computer work with access to sensitive customer data, including credit card information, the defendant stated that it had to comply with Payment Card Industry (PIC) security standards, which required background checks, including criminal record reviews. Pursuant to the PIC security standards, persons convicted of a felony could not be hired, retained, maintained, or promoted for “computer-related positions of trust”; and about one-half of the defendant employer’s positions fell into this “trust” category. Accordingly, the defendant argued that it did not have a “blanket” policy but rather a “narrowly tailored screening process” for these computer-related trust positions and that its policy was in keeping with PIC security standards (Edmond v. Pikes Peak Direct Marketing, 2013, pp. 10-11). Another major problem for the plaintiff job applicant in the case was the plaintiff’s inability to present to the court adequate “competent evidence” that the defendant’s hiring policy actually caused a disparate impact on African-Americans (Edmond v. Pikes Peak Direct Marketing, 2013, pp. 15-16). As a result, the court ruled in favor of the defendant employer and dismissed the lawsuit. Similarly, in the recent federal district court case of Manley v. National Prosource, Inc. (2013), the plaintiff job applicant, a black male with a criminal record, failed to produce sufficient evidence of statistically significant disparities based on race and gender to sustain a disparate impact case against a job referral organization.

Although a credit background check case, as opposed to a criminal background case, the federal district court case of EEOC v. Freeman (2013) is instructive regarding the demanding nature of statistical evidence required in a disparate impact race-based case: “To use general population statistics to create an inference of disparate impact, the general populace must be representative of the relevant applicant […]. The general population pool ‘cannot be used as a surrogate for the class of qualified job applicants, because it contains many persons who have (and would not) be’ applying for a job with Defendant” (pp. 40-41). Moreover, the court in EEOC v. Freeman (2013) also said that for Title VII it is not sufficient for the plaintiff to show generally that the collective results of a hiring process caused the disparate impact. Rather, when the hiring process has multiple components statistical evidence must “isolate and identify” the distinct element in the hiring process that produced the discriminatory outcome unless the aspects of the hiring process are not capable of separation for purposes of analysis (pp. 42-43).

6.2 Equal employment opportunity guidance

In the context of criminal background checks, the EEOC advises that since disproportionate members of African-Americans and Hispanics are convicted of crimes the use of conviction records to make employment decisions is likely to result in a disparate impact on these groups (Cavico et al., 2014). Furthermore, in its Enforcement Guidance manual, the agency states that the national data indicating disproportionate arrests and incarceration of black and Hispanic men “supports a finding that criminal record exclusions have a disparate impact based on race and national origin” (Equal Employment Opportunity Commission, 2012, p. 7). The agency also warns that “an employer’s evidence of a racially balanced workforce will not be enough to disprove disparate impact” (Equal Employment Opportunity Commission, 2012, p. 7). Furthermore, the EEOC warns employers that “national data supports a finding that criminal record exclusions have a disparate impact based on race and national origin” and thus that the “national data provides a basis for the Commission to investigate Title VII disparate impact charges challenging criminal record exclusions” (EEOC, Questions and Answers about the EEOC’s Enforcement Guidance on the Consideration of Arrest and Conviction Records, 2014).

Consequently, if there is a disparate impact, an employer can only use criminal history information to make employment decisions when the information is job-related for the position, consistent with business necessity, and there does not exist an equally effective but less discriminatory alternative (EEOC, Office of the Legal Counsel, Title VII: EPA Information Collection Request, Background Checks, 2013). Furthermore, the EEOC advises that “with respect to exclusions based on criminal records, employers should assess the risk that a person with a criminal record may pose if employed, by relating the nature of the crime to the nature of the position, in light of the time elapsed since the crime” (EEOC, Office of the Legal Counsel, Informal Discussion Letter, Title VII: Criminal History & Arrest Records, 2013, p. 2). Procedurally, the EEOC notes that “after the plaintiff in litigation establishes disparate impact, Title VII shifts the burdens of production and persuasion to the employer to ‘demonstrate that the challenged practice is job related for the position in question and consistent with business necessity’” (Equal Employment Opportunity Commission, 2012, p. 7). Evidence that the exclusionary policy is necessary for safe and efficient job performance will be a critical factor for the agency (Equal Employment Opportunity Commission, 2012, p. 7).

