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Human Resource Management Review 19 (2009) 232–250

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Human Resource Management Review

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Major EEO issues relating to personnel selection decisions

Arthur GutmanDepartment of Psychology, Florida Institute of Technology, 150 West University Boulevard, Melbourne, FL 32901, USA

a r t i c l e i n f o

E-mail address: [email protected].

1053-4822/$ – see front matter © 2009 Published bydoi:10.1016/j.hrmr.2009.03.005

a b s t r a c t

Keywords:
This paper examines recent EEO (Equal Employment Opportunity) case lawprecedents relating topersonnel selection, most notably hiring, training, promotion and downsizing. The statutesreferenced include Title VII of the Civil Rights Act of 1964, the Age Discrimination in EmploymentAct (ADEA) of 1967, the Americans with Disabilities Act (ADA) of 1990 as amended by the ADAAmendments Act of 2008 (ADAAA), Constitutional claims, the Civil Rights Act of 1991 (CRA-91),andExecutiveOrder 11246onAffirmative action. Seven topics are featured, including: (I) disparatetreatment theory, (II) adverse impact theory in the ADEA, (III) adverse impact theory in Title VII,(IV) affirmative action based on operational needs, (V) key ADA rulings and the ADA amendmentsAct of 2008 (ADAAA), (VI) retaliation, and (VII) mandatory binding arbitration agreements. Thecase lawsurveyed reveals costlymistakes employers andHRmanagers canmake, butwhich canbeavoided with proper methods and policies. Some issues may require professional help(e.g., developing and validating selection tests), whereas others (e.g. retaliation), can beaddressed in-house with knowledge of policies and procedures recommended by the EEOC toprevent problems from occurring, and to quickly correct them if they occur.
© 2009 Published by Elsevier Inc.

EEO LawWorkplace discriminationPersonnel selectionAffirmative actionRaceSexAge and disability discrimination

1. Introduction

The purpose of this paper is to survey the current landscape on EEO (Equal Employment Opportunity) law related to personnelselection. The cases reviewed represent what the author believes are the most critical legal precedents over the past 2 decadesrelating to hiring, training, promotion and downsizing. Despite the length of this paper, no one issue is exhausted. Rather, the goalis to sample a sufficient amount of case law on each topic to illustrate potential vulnerabilities faced by employers and to offerpotential solutions for correcting and preventing potential workplace violations.

Several statutes are referenced below, including Title VII of the Civil Rights Act of 1964, the Age Discrimination in EmploymentAct (ADEA) of 1967, the Americans with Disabilities Act (ADA) of 1990 as amended by the ADA Amendments Act of 2008(or ADAAA), and Constitutional claims. The Civil Rights Act of 1991 (CRA-91) and Executive Order 11246 (EO 11246) on affirmativeaction are also referenced.

A major organizational challenge in this paper is that some issues apply to several statutes, whereas others apply uniquely toone statute, or apply differently to two or more statutes. For example, disparate treatment and retaliation apply similarly tovirtually all statutes. In comparison, the definition of disability applies uniquely to the ADA, and adverse impact has a differentmeaning in Title VII as compared to the ADEA.

For purposes of exposition, the discussion below is broken down into seven topics. The seven topics are: (I) disparate treatmenttheory, (II) adverse impact theory in the ADEA, (III) adverse impact theory in Title VII, (IV) affirmative action based on operationalneeds, (V) key ADA rulings and the ADAAA, (VI) retaliation, and (VII) mandatory binding arbitration agreements.

Given space limitations, it is not possible to sample all relevant court cases associated with each of the topics covered. Readersinterested in sampling other relevant cases are directed to a column entitled On The Legal Front published in The Industrial–Organizational Psychologist (TIP). These articles are authored bymyself, Don Zink and/or Eric Dunleavy, andmay be accessed online athttp://www.siop.org by selecting “TIP (Quarterly News)” under “Publications” and selecting “Back Issues.” To save space, these and

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1 Reeves v. Sanderson Plumbing and Desert Palace v. Costa are discussed by the author in the October 2000 and September 2003 issues of TIP, respectively.2 Smith v. City of Jackson is discussed by the author in the July 2005 issue of TIP.

Table 1McDonnell–Burdine scenario.

McDonnell–Burdine scenario

Phase 1 Presumptive evidence of a violation: protection, qualification, application, and rejection & continuation of search.Phase 2 Productive defense—articulation of legitimate reason for the selection decision made; no proof needed.Phase 3 Pretext—direct evidence that defendant discriminated illegally or indirect evidence that the articulation given is false

233A. Gutman / Human Resource Management Review 19 (2009) 232–250

.

other TIP articles relevant to a given topic will be footnotedwith the year andmonth inwhich it was published. Footnoting will also beused to cite articles, book chapters or Internet references where relevant.

2. Disparate treatment theory

Disparate treatment is the most common form of employment discrimination, occurring most often when otherwise legalrequirements are differentially applied because of race, color, religion, sex or national origin (covered by Title VII), age (covered bythe ADEA) or disability (covered by the ADA). For example, assume that a male and a female are equally guilty of violatingemployer policies, but the female is terminated and the male is retained. Termination for cause is a legitimate employerprerogative. However, it is illegal disparate treatment when an otherwise legitimate rule is differentially applied so as to favormales and disfavor females or to favor non-minorities and disfavor minorities.

Disparate treatment rules apply to several statutes. The two most recent Supreme Court rulings on this issue include an ADEAruling (Reeves v. Sanderson Plumbing, 2000) and a Title VII ruling (Desert Palace v. Costa, 2003).1,2 Reeves addressed theMcDonnell–Burdine scenario, which incorporates six Supreme Court Title VII rulings between McDonnell-Douglas v. Green (1973)and St. Mary's v. Hicks (1993), and is the most important mechanism for analyzing individual claims of disparate treatment. Costaaddressed the mixed-motive scenario, an alternative to the McDonnell–Burdine scenario that incorporates a key Title VII SupremeCourt ruling in Price Waterhouse v. Hopkins (1989) and a critical amendment in CRA-91.

2.1. McDonnell–Burdine

The “McDonnell”part ofMcDonnell–Burdine refers toMcDonnell-Douglas v. Green (1973). In this case, PercyGreenwas laid off andlater reapplied for his prior job. He was denied the job and sued, claiming racial discrimination. In a unanimous ruling, Justice Powellcreated a unique scenario involving light presumptive evidence from the plaintiff in the prima facie phase (phase 1), a light burden ofproduction in thedefense phase (phase 2), leaving the only burdenofpersuasionon theplaintiff in the pretextphase (phase 3). All Greenhad todo inphase 1 is show(a) he is protectedbyTitleVII, (b) qualified for the job, (c)waspassed over and (d) the search continued. Allthe defendant had to do in phase 2 was articulate,without proving, a nondiscriminatory reason for not rehiring Green. The only heavyburden in this scenario, therefore, was onGreen,whohad to provewithdirector indirect evidence inphase 3 that the articulation by thedefendant in phase 2 was a pretext to cover up discrimination. The McDonnell–Burdine scenario is summarized in Table 1.

Critically, Justice Powell applied equal weight in the pretext phase to direct evidence, or “smoking gun” testimony (e.g., racialremarks, eyewitnesses to key events), and indirect evidence, which is circumstantial (e.g., white workers guilty of similar illegalacts are rehired). Green lost on both counts. More generally, few disparate treatment cases have “smoking gun” testimony.Therefore, indirect evidence is the most common route to proving pretext in disparate treatment cases.

Cases between McDonnell-Douglas v. Green (1973) and Texas v. Burdine (1981) dealt with confusion relating to the defenseburden in phase 2. This confusionwas created in Furnco v.Waters (1978), where Justice Rehnquist inadvertently called the defenseburden a burden of “proof.” In Texas v. Burdine (1981), the Supreme Court clarified that the phase 2 burden is one of production,thereby giving this scenario it's name—McDonnell–Burdine.

All seemed well until St. Mary's v. Hicks (1993). Here, Melvin Hicks had strong indirect evidence of pretext and lost. Thedefendant articulated that Hicks was terminated for severity and accumulation of rules violation. Hicks had circumstantial proofthat white prison guards with more severe violations were less harshly punished. The district court trial judge nevertheless ruledfor the defendant on grounds that termination of Hicks was motivated by personal rather than racial reasons, and the SupremeCourt sided with the trial judge. In a controversial 5–4 opinion, Justice Scalia ruled:

“The [district court's] disbelief of the reasons put forward by the defendant … may together with the elements of a primafacie case, suffice to show intentional discrimination. Thus, rejection of the defendant's [articulation] will permit the[district court] to infer the ultimate fact of discrimination … But the Court of Appeals' holding that rejection of thedefendant's [articulation] compels judgment for the plaintiff disregards the fundamental principle of Rule 301 that apresumption does not shift the burden of proof, and ignores our repeated admonition that the Title VII plaintiff at all timesbears the ‘ultimate burden of persuasion’.”

In plain English, that means that indirect evidence may suffice for judgment for the plaintiff, but does not guarantee it. Rather, it'sup to the trier of fact, who in the Hicks case was a judge. Speaking for the dissent, Justice Souter opined that the Hicks rulingwould reduce McDonnell–Burdine to a “misleading and potentially useless ritual.”

234 A. Gutman / Human Resource Management Review 19 (2009) 232–250

Unlike Hicks, Reeves was tried to a jury. Furthermore, the jury was persuaded by strong indirect evidence of employer pretext,and sided with Roger Reeves. Aside from being an ADEA case, the facts paralleled Hicks. Like Melvin Hicks, who was treated moreharshly than white prison guards, Roger Reeves was treated more harshly than younger employees. Reeves was fired for “shoddyrecord keeping.” He had strong indirect evidence that similarly situated younger employees were not terminated. The 5th Circuit,based on Hicks, sided with the Sanderson Plumbing. However, in a unanimous opinion written by Justice O'Connor, the SupremeCourt overturned the 5th Circuit, ruling as follows:

3 Pric

“This much is evident from our decision in St. Marys Honor Center. There we held that the factfinders rejection of theemployers legitimate nondiscriminatory reason for its action does not compel judgment for the plaintiff… The ultimatequestion is whether the employer intentionally discriminated, and proof that the employers proffered reason isunpersuasive, or even obviously contrived, does not necessarily establish that the plaintiffs reason is correct. … In otherwords, it is not enough … to disbelieve the employer; the factfinder must believe the plaintiffs explanation of intentionaldiscrimination. … In reaching this conclusion, however, we reasoned that it is permissible for the trier of fact to infer theultimate fact of discrimination from the falsity of the employers explanation.”

Critically, Hicks pre-dated CRA-91 and was tried by a judge. CRA-91 introduced jury trials to both Title VII and the ADA. Jurytrials have always been available in the ADEA. In a trial by judge (i.e., a bench trial), the phases of the trial occur in order and thejudge can end a case in any phase by ruling that the burden in that phasewas not carried. However, in a jury trial, the evidences forall three phases are presented and the judge instructs the jury regarding the respective burdens in each phase. Indeed, as we willwitness shortly, it was the jury instructions that prompted the Supreme Court ruling in Desert Palace v. Costa (2003).

