Models of labor market discrimination

Labor market discrimination means that similar labor resources are paid or treated differently when their labor productivity is the same.
We have to be careful though not to think that difference in pay of people doing similar types of work is due to discrimination.  Much of the earning differentials between male and female, black and white can be explained by age, training, education location, types of jobs, experience in the labor market and other types of factors.  What ever can’t be explained by these factors are usually attributed to discrimination.

Types of discrimination
Wage discrimination:  One group is paid less than the white males doing the same work.

Employment discrimination: women or minorities receive inferior treatment in hiring promotions, assignments etc.  Also can include sexual and racial harassment.

Occupational discrimination:  women and minorities are restricted or prohibited from entering the more desirable, higher-paying occupations.

Human capital discrimination: women or minorities do not have the same access to educational and training as white males.  Less educational opportunities.

Costs of Discrimination

Obviously those people who are discriminated against incur a cost while those people doing the discriminating get the good jobs, that pay more, that are withheld from those being discriminated against.

Discrimination is actually an artificial barrier of entry into the labor market.  And like all barriers of entry, results in the economy’s output and income being reduced.  Thus there are costs to society resulting from discrimination.

When otherwise highly qualified and productive workers are prevented from jobs that pay more then society does not allow them to make their maximum contribution to output, income and well-being.  This becomes a loss to society.

Set up a production possibilities curve with capital goods on vertical axis and consumer goods on horizontal axis.  When workers (labor resource) is not allowed to be as productive as they can then society ends up inside the production possibilities curve.

Some estimates suggest that if we eliminated racial discrimination our economy would gain $325 billion per year.  If we ended gender discrimination we would gain another $180 billion per year.

Economic Analysis of Discrimination
Taste-for-discrimination model.

Some people dislike one group so much that these prejudiced people are actually receiving disutility when they are around the people they dislike.    Thus they are willing to pay a price to avoid the people they dislike.

Coefficient of Discrimination

If a white employer is prejudiced to black workers to that white employer there is a cost (disutility) and this cost is shown by the discrimination coefficient, call it d which can be measured in dollars.  The cost of a white worker is Ww the discrimination coefficient is d.  The black worker’s wage is Wb plus the cost of d.  or Wb+d.

As long as the cost of the black and white worker is the same then the prejudiced white employer is indifferent between workers.  Thus Ww = Wb+d.

So if a white worker costs $10 and d=$2 then the employer is indifferent between black and white workers when the black wage is $8.    Thus the prejudices white employer will hire black workers only when their wage is less than $8.  If d=0 then equally productive black and white workers will be paid the same.  The greater d then the lower the wage will be for black workers.

As employers realize that d is approaching 0 then the wage differential between black and white workers will get smaller.

An interesting outcome of this taste for discrimination model is that competition will in the long run reduce discrimination.  Suppose d = $2 then all firms can hire black workers for $8 including the nondiscriminators.  (remember all the workers are equally productive) Thus the nondiscriminators will hire blacks for less than whites and will therefore have lower costs per unit of output and lower average total costs than firms which discriminate.  Remember firms which discriminate pay $8 plus if a $2 cost for discrimination.   These lower costs for nondiscriminating firms will allow them to under price their competitors, which discriminate thus driving them out of business.  Firms are driven out of business because those firms that discriminate are maximizing utility and not profits.  Since utility also includes their prejudicial preferences instead of profits competing firms that do not discriminate maximize profits, which allows them to pay a lower wage.

Statistical Discrimination.

This occurs when individual people are judged on the basis of the average characteristics of the group in which they belong instead on their own characteristics or productivity.

For example:  You were hired to perform a very complicated mathematical study but your pay requires you to perform this task within one hour and you are restricted to hiring people only from SUNY/Oswego.  If you are successful you will be paid a lot of money but you need to hire people who will be able to help you perform the mathematical study.

Who among the 8000 students, most of which are strangers to you, will you approach first?  Clearly you would want someone who is a mathematics, physics or engineering major.  Would you select a man or women?  A white, black, Hispanic, or Asian student?  If gender or race influenced who you chose then you just engaged in statistical discrimination.

Firms that need to hire workers try to collect information on each job applicant including age, education, and past work experience.  Sometimes they might do some pre-employment testing.  All of this information is very expensive to gather and it is difficult to predict job performance from limited data.  Thus some firms looking for less costly information may examine average characteristics of women and minorities in making their hiring decisions. This is statistical discrimination. Note there is no taste for discrimination but the firm is just using gender, race or ethnic background as a crude indicator for production related characteristics of a worker which are not so easy to determine without extensive costs.


Suppose you need a long term training program for workers and in order to recover the cost the worker need to be career oriented.  Your experience and data shows that females are less career-oriented than men, and are more likely to quit work to care for young children and also are less likely to make a geographical transfer than men.    Thus you figure the investment for training will have a lower payoff for females than for males since they will not stay, on average, in the labor market as long as men.

Thus you are falsely assuming that every women has the same tendencies as the average women.  You are stereotyping, thus exclude many women who are very career-oriented, plan to work when they have children and are more than willing to transfer to another geographical area.  You are discriminating against them.