The EEOC counsels the employer to make a distinction between arrests and convictions As such, employers must be cognizant of the fact that arrest records should be treated differently from conviction records (Cavico et al., 2014). Arrest standing alone does not necessarily mean that a job applicant has committed a crime and thus the employer should not assume that the applicant committed the offense. Rather, the employer should allow the applicant the opportunity to dispute the arrest and to explain the circumstances of his or her arrest or arrests; and then the employer should make a “reasonable effort” to determine if the explanation is “reliable” (Equal Employment Opportunity Commission, 2013).

Compared to arrests a conviction typically will serve as sufficient evidence that a person engaged in the particular conduct; but nonetheless the agency also states that the conviction could be outdated or there could be errors in the record (Equal Employment Opportunity Commission, 2012). Convictions can preclude employment if the history of criminal conduct is job-related and any exclusion is consistent with business necessity. However, for exclusions based on convictions, the law requires that the criminal conduct must be recent enough and sufficiently job-related to be predictive of performance in the position desired given the duties and responsibilities (Cavico et al., 2014). Specifically, the EEOC holds that “an employer needs to show that the policy operates to effectively link specific criminal conduct, and its dangers, with the risks inherent in the duties of a particular position” (Equal Employment Opportunity Commission, 2012, p. 9). Another problematic area of disparate impact law and practice involves the employer’s use of credit checks to make hiring and promotion decisions.

7. Credit checks

Another area of disparate impact concern for employers is the use of credit checks in hiring and promoting. Credit checks, though applied to all employees, nevertheless may have an adverse disproportionate impact on minorities (Karpa, 2014; Concepcion, 2010). However, the Equal Employment Opportunity Commission maintains that neither Title VII nor other non-discrimination statutes prohibit discrimination against employees based on credit information obtained during a credit check (Equal Employment Opportunity Commission, 2010c). Yet the EEOC counsels that if the employer’s use of credit information or other financial criteria disproportionately excludes African-Americans and Hispanic candidates for employment the practice would be illegal unless the employer can demonstrate that the practice was job-related and necessary for the employee to operate in a safe and efficient manner (Equal Employment Opportunity Commission, 2010c; Equal Employment Opportunity Commission, 2005). The agency, moreover, provides an example, supported by case law, where a credit check would be appropriate in the case of a bank employee who handles large amounts of cash (Equal Employment Opportunity Commission, 2010c; Equal Employment Opportunity Commission, 2005). Another example of a credit check – disparate impact case is the Court of Appeals decision in EEOC v. American National Bank (1981), where the court ruled in upholding a lower court decision: first, that the use of credit checks in the hiring of personnel for teller positions was job-related and consistent with business necessity since tellers handled large sums of money; and second, the EEOC did not produce sufficient evidence showing that the bank’s use of credit checks affected African-American job applicants more adversely than white applicants; and consequently the bank’s use of credit checks did not contravene Title VII.

Employers, of course, as noted in the preceding case, have valid reasons for wanting to use credit checks as a hiring and promotion too. Employers contend that credit checks can provide valuable information to assist them in evaluating job applicants and in determining whether a potential employee has the required abilities to be successful and to perform the job safely (Karpa, 2014). Moreover, Aamodt (Equal Employment Opportunity Commission, 2010d, p. 1) lists five main reasons why employers utilize credit checks: first, the employer is required to by a governmental entity, such as a state, or an external entity, such as a bonding company; second, the lesser the potential for lawsuits based on the common law tort of negligent hiring; third, the employer believes that the financial distress of an applicant or employee may result in financial wrongdoing, such as theft or bribery; fourth, the employer believes that a bad credit history may mean that the applicant or employee is irresponsible and not conscientious; and fifth, the employer believes that an employee with financial problems will be too stressed out at work to perform his or job effectively. Of course, there is a debate as to whether all or any of the previous reasons and/or beliefs are valid, as opponents contend that credit checks are neither an accurate measurement of job qualifications nor a good predictor of job performance (Concepcion, 2010; Murray, 2010). The efficacy of credit checks debate, however, is beyond the purposes of this paper; yet nevertheless employers do use credit checks and must be very careful in doing so, as to not trigger a civil rights lawsuit based on the disparate impact theory. As such, the “business necessity” for a credit check will be the paramount factor in determining liability in this area as well as for other selection procedures and employment tests.

