US Law

EMPLOYMENT LAW: http://riskmgmt.biz/cle.htm/

Abbreviations used:

NS = Nutshell on Federal Employment Discrimination Law

ER = Employer, EE = Employee, ENT = Employment, K = contract,

pfc = prima facie case, legitimate nondiscriminatory reason = LNR / NDR = nondiscriminatory reason.

PART ONE: PROTECTING EMPLOYEES FROM STATUS DISCRIMINATION Chapter 1: Paradigms for Status Discrimination

A. Introduction

Note on Title VII of the Civil Rights Act of 1964 and other Federal Initiatives Against Race Discrimination in Employment Triumph of morality.

We distort the natural freedom of the labor market unlike other markets. How can this sacrifice of freedom be justified?

THREE IMPERFECTIONS in the LABOR MRKT: 1) lack of information; 2) immobility - accute for 2nd wage earner, family with illness & health insurance tied to employer; 3) "sunk cost" of experience

The workplace has become a primary social community in addition to an economic relationship. EEs gain personal satisfaction, emotional / psychological gratification. The labor market is not necessarily "free and efficient." ENT = more than just cash. People will not necessarily change jobs just to get a little more money. Noneconomic variables influence job selection and utility maximization.

Social Service Safety Net in USA - compares unfavorably to other industrialized nations. Presumes people prefer to work over unemployment.

Common Themes

1. Why are we using law at all to regulate a relationship that is primarily economic? (why not let ENT markets operate alone? )

a. To help diminish fraud in civil society and protect the unwary who cannot protect themselves (this is a limited answer)

b. Further dimension that transcends simple economics--E powerful psychological component: we define ourselves by our work.

c. Market for labor is vastly different than other commodities market. Info is different and people do not behave rationally in terms of economic factors. Microeconomic model is not strictly applicable.

Goals of Title VII: 1) Neutrality in hiring and promoting employees - alter current practices, and 2) Remediation - correct past wrongs, that is the justification for the impact portion. 42 U.S.C. Section 2000e

Extends anti-discrimination to private sector employers

Seeks to promote economic integration of blacks into society

Covers all private employers with 15 or more employees and all government employers, state, federal and local.

The Civil Rights Act of 1964, Section 703(a)

(codified at 42 USC Sections 2000e-2000e-17) - very sweeping prohibition

It shall be an unlawful ENT practice for an ER--

(1) to fail to refuse to hire or to discharge any individual or otherwise discriminate against individual with respect to his compensations, terms, conditions, or privileges of ENT, because of such individual's race, color, religion, sex, or national origin; or

(2) to limit, segregate, or classify his EEs or applicants for ENT in any way which would deprive or tend to deprive any individual of ENT opportunities, or otherwise adversely affect his status as an EE, because of such individual's race, color, religion, sex or national origin.

Also covers discrimination against whites & men. Compels neutrality.

Remember that Title VII depends for its enforcement on private actions by EEs. Congress relied on the private bar to represent (vindicate) those injured. This was a policy choice: using private rights to enforce public scheme requires Low Threshold to prove case (to keep the cases in court). [gets around 12(b)(6) motions] Makes it possible for plaintiff to get to court, stay in court, and pay attorneys - fee shifting for prevailing plaintiff.

B. Proving Individual Disparate Treatment

Main Inquiry in intentional discrim. cases: What was the ER's motive?

Under McDonnell Douglas, prima facie case creates the inference that the Defendant was motivated by an impermissible factor.

3-Step analysis (NS p. 70)

1. Plaintiff creates initial inference of illegal motivation by proof that as a member of a protected class, he was treated differently than a similarly situated person of another class. If proven, go to #2

2. Defendant has burden of articulating a legitimate, nondiscriminatory reason (LNR) for the treatment. (McDonnell Douglas); NOTE: Defendant's burden is NOT of persuasion--it is to produce evidence from which lawful motivation could be inferred (Burdine). Defendant must prove that the employee hired was "better qualified." If Defendant fails to present such reasons, judgment must be for Plaintiff.

3. If Defendant produces a LNR for its action, Plaintiff has burden to present evidence of a pretextual nature of Defendant's articulated reason. If π fails to produce proper evidence, judgment for Defendant. BUT, if Plaintiff produces sufficient evidence to raise an issue of fact as to Defendant's motivation, this evidence brings into focus the ultimate factual issue, namely Defendant's true motivation. Plaintiff carries the burden of persuasion (preponderance of the evidence) that Defendant was illegally motivated.