2.2. Mixed-motive

The mixed-motive scenario applies to a special instance of disparate treatment theory in which the plaintiff has strong (e.g.,“smoking gun”) evidence of a violation. For example, the terminated female in the example used earlier might have evidence thather boss routinely made derogatory remarks about females (e.g., they are less productive than males). In the mixed-motivescenario, the defendant concedes the illegal motive (i.e., that derogatory remarks were made), and attempts to prove that despitethe evidence of the illegal motive, there was a legal motive unrelated to the derogatory remarks for the termination (e.g., repeatedrules violations).

To illustrate, in Price Waterhouse v. Hopkins (1989), Anne Hopkins was passed over for promotion in consecutive years andclaimed sex discrimination in promotion. She had smoking gun evidence that key decision-makers made stereotypical sex-basedderogatory remarks suggesting that she had flawed “interpersonal skills” correctable “by a soft-hued suit or a new shade oflipstick”, that she was “macho”, and that she “overcompensated for being a woman”. The defense countered with direct evidencethat she was brash and abrasive, particularly to staff, and often to clients, and this is why she was not promoted.

The trial judge and the DC Circuit Court favored Anne Hopkins, because the defense lacked clear and convincing evidence of thelegal motive. In an otherwise fractured ruling inwhich a majority of justices never agreed on all aspects of the case, six justices didagree that clear and convincing evidence was too strong a requirement and that the defense need only offer a preponderance ofevidence for the legal motive. Additionally, Justice O'Connor opined that the mixed-motive scenario could be triggered only withdirect evidence of discrimination, implying that if there is only indirect evidence of discrimination, it should be treated under theburden of persuasion in the pretext phase (phase 3) in a McDonnell–Burdine scenario.

Hopkinswas overturned in CRA-91 as relates to remedies. Prior to CRA-91, the defendant that proved the legal motive escapedall liability. CRA-91 dictates that if a plaintiff proves the illegal motive (as did Anne Hopkins), remedies include declaratory relief(declaring an employment practice illegal), injunctive relief (an order to cease such practices) and attorney fees. However, if thedefense proves the legal motive with a preponderance of evidence (a debatable outcome in Hopkins), the defendant escapesliability related to the selection decision, which in Hopkins included lost back pay, the applied for promotion, and attorney fees.3

Justice O'Connor was alone in Hopkins in requiring direct evidence as the only trigger for the mixed-motive defense.Nevertheless, lower courts subsequently followed her lead. Many cases were jury cases tried under the ADEA. Costawas a Title VIIcase tried under post-CRA-91 rules, and therefore, was also a jury case.

Catharina Costa, was terminated after a fight with a male co-worker. She was the only female worker in a hotel warehouse.Costa presented indirect evidence that she was treated more harshly than the male co-worker with whom she fought, as well asother male co-workers who had committed similar acts in the past. The defense articulated that Costa was terminated because shewas a repeat offender, whereas the suspended co-worker and similarly situated male employees were not. Under McDonnell–Burdine rules, the jury wouldweigh Costa's indirect evidence against the defense's articulation. However, the trial judge issued thefollowing mixed-motive instruction:

“You have heard evidence that the defendant's treatment of the plaintiff was motivated by the plaintiff's sex and also byother lawful reasons. If you find that the plaintiff's sex was a motivating factor in the defendant's treatment of the plaintiff,the plaintiff is entitled to your verdict, even if you find that the defendant's conduct was also motivated by a lawful reason.

e Waterhouse v. Hopkins is discussed in detail by Gutek and Stockdale (2005).

4 An5 Smi6 Mea


… However, if you find that the defendant's treatment of the plaintiff was motivated by both gender and lawful reasons,you must decide whether the plaintiff is entitled to damages. The plaintiff is entitled to damages unless the defendantproves by a preponderance of evidence that the defendant would have treated plaintiff similarly even if the plaintiff'sgender had played no role in the employment decision.”

In what was considered a surprising ruling, the Supreme Court supported the trial judge. Speaking for a unanimous Court,Justice Thomas ruled:

“In order to obtain a [mixed-motive] instruction … a plaintiff need only present sufficient evidence for a reasonable jury toconclude, by a preponderance of the evidence, that “race, color, religion, sex, or national originwas amotivating factor for anyemployment practice”. Because direct evidence of discrimination is not required inmixed-motive cases, the Court of Appealscorrectly concluded that the District Court did not abuse its discretion in giving a mixed-motive instruction to the jury.”

For her part, Justice O'Connor joined this ruling because she believed, as did the other eight justices, that “Congress codified a newevidentiary rule for mixed-motive cases arising under Title VII” in CRA-91.

2.3. Implications

The Reeves ruling was not surprising. The Supreme Court inasmuch signaled in Hicks that it would follow the ruling of the trierof fact, be it a judge or jury. Therefore, comparison of Reeves to Hicks suggests that juries are more sensitive to plaintiff claims thantrial judges, which is hardly a revelation. However, the Costa ruling shocked the legal community. Several lower courts hadevaluated mixed-motive scenarios in light of CRA-91 and concluded that the direct evidence test is necessary because the mixed-motive scenario offers a great advantage to plaintiffs. For example, in Fuller v. Phipps (1995), the 4th Circuit Court virtuallyrequired “smoking gun” evidence reflecting animus toward the plaintiff (as in Hopkins) in order to invoke the mixed-motivedefense. The 4th Circuit reasoned that without the direct evidence test, the line between McDonnell–Burdine and mixed-motivewould be blurred.

A major fear expressed by many trial attorneys4 is that defendants may face a critical decision during trials on whether todefend with an articulation, as in McDonnell–Burdine, or offer proof that the alleged illegal motive was not the true reason forchallenged selection decision, as in mixed-motive. If the defense provides both the articulation and the affirmative defense, a jurycould be persuaded that the illegal motive is true. These are complicated issues beyond the scope of this paper. For presentpurposes, it is sufficient to understand that employers should be careful about what they or their managers say to or aboutemployees, as anything derogatory could be construed as representing an illegal motive, and therefore, could color the perceptionsof a jury as relates to a challenged personnel selection decision.

3. Adverse impact theory in the ADEA

Adverse (or disparate) impact occurs when an otherwise facially neutral employment practice disproportionately excludes ahigher percentage of one group as opposed to another. For example, there is nothing inherently (or facially) discriminatory about acognitive test. However, when used for the purposes of hiring or promotion, it generally results in a significantly greater exclusionrate for minorities as opposed to nonminorities. Similarly, physical criteria such as height and weight tend to exclude significantlymore females than males, and requiring “flexibility for retraining” in a layoff plan tends to adversely impact older workers.

Adverse impact has long been a staple feature in Title VII case law. More recently, the Supreme Court endorsed ADEA claims ofadverse impact in Smith v. City of Jackson (2005)5 and Meacham v. Knolls Atomic Power Laboratory (KAPL) (2008).6 However, as wewill witness below, the manner inwhich adverse impact cases are tried in the ADEA differs from how they tried in Title VII. ADEA caselaw on adverse impact is discussed in this section, and Title VII case law on adverse impact is discussed in Section 3 below.

3.1. Early ADEA adverse impact precedents

Prior to the Supreme Court's ruling in Smith v. City of Jackson (2005), most circuit courts questioned whether adverse impact is alegitimateADEAclaim. Smith affirmed that adverse impact is a legitimateADEAclaim,butwithdecidedly different rules than inTitle VII.Additionally, Smith left residue that required a subsequent ruling in Meacham v. Knolls Atomic Power Laboratory (KAPL) (2008)6.

Prior to the Supreme Court's ruling in Hazen v. Biggens (1993), lower courts commonly treated age-based adverse impactclaims with Title VII rules (e.g., Geller v Markham, 1980; Leftwich v. Harris-Stowe, 1983). In Hazen, Walter Biggens was fired at age62 just a few weeks short of pension eligibility. A jury found for Hazen on disparate treatment. However, the Supreme Court feltthat the jury was unduly influenced in its disparate treatment ruling by a factor correlated with age (years of service). All ninejustices agreed that “employer decisions”may be motivated by “factors other than age… even if the motivating factor is correlatedwith age.” They also agreed that “disparate treatment captures the essence of what Congress sought to prohibit in the ADEA.”Perhaps most importantly, three justices opined that it was improper to transport Title VII adverse impact rules into the ADEA.

excellent (free) source for opinions of EEO trial attorneys is provided by the Employment Law Information Network at http://www.elinfonet.com.th v. City of Jackson is discussed by the author in the July 2005 issue of TIP.cham v. KAPL is discussed by Gutman and Dunleavy in the April and October 2008 issues of TIP.

http://www.elinfonet.com


3.2. Smith v. City of Jackson (2005)

In Smith, the City of Jackson, Mississippi feared loss of personnel to neighboring communities and authorized higher percentageraises to officers and dispatchers with less than 5 years experience. Somemembers of this groupwere older than 40 (theminimumage for an ADEA claim). However, most personnel with less than 5 years experience were younger than 40, and there was asignificant differences in the ages of those with less than 5 versus greater than 5 years of service. In what had become a commonruling after Hazen, the district court ruled that adverse impact is unavailable in the ADEA as a matter of law, and the 5th Circuitagreed.

The essence of the Smith ruling is captured in Table 2, which compares Title VII to the ADEA in each phase of the adverse impactscenario. The only commonality is in phase 1, where plaintiffs have to (a) identify a specific employment practice(s) that (b) fallsmore harshly on one group than another. These two principles are commonly called identification and causation. The defense toadverse impact in Title VII is proof that the challenged practice is job-related and consistent with business necessity, forcing theplaintiff to prove there are equally valid alternative practices with less or no adverse impact. In comparison, in the ADEA,defendantsmay use the RFOA (Reasonable Factor Other than Age) statutory defense, forcing the plaintiff to prove that the factor(s)offered is not reasonable. Thus, in the ADEA, there is no business necessity defense in phase 2 and no alternative with less adverseimpact in phase 3.

In a divided ruling in which five justices favored adverse impact in the ADEA, a major reason offered was that CRA-91overturned Wards Cove v. Atonio (1989) for Title VII, but not for the ADEA. Ultimately, as clarified by the Supreme Court inMeacham v. KAPL (2008), the majority in Smith used Wards Cove only to amplify the phase 1 requirement (i.e., identification andcausation). However, as we will witness shortly, the 2nd Circuit's interpretation of Wards Cove is what ultimately prompted theSupreme Court's review of Meacham. Interestingly, the plaintiffs in Smith lost on every issue. The ruling was unanimous thatplaintiffs failed to identify a specific employment practice in phase 1, and that even had they done so, the City's need to competewith neighboring communities constitutes an RFOA.

3.3. Meacham v. KAPL (2008)

The 2nd Circuit reviewed Meacham twice; in 2004 and 2006. This court had a long history of assessing adverse impact in theADEA, beginning with Geller v Markham (1980). After CRA-91, the 2nd Circuit applied Wards Cove rules to age-based adverseimpact cases, including inMeacham I. This was a more traditional adverse impact case than Smith. The defendant, KAPL, institutedan involuntary reduction in force (IRIF) in conjunction with a voluntary separation plan (VSP) (for employees with 20 or moreyears of service). There was no difficulty in identifying an employment practice; it was a layoff. Nor was there any difficulty inproving causation; 98% of the laid off employees were over age 40. UnderWards Cove rules, whichmimic McDonnell–Burdine rulesin the defense phase, KAPL articulated that the laid off employees were rated lowest in criticality of skills and flexibility forretraining. However, in the pretext phase, the plaintiffs proved to the satisfaction of a jury that therewere suitable alternatives withless adverse impact, including a hiring freeze and extension of the VSP to employees with less than 20 years of service. The 2ndCircuit agreed with the Jury and the plaintiffs were victorious in Meacham I.

