Even law firms get sued for discrimination once in a while, but you would expect lawyers to be smart enough not to serve Big Red and fried chicken to black employees in celebration of Juneteenth.  Talk about stereotyping!!

Sadly that is just what has happened to Dallas law firm Eberstein & Witherite (Better known as the 1-800-Carwreck firm).  The firm’s “all white” management allegedly made the decision to celebrate Juneteenth with Big Red and Fried Chicken after two employees asked to have the day off.

According to the petition, the firm’s HR manager replied to the request by saying:  “Y’all don’t need no day off. Ya’ll need to work.”  She then allegedly sought and obtained permission to serve Big Red and fried chicken to employees on that day instead.

For those who are not familiar, Juneteenth, or, Freedom Day, is an unofficial holiday on June 19 each year to commemorate the announcement of the abolition of slavery in Texas.  On June 18, 1865, during the civil war, Federal General Gordon Granger landed on Galveston Island.  The following day June 19th, General Granger proclaimed the slaves of Texas freed.  Over time, a celebration developed around the day each year.

The law firm’s racist traits do not appear to end with the Juneteenth incident, however.  The lawsuit alleges that the firm’s HR manager made other comments such as:

  • Complaining that she is “sick and tired of Black women bitching about being the victim” (interesting for a personal injury firm).
  • Quizzing black employees by saying “I don’t even know if you’re Black.”
  • Commenting “Oh no. You’re not going to have that mad, bitter Black attitude with me.”

Later, the firm is alleged to have terminated both black employees for being unhappy with their jobs.

Handling these types of cases for as many years as I have, you would think nothing surprises me anymore.  This one did.  Take a lesson from the claims made here:  Don’t try to be cute.  And, (no opinions cast here) be sure that your HR Manager is not a racist.

Who, What, Why . . . 

Who does it apply to:  All employers that use criminal backgroundchecks to evaluate applicants or employees.

What is the issue:  Blacks and Hispanics are statistically more likely to be arrested and convicted of crimes than whites.  As a consequence, employers who make a blanket rule that any person with an arrest or conviction should not be hired or promoted may be unintentionally discriminating.  The EEOC recently used these statistics to force a settlement with Pepsi® over its policy against hiring anyone who has been arrested.   Following the settlement, the EEOC issued new guidelines regarding the use of criminal background checks.

Are the EEOC’s guidelines law:  The guidelines do not change existing law, but they reflect the EEOC’s focus on this issue and its intent to use the statistics against businesses.

How is the discrimination happening:  You all know discrimination is illegal.  You are probably less clear on the legal framework underlying discrimination, which comes in two forms: “disparate treatment” and “disparate impact”.  Disparate treatment involves intentionally treating one employee or a group of employees differently because of a protected characteristic.   Disparate impact is a little more subtle.  It involves a rule or policy established by an employer that disproportionately affects people in a protected group – here Hispanics and Blacks.  The EEOC’s new guidelines are primarily directed toward disparate impact discrimination where employers use criminal background checks as a threshold test to weed out applicants without considering the facts of each individual case.  Even though the employer’s policy is not discriminatory on its face, it can have the unintended consequence of reducing the number of Blacks and Hispanics in the employer’s workforce.

What are employers supposed to do differently:  To avoid accidentally denying a disproportionate number of Blacks or Hispanics a job or promotion, employers who use criminal background checks are required to make an in-depth analysis of that background.  Employers cannot simply deny all people employment because they have been arrested or convicted of a crime.  Instead, an employer must determine whether the specific criminal history should be used as a consideration for the job or promotion at issue.   Stated simply, employers should consider whether the particular crime should really act as a reason to deny a person employment to the particular job or promotion at issue.  As an example, a person considered for a night watchman position where people are rarely encountered should not necessarily be denied a job because of a conviction for assault in high school.   The EEOC wants to foster the use of targeted exclusions for particular positions.  This means that employers should evaluate each job category and exclude applicants with a criminal history only if that history relates to the performance of the job in question.

