This page contains entries under the topic: "Discrimination - Race" | Main
Punitive damages without an award of compensatory damages.
January 03, 2008 by Ross Runkel at LawMemo
Abner v. The Kansas City So RR (5th Cir 01/02/2008)
Eight African American employees sued claiming a work environment hostile to race, in violation of Title VII and 42 USC 1981. A jury returned a verdict finding the employer liable, awarded no compensatory damages, and awarded $125,000 in punitive damages. The 5th Circuit affirmed.
The evidence, which extended over a ten year period, indicated that the employees were subjected to racial graffiti, a noose hanging outside a door, racially derogatory comments, and discriminatory assignments. The jury found that supervisors caused and/or failed to properly respond to this racially derogatory behavior.
(1) The court held that a punitive damages award under Title VII and Section 1981 need not be accompanied by compensatory damages. This was based on the "plain language" of the statute, the legislative history, and the purpose of punitive damages. Any concern about unbounded jury discretion is directly addressed by the statutory cap on punitive damages. Due to the statutory cap, it is not necessary for a trial court to award "ceremonial" nominal damages of $1 to each plaintiff.
(2) The court rejected the employer's argument that an award of punitive damages violates due process under the test in BMW of North America v. Gore, 517 US 559 (1996), saying that "the three-factor Gore analysis is relevant only if the statutory cap itself offends due process." As with cases in which punitive damages accompany nominal damages, "a ratio-based inquiry becomes irrelevant."
(3) The court held that it was proper to allow the plaintiffs to testify about conduct over a ten year period. National Railroad Passenger Corp v. Morgan, 536 US 101 (2002) said that if "an act contributing to the claim occurs within the filing period, the entire time period of the hostile environment may be considered." To the extent that there was testimony outside of the ten year period, it did not cause prejudicial error.
|
|
2.5 MILLION for harrassing one employee
January 03, 2008 by Ross Runkel at LawMemo
Here's the EEOC press release:
EEOC Says African American Electrician Subjected to ‘N-Word’ and Threats of Lynching at Worksites Across the Country
HONOLULU -- The U.S Equal Employment Opportunity Commission (EEOC) today announced a major settlement of a race discrimination and retaliation lawsuit against Lockheed Martin, the world’s largest military contractor, for $2,500,000 and other relief on behalf of an African American electrician who was subjected to a racially hostile work environment at several job sites nationwide – including threats of lynching and the “N-word.”
The monetary relief for former Lockheed employee Charles Daniels is the largest amount ever obtained by the EEOC for a single person in a race discrimination case, and one of the largest amounts recovered for an individual in any litigation settlement by the agency. Additionally, the Bethesda, Md.-based company agreed to terminate the harassers and make significant policy changes to address any future discrimination, the EEOC said at a press conference in Hawaii.
The EEOC’s suit, filed in August 2005, alleged that Daniels was subjected to severe racial harassment while working on military aircrafts as part of a field service team in Jacksonville, Fla., Whidbey Island, Wash., and Oah’u, Hawaii. The EEOC charged that Daniels was the target of persistent verbal abuse by coworkers and a supervisor whose racial slurs and offensive language included calling him the “N-word” and saying “we should do to blacks what Hitler did to the Jews” and “if the South had won then this would be a better country.” Daniels was also subjected to multiple physical threats, such as lynching and other death threats after he reported the harassment. Despite its legal obligations, Lockheed failed to discipline the harassers and instead allowed the discrimination against Daniels to continue unabated – even though the company was aware of the unlawful conduct.
Commenting on the settlement, Daniels said: “As an armed forces veteran who swore to defend the rights and interest of Americans around the globe, I find it sad that the U.S. government had to sue its largest defense contractor Lockheed Martin -- whose slogan is ‘We never forget who we’re working for’ -- to protect my rights here at home!”
Daniels added, “I am pleased that we stood up for justice, because it should help all hard-working Americans of every race and gender to know that we have rights and protections guaranteed under the laws of this nation.”
EEOC Regional Attorney William Tamayo said, “This is a very good resolution because Lockheed Martin agreed to terminate and permanently bar Daniel’s harassers from employment. It sends a powerful message that racism cannot and must not be tolerated.”
