Introduction to Antidiscrimination Law 22

Introduction to Antidiscrimination Law 22

Perhaps the most costly legal problem a business manager can face is a lawsuit based on some type of discrimination. Consider the following examples, reported by the Equal Employment Opportunity Commission (EEOC), the federal administrative agency that oversees discrimi- nation complaints based on Title VII of the Civil Rights Act of 1964:

• Yellow Transportation Company agreed to an $11 million settlement of a race discrimina- tion case for subjecting one of its African-American employees to a racially hostile working environment.

• Whirlpool Corporation was assessed a $1 million judgment for its failure to stop a white male coworker from harassing an African-American female employee because of her race and sex. The abuse lasted for two months and escalated, when the coworker physically assaulted the black employee and inflicted serious permanent injuries.

• A Washington, Pennsylvania–based cardiology practice will pay $125,000 and provide significant remedial relief to settle a federal sexual harassment and retaliation lawsuit. According to the lawsuit, three cardiologists, who were owners, shareholders, or officers of the medical practice, subjected a registered nurse, Moncel Deitz, and two other female employees to a sexually hostile work environment. The doctors repeatedly made sexu- ally offensive and debasing comments to Deitz and other female employees. The harass- ment also included being forced to look at sexually explicit pictures and messages on a cell phone, the EEOC said.

• United Road Towing, Inc., a Mokena, Illinois–based towing company, will pay $380,000 to 13 claimants and provide other relief resolving a disability discrimination lawsuit in which United Road Towing had failed to provide reasonable accommodations to a class of employees with disabilities.

• FedEx Freight will pay $115,000 to settle a sex discrimination lawsuit in which the FedEx Freight’s employee relations manager passed over three qualified women for a human resources job at its Phoenix office and instead hired a man who was unqualified for the position.

• The Jackson Sun, a Gannett daily newspaper in Jackson, Tennessee, will pay $150,000 and provide other relief to settle a disability lawsuit in which the Sun fired a commercial print manager exactly one week after his return from a medical leave of absence. He had sus- tained permanent spinal cord damage after back surgery. The EEOC said that the Sun could have accommodated the employee with minimal effort and that his termination was discriminatory.

(See U.S. Equal Employment Opportunity Commission. Selected list of pending and resolved EEOC cases involving racial harassment since 2009 [as of June 2012] at http://www.eeoc.gov/eeoc/litig ation/selected/racial_harassment.cfm.)

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What do all of these incidents have in common? To begin with, all represent workplaces that discriminated against their own workers in such significant ways that a large amount of money was awarded to the litigants. Each one also represents the failure of manage- ment to either develop or enforce policies to prevent unfair treatment of its workers, resulting in unpleasant if not dangerous working conditions and unnecessary expenses to the business. One can only imagine, additionally, the effect such treatment had on fellow coworkers witnessing the discrimination and the embarrassment of having their employer publicly chastised, and ultimately sanctioned, by the EEOC.

Unlawful discrimination is rampant in employment. This chapter begins the study of anti- discrimination law—an aspect of the workplace you will undoubtedly see firsthand. Keep in mind that, as a manager, you may be required to keep seemingly burdensome records, develop policies, and monitor the behavior of your employees in this area. Such require- ments may seem onerous. However, seeing, through the cases that follow, the devastation that discrimination and its resultant litigation leave in their wake may make you more thoughtful about the purpose of such regulations, aware of why such steps are necessary, and sensitive to the ramifications of failing to do so.

22.1 Constitutional Underpinnings of Antidiscrimination Law

Before one can understand antidiscrimination law, it is first necessary to understand the role the U.S. Constitution plays. It may surprise you to learn that nothing in the Constitution explicitly mentions discrimination per se. Instead, it contains provi- sions that, over time, have been interpreted by the U.S. Supreme Court to grant rights that have to do with equal treatment under the law.