8. Employment tests and other selection procedures

In addition to credit checks employers use many tools and instruments to evaluate applicants for employment and employees for promotion. Title VII forbids the use of employment tests and other selection procedures in a discriminatory manner. The Equal Employment Opportunity Commission takes an expansive view of “employment tests and selection procedures,” encompassing the following: cognitive tests which assess reasoning memory, mathematic skills, reading comprehension, as well as knowledge of a particular job or function; physical ability tests, including strength and stamina tests; “sample job tasks,” such as performance tests, simulations, and sample job task test; medical inquiries and physical exams, including tests that assess mental and physical health; personality tests and integrity tests; criminal background tests, credit and financial investigations; performance appraisals; educational requirements, and English or language proficiency tests (Equal Employment Opportunity Commission, 2010a). The disparate impact theory can also be applied to physical tests, such as strength and agility tests, and other physical-selection procedures, which may have a disproportionate adverse effect on female applicants (Wu, 2012).

Employment tests and selection procedures, moreover, can trigger liability pursuant to the disparate impact theory of Title VII too (Cavico et al., 2014). The Equal Employment Opportunity Commission construes disparate impact discrimination as the employer using a neutral test or selection procedure that has the effect of disproportionately excluding persons based on their race or other protected categories where the tests or selection procedures are not job-related and consistent with business necessity (Equal Employment Opportunity Commission, 2010a; Equal Employment Opportunity Commission, 2012). The EEOC uses the following criteria to determine disparate impact liability: Does the employer use a particular employment practice that has a disparate or disproportionate impact on race or other protected categories? If there is a disparate impact, can the employer demonstrate that the selection procedure is job-related and consistent with business necessity? Can the employer show that the selection criterion is necessary to the safe and efficient performance of the job? Is the selection criterion sufficiently associated with the knowledge and skills to perform the job successfully? Even if the selection criterion is job-related and consistent with business necessity can the employee show that there is a less discriminatory alternative available (Equal Employment Opportunity Commission, 2010a; Equal Employment Opportunity Commission, 2012).

The Equal Employment Opportunity Commission provides an example of how it would construe a hypothetical education requirement of a master’s degree for a position of Public Health Director. Assuming the application of the educational requirement results in a significantly disproportionate exclusion of minorities from the position, the Equal Employment Opportunity Commission (2010b) advises:

The employer could show that a strict master’s degree requirement is job-related and consistent with business necessity by showing that it is ‘necessary to the safe and efficient performance’ of the Public Health Director job […]. Whether the employer could make such a showing depends on the specific duties of the job. Two relevant considerations are how effectively a master’s degree predicts Public Health Director job performance, and whether the strict degree requirement applies to other people holding substantially similar jobs. Assuming that the employer could show that the master’s degree requirement was ‘job-related and consistent with business necessity,’ an employer might nevertheless be liable if there is an available alternative that would equally effectively meet its business objectives. Accordingly, assuming this requirement has a disparate impact on racial minorities, the employer is advised to determine whether there is an equally effective alternative selection procedure that has less adverse impact and, if so, adopt the alternative procedure […]

(p. 1).

The prior EEOC example illustrates certain key components of the disparate impact theory. The field of disparate impact law, already a challenging one as can be seen, was made even more difficult, especially for the employer, by means of a fairly recent US Supreme Court decision.

9. The supreme court’s 2009 Ricci v. DeStefano decision

Employers naturally want to avoid liability for civil rights violations based on both theories – disparate treatment and disparate impact. Yet based on the 2009 Supreme Court decision of Ricci v. DeStefano a conundrum exists for employers who use employment tests and selection procedures and who fear that these measures may have caused a disparate impact on a protected group of employees or job applicants (Muffler et al., 2010). The crux to this important case centered on the operative fact that the city of New Haven, Connecticut, discarded the promotion test results for firefighters on which minorities had scored poorly. City officials contended that if the city did not discard the results the minority applicants would have sued the city. Justice Anthony Kennedy, writing for the majority, stated that mere fear of litigation alone cannot justify an employer’s reliance on race to the detriment of individuals who passed the examinations and qualified for promotions. Specifically, Justice Kennedy stated that there must be “[…] a strong basis in evidence to believe it [employer] will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action” (Ricci v. DeStefano, 2009, p. 47). He further restated the district court’s comment that “the city rejected the test results because too many whites and not enough minorities would be promoted” (Ricci v. DeStefano, 2009, p. 37). Justice Kennedy also wrote: “Without some other justification, this express, race-based decision-making violates Title VII’s command that employers cannot take adverse employment actions because of an individual’s race” (Ricci v. DeStefano, 2009, p. 37).