Raymond Cheung, the EEOC attorney who led the government’s litigation effort, added, “To combat the harassment and threats faced by Mr. Daniels is at the heart of why the EEOC was created. Despite concerns of retaliation, this man had the courage to stand up and make public what happened to him, in an effort to ensure that it would not happen to anyone else. It has been a once-in-a-lifetime honor to work on this case.”
The litigation and consent decree were filed by the EEOC under Title VII of the Civil Rights Act in the U.S. Court for the District of Hawaii (U.S. Equal Employment Opportunity Commission v. Lockheed Martin, CV-05-00479).
EEOC Honolulu Local Office Director Timothy Riera praised the agency’s lead investigator in the case, Gloria Gervacio, and said: “The overt harassment to which Mr. Daniels was subjected in Hawaii represents some of the most severe misconduct this office has come across. It is imperative that employers here take proactive measures to ensure that discrimination complaints are taken seriously and that all employees work in an environment free of harassment.”
Racial harassment charge filings with EEOC offices nationwide have more than doubled since the early 1990s from 3,075 in Fiscal Year 1991 to approximately 7,000 in FY 2007 (based on preliminary year-end data). Additionally, race remains the most frequently alleged basis of discrimination in charges brought to the EEOC, accounting for about 36% of the agency’s private sector caseload.
On Feb. 28, 2007, EEOC Chair Naomi C. Earp launched the Commission's E-RACE Initiative (Eradicating Racism And Colorism from Employment), a national outreach, education, and enforcement campaign focusing on new and emerging race and color issues in the 21st century workplace. Further information about the E-RACE Initiative is available on the EEOC’s web site at http://www.eeoc.gov/initiatives/e-race/index.html
|
|
Supreme Court will decide 42 USC Section 1981 retaliation case
September 25, 2007 by Ross Runkel at LawMemo
CBOCS West, Inc. v. Humphries (certiorari granted 09/25/2007)
Details: http://www.lawmemo.com/supreme/CBOCS/
Humphries sued under 42 USC Section 1981 claiming that his employer discharged him in retaliation for complaining to managers about (a) disciplinary actions taken against him allegedly because of his race, and (b) the discharge of another employee allegedly because of that employee's race.
The 7th Circuit held (2-1) that 42 USC Section 1981 provides a cause of action for retaliation.
The US Supreme Court granted certiorari to review the 7th Circuit's judgment.
|
|
Walgreens: "store assignments based on race"
March 08, 2007 by Ross Runkel at LawMemo
The EEOC claims Walgreens assigns managers, trainees, and pharmacists based on race - assigning them to low-performing stores and to stores in African American communities because of their race.
[Details in EEOC press release]
EEOC St. Louis District Director James R. Neely, Jr., said, "Essentially, Walgreens has made store assignments based on race. This policy has served to restrict the opportunities for advancement of African American employees at Walgreens stores nationwide."
So the EEOC has sued Walgreens in the U.S. District Court for the Southern District of Illinois.
A group of current and former African American managers filed a private lawsuit making similar allegations in June 2005. That lawsuit is currently pending in the U.S. District Court for the Southern District of Illinois, and the plaintiffs in that case have asked the court to certify it as a class action.
|
|
Ash v. Tyson tries a comeback
January 18, 2007 by Ross Runkel at LawMemo
Less than a year after the US Supreme Court remanded Ash v. Tyson Foods to the 11th Circuit, the case is trying to make a comeback. [Details]
Plaintiffs have filed a petition for certiorari, and the case is on the Court's conference calendar for January 19.
And the petitioners' Reply Brief points to extensive plagiarism (my word) in which the 11th Circuit copied from the defendant's brief, and "reproduces even the typographical and grammatical errors." An Appendix to the Reply Brief sets out a detailed comparison of the brief and the opinion.
A manager called an African-American supervisor "boy," and the 11th Circuit said that could not be evidence of racial animus because the comment was not "black boy." The Supreme Court told the 11th Circuit to be a bit more realistic about the context of the word "boy" rather than categorically excluding it as evidence of pretext in a Title VII case. The 11th Circuit took another look and decided that "boy" in context could not have had any racial significance.