Recall that the U.S. Constitution begins by setting out the three branches of government: Article I establishes the legislative branch, or Congress; Article II, the executive branch, or the president; and Article III, the federal judiciary, the U.S. district courts, the appellate courts, and the U.S. Supreme Court. The powers of each branch of government are con- tained in these respective Constitutional Articles. If someone challenges a branch’s actions as overstepping its power, then the issue may reach the U.S. Supreme Court for a ruling. If the Court finds that one of the branches exceeded its powers, it declares the action uncon- stitutional. In this way, the Court “checks” or reins in the power of another branch.

The Commerce Clause

Article I, Section 8, sets out the powers of Congress in a list. Included in this “list of pow- ers” is the Commerce Clause, which states:

The Congress shall have Power: To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;

Although the Commerce Clause might seem an unlikely origin for enforcing antidiscrimi- nation law, it is in fact a powerful tool. This chapter will discuss the Commerce Clause as one of the sources of constitutional theory for antidiscrimination law. (Other constitutional provisions include the Equal Protection Clause and the Due Process Clause.) By its terms,

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Congress is expressly given the power to regulate interstate commerce, or commerce that takes place across state borders. If the commerce being conducted is not across state lines, then it is intrastate commerce, or within the state and regulated only by the individual states, and not the federal government. Therefore, we say that interstate commerce is regu- lated by Congress (the federal government) and intrastate commerce is regulated by the states. In its simplest form, if a buyer travels to a city in her state and purchases an auto- mobile, that is intrastate commerce; if she travels to another state and buys the automo- bile, then she has engaged in interstate commerce. Few consumers notice which type of commerce they are involved in because such a distinction rarely impacts their lives. From a legal standpoint, however, understanding the type of commerce is essential because it has myriad implications about which law governs the situation.

The Affectation Doctrine

On its face, Congress’s power to regulate interstate commerce might appear to involve just the sale of goods from a business in State A to a business in State B, and that is true. Over time, however, judicial interpretations by the U.S. Supreme Court have used the Commerce Clause to greatly extend the power of Congress; as a result, the impact of being engaged in interstate commerce has become far reaching. The U.S. Supreme Court has interpreted the clause “To regulate Commerce . . . among the several States” to mean that if a person or business is engaged in interstate commerce, then all federal statutes apply to that business. This is true even if the business in State A sells only to another business in State A. If the activity of selling within a state ripples out and affects people in another state, then the intrastate activity becomes interstate activity. This is called the Affectation Doctrine. In a sense, the Doctrine is not a “law” per se but a concept formulated by the U.S. Supreme Court. By making intrastate activity into interstate activity, the Court essen- tially expanded the power of Congress to regulate many more businesses.

Wickard v. Fillburn Consider the case Wickard v. Fillburn (317 U.S. 111), decided by the U.S. Supreme Court in 1942 (http://www.law.cornell.edu/supct/html/historics/USSC_CR_0317_0111_ZS .html). In this case, a farmer owned a small farm in Ohio. There, he raised poultry, sold eggs, and grew a crop of winter wheat to feed his cattle. He also used the wheat for home consumption (presumably, making it into bread) and sold a portion of it. For all intents and purposes, one would conclude that his activity was strictly local (intrastate) and there- fore not subject to regulation by the federal government under the Commerce Clause.

In 1938, to combat the lowering of crop prices during the Great Depression, Congress passed the Agricultural Adjustment Act, which established quotas for how much wheat a farmer could grow. If one exceeded the allotment, then there was a penalty. The Ohio farmer exceeded his allotment and, as a result, was assessed a penalty of $117.11 in all. From the farmer’s point of view, since he was involved only in intrastate commerce on his tiny farm, the federal government should not have had any power over him, nor should the Agricultural Adjustment Act have applied to his operation. A federal statute should apply only to those involved in interstate commerce because Congress has the power to regulate only commerce between states.