However, it must be emphasized that the US Supreme Court in the New Haven firefighter decision did not strike down the disparate impact doctrine on statutory or Equal Protection constitutional grounds. The disparate impact doctrine is thus still the law. Rather, the Court invalidated the New Haven employment decision of discarding the tests by saying the city had violated Title VII of the Civil Rights Act of 1964. For an employer to throw out a test that has a disparate impact, the employer must have “a strong basis in evidence” that the employer will be sued and lose a disparate impact lawsuit before discarding test results solely based on race (Muffler et al., 2010). Therefore this “strong basis in evidence” that a test was flawed is a new and critical standard in anti-discrimination law that employers must know and observe.

10. Implications for management

Initially, employers and managers must be aware of the distinction between a disparate impact case and a disparate treatment case and the legal requirements for each theory of civil rights law. The causation requirement in disparate impact, especially the use of statistical and numerical data, presents special problems for employers. As Seiner (2013) emphasizes the courts are not consistent as to what type or how much statistical or numerical data is required; but nonetheless urges that “at a minimum, a claim accompanied by numerical support demonstrating a disparate impact in the workplace would seem to allege a more plausible case than a claim without these data” (p. 303). Seiner (2013) also notes that obtaining the data might prove to be difficult and costly since at least initially the data will be in the employer’s possession; and securing experts to analyze the data and provide pertinent testimony will also typically involve “substantial expense” (p. 304). To illustrate, in the federal district court case of Eduardo Martinez, Phillip Browne v. Connecticut Department of Corrections (2015, pp. 412-413), the plaintiffs, minority corrections officers seeking promotions, did provide some statistical evidence that the state’s promotions policy caused a disparate impact, but their case failed due to “no expert statistical analysis,” an “extraordinary scant amount of quantitative information,” the “near-complete lack of statistical proof,” and merely “anecdotal reports of past intentional discrimination.” Another problematic area of disparate impact law deals with the employer’s defense that its policy or practice that caused the disproportionate impact is nonetheless job-related and justified by business necessity. For the employer to prevail on this defense it must be able to show that it is directly related to the job in question and that there is a clear business need for the policy or practice. Sacherm Lindsey (2010, p. 635) in analyzing the case law adds that the courts “tend to construe the defense narrowly” by requiring “convincing facts” showing a connection between the qualification and the job.

The disparate impact theory of civil rights law, therefore, clearly has important ramifications for employers and managers. One major implication to discuss involves criminal background checks. However, it is necessary to emphasize that the EEOC does not prohibit the use of criminal background checks in employment. However, the agency also underscores that employers who use such records as an “absolute measure,” which prevents a job applicant from being hired, could limit employment opportunities for some members of protected groups; and thus such “absolute” use would be deemed impermissible (Equal Employment Opportunity Commission, 2013).

The EEOC in 2012 issued extensive “guidelines” for employers to consider the criminal justice history of a job applicant or employee. The agency thereby advises employers concerning the use of criminal background checks to consider the following factors:

· The nature and gravity of the crime, the elements of crime, the harm caused by the crime, and whether it is a misdemeanor or felony.

· The number of offenses for which the person was convicted and the age of the person at the time of conviction or release from prison.

· The relationship of the crime to the applicant’s potential job.

· The amount of time has that passed since the criminal offense, conviction and/or completion of sentence; and note that the exclusion should be of unlimited duration.

· The nature of the job held or sought and job duties and functions.

· Whether a criminal exclusion is narrowly tailored.

· The level of supervision and oversight, the amount of interaction with co-workers or customers, and the degree of access to vulnerable people, such as children.

· Where the work is to be performed (e.g. out-of-doors, in a warehouse, or in a private home).