There is not malicious intent and on average their hiring decisions will be rational and profitable because on average their hiring decisions will be correct though they may be violating antidiscrimation laws.  But notice how many people are harmed because of this statistical discrimination.  Since it is often profitable to statistically discriminate it can last a long time.

The Crowding Model:  Occupational Segregation.

Occupational Segregation means that society is crowding women, blacks and certain ethnic groups into jobs that are not as desirable, which pay less.  For example women are more concentrated in jobs such as teaching, nursing, secretarial and clerical types of jobs.  However, keep in mind that teaching and nursing types of jobs though heavily dominated by females are no longer low paying.  One reason for this has been the political and union organization of these two industries.  With respect to teachers they have become very well organized not just from a union point of view but also from a political point of view.  They have been able to vote and get their family members to vote for boards of education that have been more favorable toward them thus getting better pay and more professional status.   Nursing starting salary is between $50,000 and $100,000 per year depending on the type of specialty ones goes into.  Nurses also have become organized but more importantly the demand for nursing has increased by more than the supply thus driving wages up.  Secretarial and clerical workers have not become that organized and thus still receiving low pay.

Hispanics and blacks are crowed into low-paying jobs like laundry workers, cleaners and household aids, hospital orderlies, agricultural workers and other low paying manual jobs.

We will examine the model that helps explain how this crowding occurs due to discrimination.

To simplify the model assume:
1.    market equally divided between men and women, six million of each.
2.    There are three occupations in the economy, X, Y and Z
3.    Both men and women have the same work characteristics and either can perform the jobs in the three occupations.

As a result of discrimination all six million women are prevented from entering occupations X and Y and are thus all crowded into occupation Z.  The men are equally distributed between occupation X and Y in equal numbers.  Thus 3 million in X and 3 million in Y.  While women have all six million in Z.

Men can move easily between occupations X and Y thus any time there is a difference in wages between the two occupations men will move from the lower paying occupation to the higher paying occupation.  This continues until there is an equal distribution between the two occupations.  The wages for men (M) between X and Y will become equal as the freedom on entry and mobility into the higher paying occupations brings about the equilibrium wage rate for men of M.

Since women are crowed into occupation Z  (discrimination prevents them from going into occupations X and Y) all six million of them are competing for the jobs thus increasing the supply of labor in Z and driving down wages.  Labor market discrimination prevents them from entering the labor market.

Another version of the crowding hypothesis is the Dual Labor Market.

This model says that there are two separate noncompeting labor markets.  A primary labor market, which has relatively high wages, stable employment, good working conditions and opportunities for advancement.  These jobs are often filled by white males ages 21-44.  Then there is a secondary labor market, which tend to be low-wage, unstable, dead-end jobs with poor working conditions.  In this market any returns to education and experience are thought to be close to zero.  The workers in this market (usually women and minorities) often get labeled as being unstable and undesirable workers.  This further leads to statistical discrimination.

Since there is this dual labor market women and minorities are crowded into the secondary market thus keeping wages low while prime age white males are in the primary labor market.  Since their supply is low wages are kept high and since discrimination and social values prevent women and minorities from entering the primary market wages for these groups are kept low.

Discrimination is a form of market failure, which prevents freedom of entry and exit into the labor market for a large number of workers.  When we have any market failure it then becomes the responsibility of the Government to rectify this failure to try and make the market more competitive.  This is what Anti-discrimination law seeks to accomplish. To prevent this type of discrimination, which is due to market failure that has occurred in the economy and the labor market the government has to step in

There are 4 acts that deal with equal rights in employment.

1. Civil Rights Act 1964, Title VII amended by Equal Employment Act of 1972. In this act you cannot discriminate either the union or employer based on race, color, religion, sex or national origin.

2. Equal Pay Act of 1963

Must pay equal pay for men and women do equal work

3. Age Discrimination in Employment Act of 1967 as amended.

Can't discriminate in hiring practices against people between ages of 40 - 70.

4. Rehabilitation Act of 1973 protects the handicapped from discrimination by employers performing federal contract work.

In addition to these 4 statues there is executive order 11246 which comes from the President of US. This order forbids discrimination against minorities and in certain situations requires affirmative action to be taken to better insure employment opportunities for minorities working for contractors and subcontractors doing business with the federal government.

Many recent cases about affirmative action in California and Texas have been trying to roll back affirmative action laws dealing with state laws that are trying to give protected groups an opportunity to receive state government contracts. These roll backs of affirmative action laws are only with regard with state contracts not private contracts.

First we will examine Title VII of the Civil Rights Act. Title VII says that you cannot discriminate in hiring or any other term and condition of employment. This also pertains to unions. They can't exclude or expel people from their membership because of race, religion, color or sex..

History of Civil Rights Title VII

It is interesting that one of history’s great ironies is that the strong employment discrimination provisions of title VII were included in the law primarily through the efforts of opponents of civil rights.