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However, in a case opinion that has implications even today, the Court stated as follows:

The commerce power is not confined in its exercise to the regulation of com- merce among the states. It extends to those activities intrastate which so affect interstate commerce, or the exertion of the power of Congress over it, as to make regulation of them appropriate means to the attainment of a legiti- mate end, the effective execution of the granted power to regulate interstate commerce. . . . The power of Congress over interstate commerce is plenary and complete in itself, may be exercised to its utmost extent, and acknowledges no limitations other than are prescribed in the Constitution. . . . It follows that no form of state activity can constitutionally thwart the regulatory power granted by the commerce clause to Congress. Hence the reach of that power extends to those intrastate activities which in a substantial way interfere with or obstruct the exercise of the granted power.

It is well established by decisions of this Court that the power to regulate commerce includes the power to regulate the prices at which commodities in that commerce are dealt in and practices affecting such prices. One of the primary purposes of the Act in question was to increase the market price of wheat, and to that end to limit the volume thereof that could affect the mar- ket. It can hardly be denied that a factor of such volume and variability as home-consumed wheat would have a substantial influence on price and mar- ket conditions. This may arise because being in marketable condition such wheat overhangs the market and, if induced by rising prices, tends to flow into the market and check price increases. But if we assume that it is never marketed, it supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat in this sense competes with wheat in commerce. The stimulation of commerce is a use of the regulatory function quite as definitely as prohibitions or restrictions thereon. This record leaves us in no doubt that Congress may properly have considered that wheat consumed on the farm where grown, if wholly outside the scheme of regulation, would have a substantial effect in defeating and obstructing its purpose to stimulate trade therein at increased prices.

In short, if an activity is local, but that local activity affects interstate commerce, then Congress may regulate it. Thus, the name given to this tenet is the Affectation Doctrine.

1964 Civil Rights Act Fast-forward to the highly segregated United States of the 1950s. Discrimination against African-Americans is rampant. Demonstrations, especially in the South, highlight a stark class system that is in fact reinforced by a system of state laws called “Jim Crow,” which required segregation in public accommodations and set a standard of “separate but equal” for African-Americans. However, in 1954, the U.S. Supreme Court had already decided the case of Brown v. Board of Education (347 U.S. 483), which ordered the desegre- gation of public schools. The federal government attempted to integrate by negotiating with individual states but without success; it then tried enforcing the law through use of the National Guard. Businesses in the South blatantly discriminated on the basis of race, with signs on water fountains, doors of restaurants, and seating areas in bus stations that read, “Colored Only” or “Whites Only.”

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Then, in 1964, Congress passed federal legislation known as the Civil Rights Act. Prior to this time, little federal statutory law had prohibited discrimination. That all changed, however, with the stroke of President Lyndon Johnson’s pen. Suddenly, it became illegal to discriminate on the basis of race, color, national origin, sex, or religion at places of public accommodation (per Title VII; for the full, amended text, see http://www.dol.gov/oasam/ regs/statutes/2000e-16.htm). These included restaurants, motels, bowling alleys, and movie theaters. The fact that a law was put in place, however, didn’t mean that communities integrated overnight. In fact, segregation remained as prev- alent as before even if it was without legal sanction.

From a legal standpoint, can you think of what argument businesses made to try to avoid the application of the statute to their business? Just like the wheat farmer in Wick- ard, they argued that the Civil Rights Act did not apply to them because they were engaged only in local activity. If one is engaged only in local activ- ity, they reasoned, then one is not engaged in interstate commerce; if one is not engaged in interstate commerce, then Congress has no power to regulate you, because Congress can regulate only commerce among states. Since businesses were engaged in only local activity, then they were subject only to state law, and since many of the states had no anti- discrimination laws, businesses could legally continue to exclude blacks. How then could the federal government get the Civil Rights Act to apply to individuals and businesses that continued to discriminate against African-Americans? This leads us to two landmark decisions: the Heart of Atlanta Motel, Inc. v. United States and Katzenbach v. McClung.

In the Heart of Atlanta Motel case, a Georgia man owned and operated the Heart of Atlanta motel, which had 216 rooms available to transient guests in downtown Atlanta. The motel was near an interstate highway and was advertised in national magazines and on inter- state billboards and highway signs. It also accepted convention trade from outside the state of Georgia, and more than 75% of its registered guests were from out of state.