· If the individual performed the same type of work, post-conviction, with the same or different employer, with no known incidents of criminal conduct.

· The length and consistency of employment history before and after the offense or conduct.

· The existence of rehabilitation efforts, such as education and training.

· The existence of employment and/or character references or any other pertinent information concerning the fitness of the applicant for a certain position.

· Whether the person is bonded under a federal, state, or local bonding program.

· Whether each case was reviewed individually, the applicant or employee was informed that he or she could be excluded from the job or position because of a criminal record, and whether the applicant or employee was permitted to state why he or she should be hired or promoted despite his or her criminal record (Equal Employment Opportunity Commission, 2012). These guidelines, the agency advises, should be used in the case of convictions and even for arrests when the employer believes in fact that the job applicant did engage in the conduct that he or she was arrested for, but in the latter case only to the extent that the applicant cannot be trusted to perform the duties of the position taking into consideration the preceding factors (Equal Employment Opportunity Commission, 2013).

Regarding employment tests and the Ricci v. DeStefano (2009) decision, the major implication for the employer is that it has been placed in a difficult position. One problem was that the Supreme Court did not provide any guidelines to advise employers on how they can determine what type and degree of evidence rises to the level of a “strong basis in evidence” (Muffler et al., 2010). Consequently, the “mere” concern or fear on the part of the employer that it might be sued because insufficient numbers of minority applicants or employees did not pass the test will be an inadequate reason to ignore the results of the test and thereby to deny employment or promotions to the non-minorities who did pass the test, thereby resulting in a disparate treatment lawsuit (Muffler et al., 2010). Nevertheless, the “strong basis in evidence” test, though not precisely defined, does emerge as a critical component to disparate impact discrimination law.

The employer, therefore, must use job selection measures, tests, and checks in a judicious manner so as to strive not to cause discrimination against any group of job applicants or employees. The employer, of course, must use any selection measure in a fair and non-discriminatory manner and must ensure that the measure, test, or check is necessary for and specific to the particular job or promotion in question. The employer, moreover, must create a workplace that is free of discrimination, bias, and stereotyping. As such, establishing a corporate culture of legality, ethics, morality, fairness, and respect is critical; and appropriate diversity training of employees, especially managerial employees, is an essential feature in establishing this “good” corporate culture.

11. Diversity audits and training

When respected, engaged and used effectively, diversity education and training can help avoid lawsuits as well as provide a competitive advantage through an institution’s human capital (Allahand and Mujtaba, 2016; Syed and Ozbilgin, 2015; Mujtaba, 2014). In order to provide this “edge” in the modern workplace, organizations should regularly monitor, audit the diversity make-up of their workforce, and train managers to become culturally competent (Mujtaba, 2010). Human diversity is inclusive of culture, age, gender, generational differences, abilities and disabilities, sexual orientation, religion, and numerous other such dimensions that make people unique as groups and cliques, and even more so in terms of various individual characteristics (Mujtaba and Cavico, 2010). The ideal goal of each workforce’s diversity is to make sure it represents the unique demographics of the institution’s customers, clients, vendors, and other relevant stakeholders as today’s paying clients and consumers want to be taken care of by employees who look like them, speak their language, and understand their individualized needs.

An initial starting point can be to assess and audit the current demographics of employees, their views on diversity/inclusiveness, and then design relevant diversity training based on their needs. Dressler (2012) states that an audit is basically an analysis by which an organization measures where it currently stands and determines what it has to accomplish to improve its HR function. “An organizational audit reveals how an organization is currently capturing, storing, using, and sharing data, information, and knowledge” (Tacchi, 2013, para, 1). According to Allahand and Mujtaba (2016, p. 20), Gary Dressler offers the following steps for auditing:

· decide on the scope of the audit;

· draft an audit team;

· compile the checklists and other tools that are available;

· know your budget;

· consider the legalities;

· get top management support;

· develop the audit checklist;

· collect the data about the company and its HR practices;

· benchmark the findings;

· provide feedback to your firm’s HR professionals and senior management; and

· create action plans.

One aspect to an audit would deal with workforce diversity to make sure it represents the unique qualities of the organization’s customers (Mujtaba, 2010).