As the civil rights movement in the early 60’s mushroomed, President Kennedy proposed the civil rights bill on June 19, 1963. The major focus of the act was to prohibit racial discrimination in public accommodations (hotels, restaurants, etc.) and the guarantee of voting rights. Kennedy believed that any strong provision against employment discrimination would kill the bill (because employment discrimination also occurred in the north). Liberals in Congress were very upset about this and proposed an agency like the NLRB be set up to deal with employment discrimination. They did not have enough votes to pass this legislation so they formed a block with Southerners, that group most opposed to civil rights. The Southerners thought if they supported this portion of the bill then the whole bill would be killed because the northerners did not want it passed due to its employment discrimination parts.

Kennedy as a compromise developed title VII which made discrimination at employment illegal but this provision was not to be enforced by an agency like the NLRB. Instead, under the compromise reached, a person would file charges with EEOC which would then seek to obtain relief by conciliation. If this failed the case would go to a federal district court who had the primary responsibility of enforcement at title VII.

How does this differ from the NLRB handling labor cases?

The Southern legislators had one more ploy to "strengthen" the bill to death. They added to title VII a provision prohibiting employment discrimination based on sex.

If the job discrimination aspect of title VII did not kill the bill the section on sexual discrimination most certainly would.

Why do you suppose adding sexual discrimination to the bill was thought to be enough to kill the bill from passage?

While the debate was going on over the civil rights bill, Kennedy was assassinated. The bill then passed because many members of Congress thought its enactment into law would be a particularly fitting memorial to the fallen President.

The administrative agency that deals with title VII is the Equal Employment Opportunities Commission, which consist of five members appointed by the president and confirmed by congress. They essentially are like the NLRB in that they have the authority to investigate and conciliate grievances dealing with discrimination. However they do not decide individual cases like the NLRB does. The general council of the EEOC conducts the litigation in courts.

How a Grievance is Filed.

If state or local government has an agency dealing with discrimination you must first file with the local agency then wait 60 days or until termination of state proceedings whichever comes first before filing a charge with EEOC.

The EEOC then holds an investigation to see if reasonable cause exists; if so, they try to remedy the problem through conciliation.

If they can't conciliate the charge then the commission can either: (1) litigate the case by filing a lawsuit with the Federal district court or, if not possible, they issue a "right to sue letter" which allows the party to go to court. If the case does not go to court, it does not mean that the case is without merit, it just means it is not as urgent as some of the other cases they choose to take to court.

The amendment in 1972 to the Act enlarges the groups of people who fall under the EEOC. Government workers are now covered.

There are time limits for filing charges. Must file within 180 days after the discriminatory act occurred or 300 days if you must first file with state agency.

After the EEOC proceeding and upon receiving a "right to sue" letter you have 90 days to bring suit to federal district court.

The federal courts deciding title VII have certain remedial powers. They can issue an injunction to stop the unlawful practice and issue affirmative orders such as reinstatement with or without back pay. Back pay can only be for 2 years prior to filing the charge.

Sometimes situations that occur in one law fits into different situations in another law. If you remember prior to discussing the NLRA we talked about how the courts interpreted the concept of an employee in such a way that striking workers were not considered employees and thus were not protected by the act. This concept came up in Robinson v Shell Oil Co. In 1997.

What happened in this case?

Why was he considered an employee by the Supreme Court?

Theories of Discrimination:

Disparate Treatment and Disparate Impact.

In order to prove a case of unlawful employment discrimination the supreme court has devised two types of theories.

1. Disparate treatment when a employer treats some people less favorable than others because of their race, color, religion, sex or national origin. Proof of the employers’ discriminatory motive is critical.

2. Disparate impact when an employers facially neutral employment practices, like hiring or promotion examinations, which make an adverse reference to race or color, religion, sex or national origin, though neutrally applied has a significantly adverse or disparate impact on a protected group, and the employment practice in question is not shown to be job related and consistent with business necessity by the employer. Then an employer can’t use as a defense that he did not intend to discriminate. There are rules pertaining to such matters that we will discuss latter on.

When there is a disparate treatment case the EEOC may itself bring a Pattern and Practice case.
What is a Pattern and Practice Case?

Why do you suppose a employer would rather not be involved in a pattern and practice case?

EEOC v Mitsubishi Motor Manufacturing of American Inc. decided in 1998 was such a case.  The company tried to get the courts to say that each of the individual who filed for sexual discrimination must file there own law suit rather than the all past and present individuals.  The court did not allow the company to have there way and they settled for $34 million for 350 past and former employees.

If an American citizen is working on Foreign soil for an American Co., the Supreme Court held that Title VII does not apply. EEOC v Arabian Oil Co. 1991

In response to this case Congress amended title VII of the Civil Rights Act of 1991 and the American with Disabilities Act to cover US citizens employed in foreign countries by American-owned or controlled companies. The only time the American owned company would be exempt from US Law is if the company violates the law of the foreign country.

Once a Title VII case has been made then it may or may not go to a jury trial.  If it is a Disparate Treatment case then you are entitled to a jury trial.  The person who has been discriminated against is entitled to be reinstated, hired or promoted.  The can get back pay minus earnings in the interim.  They can get retroactive seniority and can be paid for their legal fees and expert witness fees.  When there is a disparate treatment situation then the plaintiff can also get Compensatory and punitive damages.  Compensatory damages are future pecuniary losses and nonpecuniary losses such as emotional pain and suffering, inconvenience, loss of enjoyment of life and other nonpecuniary losses.  This part of damages was added to the civil rights act of 1991.  Thus when there is intentional discrimination (Disparate Treatment only) compensatory damages can be recovered.  These damages are difficult to quantify and while some economist claim to be able to do so by measuring losses in utility all they can do is guess because we can’t measure utility.  However, economist can measure back pay losses and future pay losses along with fringe benefit losses.