In Heart of Atlanta Motel, the U.S. Supreme Court described the Civil Rights Act as the “most comprehensive, undertaking to prevent . . . discrimination in voting, as well as in places of accommodation and . . . in employment.” Part of the act states:

All persons shall be entitled to the full and equal enjoyment of the goods, ser- vices, facilities, privileges, advantages, and accommodations of any place of public accommodation, as defined in this section, without discrimination or segregation on the ground of race, color, religion, or national origin . . . includ- ing . . . Restaurants, cafeterias, etc.

President Lyndon Johnson, watched by Martin Luther King Jr., signed the Civil Rights Act on July 2, 1964.

Courtesy Everett Collection

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Excerpts from the Court’s opinion follow.

Cases to Consider: Heart of Atlanta Motel, Inc. v. United States

Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241 (1964)

The motel owner refused to provide lodging to African Americans. [The Court discussed the increase in automobile travel throughout the United States, noting that] Negroes in particular have been the subject of discrimination in transient accommodations, having to travel great distances to secure the same; that often they have been unable to obtain accommodations and have had to call upon friends to put them up overnight; and that these conditions had become so acute as to require the listing of available lodging for Negroes in a special guidebook which was itself “dramatic testimony to the difficulties” Negroes encounter in travel. These exclusionary practices were found to be nationwide.

This testimony indicated a qualitative as well as quantitative effect on interstate travel by Negroes. The former was the obvious impairment of the Negro traveler’s pleasure and convenience that resulted when he continually was uncertain of finding lodging. As for the latter, there was evidence that this uncertainty stemming from racial discrimination had the effect of discouraging travel on the part of a substantial portion of the Negro community.

The power of Congress to deal with these obstructions depends on the meaning of the Commerce Clause. In short, the determinative test of the exercise of power by the Congress under the Com- merce Clause is simply whether the activity sought to be regulated is “commerce which concerns more States than one” and has a real and substantial relation to the national interest. Let us now turn to this facet of the problem.

It is said that the operation of the motel here is of a purely local character. But, assuming this to be true, “(if) it is interstate commerce that feels the pinch, it does not matter how local the operation which applies the squeeze.”

The power of Congress over interstate commerce is not confined to the regulation of commerce among the states. It extends to those activities intrastate which so affect interstate commerce or the exercise of the power of Congress over it as to make regulation of them appropriate means to the attainment of a legitimate end, the exercise of the granted power of Congress to regulate interstate commerce. Thus the power of Congress to promote interstate commerce also includes the power to regulate the local incidents thereof, including local activities in both the States of origin and destina- tion, which might have a substantial and harmful effect upon that commerce. One need only exam- ine the evidence which we have discussed above to see that Congress may—as it has—prohibit racial discrimination by motels serving travelers, however “local” their operations may appear.

We, therefore, conclude that the action of the Congress in the adoption of the [Civil Rights Act of 1964] as applied here to a motel which concededly serves interstate travelers is within the power granted it by the Commerce Clause of the Constitution, as interpreted by this Court for 140 years. It may be argued that Congress could have pursued other methods to eliminate the obstructions it found in interstate commerce caused by racial discrimination. But this is a matter of policy that rests entirely with the Congress not with the courts. How obstructions in commerce may be removed— what means are to be employed—is within the sound and exclusive discretion of the Congress. It is subject only to one caveat—that the means chosen by it must be reasonably adapted to the end permitted by the Constitution. (continued)

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Note this important language from the Supreme Court’s decision: “The power of Con- gress over interstate commerce is not confined to the regulation of commerce among the states. It extends to those activities intrastate which so affect interstate commerce or the exercise of the power of Congress over it as to make regulation of them appropriate means to the attainment of a legitimate end, the exercise of the granted power of Congress to regulate interstate commerce.”