Are arrests somehow distinguishable from convictions:  In the EEOC’s view, employers should not ever use an arrest alone as a basis to deny a job or promotion to a candidate.  The EEOC cites two primary reasons for this view: (1) arrested people are still innocent until proven guilty; and (2) criminal databases are sometimes incomplete, leaving final dispositions out of records which might reflect an acquittal or failure to prosecute.  Interestingly, the EEOC does believe that employers can evaluate the underlying facts and act as judge and jury to decide whether the person committed the crime and whether there are extenuating circumstances that negate the arrest.

What type of in-depth analysis is required:  The EEOC cites to court of appeals cases setting out a three pronged analysis:

   • What was the nature and gravity of the offense;

   • How much time has passed since the offense; and

   • The nature of the position sought.

Are there some businesses that have to exclude convicts:  There are a large number of federal and state laws that restrict businesses from hiring people with certain criminal records.  For example, there are federal laws restricting people with criminal histories from having federal law enforcement positions, and being child care workers for federal agencies, bank employees, and port workers.  For a complete understanding of the restrictions that may affect your business, consult a lawyer.

Common Situations:

But we’re diverse:  Bakery of the South has a policy against hiring anyone with a criminal conviction in the last 10 years.   An applicant complains under the new EEOC guidelines.  After learning of the EEOC’s new guidelines and that its rule might not be legal, Bakery’s lawyer argues that there is no disparate impact against Blacks or Hispanics at Bakery because 40% of its employees are Hispanic and 35% are Black.  Are Bakery’s excellent diversity statistics sufficient to overcome the claim.  Unfortunately, no.  While it might seem counter-intuitive, simply having a diverse workforce does not change the fact that Bakery’s hiring practices have a disparate impact.  Without the policy Bakery might be 50% Black and 50% Hispanic.  But the law says I can:  If the federal limitations for working in banks are convictions within the last 10 years, Bankorama figures limiting for 20 years would be even better.  It can pride itself on the security it takes for its customers.  Is this OK?  There is no clear answer, but you can bet the EEOC is going to take the position that 10 years is good enough for the federal regulations, so it ought to be good enough for you.  If there are limitations in your industry, you probably should not go beyond them.

Only for applicants:  Nick has been a faithful employee of Fidget Widget, Inc. for 15 years, when the company’s owners sell out to Conglomerate.  Conglomerate wants to promote Nick to head Fidget Widget in the absence of the old owners, but finds a criminal conviction for felony assault 25 years ago when running a background check before the promotion.  Conglomerate refuses Nick the promotion because of this single criminal event.  Is Conglomerate within its rights?  No.  The guidance by the EEOC doesn’t just apply to applicants – it applies to all employment decisions.  As long as there is not a business justification consistent with Nick’s position, Conglomerate will be in the wrong with the EEOC.

What should I do:

Good: Be certain you are following all federal and state requirements applicable to your business restricting the hiring of convicted individuals.  Avoid using criminal convictions or arrests to make hiring decisions without a good connection to the position and your business.

Better: If using arrest as a basis to make hiring decisions, obtain the underlying facts and make your own decision about whether the applicant committed the offense.  Create conviction history restrictions for each job position in your business with strong consideration of whether the restrictions set are consistent with business necessity for that job.

Best:  All of the above, plus, document all facts considered for arrests and individualized circumstances considered when using convictions.  Be sure to draw the connection between the job and the need of the business in doing so.  Be careful not to create restrictions that are tenuous which might be questioned by the EEOC.

The Wall Street Journal reported yesterday that Augusta National Golf Club has admitted two women as members: financier Darla Moore and former Secretary of State Condoleezza Rice.

Augusta Allows WomenI don’t know much about golf, but I do know that Augusta National is  hallowed ground in the minds of most golfers.  As an employment lawyer, I also know about the history of discrimination at the course.