Meacham I was then vacated and remanded for reconsideration in light Smith, and the plaintiffs lost in Meacham II. Based onSmith, a divided panel of the 2nd Circuit ruled that the defense's articulation in Meacham I was sufficient to satisfy the RFOAdefense and that the plaintiffs now had the burden to prove that the reasons offered by KAPL were unreasonable. The twomajorityjudges ruled that based on the Supreme Court's reference to Wards Cove in Smith, the RFOA defense is productive (as inMcDonnell–Burdine). The dissenting judge argued that the burden in RFOA is persuasive, and therefore, that KAPL would have toaffirmatively prove, rather than merely articulate, its reasons for using the IRIF criteria. For its part, the Supreme Courtunanimously agreed with the dissenting judge, listing numerous reasons why RFOA and statutory defenses in other statutes areaffirmative defenses.

3.4. Implications

Two things are clear from the Smith andMeacham rulings. First, adverse impact is far less imposing for defendants in the ADEAthan in Title VII. There is no business necessity defense and there is no need to search for alternatives with less adverse impact. It is

Table 2Adverse Impact in Title VII and the ADEA.

Title VII

Phase 1 Statistical evidence of an identified employment practice that disproportionately excludes protected group membersPhase 2 Proof that the challenged practice is job-related and consistent with business necessity.Phase 3 Proof there is an equally valid, job-related practice with less or no adverse impact.

ADEA

Phase 1 Statistical evidence of an identified employment practice that disproportionately excludes protected group membersPhase 2 Proof that the challenged practice is supported by a Reasonable Factor Other than Age (RFOA).Phase 3 Proof that the factor cited is unreasonable, or not the true reason for the employment practice.

.

.


sufficient that the factors cited in the RFOA defense are provably reasonable. They do not have to be the most reasonable factors;nor do they have to be more reasonable than other possible factors. Thus, if a defendant presents evidence of an RFOA, the onlyrecourse for the plaintiff is to affirmatively prove it is unreasonable.

That said, the fact that KAPL cannot merely articulate its criteria (i.e., criticality of skills and flexibility for retraining) is asignificant burden on defendants. Particularly in layoffs, employers need to establish criteria they can defend as being reasonableand reasonably assessed. For example, in an examination of 115 district court cases on reductions in force (RIFs)7, it was found thatcommon characteristics associated with employer victories included a concrete layoff planwith systematic methods for employeeassessment and selection for termination. These plans featured formal performance appraisal systems and internal organizationalreviews of actual termination decisions.

In short, KAPL's need to retain employees on the basis of critical skills and flexibility for retraining may have been a legitimate RFOA.However, the burdenof proof on the legitimacyof the layoff criteria and their fairness in application is onKAPL, not the laid off employees.

4. Adverse impact theory in Title VII

The Supreme Court has not ruled on adverse impact in Title VII since Wards Cove v. Atonio (1989).8 In Wards Cove, a 5–4majority required plaintiffs to satisfy the aforementioned identification/causation provision in phase 1. More importantly, themajority reduced the burden of defense from persuasion (proof of job-relatedness) to production (articulation of a legitimatebusiness justification) in phase 2. Phase 3 (alternatives with less adverse impact) was left intact. Subsequently, in CRA-91, Congresscodified the identification/causation provision in phase 1, but returned the burden of persuasion in phase 2, requiring proof that achallenged practice is “job related and consistent with business necessity”.

The Supreme Court's 19-year silence on adverse impact leaves important questions unanswered with respect to severalimportant personnel selection issues. One notable issue in need of clarification is how to assess cutoff scores on standardized tests.Other emerging issues include attempts to reduce (or avoid) adverse impact by defendants and attempts to satisfy the phase 3requirement in the adverse impact scenario by plaintiffs (alternatives with less or no adverse impact).

4.1. Cutoff scores9

Prior to the 3rd Circuit's ruling in Lanning v. Septa (1999), lower courts generally deferred to Section 1607.5(H) of the UniformGuidelines on Employment Selection Procedures (1978)10 to assess cutoff scores. Accordingly:

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“Where cutoff scores are used, they should normally be set so as to be reasonable and consistent with normal expectationsof acceptable proficiency within the work force.”

Although vague in its construction, lower courts have traditionally interpreted this guideline favorably for defendants withevidence of content, criterion, and/or construct validity. These courts have also weighed other factors, including professionaljudgment and natural breakpoints in the distribution of scores. For example, in an early landmark ruling in Guardians v. CivilService (1980), involving a content validity study, the 2nd Circuit ruled that:

“An employermay establish a justifiable reason for a cut-off score by, for example, using a professional estimate of the requisiteability levels, or, at the very least by analyzing the test results to locate a logical break-point in the distribution of scores.”

This ruling was later echoed verbatim by several courts, including the 7th Circuit in Gillespie v Wisconsin (1985), another contentvalidity ruling.

However, in Lanning, the 3rd Circuit took the phrase “job related and consistent with business necessity” from CRA-91 andparsed it into two parts. One part (“job related”) was interpreted to require that a test is valid, and the other part (“consistent withbusiness necessity”) was interpreted to require proof that a cutoff score “measures the minimum qualifications necessary forsuccessful performance of the job in question.” More specifically, the 3rd Circuit ruled:

“Under the District Court's understanding of business necessity, which requires only that a cutoff score be “readilyjustifiable,” SEPTA, as well as any other employer whose jobs entail any level of physical capability, could employ anunnecessarily high cutoff score on its physical abilities entrance exam in an effort to exclude virtually all women byjustifying this facially neutral yet discriminatory practice on the theory that more is better. This result contravenes Griggsand demonstrates why, under Griggs, a discriminatory cutoff score must be shown to measure the minimum qualificationsnecessary to perform successfully the job in question.”

This interpretation from Lanning was explicitly rejected by the 7th Circuit in Bew v. City of Chicago (2001). The 7th Circuit, whichpreviously favored the Uniform Guidelines interpretation in Gillespie v Wisconsin (1985), ruled that “Griggs does not distinguishbusiness necessity and job relatedness as two separate standards.” It should be noted, however, that more recently, the 6th Circuit

Wingate, Thornton, McIntyre & Frame (2003).Wards Cove ruling is discussed in detail by Gutman (2000). See also Legal Front articles written by the author in the Jan 2003 and Jan 2004 issues of TIPtman (2005a,b).or issues relating to cutoff scores are discussed in detail by Kehoe and Olson (2005).eret (2005) compares the Uniform Guidelines, APA Standards, and SIOP Principles in relation to test validity, cutoff scores, and other related issues.


adopted the Lanning standard in Isabel v. City of Memphis (2005). Therefore, at least two circuit courts adhere to aninterpretation of cutoff scores that most other circuit courts disagree with.

4.2. Reduction or avoidance of adverse impact

The most heralded cases in this arena are Hayden v. Nassau County (1999) and Ricci v. Destefano (2006). In both cases, examswere administered and scored, and they resulted in adverse impact on minorities. In Hayden, Nassau County (New York)eliminated portions of the test in order to reduce the adverse impact, whereas in Ricci, the New Haven, Connecticut Civil ServiceBoard (CSB) refused to certify the exam. Both actions were supported by the 2nd Circuit Court.

The origins of Hayden stem from 1977, when the Department of Justice (DOJ) sued Nassau County for adverse impact of an entry-level police exam forminorities and females. The County entered into a consent decreewith the DOJ in 1982 to construct an exam thatproduces no adverse impact, or is valid “in accordancewith Title VII and theUniform Guidelines.”However, exams constructed in1983,and again in 1987, resulted in severe adverse impact (and two newconsent decrees). Then, in 1990, theDOJ andNassau County agreedto work together, jointly appointing a Technical Design Advisory Committee (TADC) of experts to design a new exam.

The TADC composed a 25-component test that was administered to 25,000 candidates. The exam as a whole resulted in severeadverse impact. The TADC attempted to eliminate the adverse impact entirely, but concluded that the end result was not jobrelated. So they eliminated 16 of the 25 components to significantly reduce (but not eliminate) the adverse impact and offered it asa job related test. The test was then challenged by 68 unsuccessful candidates, most of whomwerewhite. The plaintiffs alleged thatthey would have been selected had all 25 components been used. The 2nd Circuit supported Nassau County, ruling that “the intentto remedy the disparate impact of the prior exams is not equivalent to an intent to discriminate against non-minority applicants.”The 2nd Circuit acknowledged that the decision to “redesign the exam” did take race into account, but reasoned that the examwas“scored in a wholly race-neutral fashion”, and therefore, that the plaintiffs failed to state a claim under the Equal Protection Clauseof the 14th Amendment, Title VII, or CRA-91.

In Ricci, the exams were for promotion of firefighters to lieutenant and captain. The New Haven CSB refused to certify the testsbased on adverse impact, choosing instead to seek input on alternatives with less adverse impact (most notably, on assessmentcenters). The plaintiffs (17 whites, 1 Hispanic) claimed disparate treatment on grounds that race was the sole reason for notcertifying the tests. However, based on Hayden, the district court judge rejected the claim, ruling:

11 Issu2007 is

“Thus, while the evidence shows that race was taken into account in the decision not to certify the test results, the resultwas race-neutral: all the test results were discarded, no one was promoted, and firefighters of every race will have toparticipate in another selection process to be considered for promotion. Indeed, there is a total absence of any evidence ofdiscriminatory animus towards plaintiffs—under the reasoning of Hayden, 180 F.3d at 51, ‘nothing in our jurisprudenceprecludes the use of race-neutral means to improve racial and gender representation. … [T]he intent to remedy thedisparate impact of the prior exams is not equivalent to an intent to discriminate against non-minority applicants’.”

More recently, on June 9, 2008 the 2nd Circuit affirmed the district court in an unsigned (per curium) ruling stating that thedistrict court opinion was “well-reasoned” and that the CSB was “in an unfortunate position of having no good alternatives.”

4.3. Alternatives with less adverse impact

The ruling in Ricci v. DeStefano is that employers can voluntarily eschew tests that produce adverse impact and start the processanew searching for alternatives with less or no adverse impact. Two district court rulings carry this ruling one step further;Bradley v. City of Lynn (2006) and Johnson v. City of Memphis (2006).11

In Bradley v. City of Lynn, a cognitive test served as the sole basis for selecting entry-level firefighters. There was proof of adverseimpact in phase 1 and insufficient evidence of job relatedness in phase 2. However, the judge ruled that evenwith evidence of jobrelatedness of the cognitive exam in phase 2, there was evidence in case law that a combination of cognitive and physical abilitieswas a better predictor of firefighter performance than cognitive abilities alone (e.g., Brunet v City of Columbus, 1995). The judgealso suggested that a combination of personality (work style), biodata and cognitive abilities should produce less adverse impactthan cognitive tests alone. The judge ruled that “while none of these approaches alone provides the silver bullet, these other non-cognitive tests operate to reduce the disparate impact of the written cognitive examination.”