Scope and Implications of the Affectation Doctrine

Ask yourself at this point: Using the above reasoning, is there any activity that does not affect interstate commerce? If you think back to the Wickard case, remember that the farmer was growing wheat essentially for home consumption. But the fact that he was not going to the store to buy bread, or that all farmers who grew wheat for home consumption—in the aggregate—were not going to the store, affected interstate commerce. Likewise, the motel owner who denied interstate travelers the right to stay at a motel near an interstate highway impacted interstate commerce.

What would happen, however, if the situation involved no interstate movement of people whatsoever? Suppose that the business did not serve interstate travelers, nor did it adver- tise on interstate highways or service out-of-state convention trade. Would the Affectation Doctrine apply if such a business were engaged in a strictly local activity?

The Supreme Court considered this issue in the case Katzenbach v. McClung. This case concerned a family-owned barbecue located in Birmingham, Alabama, that specialized in barbecued meats and homemade pies, with a seating capacity of 220 customers. The res- taurant was located on a state highway 11 blocks from the interstate. Although two-thirds of its employees were African-Americans, customers who were black had to get service at the back door in the form of takeout and could not sit in the dining room. Excerpts from the Court’s opinion follow.

Cases to Consider: Heart of Atlanta Motel, Inc. v. United States (continued) Read the full text of the case here: http://www.law.cornell.edu/supct/html/historics/USSC_CR_ 0379_0241_ZO.html.

Questions to Consider

1. What activity did the Court say was significant in finding that the Heart of Atlanta motel engaged in interstate commerce?

2. What argument did the motel owner make to the Court about the inapplicability of the Civil Rights Act to his business?

3. Can you explain how the Affectation Doctrine applied to this case? 4. What “laws” are in play in this case? What “legal theories” are in play in this case? Can you tell

the difference between a “law” and a “theory”?

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Cases to Consider: Katzenbach v. McClung

Katzenbach v. McClung, 379 U.S. 294 (1964)

In the 12 months preceding the passage of the [Civil Rights Act of 1964], the restaurant purchased locally approximately $150,000 worth of food, $69,683 or 46% of which was meat that it bought from a local supplier who had procured it from outside the State. The District Court expressly found that a substantial portion of the food served in the restaurant had moved in interstate commerce. The restaurant has refused to serve Negroes in its dining accommodations since its original opening in 1927, and since July 2, 1964, it has been operating in violation of the Act. The court below concluded that if it were required to serve Negroes it would lose a substantial amount of business.

The basic holding in Heart of Atlanta Motel answers many of the contentions made by the (appellees) owners of the restaurant. There we outlined the overall purpose and operations plan of Title II and found it a valid exercise of the power to regulate interstate commerce insofar as it requires hotels and motels to serve transients without regard to their race or color. In this case we consider its appli- cation to restaurants which serve food[,] a substantial portion of which has moved in commerce.

***

The sole question, therefore, narrows down to whether Title II, as applied to a restaurant annually receiving about $70,000 worth of food which has moved in commerce, is a valid exercise of the power of Congress. It goes without saying that, viewed in isolation, the volume of food purchased by Ollie’s Barbecue from sources supplied from out of state was insignificant when compared with the total foodstuffs moving in commerce.

This grant, as we have pointed out in Heart of Atlanta Motel “extends to those activities intrastate which so affect interstate commerce, or the exertion of the power of Congress over it, as to make regulation of them appropriate means to the attainment of a legitimate end, the effective execution of the granted power to regulate interstate commerce.”

Much is said about a restaurant business being local but “even if appellee’s activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce. The activities that are beyond the reach of Congress are “those which do not affect other States. . . .”

This Court has held time and again that this power extends to activities of retail establishments, including restaurants, which directly or indirectly burden or obstruct interstate commerce. We have detailed the cases in Heart of Atlanta Motel, and will not repeat them here.