What I didn’t know is that Augusta National has roughly 300 members or that women have been allowed to play the course as guests for many years.  In fact, there are only four days a year where “members only” events are conducted and women are (were) completely excluded.  I’ve also learned that you cannot “apply” for membership at Augusta, you are nominated and approved for membership by a board.

So, how did Augusta get away with keeping women out for so long?  It is a private golf club.  Yes, that matters.  You see, the decision to allow women at Augusta national doesn’t have a lot to do with employment law, but it does have to do with a common misconception folks have about Title VII and the other anti-discrimination laws.  People think that these laws prohibit discrimination anywhere – restaurants, parks, and private clubs.

Unfortunately, or fortunately (depending on your point of view) a purely private organization can still decide who can be a member.  So, just as the neo-nazi’s can restrict membership against Jews, Augusta National can restrict membership to all men and the anti-discrimination laws we enforce as employers have no effect.

What prompted the change you may ask?  A change of heart, perhaps?  Nope. Most commentators believe it was pressure from corporate sponsors.  Many of America’s largest corporations are very sensitive to diversity and some are headed by women.  In fact, it is likely that IBM CEO Ginni Rometty was impetus for change.  IBM is a major sponsor of the Masters golf tournament which is held each year at Augusta National and its CEO is traditionally offered membership to the club.

Yet, the club did not announce membership to Rometty in the spring during the tournament.  Instead, it waited to the end of summer after the smoke cleared to pick two other high profile women to bring in as members in a likely effort to avoid being viewed to cow to pressure.

Regardless of the cause, I am glad to see the change.  Employment laws can go only so far to stamp out discrimination.  People have to do the rest.

Everything is bigger in Texas.  Darn right.  Well, maybe this is one distinction Texas businesses could have done without.   In recently released EEOC complaint results for 2011, Texas ranked first. One in ten complaints across the US were filed in Texas.  Of those claims filed in Texas, race charges came in first, followed by sex, age, and national origin.

Folks, we are beating California where the employment laws and employee protections run rampant!  Let’s try to take some proactive steps to avoid this distinction in the future.

The EEOC announced today that Pepsi Beverages has agreed to a settlement of $3.1 million to resolve a claim by black prospective employees.  Between 2006 and 2010, Pepsi excluded from any consideration for employment any applicant who had been arrested or convicted of a crime, including minor offenses (not sure how minor).

The EEOC found reasonable cause to believe that Pepsi’s policy had a disproportionate effect on black applicants, and was poised to file a lawsuit against Pepsi.  According to the EEOC, the use of criminal background checks “can be legal”, but now apparently, it can also be illegal.

For the uninitiated, the US laws on discrimination not only prevent what might be called direct discrimination – toward a particular individual or group of individuals, but also they also prevent what is known as “disparate treatment”.  Disparate treatment happens when a protected class does not equal treatment with other protected class.  Disparate treatment can even happen when an otherwise innocuous policy – such as using criminal background checks – has a disproportionate and discriminatory effect.

Now, many of you reading this would say that it is ridiculous to say that you can’t exclude prospective employees because they have a criminal history.  After all, being a criminal isn’t a “protected class”.  I’m right there with you, but the EEOC doesn’t seem to see it that way.  From its perspective, a person’s criminal history might not be relevant to whether they can be a good employee.  I’m not exactly sure how that would work.  A person who commits a crime is willing to cross a line that I believe an employer ought to have the right to say they don’t want crossed.  It doesn’t matter to me if the person is applying for a job as a janitor and their crime was being drunk in public.  Sure the two are different, but that crosses a line I don’t want crossed.

If the EEOC can sue for this, it is tantamount to making being an ex-con a protected class.  Of course, since I am not king of the world, I don’t get to overrule this decision and my opinion doesn’t matter.

So, what does this mean for you, employers?  I guess it means that you have to give more thoughtful consideration to hiring criminals, or perhaps you have to be more careful to have a thoughtful excuse why a particular criminal shouldn’t be hired and mark it on their application.