In Johnson v. City of Memphis, the judge ruled that a promotion exam to police sergeant was job related, but ruled for theplaintiffs because of valid alternatives with less adverse impact. Critical to this case was the fact that the City had previously used avalid promotion test in 1996 and deviated from its prior procedure in the challenged test. The judge ruled “It is of considerablesignificance that the City had achieved a successful promotional program in 1996 and yet failed to build upon that success.”

4.4. Implications

The implications of Lanning are plain; it makes a difference if the CRA-91 requirement (“job related and consistent withbusiness necessity”) is parsed (as in Lanning) or unparsed (as in most other circuits). Clearly, a Supreme Court review is needed.

es relating to Bradley v. City of Lynn and Johnson v. City of Memphis are debated in articles written by James C. Sharf and James L. Ouutz in the Octobersue of TIP.


Moreover, the author expects (or at least hopes) that the Lanning viewpoint would lose on two grounds. First there is no basis incase law or the legislative history of CRA-91 for assuming that the job relatedness standard was altered in CRA-91. Second, eventhough the Uniform Guidelines are outdated on the issue of cutoff scores, it is more than likely that the vast majority of professionalsin psychology or management that specialize in validity research would agree with the manner in which the 2nd Circuitinterpreted the Uniform Guidelines on cutoff scores in Guardians.12

The Hayden ruling was very controversial among professionals based on the criticism that to reduce adverse impact, the TADChad to eliminate primarily cognitive test components in favor of personality components.13 It is unclear whether the same criticismapplies to Ricci because it is as yet unknownwhich alternatives the NewHaven CSB actually chose. From a legal standpoint, there isno basis for a Supreme Court review because the Hayden and Ricci rulings are within the same judicial circuit. From a practicalstandpoint, it is noteworthy that if cognitive factors were greatly sacrificed inHayden as charged, amunicipality could open itself toliability if it selected incompetent police officers that later endangered the public.

Although the Bradley and Isabel rulings are also controversial among professionals, thus far, we have only district court rulingsand no disagreements. Furthermore, the Isabel ruling is the only one in which the defendants were successful in their phase 2defense and lost only because of alternatives in phase 3.

5. Affirmative action and operational needs

Historically, most court rulings on affirmative action (AA) have focused on “remedial needs”, or whether AA is a justifiableremedy for past discrimination. In fact, among 13 Supreme Court AA rulings between Regents v. Bakke (1978) and Adarand v. Pena(1995), all but the first one (Bakke) were on remedial needs. Lost in the next 12 rulings was that Bakke was about “operationalneeds”, or in that particular case, whether diversity among students makes for better medical school education. In three SupremeCourt AA rulings since Adarand, two were landmark rulings (Gratz v. Bollinger, 2003; Grutter v. Bollinger, 2003), and the third(Parents v. Seattle School District, 2007) was basically a retest of the Grutter ruling.14

5.1. The Bakke ruling

The University of California's “Davis Plan” reserved 16 of 100 medical school admissions for minorities. Allen Bakke suedunder Title VI (not Title VII), claiming this plan was a quota, and under the 14th Amendment, claiming unequal treatmentbecause he could not compete for all 100 seats. The Supreme Court ruling by Justice Powell was clearly fractured. Four justicesviewed the Davis Plan as an illegal quota under Title VI and ignored the 14th Amendment claim. Four others viewed it as legalunder 14th Amendment moderate scrutiny rules. Powell borrowed from each plurality, agreeing that the Davis Plan was anillegal quota, but offering the “Harvard Plan” as a legal way to treat race as one of many admissible factors (or “plusses”). Powellruled that the Harvard Plan satisfied both prongs of the strict scrutiny analysis under the 14th Amendment: that diversity inhigher education is a compelling government interest (prong 1) and that the Harvard Plan is narrowly tailored (prong 2) to thatinterest.

5.2. The Gratz and Grutter rulings

After Adarand, some lower courts ruled that Bakke was bad law, including the 5th Circuit in Hopwood v. Texas (1996) and the11th Circuit in Johnson v. Bd. of Regents of Georgia (2001). For example, in Johnson, the 11th Circuit ruled:

12 See13 See14 Issuissue of

“Justice Powell clearly identified diversity as a compelling interest that may be asserted by a university in defense of anadmissions program that flexibly considers race as one of several factors in making admissions decisions. No other Justice,however, expressly endorsed that view.”

Therefore, aside from the specific issues relating to the University of Michigan's undergraduate admissions (or UGA) plan (Gratz)or its law school admissions (LSA) plan (Grutter), the critical question was whether Bakke is good law. As it turned out, Bakkesurvived, the LSA plan was upheld, and the UGA plan was struck down.

The UGA plan used a “selection index” with 100 out of 150 points required for admission. Applicants could receive up to 12points for standardized test scores; 98 points for grade point average, category of school attended, and strength of curriculum; 20points for geographical location, alumni relations, outstanding essay, personal achievement, leadership and service activity; and 20points for miscellaneous categories, including socioeconomic disadvantage, racial and ethnic minorities, athletic scholarship, anddiscretionary selection by the Provost.

The LSA plan combined objective test scores with “soft” variables (recommendation letters, quality of undergraduate school,leadership, work experience, unique talents, and overcoming social or economic disadvantage). The stated goal was to seek acritical mass of underrepresented minority students to: (1) make each class “stronger than the sum of its parts”, (2) preventminority students from feeling “isolated or like spokespersons for their race”, and (3) prevent minority students from feeling

, for example, Landy’s (1986) discussion of content, criterion and construct validity., for example, articles written by Linda Gottfredson at http://www.ipmaac.org/nassau/.es related to affirmative action and the cases cited in this section are discussed by the author in the April, July, and October 2003 issues and the April 2004TIP, and by the author and Eric Dunleavy in October 2007 issue of TIP.

http://www.ipmaac.org/nassau/


“uncomfortable discussing issues freely based on their personal experiences”. The law school claimed there was no fixedpercentage goal for the “critical mass.”

The LSA plan was upheld by a 5–4 majority in Grutter in which Justice O'Connor was the deciding vote. Quoting from JusticePowell's ruling in Bakke, Justice O'Connor ruled that diversity is a compelling government interest and that the law school planwasnarrowly tailored to that interest. Accordingly:

“The Law School's admissions program bears the hallmarks of a narrowly tailored plan. To be narrowly tailored, a race-conscious admissions program cannot “insulate each category of applicants with certain desired qualifications fromcompetition with all other applicants ”…. Instead, it may consider race or ethnicity as a ‘plus’ in a particular applicant's file;i.e., it must be “flexible enough to consider all pertinent elements of diversity in light of the particular qualifications of eachapplicant, and to place them on the same footing for consideration, although not necessarily according them the sameweight”.…It follows that universities cannot establish quotas for members of certain racial or ethnic groups or put them onseparate admissions tracks. … The Law School's program, like the Harvard plan approved by Justice Powell, satisfies theserequirements. Moreover, the program is flexible enough to ensure that each applicant is evaluated as an individual and notin a way that makes race or ethnicity the defining feature in the application.”

However, in Gratz, a 7–2 majority ruled that the UGA planwas not narrowly tailored. Justice O'Connor was in that majority, andexplained her differing opinions in Grutter and Gratz as follows:

“Unlike the law school admissions policy …. The procedures employed by the …. Office of Undergraduate admissions donot provide for a meaningful individualized review of applicants. … The Law school considers the various diversityqualifications of each applicant, including race, on a cases by case basis. … By contrast, the Office of UndergraduateAdmissions relies on the selection index to assign every underrepresented minority the same, automatic 20-point bonuswithout consideration of the particular background, experiences, or qualities of each individual applicant.”

In short, unlike the LSA plan, which O'Connor viewed as flexible, as requiring intensive individual assessment, and as treating raceas a “plus” factor, she viewed the UGA plan as an automatic “bonus” for race in a plan that otherwise had little flexibility andvirtually no individual assessment.

Another point to note is that even though Justice Kennedy voted against the plans in Grutter and Gratz, he expressed thefollowing opinion in Grutter:

“The separate opinion by Justice Powell in …[Bakke] …is based on the principle that a university admissions program maytake account of race as one, nonpredominant factor in a system designed to consider each applicant as an individual,provided the program can meet the test of strict scrutiny…. If strict scrutiny is abandoned or manipulated to distort its realand accepted meaning, the Court lacks authority to approve the use of race even in this modest, limited way. The opinionby Justice Powell, in my view, states the correct rule for resolving this case. The Court, however, does not apply strictscrutiny.”

Thus, Kennedy believed that Powell's ruling in Bakke was good law, but did not believe the LSA plan satisfied Powell'sprescriptions. Two of the other three dissenters in Grutter (Rehnquist & Scalia) focused only on prong 2 of the strict scrutinyanalysis (narrow tailoring), leaving Justice Thomas as the only one of nine justices who would have opted to consider whetherBakke is good law.

5.3. Parents v. Seatle School District

Of major interest in the Parents case was that Justice O'Connor, a strong supporter of Justice Powell's Bakke ruling, retired andwas replaced by Justice Alito. The late Justice Rehnquist was replaced by Justice Roberts, but few doubted that his views differedfrom Rehnquist's. The case itself featured a high school admissions plan in Seattle, Washington and a grade school admissions/transfer plan in Louisville, Kentucky. The Seattle plan had “tiebreakers” for deciding student school choices, one of which wasbased on a classification of students as “white” and “nonwhite” and required schools to remain within 10% of the school district'sracial composition (41% white, 59% nonwhite). The Louisville plan classified students as “black” or “other” and divided its schoolsinto clusters with the goal of maintaining 15%minimum and 50%maximum black enrollment within each cluster. Thus, both planshad race-conscious features, and both were challenged under 14th Amendment strict scrutiny rules.

Both plans were struck down, but as in Gratz and Grutter, more was at stake. Additionally, the ruling was fragmented much likeit was in Bakke. Four justices (Breyer, Ginsburg, Stevens & Souter) argued that both plans satisfied both prongs and four others(Roberts, Alito, Scalia & Thomas) argued that neither plan satisfied either prong of the strict scrutiny analysis. Therefore, JusticeKennedy decided this case. Justice Roberts argued the following:

“In upholding the admissions plan in Grutter ….. this Court relied upon considerations unique to institutions of highereducation, noting that in light of “the expansive freedoms of speech and thought associated with the universityenvironment, universities occupy a special niche in our constitutional tradition.” 539 U. S., at 329. See also Bakke, supra, at312, 313 (opinion of Powell, J.). The Court explained that “[c]ontext matters” in applying strict scrutiny, and repeatedlynoted that it was addressing the use of race “in the context of higher education.” Grutter, supra, at 327, 328, 334. The Court


in Grutter expressly articulated key limitations on its holding–defining a specific type of broad-based diversity and notingthe unique context of higher education–but these limitations were largely disregarded by the lower courts in extendingGrutter to uphold race-based assignments in elementary and secondary schools. The present cases are not governed byGrutter.”