The appellees contend that Congress has arbitrarily created a conclusive presumption that all res- taurants meeting the criteria set out in the Act “affect commerce.” Stated another way, they object to the omission of a provision for a case-by-case determination—judicial or administrative—that racial discrimination in a particular restaurant affects commerce. But Congress has determined for itself that refusals of service to Negroes have imposed burdens both upon the interstate flow of food and upon the movement of products generally. The only remaining question—one answered in the affirmative by the court below—is whether the particular restaurant either serves or offers to serve interstate travelers or serves food a substantial portion of which has moved in interstate commerce.

. . . [R]acial discrimination in restaurants had a direct and adverse effect on the free flow of interstate commerce. Congress prohibited discrimination only in those establishments having a close tie to interstate commerce, i.e., those, like the McClungs’, serving food that has come from (continued)

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As you can see from both Heart of Atlanta Motel and Katzenbach, these Supreme Court interpretations of the Commerce Clause greatly expanded the power of Congress. But are there any limits on the Commerce Clause? More than 30 years after these decisions, only three significant cases have provided further insights into the scope of the Commerce Clause’s application. In the first, United States v. Alfonso Lopez, Jr., 514 U.S. 549 (1995) (available at http://www.law.cornell.edu/supct/html/93-1260.ZD2.html), the defendant was arrested for having a gun inside a school zone and charged with a federal statute, the Gun-Free School Zones Act of 1990. Did federal law apply to him? The Supreme Court said no, this was not a correct application of the Commerce Clause because possession of a gun is not commerce. This case was until recently considered the only one to have limited the application of the commerce clause.

In contrast, Gonzales v. Rich, 545 U.S. 1 (2005), continued the more liberal approach. Here, two women with serious illnesses grew medical marijuana for home consumption. In their state of California, a law was in place that allowed usage for persons suffering from serious illnesses. Nevertheless, federal agents confiscated their marijuana and the women sued, contending that their right to use medical marijuana was controlled by the state law, and the federal law prohibiting the use of the drug did not apply to them under the Com- merce Clause. In a decision similar to Wickard, the Court held that federal law did apply to the women because their use of medical marijuana affected the national markets for the sale and purchase of the drug. In language strikingly similar to the holding in Wickard, the Court opined as follows:

The parallel concern making it appropriate to include marijuana grown for home consumption in the [Controlled Substances Act] is the likelihood that the high demand in the interstate market will draw such marijuana into that market. While the diversion of homegrown wheat tended to frustrate the federal interest in stabilizing prices by regulating the volume of commercial

Cases to Consider: Katzenbach v. McClung (continued) out of the State. We think in so doing that Congress acted well within its power to protect and foster commerce in extending the coverage of Title II only to those restaurants offering to serve interstate travelers or serving food, a substantial portion of which has moved in interstate commerce.

Read the full text of the case here: http://www.law.cornell.edu/supct/html/historics/USSC_CR_ 0379_0294_ZO.html.

Questions to Consider

1. The owners of the restaurant argued that the Court had extended the power of Congress too far under the Affectation Doctrine and that the restaurant was not engaged in interstate com- merce. What was the Court’s response to this argument?

2. The Court stated that, “viewed in isolation, the volume of food purchased by Ollie’s Barbe- cue from sources supplied from out of state was insignificant when compared with the total foodstuffs moving in commerce.” If this is true, how did the Court find that the restaurant was engaged in interstate commerce?

3. What rule can you take away from this case about the applicability of the Commerce Clause and the Affectation Doctrine to businesses in general?

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transactions in the interstate market, the diversion of homegrown marijuana tends to frustrate the federal interest in eliminating commercial transac- tions in the interstate market in their entirety. In both cases, the regulation is squarely within Congress’s commerce power because production of the com- modity meant for home consumption, be it wheat or marijuana, has a substan- tial effect on supply and demand in the national market for that commodity.