When there is intentional discrimination a plaintiff can also recover punitive damages.   Figure 11-2 in the book shows the amount that can be recovered under compensatory and punitive damages.   Notice when dealing with racial discrimination there is no cap.

Pollard v E.I Dupont De Nemours & CO
Supreme court of US 532 U.S. 843 (2001)

A part of an award is back pay and front pay.  Back pay awards are the amount of money earned on the job but for the unlawful action.  Front pay is money lost between court payment and actual reinstatement. The Pollard case is very interesting because it deals with back pay and front pay and the $300,000 limit on compensatory damages under the civil rights act of 1991.

Is front pay, if appropriate, an element of compensatory damages?

Dupont was found guilty of violating title VII under sexual harassment.
She was awarded back pay $107,364, legal fees $252,997 and compensatory damages of the maximum of $300,000.

If front pay is not part of compensatory damages then the overall award can be greater.  If front pay is part of compensatory damages then it is part of the $300,000 maximum amount.

Normally front pay is not that much because the person is reinstated but sometimes the person can’t be reinstated because of either psychological problems or just not being able to do the job anymore because of the actual suit.  Then the courts say front pay can be substituted for reinstatement.  If that is the case it can be a huge number and can last for a persons entire work-life expectancy.  Thus whether it is part of compensatory limitations becomes an important issue.

The district court found the $300,000 award under compensated the plaintiff but they had no choice but to follow past precedent of the sixth circuit which said front pay is part of compensatory damages thus subject to cap.

The Supreme Court in this case overturned the sixth circuit and said front pay is not an element of compensatory damages and thus the statutory cap does not apply.  The award can now be significantly greater.

They reasoned that the new law in 1991 added compensatory and punitive damages when there was intentional discrimination under title VII.  In the 1967 law back and anything under relief of section 706(g) of civil rights act of 1964 is not new thus should not be under compensatory and punitive damages.  Prior to 1991 law back pay was anything up to and including reinstatement.  This would include what today is considered front pay.  Thus can’t be part of compensatory damages.  The Supreme Court also considered front pay in lieu of reinstatement as part of section 706(g).
 Here is a link to an article that talks about how difference in pay can be explained and may have nothing to do with discrimination.

It deals with the equal pay act but is useful in explaining wage gaps that people claim is due to discrimination.

Race and Color

The historical intention of Title VII was to provide fair employment opportunities for blacks. However, it does pertains to all four races.

80% of charges of EEOC claim discrimination based on race or color. The EEOC has determined that its the employers responsibility to keep work environment free from racial discrimination. Thus, ethnic or racial jokes should not be tolerated at work place. Grooming policy should conform to the norm even if infringing on cultural identification. However, if you have very sensitive skin and can’t shave then the employer must show a business necessity for the grooming policy. Can’t take arrests records into account (remember being arrested does not mean you are convicted) unless the arrest might affect the business of the company. The idea being that blacks have a higher percentage of arrests than whites due to the bad areas they live in.

The EEOC has taken the position that review of arrest records are irrelevant. The burden of proof is on the employer to justify inquiries into an applicants arrest conviction record.

Since most employers will not admit to overt discrimination, to establish a case of discrimination the causal connection must be shown that the employers hiring practices have the effect of excluding minorities. The statutory language of title VII does not, on it face, indicate whether such a showing is sufficient to establish a prima facie case. The Supreme Court first addressed this issue in Griggs v Duke Power Company a classic decision which established a type of title VII case known as disparate impact.

Griggs v Duke Power Company. Supreme Court 1971

In this case an employer was found to have discriminated against black workers about transferring jobs and hiring new workers. This was done by Duke Power by requiring testing of job applicants and requiring a high school diploma both of which were not job related.

What is the issue?

Under the Act, practices, procedures, or tests neutral on their face, and even neutral in terms of intent, cannot be maintained if they operate to "freeze" the status quo of prior discriminatory employment practices.

The Supreme court reversed the appeals court decision.

The Court of Appeals found that there was no violation of the Act since there was no showing of a discriminatory purpose in the adoption of a diploma and test requirements.

With regards to testing employees the Supreme Court said the following: If an employment practice which operates to exclude African Americans cannot be shown to be related to job performance, the practice is prohibited. Thus, even though there is no intent to discriminate by requiring the high school diploma and testing that is not an excuse to discriminate. The tests and HS requirement has a disparate or disproportionate impact on black workers and are not job related. Thus it is discrimination.

U.S. v Villages of Elmwood Park and Melrose Park , US District Court, Illinois 1987

The towns set up residency requirements for its workers.

What did court say about these requirements.

What do you think about the fairness of the villages recruiting procedures which used word of mouth.

They say that its okay once a person is hired to make them move after they get the job not before.