As evidence of pretext in a Title VII case two black employees had evidence that their qualifications were better than the qualifications of the folks that actually got the promotions they sought. The 11th Circuit said this evidence could not be used unless "the disparity in qualifications is so apparent as virtually to jump off the page and slap you in the face." The Supreme Court thought that was "unhelpful and imprecise" and sent the case back for some true legal reasoning. The 11th Circuit then applied the rule that "disparities in qualifications must be of such weight and significance that no reasonable person, in the exercise of impartial judgment, could have chosen the candidate selected over the plaintiff for the job in question."
My view:
The qualifications issue badly needs Supreme Court review. Courts that follow some form of the "slap in the face" test (even when dressed up in fancy legal lingo) have got it backwards. It's for the jury to make any inferences about evidence unless no reasonable juror could make the inference. The 11th Circuit's test selects one type of pretext evidence for special treatment, and that evidence never gets to a jury.
The "boy" question is a serious one. However, I think the 11th Circuit is probably right in saying that the plaintiffs did not produce the right kind of evidence to show that the word was being used in its nasty and insulting sense.
Original 11th Circuit decision.
Supreme Court decision.
Second 11th Circuit decision.
Petition for certiorari.
Petitioners' Reply Brief (containing Appendix)
|
|
Supreme Court takes up "cat's paw" case
January 06, 2007 by Ross Runkel at LawMemo
It's called "cat's paw." A human resources manager decides to fire an employee she doesn't know, based mainly on information from a supervisor. The supervisor has a history of racism. So the question is whether the employer is insulated from liability because the manager didn't know the employee was black.
The case: BCI Coca-Cola Bottling Co v. EEOC, certiorari granted January 5, 2007. [Details, case below, etc.]
EEOC claimed that BCI discharged Stephen Peters in violation of Title VII. The trial court granted summary judgment for BCI; the 10th Circuit reversed. The US Supreme Court granted certiorari to review the 10th Circuit decision.
BCI discharged Peters, who is black, for insubordination. EEOC claimed that BCI discriminated on the basis of race because similarly situated white and Hispanic employees were treated less harshly. The discharge decision was made by a human resources manager based on information provided by Peters' immediate supervisor plus a review of Peters' personnel record. The HR manager did not know Peters was black. The supervisor not only knew Peters’ race but allegedly had a history of treating black employees unfavorably and making disparaging racial remarks in the workplace.
The formal Question Presented in the Supreme Court is:
"Under what circumstances is an employer liable under federal anti-discrimination laws based on a subordinate’s discriminatory animus, where the person(s) who actually made the adverse employment decision admittedly harbored no discriminatory motive toward the impacted employee."
|
|
EEOC hits FedEx with broad subpoena
June 07, 2006 by Ross Runkel at LawMemo
EEOC is investigating FedEx on charges of a pattern and practice of discriminating against African-Americans and Latinos in promotion.
FedEx refused to comply with an administrative subpoena, and EEOC has gone to court to enforce the subpoena. Details in the EEOC press release - EEOC Investigating FedEx on Charges of Companywide Race, National Origin Discrimination.
The claim against FedEx is that it uses a cognitive ability test known as a Basic Skills Test for promotion from the entry-level position of handler to positions of customer service agent, ramp transporter driver, or courier.
The claim is that this test has an adverse impact on African-Americans and Latinos, and discriminates against them in violation of Title VII.
Claims like this require complex statistical evidence, much of which must come from the employer's own records. See Disparate impact #20 from Employment Law 101.
|
|
Herrera today, gone tomorrow
June 02, 2006 by Ross Runkel at LawMemo
Strange. The 10th Circuit filed an opinion on Tuesday and withdrew it on Wednesday.
The order:
The opinion entered in this matter on May 30, 2006, is withdrawn. The appeal shall be restored to pending status.
The case: Herrera v. Lufkin Industries (10th Cir 05/30/2006, 05/31/2006).
Findlaw has dutifully scrubbed the original opinion off its web site. We've captured the original 05/30/2006 opinion.
I thought the case was pretty ordinary. Some racist comments which the court thought were not pervasive or serious enough to create a legally actionable offensive work environment.
