OFCCP’s Disparate Treatment Claim Lacked Any Proof of Pretext
The courts often analogize proof in a “disparate treatment intentional class-type” discrimination (U.S. v. Teamsters-type) case to a three-hit tennis match:
First, the Plaintiff (OFCCP in this case), must “hit the tennis ball” over the net to set the game in motion. It does so typically by a modest showing of only a disparity in the rejection rates of one Protected Class versus the Most Favored Group, or “MFG.” In the Enterprise case, the claim was that White Applicants were the MFG and African Americans were the Protected Group suffering a statistically disproportionate rejection rate. No rejected persons expressing interest had complained out of the thousands rejected. The disparity, however, must be “legally meaningful” (it cannot be sleight), meaning that the disparity in selection rates must be at least two or more standard deviations different from what we would expect if both races were rejected in the same proportions. (BTW, while many practitioners discuss “selection” rates, technically and more properly we are looking at “rejection” rates since we are measuring “adverse action” (although the “rejection rate” and the selection rate” are reciprocals of each other adding to 100% of the considered applicant pool: if 30% are rejected; 70% are hired, for example). The ALJ and the ARB found that the record evidence at trial was that OFCCP had satisfied its burden to show a statistically significant disparity in selection rates during the years in question (but not in 2013). Enterprise agreed and had, indeed, stipulated to that conclusion.
Second, the Defendant (Enterprise in this case), to win the tennis match, then had a legal obligation to “hit the ball” back over the net to OFCCP by “going forward with evidence” (NOT prove it…just put evidence forward) of its legitimate non-discriminatory explanation(s) for each adverse decision (in this case: thousands of rejected African Americans who expressed Interest because Enterprise had heavy and meaningful involvement with the Black community in Baltimore and was a magnet for African Americans). Enterprise went forward at trial by introducing into evidence its thousands of “Disposition Codes” (which had contemporaneously documented, including often with handwritten and typed notes, the thousands of legitimate non-discriminatory reasons for rejection tracked along Enterprise’s sophisticated multi-tiered and multi-stepped behavioral interviewing and selection system). The ARB held that “…the record shows that defendant [Enterprise] articulated nondiscriminatory reasons for rejecting applicants for the management trainee program.” (Slip op. p.8) So, at that point, Enterprise had, in legal effect, now “hit the imaginary tennis ball” back into OFCCP’s side of the imaginary tennis court. Then, if OFCCP does not hit the imaginary tennis ball back, OFCCP loses…just like in tennis.
Editor’s Note: This is a perfect description of the context in which Disposition Codes suddenly become SO TERRIBLY IMPORTANT when an employer’s/contractor’s selection system results in significant statistical disparities as occurs with many, many employers that experience high-volume applicant flows.
Third, OFCCP then had to prove that Enterprise’s proffered legitimate nondiscriminatory explanations for rejection were “pretext” (i.e., “false”/not a true non-discriminatory reason). However, OFCCP’s attack on Enterprise’s Disposition Codes, which Judge Davis swallowed hook, line, and sinker, was not that they were “false,” but rather that they were “subjective.” But the problem for OFCCP and Judge Davis was that Title VII law does not make subjective decision-making decisions unlawful. Rather, Title VII case decisions actually laud and applaud subjective decision-making systems. (And, of course, the great irony of OFCCP’s and the Judge’s attack on subjective decision-making hiring systems was that everyone in the courtroom and all its witnesses had been hired through subjective decision-making, as with most employees). Here was the ARB’s analysis and holdings on OFCCP’s disparate treatment class-type claims:
“The ALJ found that Defendant’s subjective use of disposition codes did not adequately explain the racial disparities shown in the statistical evidence. [fn omitted] However, in analyzing the evidence and arguments concerning Enterprise’s hiring criteria, (including its requirement of sales and/or customer service), the ALJ conflated evidence of subjectivity with evidence of discrimination without allowing an employer’s legitimate use of subjective hiring criteria. [fn omitted]
Although there is a risk that a nefarious employer may use subjective standards as cover for discrimination, subjective criteria which are facially nondiscriminatory “no matter how subjective the criteria—may constitute a legitimate reason” for rejecting applicants. [fn omitted] Subjective evaluation criteria “can constitute [ ] legally sufficient, legitimate, nondiscriminatory reason[s]” for an employer’s business decisions. [fn omitted] In fact, “subjective evaluations of a job candidate are often critical to the decision-making process, and if anything, are becoming more so in our increasingly service-oriented economy . . . .” [fn omitted]
However, an employer’s subjective criteria is not beyond scrutiny. The reasons given must have some substance to allow for evaluation. [fn omitted] If, for example, the ALJ compared the qualifications of those rejected with those that were hired in order to show intentional discrimination, the differences must be so striking as to permit a reasonable factfinder to raise the alarm of a pattern or practice of intentional discrimination. [fn omitted] Slight or even mistaken differences in qualifications fail to satisfy this burden because the ALJ does not sit as a super-personnel board second-guessing the employer’s hiring practices. [fn omitted]
This objective evaluation is not accomplished by reviewing and comparing a small number of applications. [fn omitted] The ALJ relied on the subjectivity of the hiring decision-making process to summarily conclude that the racial disparity shown in the statistical evidence, and the few number of applications he reviewed, was the result of racial discrimination. Thus, “absent evidence that subjective hiring criteria [was] used as a mask for discrimination, the fact that an employer based a hiring or promotion decision on [ ] subjective criteria” does not in and of itself prove pretext for intentional discrimination. [fn omitted]
Because the ALJ erred in his disparate treatment analysis we must remand the case back to the ALJ”