Special section on Freedom of Religion.
A question we might think about in this class is why America has a strong desire to maintain a separation between church and state.  In fact, so many cases we read about involve this separation of church and state.  In our class we see that under title VII it is illegal to discriminate in employment against a person for their religious views.  Is it purely political that we have this separation of church and state or is there some economic aspect to it?  Remember we talked about how labor law came about because of monopoly power growing in the labor market.  To counteract the monopoly power that a firm might have the government creates labor law to try and make the landscape more like a perfectly competitive labor market.

 Well let’s think of a church as a monopoly.  If the church acts as a monopoly then as in any monopoly less output would be produced and the price will be greater.  Now the question is does religious competition among churches stimulate the level of religious activity?

 For example in the US where the constitution guarantees religious competition, weekly church attendance is 40% of the total population.  In Scandinavian countries where a single state-run Lutheran church dominates the market, runs on tax dollars and pays its clergy as civil servants, church attendance is only 10% of the population.  Thus all citizens must pay the higher price for the religion and only a few actually buy the product while in America only those interested pay a price and many attend.

So we see title VII is actually trying to keep an active competitive market for religion thus the constitution protects it.

Many studies show a high correlation between rates of religious diversity and religious participation.  At the turn of the century cities with high rates of religious diversity had higher rates of religious affiliation and Sunday school activity.  Even per-capita contribution to the church are shown to be higher in congregations located in areas where their denomination enjoys a low market share and where the overall religious market is more diverse.

Historical studies show that church membership rose in the American colonies as the original religions, which were more like a monopoly, gave way to a more free religious market.

In fact studies show that every time state sponsored churches (monopolies) gave way to a more free market of churches attendance increased.  Even in post world war II Japan when the state Shinto religion was abolished and a new religious freedom was allowed in the five years following this period known as “the rush-hour of the Gods” over 2,000 new sects were formed in Japan.

In fact Thomas Jefferson said this about religion,  “Divided we stand, united we fall.”  Which, of course, is the opposite of our “Divided we fall, united we stand.”

Most cases of religion revolve around the determination of whether or not an employer has made reasonable efforts to accommodate its employees’ religious beliefs. Failure to make accommodations is unlawful unless an employer can demonstrate that it cannot reasonably accommodate such beliefs, practices, or observances without undue hardship in the conduct of its business.

A firm or union does not have to violate seniority provisions or make someone else work a shift they do not want to in order to accommodate someone’s religion. Thus if someone claims they can’t work on Sunday for religious reasons and it is their normal turn to work, they can’t force another worker to switch with them.

However, reasonable accommodation should be made. Thus if either side make a reasonable proposal to resolve the situation then it should be taken care of. If the employer offers a reasonable accommodation to the employee which solves the problem, but not totally suitable to the employee, then there is no title VII violation. If the firm can not offer an alternative and the employee's alternative proves to be an undo hardship on the firm, then there is no violation.

Title VII does permit religious societies to grant hiring preferences in favor of members of their religion. The Feldstein case is an example of this preference.

Feldstein v The Christian Science Monitor,  U. S. District Court 1983

Mark Feldstein applied for a reporters job. The Monitor required that he be a member of the church, he was not and thus did not get the job.

Problem under Title VIII is that religious organizations want to hire co-religionist.

What is the issue in this case?

Yes it is even though it is highly regarded in the secular community as a fine newspaper.  Thus it is a religious activity of a religious organization.

Conequently they can apply a test of religious affiliation to candidates for employment.

Thus sec 702 or title VII which says a religious society can hire co-religionist for secular activities as opposed to religious activities was not considered because it was found to be a religious activity of a religious organization. This case does not answer this question because it was a religious activity of a religious organization.  We still do not  know if a religious society can hire co-religionist for secular activities. This was answered in Morman v Amos case.

The constitutionality of section 702 was established in Morman Church v Amos.

Brown v Polk County Iowa US Court of Appeal 1995 8th cir.

This fellow was having prayer meetings and having employees type religious articles while working for the county and being paid. He was told not to do so and latter was in trouble for some job related financial matter. He was asked to resign which he refused to so and was subsequently fired. He filed a discrimination case based on race but no racial motive was found. He then filed a discrimination charge based on religion.

What constitutes religion in labor law?

Why did the appeals court overturn the district courts finding that there was no religious motive for firing Mr. Brown?

The court found that part of the reason he was fired was because of the infrequent prayer meetings. The court believed these activities were protected unless shown to harm the operation of the department, which evidence showed it did not.  That is, the court said the county must show that his religious activities caused an undue hardship on the county.  If they did then he could be fired otherwise what he was doing must be accommodated.  The county's argument that there  was an undue hardship was not valid according to the court.  The court believed the only reason he was fired was for his religious beliefs.

How is the mixed motive idea similar to the dual motive case we discussed previously.

Mormon Church v Amos Supreme Court of US 1987

Remember section 702 in 1972 was amended to say that a church can refuse to hire someone for non-religious jobs. Whether or not this is constitutional remained to be seen until this case.

In this case the district court said section 702 was unconstitutional and Mayson had to be reinstated with back pay. They said it was unconstitutional because it applied to secular activities.