Had Justice Kennedy agreed, punditswould havewritten that diversity as a compelling interest is limited to higher education, therebycasting considerable doubt onwhether and towhat extentGrutter applies to theworkplace. JusticeKennedy, believed that neither planwas narrowly tailored. However, he gave the following endorsement for the concept of diversity as a compelling interest.

“The [Breyer] dissent finds that the school districts have identified a compelling interest in increasing diversity, includingfor the purpose of avoiding racial isolation ….. The [Roberts] plurality, by contrast, does not acknowledge that the schooldistricts have identified a compelling interest here …. For this reason, among others, I do not join Parts III-B and IV.Diversity, depending on its meaning and definition, is a compelling educational goal a school district may pursue.”

Additionally, Justice Kennedy provided advice on how to pursue the goal of diversity legally. Accordingly:

“School boards may pursue the goal of bringing together students of diverse backgrounds and races through other means,including strategic site selection of new schools; drawing attendance zones with general recognition of the demographicsof neighborhoods; allocating resources for special programs; recruiting students and faculty in a targeted fashion; andtracking enrollments, performance, and other statistics by race. These mechanisms are race conscious but do not lead todifferent treatment based on a classification that tells each student he or she is to be defined by race, so it is unlikely any ofthem would demand strict scrutiny to be found permissible.”

Thus, in the end, two plans were struck down, but the basic principle of diversity as a compelling government interest wasupheld.

5.4. Implications

More was at stake in Grutter and Gratz than diversity in higher education. After Bakke, Justice Powell's ruling was endorsed inseveral police promotion cases. For example, in Talbert v. City of Richmond (1981), the 4th Circuit ruled:

“The city claims that it took race into account to advance to operational needs of the police department by achievingdiversity among the officers ranked as major. ….. The city does not claim that it promoted Miller as a remedy for pastdiscrimination in the department. Accordingly, we will follow Justice Powell's analysis in this case, because the city's claimthat diversity is beneficial to operation of the department is akin [⁎929] to the claim accepted [⁎⁎9] by Justice Powell inBakke that a school has a legitimate interest in obtaining a diverse student population.”

Consistent with Powell's ruling, the 4th Circuit accepted that race was treated as a “plus factor” in promotion from lieutenant tocaptain. The 6th Circuit had previously rendered a similar ruling in Detroit Police v. Young (1979).

More recently, in a post-Grutter ruling, the 7th Circuit upheld race-based promotion in Petit v. City of Chicago (2003), ruling:

“It seems to us that there is an even more compelling need for diversity in a large metropolitan police force charged withprotecting a racially and ethnically divided major American city like Chicago. Under the Grutter standards, we hold, the cityof Chicago has set out a compelling operational need for a diverse police department.”

Each of the above rulings relied on the basic premise in Bakke that diversity is a compelling government interest (prong 1 of thestrict scrutiny analysis). However, these interests must be addressed by narrowly tailored solutions (prong 2 of the strict scrutinyanalysis). There are several recent cases inwhich diversity failed prong 2. For example, in Lomack v. City of Newark (2006), a newlyelected mayor wanted to create a “rainbow” fire department by making each of 108 firehouses racially diverse. The 3rd Circuitviewed this as “outright racial balancing.” Similar rulings have been rendered in other municipalities (e.g., Biondo v. City ofChicago, 2004; Rudin v. Lincoln Land Community College, 2005).

In short, Diversity in the workplace is clearly an evolving issue. Employers need to be careful that when adopting diversityprograms, the focus is on why diversity is important to the success of the business.

6. Key ADA rulings and the ADAAA

Title VII and the ADEA protect it all of its class members as a “matter of law.” That means that everyone reading this chapter isprotected by Title VII, and everyone reading this chapter who is over 40 years old is protected by the ADEA. However, few amongus, including thosewith physical ormental impairments, are protected by the ADA. There are important prerequisite requirements.To illustrate, in McKay v. Toyota (1997), McKay, was required to prove each of following:

(1) that she is a disabled person within the meaning of the Act;(2) that she is qualified to perform the essential functions of her job with or without reasonable accommodation; and(3) that she suffered an adverse employment decision because of her disability.

15 Issues related to the ADA are discussed by the author in the January 2000, July 2001 and July 2002 issues of TIP, by Don Zink in the October 2002 issue of TIPand by Papinchock (2005). Dunleavy and Gutman discuss major implications of the ADAAA in the Jan 2009 issue of TIP.16 Issues related to the ADAAAA are discussed by Dunleavy and Gutman in the Jan 2009 issue of TIP.

Table 3Rulings affected by the ADAAA.

School Board v. Arline(1987)

Supreme Court rules that Episodic illnesses qualify for protection under RE-73. Ruling is endorsed in the ADAAA.

Sutton v. UAL (1999) Two myopic airline pilots not disabled because they can see normally with corrective lenses. Ruling is modified by the ADAAA.Murphy v. UPS (1999) Hypertensive mechanic not disabled because blood pressure is at normal levels with medication. Ruling is overturned by the ADAAA.Albertsons v Kirkingburg(1999)

Amblyopic truck driver not disabled because he can self-mitigate his impairment using monocular cues. Ruling is overturned by theADAAA.

Toyota v. Williams(2002)

Manual tasks are acceptable daily life functions only when central to daily life (bathing, brushing teeth). Ruling is overturned by theADAAA.


In other words, McKay had to prove both (1) disability and (2) qualification in order to establish protected class membership, andshe had to establish protected class membership before she could claim (3) an adverse employment action. Both prerequisitehurdles for protected class membership are challenging.

Hurdle 1 (disability) has three options (or prongs): (1) a current physical ormental impairment that substantially limits amajorlife activity; (2) a record of such an impairment; or (3) being regarded as being impaired. Generally, most ADA claims use Prong 1,and most Prong 1 claims reduce to determining if the cited impairment substantially limits a major life activity.

Hurdle 2 (qualification) has two requirements: (1) having the knowledge, skills, and abilities (or KSAs) to perform essential jobfunctions and (2) being able to perform these job functions with or without reasonable accommodation. Critically, employers arenot required to alter essential job functions. Therefore, if individuals cannot perform all essential job functions, even withaccommodations, they face what several courts have termed an insurmountable barrier. McKay had a physical impairment (carpaltunnel syndrome). However, she could not prove shewas substantially limitedwith respect to anymajor life activity, and therefore,lost on hurdle 1.

The Supreme Court decided nine ADA cases between 1999 and 2002 relating to personnel selection issues.15 Four of these caseswere on assessment of major life activities within the meaning of the ADA, and were either modified or reversed in the ADAAA.16

The other five rulings were not addressed in the ADAAA, but are important in their own right. Additionally, the ADAAA addressedSchool Board v. Arline (1987), a Supreme Court ruling based on the Rehabilitation Act of 1973 (RE-73).

6.1. Overview of the ADAAA

The Supreme Court rulings addressed in the ADAAA are depicted in Table 3. Unlike the other four cases, which are modified oroverturned, the ADAAA endorses School Board v. Arline. By so doing, it incorporates illnesses that are episodic or in remission (e.g.,Tuberculosis and other like diseases) into the definition of being disabled in the ADA. On a closely related issue, the ADAAA alsodefines as “transitory” (or temporary) any impairment “with an actual or expected duration of 6 months or less.” In so doing, itoverturns a host of lower court rulings featuring impairments that were considered transitory at the time, and therefore, notcovered by the ADA. These impairments include, but are not limited to back injuries (Halperin v. Abacus Tech, 1997), abdominalsurgery (McDonald v Pennsylvania, 1998), wrist and elbow surgery (Gutridge v. Clure, 1998), back surgery (Pollard v. High's ofBaltimore, 2002), and even major heart attacks (Katz v City Metal, 1996).

Among the remaining four rulings in Table 3, Sutton v. United Airlines (UAL), Murphy v. United Parcel Service (UPS), andAlbertsons v. Kirkingburg are companion cases decided on the same day (June 22, 1999). The common feature in these cases isthat each favored assessment of substantially limiting effects of physical or mental impairments in their mitigated state (i.e., withthe corrective effects of eyeglasses or medication). The fourth ruling in Table 3 (Toyota v. Williams, 2002) restricted the definitionof manual tasks to activities deemed central to daily life, such as bathing and brushing teeth.

6.2. Sutton and its companion rulings

The main target in the Sutton, Murphy, and Kirkingburg rulings was interpretive guidance by the EEOC requiring employers toassess impairments in their non-mitigated states. Accordingly:

“The determination of whether an individual is substantially limited in a major life activity must be made on a case by casebasis, without regard to mitigating measures such as medicines, or assistive or prosthetic devices.”

For example, based on this guidance, the restrictive effects of diabetes should be assessed independently of the corrective effectsof insulin, the restrictive effects of loss of limbs should be assessed independently of the corrective effects of prosthetic devices,and so on. This EEOC guidance was struck down in Sutton and its companion cases, but is supported, at least in part, in theADAAA.

,


Specifically, the ADAAA dictates that assessment of the restrictive effects of physical and mental impairments should be made“without regard to the ameliorative effects” of mitigating measures that include, but are not limited to:

17 Inteuncorre

“medication, medical supplies, equipment, or appliances, low-vision devices (which do not include ordinary eyeglasses orcontact lenses), prosthetics including limbs and devices, hearing aids and cochlear implants or other implantable hearingdevices, mobility devices, or oxygen therapy equipment and supplies.”

The list also includes “learned behavioral or adaptive neurological modifications.” However, it clearly excludes “eyeglasses orcontact lenses.”

The Sutton plaintiffs were twin sisters who previously piloted small commuter planes and hoped to pilot larger commercial jets.Their vision was 20/200 correctable to 20/20 with lenses. This satisfied Federal Aviation Administration regulations, but UAL alsorequired uncorrected vision of 20/100 or less. Surprisingly, the twins did not argue that they were restricted in the major lifeactivity of seeing, but instead, the major life activity of working. Or as noted by Justice O'Connor:

“Petitioners do not make the obvious argument that they are regarded due to their impairments as substantially limited inthe major life activity of seeing. They contend only that respondent mistakenly believes their physical impairmentssubstantially limit them on the major life activity of working.”

Substantial limitations in working require exclusion from a broad range of jobs. Thus, the twin's were destined to fail because theywere not broadly excluded from piloting planes; only from piloting bigger commercial jets. However, even if they cited seeing asthe major life activity, they were likely losers under prong 1 ADAAA rules because of the exclusion of “eyeglasses and contactlenses” from the list of mitigating measures cited in the ADAAA.17 In comparison, the plaintiffs in both companion cases hadstrong prong 1 claims under ADAAA rules.

Vaughan Murphy had hypertension, and the mitigating measure was medication (beta blockers). Hallie Kirkingburg was blindin one eye (amblyopia), and the mitigating measure was his own ability to compensate for the lack of binocular cues by relying onmonocular cues. Medication is cited in the ADAAA as a valid mitigating measure, and learned compensation for an impairment iscovered under “learned behavioral or adaptive measures.”

Murphywas a truckmechanic whowas required to road test the trucks he repaired. Hewas initially misdiagnosed. Hewas latercorrectly diagnosed and fired based on a Department of Transportation (DOT) regulation on hypertension. Murphy's medicationenabled him to maintain normal blood pressure and perform virtually all other activities except heavy lifting. Thus, in a medicatedstate, Murphy was seen as not severely restricted. However, as Justice O'Connor noted:

“Because thequestionwhetherpetitioner is disabledwhen takingmedication isnot beforeus,wehavenooccasionhere to considerwhetherpetitioner is “disabled”due to limitations that persist despitehismedicationor thenegative side effects of hismedication.”

