1991 Civil Rights Act has hurt its intended beneficiaries
Atlantic Online carries this story by Charles Taylor, Jr. (Thanks again to Jottings By An Employer’s lawyer for this fascinating piece.)
This says what I’ve always observed, but in a more academically respectable fashion than I could endeavor:
A statistical study, “The Unintended Consequences of the ’91 Civil Rights Act,” published in the Summer 2003 issue of Regulation magazine by Paul Oyer, an economics professor at Stanford, and Scott Schaefer, a management professor at Northwestern, concludes that the 1991 act had precisely the opposite of its intended effect, “by making employers in traditionally white-male industries marginally less likely to hire minorities and women.”
“How could the risk of high damage awards for discriminating against minorities and women make employers more hesitant to hire them? Because employers know that far more lawsuits are brought, and far greater damages are awarded, for claims of discrimination in firing than in hiring. So the risk of being sued for turning down a minority or female applicant is dwarfed by the risk of being sued later for firing the same applicant after giving him or her a try.”
“The increases in potential damage awards,” write Oyer and Schaefer, “coupled with a decades-long trend toward firing-based, and away from hiring-based, employment-discrimination litigation, means the main impact of the act was to increase the costs to employers of dismissing protected workers…. Because [an employer] feels firing-based costs only if it decides to hire, the costs act as an implicit tax on such hiring. Firing-based protections may therefore lead employers to hire fewer protected workers, not more.”
“[T]heir conclusions ring true in the context of views expressed privately . . . by a high-level executive at a sizable company: While every new hire poses some risk of becoming a candidate for firing, the executive said, African-American employees who don’t work out have proved far more likely than others to sue, or threaten to sue. The company usually settles quietly by making substantial payments to avoid the bad publicity that even a bogus discrimination lawsuit can bring.”
“So when evaluating comparably qualified white and black applicants, the company assumes that it will be easier and less costly to fire the white applicant if he or she does not work out. This is a disincentive to increasing black representation in the company’s mostly white workforce.”
“[M]any—and perhaps most—discriminatory discharge lawsuits are bogus. Plaintiffs lose more than half of the cases that go to trial, notes Professor Charles A. Shanor, of Emory Law School, who was general counsel of the Equal Employment Opportunity Commission from 1987 to 1990. Title VII plaintiffs must file their claims with the EEOC before going to court. ‘Most EEOC employees who have investigated a substantial number of cases will tell you that a substantial percentage are not meritorious,’ Shanor adds. By some estimates, he says, the vast majority of discriminatory-discharge claims are without merit.”
“This seems intuitively plausible. Some managers no doubt fire people for discriminatory reasons. But wouldn’t a really racist employer simply avoid hiring minority employees, rather than hire them and then look for pretexts to fire them weeks, months, or years later?”
“To the extent that the 1991 act provides financial incentives for fired employees to sue even when they are not victims of discrimination, it benefits the least-deserving minority and female employees at the expense of minority job seekers as a group, especially those struggling to escape unemployment.”
“Once the egregious discrimination is gone,” Donohue says, “then litigation-based schemes to bring ever more fairness become more burdensome and of dubious effectiveness. Litigation is a crude weapon—you can’t perform surgery with a saber. Unfortunately, Title VII has become a matter of religious dogma for many academics, and certainly for those who benefit—plaintiffs’ lawyers and consultants—and therefore immune to any type of critical inquiry.”
Controversial words? Definitely. But my experience representing employers over many years certainly bears out at least the part about bogus discharge claims, if not employers’ conscious and calculating discrimination in hiring. Certainly there are many reasons to counsel against such an approach to hiring, not the least of which is obedience to the law and honoring this country’s crucial commitment to equal opportunity.