The establishment clause is the first amendment of the constitution which says neither a state nor the federal government can set up a church. Neither can pass laws which aid one religion, aid all religions, or prefer one religion over another.

The supreme court over ruled the lower court because the government did not advance religion through its own activities and influence, thus it is ok. Thus the ruling here is that section 702 is constitutional when applied to secular activities.  Keep in mind how politically active the religious right was then.  Do you think that had any influence on the courts ruling?


Section 703 of title VII was an amendment (last minute) to the civil rights bill that added sex discrimination. Again this was added in the hope that this would kill the bill. That is, by adding employment and sex discrimination to the civil rights law most people believed that would prevent the bill from ever passing. In fact if Kennedy was not killed who knows what would have happened.

Height, Weight & Physical Requirement

Griggs v Duke says that an employer must show that a physical requirement that has a disparate impact on women must be job related. (minimum height, etc.) If there are minimum height and weight requirements that have a disparate impact on women, those requirments must in fact be job-related. If a job requires heavy lifting, must give women the opportunity in a test, even though it has traditionally been a non-female occupation. Fire departments, sanitation workers have had lifting requirements lowered.


There has been some inconsistency in the courts as to females who are pregnant.

In 1978, title VII was amended by adding section 701 subsection (K)

That amendment prevents employers from treating pregnancy, childbirth, and related medical conditions in a manner different from the treatment of other disabilities. Thus pregnant women must be provided with the same benefits as those provided other disabled workers. An employer who does not provide disability benefits or paid sick leave to other employees is not required to provide them for pregnant workers.

Women can’t be deprived their seniority when they come back from maternity leave.

Pension Related Benefits

Since females live longer than males they receive pensions longer, some companies make women pay more into pension funds than men. This is a violation of title VII because this is burdening women to whom the generalization did not apply. i.e., since we do not know which women would live longer you can’t make all women receive less.

When there are discrimination cases the sums of money that go to compensate the individual for the discriminatory behavior is often based on the work-life of the individual.  Work-life tells us how long an individual is expected to be in the labor force.  It takes into consideration a person entering a existing the labor force.  So a person whose work-life is to age say 59 means that they will retire at age 65 but they are in and out of the labor market and will work continuously to age 59 uninterrupted.
Now work-life expectancy tables are broken down by gender, race and education.  Now suppose a women was discriminated against and lost a very good pension plan.  She is eligible to recover damages for that pension plan.  However, women have less work-life expectancy than men thus one might argue they should get the pension based on their lower work-life expectancy.  The problem under title VII is you can't do that.  The problem is that the average female will work less than the average male but we don't know if the female in the law suit trying to recover lost pensions is average.  If we do this then all females will be receiving lower settlements than males.  However, we don't know if the individual in question is average.  Thus all are being penalized and this is illegal.

Do you think it would ever be appropropriate to use work life table for men when we are discusing females?  

Do you think it would ever be appropropriate to use white male work life table for black male?  

Glass Ceiling

Congress in 1991, as part of Title II, set up the Glass Ceiling Commission.

This commission looked into barriers of advancement for women and minorities. It recommended

1. All CEO’s show a commitment to workplace diversity
2.  strategic plans of company should show a commitment to diversity at senior management levels.
3.  All qualified individual have opportunity to compete on merit.
4.  Expand access to key area of business and establish formal mentoring programs to prepare women and minorities for senior positions.
5.  Formal training on company time.
6.  Balance between work and family responsibilities.
Does anyone have any thoughts on these recommendation?

Homosexuals and Transsexuals

The EEOC and the courts have found that homosexuals are not protected from employment discrimination. The courts ruled that sex under title VII means a persons gender i.e. male or female not a persons sexual orientation. Also transsexuals are not protected by the Act.

Audra Sommers, a/k/a Timothy K. Cornish v Budget Marketing, Inc. , U.S. Court of Appeals, 1982

What does Per Curiam Mean?

What is the issue?

What was the ruling? And why did they rule this way?

Sexual Harassment

The EEOC issued guidelines which defined sexual harassment. ( read on page 417) While these guidelines are not laws per see the Supreme Court in Griggs V Duke Power Company said that these guidelines should be followed very closely by the courts. Although these guidelines are important and should be followed. It is however, the courts and not the EEOC that will settle legal issues involving sexual harassment in the workplace.

Most sexual harassment suits are brought by women against men but the opposite can also happen and a claim can be made by men that a female is sexually harassing them. It is becoming clearer about same sex sexual harassment, it appears that most courts are making same sex sexual harassment actionable under Title VII.

According to the EEOC an employer can be held liable with respect to conduct between fellow employees. i.e., the employer is held responsible for acts of sexual harassment in the work place where the employer (or its agents or supervisory employees) knows or should have known of the conduct unless it can show that the employer took immediate and appropriate corrective action.

Sex Plus

Disparate treatment of a male or female subclass has come to be known as a sex-plus case. A sex-plus situation arises whenever an employer adds a specification for one sex that is not added for the other.

e.g. An employers policy not to accept job applications from women with preschool age children if it has no such policy with regard to men with preschool age children.