Employment Law Memo provided this summary:
Herrera sued the employer, asserting claims for (among other things) hostile environment race-based harassment under Title VII, breach of contract, and intentional infliction of emotional distress (IIED). The trial court granted summary judgment in favor of the employer on the first two claims, and judgment as a matter of law in favor of the employer on the third. The 10th Circuit affirmed, concluding that 1) the alleged conduct was not sufficiently "severe or pervasive" to constitute actionable harassment under Title VII; 2) Herrera's employee handbook didn't constitute a contract, and Herrera wasn't constructively discharged even if there had been a contract; and 3) the conduct underlying Herrera's IIED claim was not sufficiently extreme and outrageous to support that claim.
|
|
EEOC policy on race and color discrimination
April 19, 2006 by Ross Runkel at LawMemo
EEOC has new (04/19/2006) information on Race and Color Discrimination in Employment.
|
|
One million dollars for a hangman's noose
March 22, 2006 by Ross Runkel at LawMemo
"It is shocking that such egregious racial harassment still occurs in the 21st century workplace, more than 40 years after passage of the landmark Civil Rights Act." Quoting EEOC’s Houston District Director.
EEOC got a $1 million settlement of a racial harassment case. The allegations were:
A black employee was subjected to a barrage of racial epithets, culminating in an incident where white co-workers placed a noose around his neck in the company bathroom and choked him. The employer did not stop its employees, including managers, from harassing the employee on the basis of his race (black) and subjecting him to a racially hostile work environment - including verbal and physical abuse.
More details: EEOC press release.
|
|
Racial slurs but no smoking gun
March 20, 2006 by Ross Runkel at LawMemo
Subtitle: Let the judges rather than the jury weigh the evidence.
Sub-subtitle: So long Ash v. Tyson Foods.
Wal-Mart fired Myron Canady. Well, actually, Canady's supervisor's boss' boss fired him.
Canady, an African-American, claimed that race was a factor, and sued under Title VII. He pointed to what looked like a smoking gun: His supervisor had used many of the classic and most offensive racial slurs. "Nigga" and "lawn jockey." He called himself a "slave driver" and said all African-Americans look alike, and said Canady's skin color seemed to wipe off onto towels.
Wal-Mart said Canady was fired because he was insubordinate. He yelled at his supervisor's boss in front of customers and other employees.
On summary judgment motion, a key issue is whether Canady has evidence that insubordination was a pretext, and that race was the true reason.
You might think that the supervisor's continued use of racial comments would do it pretty nicely, especially after the US Supreme Court's decision in Ash v. Tyson Foods (US Supreme Court 02/21/2006) which unanimously chastised the 11th Circuit for ignoring use of the word "boy." Looks a bit like a smoking gun.
Not in the 8th Circuit under these facts. The court seemed to think the wrong guy was holding the smoking gun. The supervisor who made the comments was not the one who made the discharge decision (it was his boss' boss), and the comments were not made in the context of that decision.
Canady also claimed he was subjected to a racially hostile work environment in violation of Title VII.
On this point, the court seemed to think the gun wasn't all that smoky. The supervisor apologized for his "Nigga" comment and did not repeat it. The "slave driver" comment was, in context, not a sign of racial bias but merely descriptive of the supervisor's reputation.
Read all about it: Canady v. Wal-Mart Stores (8th Cir 03/17/2006) (by 2-1 vote).
Can this be? I have to agree with the dissent: There was enough evidence to send the case to a jury to decide what the facts really were.
As for harassment, there was a lot of extremely offensive racial commentary coming from the supervisor during a seven month period.
As for the discharge, the majority runs roughshod over Ash v. Tyson Foods. The dissent points out that reasonable jurors could infer that the supervisor was involved in the discharge decision and could infer that the employer's proffered reason was a pretext. Also, the dissent points out that Canady's affidavit denied any disrespect for Wal-Mart management and denied knowingly engaging in insubordination.
My view: The majority weighed the evidence, rather than letting a jury do that. Summary judgment is not the place for a judge to decide contested issues of fact.
Do I smell a certiorari petition?
|
|
Burden of proof in disparate impact case
March 04, 2006 by Ross Runkel at LawMemo
Circuit court are split 3-1 on whether it is the plaintiff (employees) or defendant (employer) who has the burden of proof on the issue of the availability of a less discriminatory alternative employment practice in a disparate impact case.
The latest entry is IBEW v. Mississippi Power & Light (5th Cir 03/02/2006), holding that the burden is on the plaintiff.
Basic facts:
- The union demonstrated that the employer had an employment practice that had a disparate racial impact on African-American employees. The employment practice was the method setting cutoff scores on a validated standardized test.
- The employer demonstrated that its practice was both "job related" and "consistent with business necessity."