Most recently, in the June 2012 decision dealing with “ObamaCare” (the Patient Protection and Affordable Care Act), National Federation of Independent Business v. Sebelius— S.Ct.—, 2012 WL 2427810, the Court once again refused to find commercial activity inherent in the mandate for all U.S. individuals to carry health insurance; thus, the Commerce Clause did not apply. The Constitution grants Congress the power to “regulate Commerce.” The power to regulate commerce presupposes the existence of commercial activity to be regu- lated. The so-called individual mandate, however, does not regulate existing commer- cial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce. Imposing it would be equivalent of finding the existence of individual lives to be part of interstate commerce, which the Court hesitated to do. See full text of the decision at http://www .supremecourt.gov/opinions/11pdf/11-393c3a2.pdf. For an excellent video discussion of the Commerce Clause and its various interpretations, see “Wheat, Weed, and ObamaCare: How the Commerce Clause Made Congress All-powerful” at http://www.youtube.com/ watch?v=6SDf5_Thqsk.

22.2 Title VII of the 1964 Civil Rights Act

Title VII is a landmark federal statute that forms one of the most significant laws in the United States prohibiting discrimination in employment. Title VII was enacted to further two primary goals: to end discrimination on the basis of race, color, religion, sex or national origin, thereby guaranteeing equal opportunity in the workplace, and to remedy the segregation and under- representation of minorities that discrimination has caused in our Nation’s work force. (Taxman v. Board of Education, 91 F.3d 1547, 1997)

Key Provisions

Title VII is a part of the Civil Rights Act of 1964 that set out sweeping legislation outlawing discrimination in the United States. It applies to places of public accommodation as well as employment. Discrimination isn’t limited to hiring and firing; it also applies to differ- ences in pay or benefits, work assignments, performance evaluations, training, discipline or discharge, or any other area of employment.

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Section 703 of Title VII states:

(a) It shall be an unlawful employment practice for an employer—

(1) to fail or refuse to hire or to discharge any individual, or otherwise to dis- criminate against any individual with respect to his compensation, terms, con- ditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin;

(2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employ- ment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex, or national origin.

Exceptions Many students are surprised to learn that Title VII does not apply to all employers. In fact, coverage begins only when there are “15 or more employees for each working day for 20 or more calendar weeks in the current or preceding calendar year” (Title VII, § 701(b)). This means that an employer with fewer than 15 employees is exempt from the rules of Title VII but still subject to state antidiscrimination laws. There are also a number of enti- ties that are exempt from Title VII, such as educational institutions that are associated with a particular religion and employ only members of that religion.

In addition, valid exceptions to discrimination, called bona fide occupational qualifi- cations (BFOQs) were established in Section 703(e) of Title VII. This section states that it is not unlawful for an employer to differentiate hiring on the basis of religion, sex, or national origin in those certain instances where religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of that par- ticular business or enterprise.

The EEOC as Enforcer

The federal administrative agency that oversees discrimination is the Equal Employment Opportunity Commission. Commonly referred to as the EEOC, this administrative agency has its headquarters in Washington, D.C. Its website (www.eeoc.gov) contains practical information especially helpful to employers who wish to remain up to date on the latest interpretations of the law.

In 1978, the EEOC implemented guidelines for determining whether or not employment decisions had an adverse impact. Referred to as the four-fifths rule, the “Uniform Guide- lines on Employee Selection Procedures” (found at 29 CFR §, 1607.4D) state, “A selection rate for any race, sex or ethnic group which is less than four-fifths (%) will generally be regarded by the Federal enforcement agencies as evidence of adverse impact” and will warrant further investigation. For example, in terms of selection criteria, the EEOC finds that an adverse impact occurs if members of a protected class are selected for a job or promotion at a rate less than 4/5 (80%) of that of another group. A protected class is a category of people that the U.S. Supreme Court has decided deserve added protection

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Key Terms CHAPTER 22

Affectation Doctrine A theory developed by the U.S. Supreme Court that says if local activity affects people in other states, then intrastate commerce becomes inter- state commerce.

Article I of the U.S. Constitution Part of the U.S. Constitution that establishes the legislative branch, or Congress.

Article I, Section 8, of the U.S. Constitu- tion Part of the U.S. Constitution that sets out the powers of Congress.

Article II of the U.S. Constitution Part of the U.S. Constitution that establishes the Executive Branch.