Cases:

McDONNELL DOUGLAS v. GREEN, 93 S. Ct. 1817 (1973) Green was a long-time civil rights activist. Defendant laid off Plaintiff, a mechanic, as a part of a general reduction in the workforce. Plaintiff protested that his firing and some of Defendant's other practices were racially motivated. In protest, Plaintiff and others engaged in a "stall-in" including unlawful trespass. Shortly thereafter, Defendant announced job openings. Plaintiff re-applied. Defendant rejected Plaintiff's application citing his participation in the stall-in and lock in. Plaintiff filed complaint with EEOC claiming violations of Sections 703(a)(1) and 704(a)--the latter section makes it unlawful to discriminate (retaliate ' 704) ag. someone "because he has opposed any practice made an unlawful ENT practice by this subchapter." EEOC found no probable cause to believe there was a violation of the Act and the trial ct. held that the EEOC finding barred suit. 8th Cir. Ct. of Appeals reversed, Supreme Court affirmed, and this remains the law today: The fact that the EEOC does not issue a right to sue letter does not bar suit under Title VII. (Filing of Title VII EEOC charge is a prerequisite for going to court; EEOC - mediate and merit determination)

Procedural Framework articulated by the Supreme Court in McDonnel Douglas:

1. Plaintiff must carry an initial burden of establishing a prima facie case of racial discrimination by showing:

a. that he belongs to a protected class;

b. that he applied for and was qualified for a job for which the ER was seeking applicants;

c. that despite his qualifications, he was rejected, and,

d. that, after his rejection, the position remained open and the ER continued to seek applications from persons of π's qualifications.

The prima facie showing allows the Plaintiff to stay in court; it is circumstantial evidence tending to give rise to the inference that race (or another impermissible quality) was a motive in the ENT decision. ER acted in a way not economically explicable.

2. If π establishes a prima facie case, the burden shifts to Δ to articulate a legitimate, nondiscriminatory reason. "Evidence that would allow inference of a nondiscriminatory reason" - low threshhold for ER.

Do not want to give ER incentives to hire on the basis of race - to pick among equally qualified candidates - just to avoid lawsuits.

If the Defendant establishes a reason with admissible evidence that IF BELIEVED, would explain the action, then the presumption is rebutted. The reason asserted by the employer need not be believed at this time. Ct takes the assertion AS IF BELIEVED. Credibility is not an issue until the trial.

Only burden of production on defendant. Burden of persuasion remains with the plaintiff throughout.

3. If Defendant gives a LNR, then Plaintiff must have a fair opportunity to prove that the articulated reason was pretext for discrimination. Burden then back on Plaintiff, with preponderence of the evidence.

what is the main thing this case shows: how the burden of proof shifts around in a Disparate Treatment case.

how demanding is the prima facie case requirement: not very demanding at all. The threshold is set low on purpose by statute.

why is the requirement that the plaintiff be in a protected class not demanding: since the statute prohibits all discrimination on race, sex, etc., everyone is really in a protected class. (?)

If, after a discrim. suit has been filed against it, the ER articulates a LNR for the decision, the π then presents additional evidence of discrimination which convinces the trier of fact that the π was discriminated against, it does not matter that the Plaintiff initially did not satisfy the 4 McDonnel-Douglas factors. (See U.S. Postal Board v. Aikens 460 US 711 (1983)).

TEXAS DEPT. of COMMUNITY AFFAIRS v. BURDINE, 101 S. Ct. 1089 (1981) (p. 30) TDCA hired Burdine. Burdine failed to receive a promotion and was fired. ER's LNR: Burdine was abusive to customers. Although she was subsequently rehired, she sued under Title VII alleging gender discrimination. District Court found for Defendant(ER). Court of Appeals reversed on the ground that Defendant failed to prove by a preponderance how its articulated reason rebutted Plaintiff's prima facie case. Reversed for EE. SCt. rejects 5th Circuit reasoning.

Issue: Does Defendant have the burden of persuasion as to the legitimacy of its articulated reason? NO.

Holding: Once a Plaintiff proves by a preponderance of the evidence, his prima facie case (pfc), then the burden shifts to the ER, not to prove but to rebut the pfc by producing evidence that its action was for a LNR.