Similarly, discriminatory policies directed only against married airline stewardess as against unmarried have been found to violate title VII, when the same policy is not applied to male airline personnel.

Sexual Harassment

Sexual harassment by supervisors fall into two broad classifications.

1. Quid pro quo sexual harassment (you do something for me and I will do something for you). The leading case in this is Barnes v Cosllo (1977) The courts said in this case that if a supervisor says that must sleep with me or be fired that is sexual harassment even though the defense argument said she was terminated from her job because she had refused sexual advances, not because she was a women. (And the defense attorney actually billed the defendants for this line of defense!!!!!) The firm is responsible for harassment by its supervisors, even if they did not know about it or if they should have known about it.

2. Hostile working environment.

This is a second type of sexual discrimination that can occur. It expands the scope of Barnes by saying that a Title VII violation occurs based on sex if a hostile or abusive work environment is created.

What 4 things must be shown in order to make a Prima fascia Case of Sexual Harassment?

1. must show that the person belongs to the protected class, since both men and women are protected just need to say which sex.

2. that she or he was subject of unwelcome sexual harassment.
   Things like groping touching private parts of body are pretty standard.  Although suppose you, as part of your nature, just touch people (pat on back type of thing) this can be a potential problem.  Sexual jokes, stories about someone’s sex life, comments about body parts.  These are things that should be avoided.  It is up to the complainant to let it be known that this type of conduct is not welcomed.

3. The harassment was based on sex.
 Thus must show that the harassment did not occur to the opposite sex.  Thus if the supervisor is equally obnoxious and abusive and demeaning to both men and women and is creating a hostile work environment there is no sexual harassment.

4. That as a result of the plaintiffs refusal to submit to a supervisors sexual demands, and adverse tangible employment action was taken against the plaintiff.

No affirmitive defense exists for tangible employment action cases.

Essentially, if the employer takes prompt action they can avoid liability for a hostile work environment.
An employer can avoid liability for a hostile work environment for sexual harassment by taking affirmative steps to prevent it.  This includes bringing the subject up to its supervisors, disapproval of it and showing its workers how to raise the issue when it occurs.  This usually requires the firm to develop a sexual harassment policy and let everyone know about it.

To be actionable it must be sufficiently severe or pervasive to alter the conditions of the victims employment and create an offensive or abusive environment.

If the offensive conduct does not create an offensive work environment, then not actionable.
 If the conduct was “welcomed” that would be a valid defense.  “welcomed” and voluntary are not the same. Voluntary means you were not being raped.

 If the employer makes an effort to remedy the situation then it will be OK.  If the sexual harassment procedures are not adequate or if the company should have known better, the behavior of a supervisor then violation

Meritor Savings Bank v Vinson 1986, Supreme Court

This case shows that a hostile work environment can be created by a supervisor even though no economic benefit was offered for sexual favors.

The district court found that the relationship between Vison’s and her boss Taylor was voluntary and had nothing to do with her continued employment or advancement. Thus the district court denied relief for Vinson.

The Court of Appeals reversed and it went to the Supreme Court.

What was the Supreme Courts reason for saying that the appeals court decision to remand was correct?

It also confused voluntary with welcomed. Sex might have been voluntary but it was not welcomed. Thus this creates a hostile work environment.

The court did not know if in fact Taylor made unwelcome advances. Thus the court did not want to rule on the employer's liability.

The lower court said that the employer is always liable for actions of an agent. Supreme Court agrees with EEOC that principle agent is important and agrees with EEOC that a company must provide a chain of claims of sexual harassment otherwise the company is liable. But the supreme court did find that the Court of Appeals made a mistake by saying an employer is always automatically liable for sexual harassment by their supervisors.

The ruling was that a claim of a "hostile environment" sex discrimination is actionable under Title VII.

Oncale v Sundowner Offshore Services, Inc. Supreme Court of the United States, 1998

This case is interesting because it is dealing with same sex discrimination.  The appellate division ruled in this case that same sex discrimination does not fall under title VII.
What was this case about?

The lower court said this does not fall under title VII because they were afraid if it was title VII would be used as a social norm for manners.  They called it civility in the case.  This is actually interesting because they were saying if men harassed other men sexually that is not a problem.  Keep in mind these other men were heterosexual as was Oncale.
The supreme court disagreed and said we have to look at same sex harassment from the point of view of a reasonable person in the plaintiff's situation.  Title VII protects men as well as women according to the supreme court.  Thus same sex discrimination is actionable under title VII.

The reasonable person standard has been taken from the concept of a reasonable women standard.  The court established the
reasonable women standard because it believed that a sex blind reasonable person standard tends to be male-biased and tends
to systematically ignore the experiences of women.  This standard was establish in 1991 in Ellison v Brady.  Now the court is
saying what would a reasonable male in Oncale situation think is appropriate behavior versus just fooling around.  This is very
interesting how they used a legal theory developed for women to decide a case on same sex discrimination.

Yates v Avco Corporation u.s. Court of Appeals (1987)

The magistrate found the company liable for the actions of the supervisor.

The issue in this case is whether Arco should be held responsible for its supervisor acts.