There are a plethora of steps when conducting an audit within an organization. The first step is to design a protocol, which is directed at all groups of employees and the human resources department. Second, administering a survey pilot is essential. The design of the survey will be the stepping stones of quality of responses. It is also crucial to let employees within the organization know that whatever they share with the auditor about the organization or company is kept within confidentiality boundaries between the auditor and the employee. The auditor should focus on building a bond of trust with the employees that the information gathered and recorded will not be held against them in anyway and will be conducted in a professional manner. The next step is to conduct the audit thoroughly and carefully in order to achieve the most profound conclusions. Lastly, analyzing the results to conclude thorough and clear findings. Following these steps can clarify what the goals are and what issues an organization must address to become successful when auditing. At this point in time the organization should know what direction it wishes to go in and how the company can peruse the organization’s goals.

After a successful audit, there are many positive steps that the organization can take to have an inclusive work environment by providing relevant diversity training. Possessing an inclusive environment requires that all employees and managers are aware of the skills needed to support their diversity initiatives. Diversity training is a prime step to take to develop awareness and to increase the knowledge and sensitivity to diversity issues within the organizational boundaries. It allows everyone to acquire and use a set of relevant skills that enable them to deal effectively with diversity within the firm and around the vicinity. Training sessions must focus on the associates’ cultural competence, which are the attitudes, skills and behaviors that allow them to work effectively across cultural differences both within and outside of the organization. Such diversity audits and training will help the organization create a more efficient and effective as well as fair and just workplace; and it will also help to avoid civil rights lawsuits.

12. Recommendations for management

Based on the legal analysis and commentary, the preceding discussion of corporate culture and diversity training, and the knowledge and experience of the authors, the following recommendations are offered to employers and managers in order to avoid liability. The business necessity defense must be clearly based on the job applicant’s or employee’s ability to perform legitimate and necessary work duties, for example, to be able to perform the job in an efficient, safe, and effective manner. Employers thus must be able to show how specific knowledge, skills, education, training, backgrounds, as well as height, weight, strength, and dexterity are legitimate qualifications that directly relate to successful job performance.

Concerning employment tests to measure knowledge and/or ability it is important for the employer to ascertain if: they are professionally developed; they are neither designed to be used or intended to be used in a discriminatory manner; they fairly measure knowledge or skills required by the job or class of jobs; and they are supported by empirical data showing that they are predictive of or correlated with important aspects of work conduct which are relevant to the particular job or position for which the applicant or candidate is being evaluated (Olatunde, 2014).

Next, regarding background checks, particularly criminal background checks, we offer the following recommendations: first, it is important to note that the EEOC does not prohibit employers from using background checks and obtaining criminal background reports about job applicants or employees. Employers must administer employment selection standards and procedures in a fair manner, that is, without regard to race, color, national origin, sex, religion, age, or disability in order to avoid disparate treatment liability. The employer must ensure that employment selection standards and procedures are validated for the purposes and positions for which they are applicable; that is, make sure they are both job-related and justified by business necessity (Cavico et al., 2014; Loafman and Little, 2014, p. 292).

Specifically, regarding criminal background checks the employer initially must ascertain if there are any laws that prohibit or limit the use of criminal background checks in hiring and the extent these laws apply to private sector employment. Conversely, the employer must ascertain if there are any federal laws and regulations that require such background checks. Be cognizant that regarding disparate impact liability employers should not use a policy or practice that excludes people with certain criminal records if the policy or practice significantly disadvantages individuals of a certain race, national origin, or other protected characteristic, and does not accurately predict who will be a responsible, reliable, or safe employee. As such, it is always best to proceed on a case-by-case basis in reviewing an applicant’s suitability for a position or promotion. Struebing (2016, p. 512) thus advises that employers take a “risk management” approach when hiring ex-offenders, that is, to consider “the risk of recidivism, the amount of time passed since an arrest or conviction, the nature of the underlying offense, and the type of job sought (because) all inform how relevant the past behavior is to create a safe employment environment.”