- Neither party made a showing that there was or was not an alternative selection device that would have a lesser racial impact and also serve the employer's legitimate interest.
The statute is part of the Civil Rights Act of 1991: 42 USC Section 2000e-2(k)(A)(ii):
An unlawful employment practice based on disparate impact is established ... only if --(i) a complaining party demonstrates that a respondent uses a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin and the respondent fails to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity; or
(ii) the complaining party makes the demonstration described in subparagraph (C) with respect to an alternative employment practice and the respondent refuses to adopt such alternative employment practice.
My view: The burden of proof is on the plaintiff.
The statute gives the plaintiff two ways to go, separated by the word "or." The plaintiff failed under subsection (i) because the employer did shoulder its burden of proving that the practice was "job related for the position in question and consistent with business necessity."
Therefore, the case moved to subsection (ii), which leaves no doubt that the burden is on the plaintiff. How could the language be more plain?
The circuit courts are split on this issue. The 3rd and 11th Circuits have held that the burden is on the plaintiff. The 8th Circuit has held that the burden is on the defendant.
Read more about this case, the circuit court split, and the possibility of this issue going to the US Supreme Court at Michael Fox's Jottings By An Employer's Lawyer.
|
|
42 USC Section 1981 limited to contracting parties
February 22, 2006 by Ross Runkel at LawMemo
Domino's Pizza v. McDonald (US Supreme Court 02/22/2006): The US Supreme Court holds (unanimously) that a plaintiff who lacks any rights under an existing contractual relationship with the defendant, and who has not been prevented from entering into such a contractual relationship, cannot bring suit under 42 USC Section 1981.
Domino's Pizza had several contracts with JWM Investments, a corporation. McDonald, an black man, was an officer and the sole shareholder the JWM corporation. McDonald personally was not a party to the contracts. McDonald sued Domino's claiming that Domino's terminated its contracts with JWM because of racial animus toward him. The suit was brought under 42 USC Section 1981 which provides that "All persons within the jurisdiction of the United States shall have the same right ... to make and enforce contracts ... as is enjoyed by white citizens." The trial court dismissed the suit, saying McDonald did not have standing because he was not a party to the contracts. The 9th Circuit reversed, saying "the same discriminatory conduct can result in both corporate and individual injuries." The US Supreme Court reversed the 9th Circuit decision.
|
|
Supreme Court - "Boy" can be probative of racial bias
February 21, 2006 by Ross Runkel at LawMemo
If a manager refers to a black employee as "boy," is that evidence of racial animus?
The 11th Circuit thought not, unless "boy" was modified by some obviously racial adjective such as "black" or "white." Thankfully, the US Supreme Court has a better grip on reality. Ash v. Tyson Foods (US Supreme Court 02/21/2006)
Two African-Americans were superintendents who were denied promotions. They sued claiming race discrimination in violation of Title VII and 42 USC Section 1981. The 11th Circuit decision went against them. The US Supreme Court granted certiorari and remanded the case in a per curiam decision, without hearing oral argument.
There was evidence that the plant manager (the decisionmaker) referred to each of the employees as "boy." The 11th Circuit held that use of "boy" alone (without adding "white" or "black") was not evidence of racial animus. The US Supreme Court said this was error because "The speaker's meaning may depend on various factors including context, inflection, tone of voice, local custom, and historical usage."
|
|
Non-contracting party standing: 42 USC 1981
December 07, 2005 by Ross Runkel at LawMemo
42 USC Section 1981 forbids race discrimination in a contractual relationship. Does a non-contracting party have standing to sue for a violation?
Assume this: ABC Corporation has a contract with XYZ Corporation. XYZ is wholly owned by John McDonald, who is black. ABC terminates the contract because of McDonald's race.
- Question 1: Can XYZ recover damages against ABC? (I suppose so, but that's not the question I want to address.)
- Question 2: Can McDonald recover damages against ABC? Another way to ask that: Does McDonald have "standing" to sue when he was not a party to the contract?
The US Supreme Court heard oral arguments on December 6 on Question 2 in Domino’s Pizza, Inc. v. John McDonald. [Summary and briefs]
SCOTUSblog summarizes the arguments here: Recap of Yesterday’s Argument: Domino’s Pizza, Inc., et al. v. John McDonald
My view:
- The Court has to figure out what Congress intended when it wrote the original version of the statute over 100 years ago.