Found that even though Arco had a published procedure with respect to sexual harassment the facts here show that it was "vague on paper, and also unspecified and ad hoc in its implementation"

What were some of the specific problems with Arco’s policy.

1. it assumes the supervisor is not the harasser and gives the supervisor the responsibility for both reporting and correcting the harassment.

2. The investigation was poorly made, the court believed that the company should have had documentation in the personnel files about the sexual harassment.

3. There was evidence that Sanders had harassed women as early as 1980

The court found that the women were entitled to back pay for sick time and the magistrates award at pre judgment interest (damages) was valid. She received back pay and sick time pay.

Under title VII damages awarded for emotional distress is not recoverable. Do you think it should be? What are potential problems if it is?

National Origin Discrimination

Title VII does not cover discrimination based on citizenship, thus you can lawfully be denied a job based on citizenship.

Physical standards such as minimum height requirements, which tend to exclude persons of a particular national origin because of the physical stature of the group, have been deemed unlawful where these standards cannot be justified by business necessity.

Adverse employment decisions based on an individuals lack of English language skills have been considered violating of title VII in those situations where the language requirements bears no relationship to the successful performance of the job to which it is applied.

Can’t discriminate because of national origin. If a person loses their job because they can’t speak English then it violates sec VII . In this situation where the language requirement has no relationship to the successful performance of the job which requires the language.

Fragante v City and County of Honolulu, US Court of Appeals 1989

Fragante was not given a job because he had a bad accent. He claimed he did not receive the job because of his Filipino accent thus a violation sec VII.

The District Court dismissed the claim and stated that the need to communicate clearly was a bona fide job requirement.

Plaintiff appealed

A problem here is that is easy to use language as an excuse for not hiring someone when it is in fact their nationality that you object to.

He was not hired because his accent prevented him from communicating, it was not that he had an accent.

Title VII: Section 703 exceptions

While title VII, as a general rule, bans all employment distinction based on race, religion, sex, or national origins, the statute provides that, in certain situations, such distinctions will not violate the act. We will examine three such situations.

bona fide Occupational Qualification (BFOQ) Exception

Section 703 (e) (1) of the act permits an employer to employ an individual "on the basis of his religion, sex or national origin in those certain instances where religion, sex or national origin is a BFOQ. Reasonably necessary to the normal operation of that particular business or enterprise.

Race can never be BFOQ

The BFOQ was intended to support "the preference of a French restaurant for a French cook and male players for a professional baseball team.

The courts do not like to use BFOQ to often and thus the burden of proving the business necessity for it is placed on the employer.

UAW v Johnson Controls: Supreme Court 1991

This case deals with an important issue when a company has a policy to protect the unborn baby in a mothers womb at the expense of discriminating against the mother by not allowing her to perform the dangerous (to the unborn child) job.

How do we know that the company was biased?

They have chosen to treat all its female employees as potentially pregnant: that choice shows evidence of discrimination on the basis of sex. Historically much sex discrimination occurred because society attempted to protect the "weaker" sex. This would just be a contention of these past policies.

How can a company handle the possibility of lead poisoning to unborn child. i.e. do not want to be sued.

1) follow OSHA established mandatory protection.

2) warn female employees about danger.

How would sex discrimination be a BFOQ?

Johnson control wanted to expand the concept of the BFOQ to include the fetal protection policies for pregnant or fertile women.

Testing and Educational Requirement.

Sec 703 (h) authorizes the use of any professionally developed ability test that is not designed , intended or used to discriminate. These tests must be job related.

There are two types of methods used to see if a test is valid.

Content validation

Which show how a test correlates to the specific job task e.g. a secretarial job can have a test for shorthand and typing. Physical tests can also be used (page 437)

The second testing method is:

Criterion related validation

This is established by demonstrating that there is a significant positive correlation between success on the test and comparative success, on some measures of job performance. For example if an intelligence test shows that salespeople with high intelligent test scores sell more than salespeople with low scores.

Seniority Systems are exceptions to a section 703 violation.

Differences in employment conditions which result from a bona fide "seniority system" are sanctioned as long as the differences do not stem from an intention to discriminate.

To invalidate a seniority system it has to be shown that the system is not bona fide because the actual motive of the parties in adopting the system was to discriminate. This is very difficult to show.

An important fact about the nature of seniority is that it is entirely relative. When one employee is given greater seniority, other employees move to a lower rung on the seniority ladder. These latter employees are both totally innocent and are the only ones hurt. So even though a seniority system has a disparate impact on a protected group that alone would not invalidate the seniority system.

Teamsters v U.S. Supreme Court 1977
The court ruled  that a bona fide seniority system is not unlawful simply because it may continue pre-title VII discrimination.

Firefighter Local 1784 v Stotts (1984)
Black officers who were hired last were to be laid off first. But they claimed this seniority system was not bona fide and discriminated against them.
The lower court said it was a bona fide seniority system but it was o.k. to break from it because it would undermine past affirmative actions that would harm black employees.  Supreme court disagreed.

The District Court held that the seniority plan was not bona fide because it was discriminatory.

But there is no intention to discriminate. Thus 703 (h) tells us it is a bona fide seniority plan.