In other words, under pre-ADAAA law, Murphy was require to show how he was substantially limited by citing symptoms that persistdespite themedication and/or side effects of themedication. Under post-ADAAA law, the analysismust bemadewithout consideration ofthe main effects of medication.

Like Murphy, Kirkingburg wasmisdiagnosed and later fired based on a DOT regulation. He had an impeccable driving record. The 9thCircuit ruled that he was disabled because of a “significant difference” in how individuals with monocular and binocular vision view theworld. The Supreme Court ruled that “significant difference” does not equate to “significant restriction” of a major life activity. Therefore,Kirkingburg's impeccable driving record was viewed as evidence that he is not significantly restricted. Speaking for six other justices,Justice Souter stressed the same point made by Justice O'Connor in the Murphy case. Accordingly:

“This is not to suggest thatmonocular individuals have an onerous burden in trying to show that theyare disabled. On the contrary,our brief examination of some of themedical literature leaves us sharing the Government's judgment that peoplewithmonocularvision “ordinarily” will meet the Act's definition of disability….We simply hold that the Act requires monocular individuals, likeothers claiming the Act's protection, to prove a disability by offering evidence that the extent of the limitation in terms of their ownexperience, as in loss of depth perception and visual field, is substantial.”

Thus, under pre-ADAAA law, Kirkingburg was required to offer evidence of impairment despite his ability to compensate for lack ofbinocular vision by use ofmonocular cues. Under post-ADAAA law, the issue of restrictiveness rests entirely on the fact the hewas blind inone eye, irrespective of his abilities to use monocular cues.

6.3. Toyota v. Williams

Ella Williams was on awork team that performed four major job tasks considered essential for assembly work by Toyota. Two of thetasks caused her pain and she was permitted, at least temporarily, to opt out of them. However, Toyota subsequently ordered rotationthrough all four tasks by all team members. Williams sued, claiming she was substantially limited in six major life activities, includingmanual tasks andworking. The 6th Circuit ruled that she was substantially limited with respect to the manual tasks needed to perform

restingly, however, had the twins cited seeing as the restricted major life activity, they could have argued that the UAL regarded individuals withcted vision less than 20/100 as being disabled under the prong 3 of the definition of being disabled.


the jobs that caused her pain, such as tool gripping and repetitive motion with hand and arms extended at or above shoulder level forextended time periods.

Manyobservers believed thatWilliams circumvented rules relating toworking as amajor life activity (i.e., being excluded fromabroadrange of jobs) by appealing tomanual tasks. For example, in Sutton, Justice O'Connor expressed a disdain for working as a valid major lifeactivity, stating:

Table 4Suprem

Clevela(1999

PGA TouChevronUS Airw

EEOC v.

“Because parties accept…. “major life activities” includes working, we do not determine the validity of the cited regulations. Wenote, however, that theremaybe someconceptual difficulty indefining “major life activities” to includework, for its seems ‘to arguein a circle to say that if one is excluded… that the exclusion constitutes an impairment,when thequestionyou're asking is,whetherthe exclusion itself is by reason of handicap’.”

Therefore, some observers (the author included) believed the Supreme Court would use Toyota v. Williams to strike downworking as a valid major life activity. However, speaking for a unanimous Court, Justice O'Connor took a different route, rulingthat the manual tasks must be central to daily life. Accordingly:

“Whenaddressing themajor life activity of performingmanual tasks, the central inquirymust bewhether the claimant is unable toperformavariety of tasks central tomost peoples daily lives, notwhether the claimant is unable to perform the tasks associatedwithher specific job. Otherwise, Suttons restriction on claims of disability based on substantial limitation in working will be renderedmeaningless because an inability to perform a specific job always can be recast as an inability to perform a class of tasks associatedwith that specific job.”

The ADAAA does two things with respect to Toyota v. Williams. First, it separates “caring for oneself” and “manual tasks” andincorporates both as valid major life activities. Second, it incorporates “working” as a valid major life activity. Accordingly:

“[M]ajor life activities include, but are not limited to, caring for oneself, performingmanual tasks, seeing, hearing, eating, sleeping,walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, andworking.”

Therefore, the ADAAA ends any speculation generated by Justice O'Connor with respect to working as a major life activity. At thesame time, it should be noted that Ella Williams, though a winner on manual tasks central to daily life under ADAAA rules, was alikely loser for another reason; her inability to perform all essential job functions with or without reasonable accommodation.

6.4. Supreme Court rulings unaffected by the ADA

The five Supreme Court rulings unaffected by the ADAAA are depicted in Table 4. One of these rulings (EEOC v. Waffle House, 2002)relates to mandatory binding arbitration agreements, and will be discussed in Section VII below. Among the remaining four cases, two(Cleveland v Policy Management Systems, 1999; Martin v. PGA Tour, 2000) relate to essential job functions, the third case (Chevron v.Echazabal, 2002) relates to theADAstatutorydirect threat defense, and the fourth case (USAirways v. Barnett, 2002) relates to unilaterallyimposed seniority agreements.

The issue inCleveland v. PolicyManagementwaswhether a Social SecurityDisability Insurance (SSDI) claimautomatically precludes anADA claim on grounds that an individual cannot be 100% disabled and, at the same time, have the ability to perform all essential jobfunctions. TheSupremeCourt ruled that SSDI claimsdonotprecludeADAclaimsbecause SSDIdeterminations aremadewithout referenceto reasonable accommodations. At the same time, Justice Souter, speaking for a unanimous Court, ruled that to defeat summary judgmentfavoring defendants, plaintiffs must explain why they can perform the essential job functions. Accordingly:

“To defeat summary judgment… [an]… explanationmust be sufficient to warrant a reasonable juror's concluding that… [in]…the earlier statement, the plaintiff could nonetheless ‘perform the essential functions’ of her job with or without ‘reasonableaccommodation’.”

Historically, district court judges have routinely rendered summary judgment for defendantswhenplaintiffs have prior SSDI claims. Thus,it is not clearhowmuchof victory this ruling is for plaintiffs, since these judges are theoneswhomustdeterminewhat a “reasonable juror”should believe.

The issue inMartin v. PGA Tour (2000) was whether the PGA Tour is free to decide that walking a golf course is an essential “jobfunction” for touring professional golfers. CaseyMartin defeated the “walking rule” and won the right to use a golf cart in PGA golf

e Court Rulings Affected by the ADAAA.

nd v Policy Management Systems)

Social Security disability claims do not automatically preclude ADA claims on qualification to perform essential jobfunctions.

r v. Martin (2001) Title III ADA ruling in which walking is struck down as an essential function of the game of golf.v. Echazabal (2002) Supreme Court supports EEOC regulation that direct threat to safety includes threat to oneself & others.ays v. Barnett (2002) Unilaterally imposed seniority systems have same force and effects as collectively bargained agreements in the genera

run of cases.Waffle House (2002) EEOC has independent right to seek victim-specific relief in face of mandatory binding arbitration agreement.

l


events. The PGA argued that cart riding would “fundamentally alter the nature” of the events. However, speaking for a 7–2majority, Justice Stevens, himself an avid golfer, ruled:

“The use of carts is not inconsistent with the fundamental character of golf, the essence of which has always been shot-mating. The walking rule contained in Petitioner's hard cards is neither an essential attribute of the game itself nor anindispensable feature of tournament golf.”

Although seemingly unrelated to most “workplaces”, this ruling signals to employers that the distinction between essential andmarginal job functions cannot be arbitrarily established, and employers cannot opt out of the ADA by simply defining arbitrary jobtasks as being essential job functions.

Chevron v. Echazabal addressed the ADA statutory direct threat defense, which permits exclusion of individuals who pose adirect threat to the health or safety of “other individuals in the workplace”, if those threats cannot be reasonably accommodated.Although statutory ADA language does not address self-threat, an EEOC regulation generalizes the exclusion to the “individual orothers.”Mario Echazabal had Hepatitis C andwas excluded from oil refinery work based on the EEOC regulation because of a threatto his own health and safety because of toxins in the air. The Supreme Court upheld the EEOC regulation in a unanimous opinion.

Lastly, the issue in Barnett was whether a unilaterally imposed seniority plan has the same force and effect as a collectivelybargained agreement (CBA). Robert Barnett, a cargo handler, suffered a back injury and could no longer handle cargo. He used hisseniority to transfer to a less demanding job (mailroomwork). However, themailroom jobwas later opened for bidding, and based onUSAir's unilaterally imposed seniority plan, he lost his job to two employeeswithmore seniority. Barnett challenged the seniority planon grounds that it was not collectively bargained. Speaking for four others, Justice Breyer upheld the unilateral system, ruling:

“[T]he seniority system will prevail in the run of cases. As we interpret the statute, to show that a requested accommodationconflicts with the rules of a seniority system is ordinarily to show that the accommodation is not reasonable. Hence such ashowing will entitle an employer/defendant to summary judgment on the question unless there is more.”

Thus, a unilateral agreement has the same force as CBA unless the plaintiff can prove there are circumstances that make theunilateral agreement unreasonable (e.g., altering the conditions of the agreement too frequently). Although only five justicesagreed with Breyer, two others (Scalia & Thomas) favored identical treatment of unilaterally imposed seniority systems and CBAs,with no additional caveats.

6.5. Implications

The ADAAA dramatically alters the landscape for ADA claims, making it easier for plaintiffs to establish disability under prong 1(current physical or mental impairment that substantially alters a major life activity). Plaintiffs now enjoy three advantages theywere previously denied. First, the prescription in Sutton and its companion cases that impairments must be assessed in their non-mitigated states is rescinded. Thus, individuals who use medication (Murphy v. UPS) or can self-adapt (Albertsons v. Kirkingburg)have stronger cases underADAAA rules. However, individualswho can seenormallywith eyeglasses or contact lenses (Suttonv. UAL)face the same challenges as in pre-ADAAA rules. Second, the ADAAA defines working as a major life activity, and endorses manualtasks required for work (Toyota v. Williams) as well as manual tasks central to daily life. Third, the ADAAA incorporates episodicillnesses, or illnesses that are in remission into the ADA, and treats impairments with actual or expected durations of 6 months orlonger with the same rules are permanent impairments.

Among the other four Supreme Court rulings unaffected by the ADAAA, two are plaintiff victories and two are defense victories.However, the plaintiff victory in one of the cases (Cleveland v. Policy Management) is suspect because plaintiffs must still showwhythey can qualify for SSDI benefits, and yet, perform all essential job functions with reasonable accommodations. On the other hand,the ruling in Martin is a strong plaintiff victory that carries with it a warning to employers to scrutinize their definitions of“essential job functions.” In the author's opinion, the definition of essential job functions should be consistent with the results of aproperly conducted job analysis.

Regarding the two defense victories, Chevron v. Echazabal extends the definition of direct threat to include threats to oneself aswell as others, even if the threat to oneself is not a threat to others. US Airways v. Barnettmakes it unreasonable as amatter of law torequest accommodations that counter seniority systems regardless of whether they are unilaterally imposed or collectivelybargained, unless it can be proven that the unilaterally imposed plan is suspect.