- In those days hardly anybody (hardly any lawyers, that is) thought that a contract suit could be brought by anybody other than the two corporations that signed the contract. I think a majority of the Court will grab that idea to conclude that Congress never intended for non-contracting parties to have rights under Section 1981.
- Some of the Justices have sympathy for McDonald's situation, but the Justices' personal desires should not get in the way of interpreting Congressional intent.
- Another point: McDonald chose to do business through the corporate form. That provided him with certain advantages, such as limited liability. The disadvantage is that he's not a party to any contracts entered into by his corporation.
|
|
42 USC 1981 suit by non-contracting party
December 04, 2005 by Ross Runkel at LawMemo
Does a person who was not a contracting party have standing to sue under 42 USC 1981? The US Supreme Court will hear arguments on that question on December 6 in Domino's Pizza v. McDonald (No. 04-0593).
Federal Circuit Courts have provided conflicting answers.
Here's what happened in the 9th Circuit:
- Domino's Pizza had entered into several contracts with JWM Investments, a corporation.
- McDonald, an African-American, was an officer and the sole shareholder the JWM corporation.
- McDonald personally was not a party to the contracts.
- McDonald sued Domino's claiming that Domino's terminated its contracts with JWM because of race.
- The suit was brought under 42 USC Section 1981 which provides that "All persons within the jurisdiction of the United States shall have the same right ... to make and enforce contracts ... as is enjoyed by white citizens."
- The trial court dismissed the suit, saying McDonald did not have standing because he was not a party to the contracts.
- The 9th Circuit reversed, saying "the same discriminatory conduct can result in both corporate and individual injuries."
- The US Supreme Court granted certiorari to review the 9th Circuit decision.
Decision below (unpublished): McDonald v. Domino's Pizza (9th Cir 06/18/2004)
Briefs: http://www.lawmemo.com/docs/us/dominos/
|
|
State secrets trump Title VII
August 03, 2005 by Ross Runkel at LawMemo
How can a covert CIA agent bring a Title VII action without running head-on into the "state secrets doctrine"?
Jeffrey Sterling, an African-American, was a covert CIA agent who claimed racial discrimination by CIA management plus retaliation for using internal EEO procedures.
In defending Sterling's Title VII action, the CIA Director filed a declaration with the court saying that this case would require disclosure of highly classified information about the identity, locations, and assignment of CIA operatives.
The judge reviewed the declarations ex parte and in camera.
Conclusion: Case dismissed. The 4th Circuit affirmed. Sterling v. Tenet (4th Cir 08/03/2005). http://caselaw.findlaw.com/data2/circs/4th/041495p.pdf
- Proving a prima case would require revealing secret information.
- Requiring the government to show a legitimate non-discriminatory reason would involve disclosure of secret information.
- Proof of the facts in this case would require attendance by witnesses who would be covert CIA operatives.
- Proceeding under special procedures would be too risky.
Bottom line: Dismiss the case.
My view: An unusual situation that most lawyers will never confront.
|
|
Supreme Court gets 42 USC 1981 case
April 25, 2005 by Ross Runkel at LawMemo
Section 1981 prohibits race discrimination in the formation, termination, and performance of contracts. Can a person who is not a contracting party recover under 1981?
That's what the US Supreme Court will decide in Domino's Pizza v. McDonald, Docket No. 04-593, certiorari granted April 25, 2005.
The allegations were: McDonald, an African American, was the president and main shareholder of JWM, a corporation. JWM entered into contracts with Domino's. Domino's made it difficult or impossible for JWM to perform, propelling JWM into bankruptcy. JWM and Domino's settled. McDonald sued Domino's under Section 1981 claiming financial and emotional loss. He claimed that the downfall of JWM was caused by racial discrimination on the part of Domino's. The allegation have not been proved. The trial court granted summary judgment for the Domino's.
The 9th Circuit reversed, saying that McDonald, even though he personally had no contractual relationship with Domino's, had standing to sue Domino's for alleged injuries that he personally suffered. The 9th Circuit's decision (06/18/2004) was not reported. See 2004 WL 1380296.