Title VII does not require an employer to hire or promote a minority or woman over an equally qualified white male. ER may use any valid (constitutional) reason to select a candidate for a given position.

The ultimate burden of persuasion remains with the plaintiff at all times.

Once the presumption is established, the Defendant rebuts with the assertion of any other reason which is assumed to be believed. The ER did not bear the burden of persuading the court that it was motivated by its proffered reason; ER need only raise a "genuine issue of material fact as to whether it discriminated ag. the Plaintiff."

The Plaintiff then has the burden of showing the reason cited is erroneous and pretextual OR showing direct evidence of discriminatory motive. NOTE: if there is direct evidence it will be in the prima facia case and will usually result in settling.

If the reasons shown for the action are pretextual, the court assumes the Δ is hiding the real reason which is presumed to be illegitimate, i.e., discriminatory. Here is where the credibility of the asserted reasons for the action become an issue. NOTE: we still do not know the real motive, there is only the inference that it is illegal.

If there is direct evidence of illegal motive, then even if there were other justifiable reasons, the action is not allowed.

Thus, at stage two the ER "must clearly set forth, through the introduction of admissible evidence, the reasons for Plaintiff's rejection. The explanation provided must be legally sufficient to justify a judgment for the Defendant. If the Defendant carries his burden of production, the presumption raised by the pfc is rebutted, and the factual inquiry proceeds to a new level of specificity."

According to Burdine, the purpose for placing this burden of production on the ER at this early point is to sharpen the factual inquiry and aid the Plaintiff in the burden of showing pretext. (This goal may be sharply undercut by St. Mary's Honor Center, below)

Policy:

1. 5th Cir. approach would have required ERs to hire a minority applicant anytime they were equally qualified with other candidates.

2. Congress did not intend to grant such preferential treatment.

3. ERs would be tempted to discriminate against whites or males just to avoid the cost of the lawsuits.

ST. MARY'S HONOR CENTER v. HICKS, 113 S.Ct. 2742 (1993) (PRETEXT case: impeach D's articulated NDR for motivation) Hicks, black, was employed by a Missouri half-way house in a supervisory capacity. He had a new boss and got fired. Hicks was replaced by a white male. Hicks proved a prima facie case. ER articulated these nondiscriminatory reasons for the decision: (1) the severity of his workers' misconduct; (2) quantity of their misconduct. Hicks proved he was the only one fired for the conduct of people supervised, that people he supervised were not disciplined, and that those workers' conduct was not severe. D.Ct. found that Hicks had proved that the ER's reasons were pretext. But, the court said that it still did not believe that the firing was racially motivated (personal vendetta, not racial vendetta). Judgment for Defendant/ER. Ct./Ap. rev'd saying that, upon finding of fact of pretext, Plaintiff wins in a Title VII case.

Issue: Does the Court's rejection of the asserted NDR by the employer mandate judgment for Plaintiff? NO (5-4 decision). Alt: Does P win upon proof of pretext but not pretextual discrimination? NO

RULES: (1) Even if the Plaintiff proves a prima facie case and that the ER's articulated reasons are pretext, he still may lose on the ultimate question of racial motivation.

(2) Nothing in the law permits substituting for the required finding that employer's action was product of unlawful discrimination, the much different (and much lesser) finding that ER's explanation of its action was not believable.

(3) ER's burden at Stage 2 is only the burden of PRODUCTION. The McDonnel-Douglas pfc raises a Fed. R. Evid. 301-type presumption of discrimination. THUS if a Plaintiff proves a pfc by a preponderance of the evidence, and the ER meets the burden of production of articulating LNR for the decision, and these reasons are DISbelieved by the trier of fact, the Plaintiff nonetheless has the burden of proving by a preponderance of the evidence that the ER unlawfully discriminated. (It is possible for a Plaintiff to present a pfc, discredit the ER's articulated reasons and STILL lose Disparate Treatment claim--this is what happened to Hicks.)

(4) π then has the burden of rebutting the ER's stated reason (this burden "merges" with the ultimate burden of proof to show intentional discrimination).

St. Mary's explains the issue in the procedural context of a π's motion for directed verdict: "If a Defendant has failed to sustain its burden but reasonable minds could differ as to whether a preponderance of the evidence establishes a pfc, then a question of fact does remain, which the trier of fact will be called upon to answer."