There is an additional point to note about the Barnett case. Robert Barnett requested several accommodations other that US Airignored. These requests were not at issue in the Supreme Court case. However, in other cases, lower courts have ruled thatemployers and employees must flexibly interact with each other to identify reasonable accommodations. Indeed, employers havelost cases they likely could have won by not interacting with employees when they believed the accommodation requests areunreasonable (e.g. Bultmeyer v Fort Wayne School, 1996; Criado v IBM, 1998; Dalton v. Suburu-Izuzu, 1998; Feliberty v Kemper,1996; Hendricks-Robinson v. Excel, 1998; Ralph v. Lucent, 1998). Therefore, the moral here is that employers should assess thereasonableness of accommodations only after discussion with applicants, employees, and/or their medical doctors.

7. Retaliation

Retaliation Proscriptions against retaliation are written into several statutes. Furthermore, the Supreme Court has ruled thatthese proscriptions apply even in statutes that lack specific retaliation provisions, including Section 1982 of the Civil Rights Acts of


1866 and 1971 (Sullivan v. Little Hunting Park,1969) Title IX (Jackson v. Birmingham Board of Education, 2005), Section 1981 of theCivil Rights Acts of 1866 and 1971 (CBOCSWest v. Humphries, 2008), and for federal employees in the ADEA (Gomez-Perez v. Potter,2008). The prototypicalmodel for proscription of retaliation is provided inTitle VII. The twomost important Title VII Supreme Courtrulings on retaliation are Robinson v. Shell Oil (1997) and Burlington Northern Santa Fe (BNSF) v.White (2006). Robinson increasedsignificantly the number of retaliation claims18, and the BNSF v. White ruling is likely to have a similar effect.

7.1. The Title VII model for retaliation

Title VII has a trilogy of proscriptions, including (a) terms and conditions of employment, (b) segregation and classification, and(c) retaliation. The first two parts are written into Section 703(a) of Title VII, which makes it illegal for employers to:

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“(1) [F]ail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respectto his compensation, terms, conditions, or privileges of employment…or (2) to limit, segregate, or classify his employees orapplicants for employment in any way which would deprive or tend to deprive any individual of employmentopportunities or otherwise adversely affect his status as an employee.”

The anti-retaliation provision is written into Section 704(a) in Title VII, which makes it illegal for employers to:

“[D]iscriminate against any of his employees or applicants for employment…because he has opposed any practice made anunlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated inany manner in an investigation, proceeding, or hearing under this subchapter (emphasis added by author).”

In other words, the anti-retaliation provision has both an opposition clause (for complaints) and a participation clause (for legalclaims).

7.2. Robinson v. Shell Oil (1997)

Prior to Robinson, some courts interpreted the phrase “employees or applicants” in 704(a) literally, denying retaliation claims ofterminated employees. Charles Robinson sued for racial discrimination under 703(a) after he was terminated, and then sued forretaliation under 704(a) when his former employer wrote a negative reference letter to a prospective employer. Shell Oil arguedthe term “employee” covers only current employees. In a unanimous ruling written by Justice Thomas, the Supreme Courtextended coverage of 704(a) to include former employees. Thomas ruled that the “primary purpose” of Section 704(a) is to “detervictims from complaining to the EEOC,” thereby “maintaining unfettered access to statutory remedial mechanisms.”

The EEOC then issued policy guidance, articulating three “essential elements” for a retaliation claim. Accordingly, plaintiffsmustprove (1) they engaged in opposition or participation; (2) they suffered an “adverse action”; and (3) there is a “causal connection”between opposition/participation and the adverse action. Based on Justice Thomas' ruling in Robinson, the EEOC articulated thefollowing definition of adverse action:

“The statutory retaliation clauses prohibit any adverse treatment that is based on a retaliatory motive and is reasonablylikely to deter the charging party or others from engaging in protected activity. Of course, petty slights and trivialannoyances are not actionable, as they are not likely to deter protected activity. More significant retaliatory treatment,however, can be challenged regardless of the level of harm.”

Broadly construed, this definition applies to any action designed to deter (or dissuade) a “reasonable person” from exercising theright to oppose or participate in accordance with Section 704(a), including actions that might occur away from the job. Thisdefinition of adverse action has been termed the EEOC Deterrence standard.

7.3. BNSF v. White (2006)

After Robinson, therewas disagreement among circuit courts on the definition of adverse action. Three circuit courts adopted theEEOC Deterrence standard, which has lightest burden of proof for plaintiffs. Amore extreme standard, termed Ultimate Employment,was adopted by two circuit courts. In the words of the 5th Circuit (Mattern v. Eastman Kodak, 1997), this standard requires actionsaffecting “hiring, granting leave, discharging, promoting, and compensating.” Amiddle standard, termed Adverse Employment, wasadopted by seven circuit courts. This standard requires a nexus between 703(a) and 704(a), meaning an adverse action must itselfbe illegal discrimination under the standards used in 703(a).

In BNSF v. White, Sheila White was hired as a track laborer and was the first female in an all-male railroad yard. She was thenreassigned to forklift operator, a cleaner and more prestigious job, but with no change in grade or pay. White filed two retaliationclaims. The first claimwas for reassignment back to track laborer after she complained that shewas humiliated by her supervisor infront of other employees. The second claim was for suspension without pay for insubordination after an incident with a foreman.White appealed the suspension via the BSNF internal grievance procedure, and a BNSF investigator ruled that the suspension wasan “overreaction”, and White was given back pay for 37 days of missed work.

C statistics on retaliation and other claims are discussed by Zink and Gutman (2005). Substantive issues related to retaliation are discussed by Ericy and/or the author in the October 2006 and January and April issues of TIP.


There was little doubt that Sheila White would win her case. She was awarded $43,500 by a jury at district court, and she won atboth the 6th Circuit and the Supreme Court. The key issue was the applicable standard for adverse action. The only standard underwhich White could lose was Ultimate Employment, but this standard was struck down by all three courts. However, the 6th Circuitapplied the Adverse Employment standard, and the Supreme Court disagreed and declared White a winner under the EEOCDeterrence Standard. Justice Breyer, speaking for an 8–1 majority, repeated Justice Thomas' ruling in Robinson verbatim. He furtherruled:

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“We conclude that the anti-retaliation provision does not confine the actions and harms it forbids to those that are relatedto employment or occur at the workplace. We also conclude that the provision covers those (and only those) employeractions that would have been materially adverse to a reasonable employee or job applicant. In the present context thatmeans that the employer's actions must be harmful to the point that they could well dissuade a reasonable worker frommaking or supporting a charge of discrimination.”

The lone dissent was by Justice Alito. He agreed there was retaliation against Sheila White on either standard, but favored AdverseEmployment over EEOC Deterrence.

7.4. Implications

The most critical implication of BNSF v. White is that a weak discrimination claim under 703(a) may become a winningretaliation claim under 704(a). For example, in Hare v. Potter (2007), Jamie Hare claimed she suffered retaliatory harassment afterfiling a sex discrimination claim for failure to promote. On the harassment claim, the 3rd Circuit ruled that “the evidence shepresentsmay not be demonstrative of a level of harassment that is severe and pervasive.”However, on the retaliation claim, the 3rdCircuit also ruled “that such treatment would deter a reasonable employee from exercising her rights.” A similar ruling wasrendered by the 3rd Circuit in Moore v. Philadelphia (2006), where white police officers that opposed harassment against fellowblack police officers experienced verbal threats, assault, and transfer. It should be noted that the 3rd Circuit was one of the courtsthat used the Adverse Employment standard prior to BNSF v. White. Therefore, it is possible that both retaliation claims would havelost under pre-BNSF rules.

In short, BNSF v. White significantly reduces the burden on plaintiffs to win retaliation claims. Therefore, employers shouldconsider establishing prevention and correction programs to educate their workforce. A mechanism for preventing, identifying,and correcting potential retaliation violations is discussed in the Conclusion section below.

8. Mandatory arbitration agreements and related issues19

Mandatory binding arbitration agreements gained popularity in the mid to late 1980s as a mechanism to prevent existingemployees from filing lawsuits. Here, an applicant agrees as a condition of employment to submit future employment disputes tointernal binding arbitration. In other words, applicants refusing to sign such agreements are simply not hired, and once hired,employees effectively sign away their private right to sue their employers in federal or state court.

The Supreme Court affirmed the rights of employers to enforce such agreements in federal employment claims in Gilmer v.Interstate (1991), andmore recently, in state employment claims in Circuit City Stores v. Adams (2001). For example, in Gilmer, theSupreme Court struck down the private right of 62-year old Robert Gilmer to sue under the ADEA based on his agreement tobinding arbitration as an original condition of employment. A majority of five Supreme Court justices supported the right ofemployers to enforce such mandatory agreements based on the Federal Arbitration Act of 1925 (FAA), an subsequently affirmedthat right for state claims in Circuit City.

Believing that mandatory binding arbitration agreements are coercive, and “inconsistent with the civil rights laws”, the EEOCwrote policy guidance in 1997 (Order 915.002), providing 20 reasons why it opposes such practices. The EEOC then sued on behalfof an employee who signed a mandatory arbitration agreement in EEOC v. Waffle House (2002). The EEOC also sued in EEOC v. Bd.of Regents of Wisconsin (2002) on behalf of four individuals denied the private right to sue under the ADEA based on the SupremeCourt's ruling in Kimel v. Florida Board of Regents (2000), that ADEA claims against state agencies are unconstitutional.

9. EEOC v. Waffle House

In theWaffle House case, Eric Baker signed an arbitration agreement as a condition of employment, much like Robert Gilmer. Hesuffered a seizure 16 days after he was hired and was discharged. He filed an ADA claim with the EEOC, and the EEOC sued on hisbehalf after a failed attempt at conciliation with the employer. The 4th Circuit ruled that the EEOC has independent statutoryauthority to file the lawsuit, but limited the remedies to injunctive relief, thereby denying victim-specific relief (e.g., reinstatement,back pay, and compensatory damages for pain and suffering or punitive damages for willful employer violations). The 4th Circuitreasoned as follows:

“When the EEOC seeks make-whole relief for a charging party, the federal policy favoring enforcement of privatearbitration agreements outweighs the EEOCs right to proceed in federal court because in that circumstance, the EEOCs

es related to issues in this section are discussed by the author in the July 2000, July 2001 and April 2002 issues of TIP.


public interest is minimal, as the EEOC seeks primarily to vindicate private rather than public interests. On the other hand,when the EEOC is pursuing large-scale injunctive relief, the balance tips in favor of the EEOC enforcement efforts in federalcourt because the public interest dominates the EEOCs action.”

Speaking for a 6–3 majority, Justice Stevens overturned the 4th Circuit and ruled that the EEOC “may be seeking to vindicate apublic interest… even when it pursues entirely victim-specific relief.” Thus, the EEOC established it's independent right to sue forthe full compliment of remedies, even in situations where employees have legally signed away their private right to sue.