The 9th Circuit relied on its earlier case Gomez v. Alexian Bros. Hosp., 698 F.2d 1019 (9th Cir 1983). The Circuits are split on this theory. See Guides Ltd v. Yarmouth Group, 295 F.3d 1065 (10th Cir 2002).
|
|
This corporation was a 42 USC 1981 "person"
April 22, 2005 by Ross Runkel at LawMemo
Section 1981 prohibits race discrimination relating to contract formation and performance. A corporation does not have a "race" so you would think a corporate independent contractor could not be a "person" under 1981. Usually true, but here's an exception.
Bains LLC was a corporation, and all the stock was owned by three brothers who were US citizens born in India. The brothers and many of the corporation's employees were religiously observant Sikhs who wore turbans and long beards.
Bains LLC contracted with ARCO to haul fuel to ARCO's Seattle terminal. Bill Davis was ARCO's lead man at the terminal, and he made life difficult for Bains' drivers - verbally harassing them, slowing them down, making them stand in the rain, etc. Bains complained to Davis' boss, the abuse continued, Bains complained again. Then ARCO terminated Bains LLC without giving a reason and without the required 30 day notice.
A jury returned a verdict for Bains: ARCO breached the contract - damages $50,000. ARCO discriminated on account of race - nominal damages $1 plus punitive damages of $5,000,000. Yes, five million dollars punitive damages on top of a one dollar compensatory damages, but 9th Circuit ordered the punitives reduced to no more than $450,000. Bains LLC v. ARCO Products (9th Cir 04/19/2005).
How can a corporation prevail under Section 1981? The 9th Circuit explains that Bains LLC "acquired an imputed racial identity." This was the theory used in Thinket Ink v. Sun Microsystems (9th Cir 2004).
My view: Perhaps a small corporation whose shareholders are all of one race should be treated as a Section 1981 "person," but not for the reasons given in the Thinket case. In Thinket the 9th Circuit analyzed whether a corporation could have "standing," and relied on the classical standing cases. Those cases might be relevant if the corporation is suing to redress injuries to others (e.g., shareholders, employees), but not so relevant when the corporation sues to redress an injury to itself. In those cases, the more relevant inquiry is one of pure statutory interpretation: Did Congress intend for a corporation to be a "person" under Section 1981? Perhaps, given 1981's history as a post-Civil War statute designed to eradicate the badges and incidents of slavery. In any event, the Bains case appears to be the prevailing view.
|
|
Four-fifths test is not a safe harbor
April 12, 2005 by Ross Runkel at LawMemo
"A selection rate for any race, sex, or ethnic group which is less than four-fifths (or eighty percent) of the rate for the group with the highest rate will generally be regarded by the Federal enforcement agencies as evidence of adverse impact, while a greater than four-fifths rate will generally not be regarded by Federal enforcement agencies as evidence of adverse impact." So says the EEOC regulation.
How does a Memphis police sergeant to get promoted to lieutenant? First pass a written test (whose cut-off score was never validated), and then move on to three other requirements.
The City had required a passing score of 70, but that resulted in a greater than 4/5 impact on African-American applicants, so the City reduced the passing score to 66. Black applicants who failed the test sued under Title VII claiming race discrimination, using the disparate impact theory.
The City's defense: No disparate impact proved because under the new cut-off score the impact was less than the four-fifths required by the EEOC regulation. In other words, there was some impact but not enough to trigger a requirement that the cut-off score be validated.
The trial court used other statistical methods as evidence of adverse impact. (a) The "T-test" which measures the difference in mean (i.e. - average) scores between minority and non-minority candidates. (b) The "Z-test" which measures statistical success among groups (i.e. - it computes the average scores of the passing candidates for each group and then compares those group averages).
The 6th Circuit (2-1) affirmed the trial court's finding of adverse impact, rejecting the City's argument that disparate impact could not be proved unless the impact satisfied the four-fifths rule. Isabel v. City of Memphis (6th Cir 04/11/2005).
The dissent was quite sure that previous authority in the circuit meant that no other statistical methods could be used if an employer satisfied the four-fifths rule. She thought the City properly "relied on the bright line four-fifths rule" and that plaintiffs should not be allowed to use "the newest statistical flavor of the month."
My view: It's too late in the day to argue that only one method of statistical analysis can be used to prove disparate impact. These cases are won or lost at the trial level, by persuading the court that one or another statistical method is truly indicative of whether the measured impact is merely a matter of chance.
|
|
|
Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc.
|