Article III of the U.S. Constitution Part of the U.S. Constitution that establishes the federal judiciary or federal courts (the judicial branch).

bona fide occupational qualifications (BFOQs) According to the EEOC, accept- able reasons to discriminate because they are “reasonably necessary to the proper operation of the business.”

Civil Rights Act of 1964 Also known as Title VII, the major federal law in the United States that prohibits discrimination on the basis of race, color, national origin, sex, or religion.

Commerce Clause A passage contained in the U.S. Constitution in Article I, Section 8, that gives Congress the power to regulate interstate commerce.

Equal Employment Opportunity Com- mission (EEOC) The federal administra- tive agency that oversees discrimination complaints based on Title VII of the Civil Rights Act of 1964.

four-fifths rule A quantitative analy- sis used by the EEOC to determine if an employer’s selection rates have an adverse impact on a protected class.

interstate commerce Commerce that takes place across state lines.

intrastate commerce Commerce that takes place within a state.

Jim Crow laws State and local laws enacted between 1876 and 1965 that mandated racial segregation in all public facilities in southern states of the former Confederacy. Starting in 1890, they estab- lished a standard of “separate but equal” status for African-Americans.

protected class A category of people that the U.S. Supreme Court has decided deserve added protection owing to a his- tory of extreme discrimination. Protected classes include persons of a particular race, color, national origin, or religion.

owing to a history of extreme discrimination. Protected classes include persons of a par- ticular race, color, national origin, or religion. If 50% of white applicants receive a pass- ing score on a test but only 30% of African-Americans pass, the relevant ratio would be 30/50, or 60%, which violates the 80% rule; that is, the test has a disparate impact on the African-American applicants. Managers need to be aware of such types of parameters and monitor any types of tests given for job advancement to ensure that they are in compli- ance. See Chapters 23, 24, and 26 for an in-depth discussion of race, sex, and other types of discrimination under the law.

Key Terms

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Critical Thinking and Discussion Questions CHAPTER 22

Critical Thinking and Discussion Questions

1. The Affectation Doctrine stems from what part of the Constitution? 2. The 1964 Civil Rights Act makes what type of discrimination in employment

illegal? 3. Under what circumstances would Title VII not apply to an employer? 4. What is the four-fifths rule, and how is it calculated? 5. What far-reaching effects can you imagine resulting from the Affectation Doc-

trine? Using simple logic, can you imagine any business not being engaged in interstate commerce?

6. In Heart of Atlanta Motel, Inc. v. United States, the African-Americans moved in interstate commerce, but in Katzenbach v. McClung, the Court admitted that the customers were all “local.” What moved in interstate commerce in this case? And why was that significant?

7. Mel is a student at Your Local College. He decides to have all of his friends over for a party at his private home. Mel sends out 100 invitations that say, “Party with Mel. Saturday night. 10 pm – ? No Methodists allowed.”

a. Ten Methodists sue Mel for religious discrimination. What do you think the outcome would be? You can assume that there is a federal statute that prohibits religious discrimination.

b. Assume the same facts as above, except that this time Mel charges admission to his house and provides beer for the price of admission. Mel obtained the beer from a local liquor store, and he also put out chips, dip, celery sticks, and chicken wings, all from local stores. He also posted the invitation on the Internet and his Facebook page. Now what do you think the outcome of the lawsuit would be?

public accommodation Accessible facili- ties, including restaurants, hotels, theaters, doctors’ offices, retail stores, libraries, parks, and private schools; private clubs and religious organizations are exempt.

Section 703 of Title VII The portion of Title VII (part of the Civil Rights Act of 1964) that sets forth the types of prohibited discrimination in the workplace as well as exceptions to the rule.

Title II Section of the Civil Rights Act of 1964 that provides injunctive relief against discrimination in places of public accom- modation. It requires hotels and motels to serve transients without regard to their race or color.

Title VII Section of the Civil Rights Act of 1964 that prohibits employment discrimi- nation based on race, color, religion, sex, and national origin.

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