The employer, most importantly, should ascertain if a facially neutral employment practice, such as a criminal background check, has an adverse or disproportionate discriminatory impact on a protected group. If there is no disparate impact, be prepared to demonstrate that fact with adequate evidence to government regulators. If a case is brought against the employer, the employer must be prepared to present local statistics, applicant data, and available recruitment pool data to demonstrate that its policies and practices do not have a disparate impact on protected classes. If there is an adverse or disparate impact, be prepared to justify the standard, such as no criminal record, as a job-related one as well as consistent with business necessity. If a selection standard or procedure, such as a criminal background check, disproportionately screens out a protected group, even though it arguably may be job-related as well as justified by business necessity, determine if there is an equally effective alternative measure with less discriminatory or adverse impact (Cavico et al., 2014).

Credit checks should only be used if a job applicant’s or employee’s credit background is directly related to job performance and is justified by business necessity. Aamodt (Equal Employment Opportunity Commission, 2010d, p. 2) further advises to do any credit check in the context of an overall “thorough background check” since a poor credit rating may be caused by factors beyond an applicant’s control, such as illness or divorce.

Another area of concern for employers and managers will be if the employer has a “blanket” policy of not hiring the “unemployed” or job-less since such a policy could produce a disproportionate and adverse effect on minorities, thereby triggering disparate impact liability (Williams, 2013; Jolly-Ryan, 2012). As pointed out by Jolly-Ryan (2012, p. 196): “With more frequency, employers now require job seekers to be ‘currently employed’ as a prerequisite for available job openings.” Consequently, an employment policy of hiring only the currently employed and consequently discriminating against the job-less could result in disparate impact liability under civil rights laws.

The employer, therefore, should provide training to managers, especially human resource managers, hiring officials, and other decision-makers as to employment legal principles generally and particularly as to the proper formulation and use of selection standards and procedures used in the hiring process in order to make sure managers understand the legal, appropriate, and effective use of such measurements for particular jobs or positions. It is advised to keep managers up-to-date with changes in job or position requirements and thus keep selection standards and procedures current (Cavico et al., 2014).

Finally, regarding the Ricci v. DeStefano (2009) decision, employers and managers must be aware that the law therein applies not just to tests but to any type of policies, procedures, and standards used to evaluate, rank, and sort current and potential employees. Of course, it is not unlawful for the employer to hire or promote employees based on the results of professionally developed ability tests, assuming obviously that the tests are not designed to be used in a discriminatory fashion. However, it is essential for the employer to demonstrate that the tests or educational requirements are predictors of, or significantly related to, important components of work behavior and successful job performance. Accordingly, if a test is designed in a good faith and in a careful manner to be race-, national origin-, and gender-neutral, then the employer need not, and should not, disregard the results even though they are different from what the employer expected and have a harmful effect on protected groups. The employer also must be keenly aware that the Ricci v. Destefano (2009) decision stands for the proposition that for an employer to disregard the test there not only must be a disparate and adverse impact on minority employees or applicants, but also, significantly, that there must be “a strong basis in evidence” that the test is somehow flawed or inadequate. So, the authors can still recommend that employers and managers should, use tests and other selection measures when making hiring and promotion decisions, but make sure that the tests and all the selection processes are valid, job-related, justified by business necessity, non-discriminatory, and bias-free. And for the employer to ignore any disparate and harmful results of such a valid test on minorities and other protected groups will be exceedingly difficult and problematical indeed.

13. Summary

The disparate impact theory under Title VII is a controversial and complicated area of civil rights laws. The salient feature of disparate impact is that this legal theory allows a plaintiff job applicant or employee to sustain a case of illegal discrimination without providing any evidence of a discriminatory motive. As opposed to the disparate treatment liability is imposed based on disproportionate adverse results and not discriminatory intent. Disparate impact is a challenging area of the law due to the many court interpretations and applications of the doctrine as well as EEOC guidelines and legal actions. There is a great deal of legal and management commentary too.

The authors have tried to explicate the fundamental aspects of the disparate impact theory and its implications for employers and then provide recommendations in order to avoid legal liability. In examining disparate impact case law one can perceive that the courts are seeking to balance the legitimate interests of the employer to make hiring and promotion decisions that the employer deems necessary for its business with the interests of the employee to be free from discrimination, direct or indirect, in employment. There is also the societal good of removing as many barriers to employment as reasonably possible and thereby to promote employment opportunities for all individuals in every diverse community.

Bottom of Form

Bottom of Form