(5) As the Supreme Court said "although [respondent/π] has proven the existence of a crusade to terminate him, he has not proven that the crusade was Racially Motivated." (quoting the D.Ct.) It was significant to the D.Ct. and the Supreme Court noted that there were blacks on the review committee and the number of blacks remained constant. (Personal vendetta but not racial vendetta)

Thus, the π cannot succeed INDIRECTLY; a showing of pretext requires a showing of "pretext for discrimination." "It is not enough . . . to disbelieve the ER; the fact finder must believe the π's explanation of intentional discrimination.

The rebuttal of the reasons given only proves that they were false, not that discrimination was the real reason. The π must still meet this burden. The trier of fact must decide, and evidence that the employer gave false reasons CAN lead to the inference that there was discrimination, it is not so as a matter of law. This gives great discretion to the trier of fact. In this situation, most of the time the Plaintiff will win.

The motive for the firing remains a mystery, it is only determined what it is not. In this case we can assume that the π was a jerk and for some reason the Defendant did not have enough evidence or chose not to use this as a defense, however, we can assume the judge saw it.

(Pat liked the dissent by Souter: If D gives a false reason, then the court has an even greater reason to grant P's inference of bad motive than from P's prima facie case).

Does St. Mary's v. Hicks gut Burdine? No--mostly you will win by showing that reasons are pretextual.

Burdine says that the Plaintiff can "succeed in this either directly by persuading the court that a discriminatory reason more likely motivated the ER or indirectly by showing that the ER's proffered reason is unworthy of credence." In other words, the π can either show pretext OR rebut the ER's evidence of nondis­crim­ination. St. Mary's labels this dictum contradictory and inexplicable and makes clear that a Title VII Plaintiff must prove his case, not just disprove the ER's articulated reasons. After St. Mary's, Plaintiff cannot win INDIRECTLY.

Burdine contemplates that there will rarely be direct evidence. Case will almost always revolve on facts that the employer knows but does not want discovered and the Plaintiff does not know but needs to prove.

PRICE WATERHOUSE v. HOPKINS, 109 S.Ct. 1775 (1989) (p. 38) - MIXED MOTIVE CASE. π worked for Δ for 5 years when she was proposed for partner. Denied partnership b/c not feminine enough. Good Motive: Interpersonal skills lacking, gruff, demanding. Bad Motive: Treated her different because she was a woman; conduct tolerated in men was penalized in women. Ct. of Appeals held that Defendant could prevail by proving by clear and convincing evidence that it would have made the same decision without regard to gender.

Issue: Is Title VII violated where both a discriminatory and legitimate motive lies behind an ENT decision? YES.

Rule: "Once a π in a Title VII case shows that a factor (gender) played a motivating part in an ENT decision, the Defendant may avoid a finding of liability only by proving by a preponderance of the evidence that it would have made the same decision even if it had not allowed the factor (gender) to play such a role."

O'Connor's concurrence wanted Plaintiff to show that an impermissible category was a substantial motivating factor - this change abrogates that difference. This decision was a plurality, so the answer is not entirely clear: a factor or a substantial factor.

Note: However, the Civil Rights Act of 1991 addresses the issue: new section 703(m) says that the statute is violated if race etc "was a motivating factor for any ENT practice, even though other factors also motivated the practice." If so, a violation is established.

HOWEVER, if the ER shows that "it would have taken the same action in the absence of the impermissible motivating factor" then the π is not entitled to damages or reinstatement; the court may only order Declaratory or Injunctive relief and attorneys fees directly related to the 703(m) claim. (see 706(g)(2)(B)).

Basically, "a" motive violation may allow judicial relief rather than allowing ER to escape from liability. Burden of proof is on ER to prove affirmative defense. How? Strong evidence of consistent behavior with respect to this conduct, e.g., we take affirmative steps to catch any cashier stealing money, not just this particular cashier; we always fire those discovered.

CRA of 1991 makes punitive damages available - previously had not been.

Dr. Michael A. S. Guth, Ph.D., J.D., is a practicing attorney at law based in Oak Ridge, Tennessee. He has taught two continuing legal education seminars on Employment Discrimination Law from which this course outline is derived. It was also taken from class notes on Employment Law taught at the University of Tennessee College of Law. He also teaches courses on-line at the undergraduate and graduate level, including courses in corporate tax. For additional information, please see the web page http://riskmgmt.biz/