9.1. EEOC v. Regents of Wisconsin

Shortly after theWaffle House ruling, the 7th Circuit extended the EEOC's right to sue for victim-specific relief in EEOC v. Boardof Regents ofWisconsin (2002). In Kimel v. Florida Board of Regents (2000), the Supreme Court struck downprivate ADEA lawsuitsagainst state agencies on grounds that Congress had overstepped its 14th Amendment powers to abrogate 11th Amendmentsovereign state immunity when it initially applied ADEA coverage to state entities. It did likewise with ADA claims in Board ofTrustees of the University of Alabama v. Garrett (2001). However, in Garrett, the Supreme Court also signaled that ADEA and ADAclaims may be enforced “by the United States in actions for money damages”, implying that the EEOC maintains the right to sueeven state agencies.

Much as it had done in reaction to the Gilmer ruling, the EEOC issued the following statement after the Kimel ruling:

“In Kimel v. State of Florida Board of Regents, the Supreme Court rules that the Age Discrimination in Employment Act (ADEA)provision granting state employees or applicants the right to file a lawsuit against state employers is unconstitutional. Stateemployees can file an ADEA charge against their employer, EEOC can investigate, but the private individual has no federal suitrights. Only EEOC can sue state employers for ADEA violations.”

In other words, the EEOC signaled that it would continue to enforce ADEA (and by inference, ADA) claims on behalf of individualsthat had lost the right to sue on their own behalf. Fulfilling that promise, the EEOC sued for victim-specific relief on behalf fouremployees on age-based termination by the University of Wisconsin Press, and won.

In the Wisconsin case, a jury found for the EEOC and the defendant appealed based on the Kimel ruling. Commenting on bothGarrett and Waffle House, the 7th Circuit ruled as follows:

“The only response left to the UW would be to say that sovereign immunity is different; it is more important than the FAAor arbitration agreements. That may be so. But when we read Waffle House together with the cautionary language ofGarrett, which indicates that despite the fact that sovereign immunity bars private suits, the federal employment statutescan be enforced by the United States, we find little room in which to maneuver—even were we inclined to. If ultimatelyWaffle House is to be distinguished from a case such as this one, that distinction should be drawn not by us, but ratherby the Supreme Court.”

In other words, based on the “cautionary language from Garrett”, and the ruling in Waffle House, the 7th Circuit ruled that unlessdeemed otherwise by the Supreme Court, the EEOC maintains the right to sue state agencies for victim-specific relief.

9.2. Implications

The implication ofWaffle House is that the EEOC used the plight of Eric Baker as an occasion to send a strong signal to employersthat it will continue to oppose mandatory binding arbitration agreements in court, including requests for victim-specific relief.Therefore, employers using or considering the use of such agreements should reconsider. However, at the same time, it must beemphasized that the EEOC sponsors its own Alternative Dispute Resolution (ADR) program supporting voluntary agreements tosubmit to employment disputes to EEOC arbitration. Readers interested in learning more about the EEOC's ADR program should goto www.eeoc.gov and click on “mediation” (under “Filing a Charge of Discrimination).

The implication of the Wisconsin ruling is that EEOC will also pursue claims of discrimination against state agencies via theADEA and ADA. The caveat, of course, is that the Supreme Court has implied that theWisconsin ruling is correct, but has not done soofficially. Nevertheless, unless and until theWisconsin ruling is overturned, state employers should assume that it has the force andeffect of law.

10. Conclusions

As noted in the Introduction, case law and other information cited in this paper illustrates, but does not exhaust legal issuesrelated to personnel selection. The reader should recognize that the law is fluid, so as one reads about a given or case or issue, freshcase law and/or statutory law may be on the horizon. For example, Congress enacted the ADAAA after the first draft of this paperwas written, thus requiring major revisions in Section 5 above. Therefore, the interested reader is advised to use available Internetresources to keep abreast of breaking developments. Two good sites to use are www.elinfonet.com and www.findlaw.com. Bothare free.

Another point to note is that the focus of this paper is on personnel selection issues, most notably, hiring, training, promotionand downsizing. By definition, other issues are not included, most notably case law relating to sexual and racial harassment and

http://www.eeoc.gov

http://www.elinfonet.com

http://www.findlaw.com


equal pay for equal work. These are important issues in their own right, and should be followed with the same interest as issuesrelating to personnel selection.

For present purposes (selection), the implications of the case law cited is that it is easy for employers and HRmanagers tomakecostly mistakes. In the author's opinion, these mistakes can be avoided by educating managers and employees. Some issues aremore difficult to grasp than others. For example, professional help is likely required in developing selection tests, adoptingdiversity programs, or in fashioning layoff policies.

However, for other issues, such as disparate treatment and retaliation, and by implication, sexual or racial harassment,employers should establish a workplace policies that focus as much on civility as it does on the law. A good model to follow wasproposed in EEOC Policy Guidance 915.050 in July 1999, inwhich the EEOC proposedminimal and best practices for preventing andquickly correcting potential workplace violations. The minimum requirements include:

• A clear explanation of prohibited conduct and associated penalties• Assurance that employees who make complaints will be protected against retaliation• A clearly described complaint process that provides accessible avenues of complaint• Assurance of confidentiality of complaints to the extent possible• A complaint process that provides a prompt, thorough, and impartial investigation• Assurance that the employer will take immediate and appropriate corrective action when it determines that violations haveoccurred

Best Practice includes additional actions, such as training employees to understand the written policies, a dedicated “EEO Officer”in charge of all EEO-related complaints, and employee handbooks to explain rights and responsibilities of all managers andemployees in the workforce.

It should be noted that Policy Guidance 915.050 was primarily for complaints relating to harassment, and secondarily forcomplaints of retaliation. Nevertheless, it applies equally as well to any disparate treatment issue in which an employee may bedisgruntled, even those not covered by any federal or state law. From the author's perspective, case law merely illustrates thepotential trouble spots in a workforce, and the best way to deal with these trouble spots is with forethought and planning.

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Gutman, A. (2005a). Adverse impact: Judicial, regulatory, and statutory authority. In F. J. Landy (Ed.), Employment Discrimination Litigation: Behavioral, Quantitative,and Legal Perspectives (pp. 20−36). San Francisco, CA: Jossey Bass.

Gutman, A. (2005b). EEO Law and Personnel Practices, Second Edition Newburry Park, Ca: Sage Publishers.Jeaneret, R. (2005). Professional and technical authorities and guidelines. In F. J. Landy (Ed.), Employment Discrimination Litigation: Behavioral, Quantitative, and

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Cases cited

Adarand v. Pena (1995) 515 US 200.Albertsons v Kirkingburg (1999) 527 US 555.Bew v. City of Chicago (2001 CA7) 252 F.3d 891.Biondo v. City of Chicago (2004 CA7) 383 F.3d 680.Board of Trustees of the University of Alabama v. Garrett (2001) 531 US 356.Bradley v. City of Lynn (2006 D.Mass) 443 F. Supp. 2d. 145.Brunet v City of Columbus (CA6, 1995) 58 F.2d 251.Bultmeyer v Fort Wayne School (CA7 1996) 100 F.3d 1281.Burlington Northern Santa Fe v. White (2006) 126 S.Ct. 2405.CBOCS West v. Humphries (2008) 128 S.Ct. 1951.Chevron v. Echazabal (2002) 536 US 73.Circuit City Stores v. Adams (2001) 532 US105.Cleveland v Policy Management Systems (1999) 526 US 795.Criado v IBM (CA11 1998) 145 F.3d 437.Dalton v. Subaru-Isuzu Automotive, Inc. (CA7 1998) 141 F.3d 667.Desert Palace v. Costa (2003) 539 US 90.Detroit Police Officers Association v. Young (1979 CA6) 999 F.2d. 225.EEOC v. Waffle House (2002) 534 US 279.EEOC v. Bd. of Regents of the University of Wisconsin, (CA7 2002) 288 F.3d. 296.Feliberty v Kemper (CA7 1996) 98 F.3d 274.


Fuller v. Phipps (CA4 1995) 67 F.3D 1137.Furnco v. Waters (1978) 438 US 567.Geller v Markham (CA2 1980) 635 F.2d 1027.Gillespie v State of Wisconsin (CA7 1985) 771 F.2d 1035.Gilmer v. Interstate/Johnson Lane Corp. (1991) 500 US 20.Gomez-Perez v. Potter (2008) 128 S.Ct. 1931.Gratz v. Bollinger (2003) 539 US 244.Grutter v. Bollinger (2003) 539 US 306.Guardians v. Civil Service (CA21980) 630 F.2d 79.Gutridge v. Clure (CA8 1998) 153 F.3d 898.Halperin v. Abacus Tech (CA4 1997) 128 F.3d 191.Hare v. Potter (2007 CA3) WL 841031.Hayden v. Nassau County (1999 CA2) 180 F.3d 42.Hazen v Biggens (1993) 507 US 604.Hendricks-Robinson v. Excel, 1998.Hopwood v. Texas (CA5 1996) 78F.3d 932.Isabel v. City of Memphis (2005 CA6) 404 F.3d 404.Jackson v. Birmingham Board of Education (2005) 544 US 167.Johnson v. City of Memphis (2006 W.D. Tenn) WL 3827481.Johnson v. Bd. of Regents of the Univ. of Georgia (CA11 2001) 263 F.3d 1234.Katz v City Metal (CA1 1996). 87 F.3d 26.Kimel v. Florida Board of Regents (2000) 528 US 62.Lanning v. Septa (1999 CA3) 181 F.3d 478.Leftwich v Harris-Stowe State College (CA8 1983) 702 F.2d 686.Lomack v. City of Newark (2006 CA3) 463 F/3d 303.McDonald v Pennsylvania, (CA3 1998) 62 F.3d 62.McDonnell-Douglas v. Green (1973) 411 US 792.McKay v. Toyota (CA6 1997) 110 F.3d 369.Meacham v. Knolls Atomic Power Laboratory (2008) 128 S.Ct. 2395.Moore v. Philadelphia (CA3 2006) 461 F.3d 331.Murphy v United Parcel Service (1999) 527 US 516.Parents Involved in Comm. Schools. v. Seattle School Dist. No.1 (2007) 127 S. Ct. 2738.Petit v. City of Chicago (CA7 2003) 352 F.3d 1111.PGA Tour v. Martin (2001) 532 US 661.Pollard v. High's of Baltimore (CA4 2002) 281 F.3d 462.Price Waterhouse v. Hopkins (1989) 490 US 228.Ralph v. Lucent, 1998.Reeves v. Sanderson Plumbing (2000) 530 US 133.Regents of Univ. of California v. Bakke (1978) 438 US 265.Ricci v. Destefano (2006) Civil No. 3:04cv1109 (JBA).Robinson v. Shell Oil (1997) 519 US 337.Rudin v. Lincoln Land Community College (2005 CA7) 420 F.3d. 712.Smith v. City of Jackson (2005) 544 US 228.St. Mary's Honor Center v. Hicks (1993) 509 US 502.Sullivan v. Little Hunting Park (1969) 396 US 229.Sutton v United Airlines (1999) 527 US 471.Talbert v. City of Richmond (CA4 1981) 648 F.3d 925.Texas Dept. of Community Affairs v Burdine (1981) 450 US 248.Toyota v. Williams (2002) 534 US 184.US Airways v. Barnett (2002) 535 US 391.Wards Cove Packing Company v Atonio (1989) 490 US 642.

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