Category Archives: Law

Court in Costco Discrimination Case to Employers: Don’t Fight Discrimination

Plaintiffs suing Costco for sex discrimination face another round of litigation thanks to the Supreme Court’s recent dismissal of the Wal-Mart sex discrimination case. Because of the Supreme Court’s decision, the Ninth Circuit Court of Appeals ruled on Friday that the Costco trial court must reconsider whether the plaintiffs can prove that the company should be liable for sex discrimination in store-level promotions. On this question the Court of Appeals, like the Supreme Court before it, ruled the wrong way, discouraging companies from implementing measures that would prevent discrimination.

When companies leave employment decisions like promotions to individual decision-makers without giving them clear, relevant criteria to guide their decisions, those decisions are often discriminatory, albeit sometimes unintentionally. Many corporations, including Costco, provide no uniform criteria – or any guidance at all – for making promotion decisions. This leaves each individual manager (the vast majority of whom are male at Costco) to make promotion decisions as he sees fit. When making decisions with unfettered discretion, people tend to rely on stereotypes and to promote those they are most comfortable with and who are most like them – in short, in the absence of clear criteria, men usually promote men. Witness Costco’s demographics: female lower-level managers at Costco are less likely to be promoted than their male counterparts. It appears that only two of Costco’s top 34 executives are women. The problem is not a shortage of interested or qualified women: Costco’s competitors have a much higher proportion of women in management than Costco does.

Companies can prevent this kind of discrimination. Sociological research shows that holding top management responsible for establishing and enforcing uniform, unbiased promotion criteria goes a long way. When companies provide managers with performance-related criteria for promotion decisions, managers can evaluate whether a candidate satisfies those criteria instead of making a gut-level decision based on personal relationship or other irrelevant factors.

Companies can also prevent sex discrimination in promotions by increasing the pool of candidates. When employees don’t know promotions are available, managers may not even consider qualified women for the positions – they may not know them well, or may rely on stereotypes to conclude that they don’t want promotions. The Costco case illustrates these consequences: the three women who sued desperately wanted promotions, but none of them ever applied for one – they couldn’t, because Costco did not accept applications, and they never knew when promotions were available anyway. An easy fix is to inform employees of promotion opportunities and invite applications. Interested women will throw their hats in the ring and managers will evaluate them based on the relevant criteria, resulting in more promotions of women.

The courts in Costco and Wal-Mart ruled the wrong way because they discouraged companies from adopting these measures. They held that corporations are not liable in class actions for the discretionary decisions of individual managers, creating an incentive for companies to wash their hands of preventing discrimination in their ranks. The more anarchic the system for decisions about promotions and other perks – raises, bonuses, etc. – the more insulation the company has from discrimination class actions. The Costco decision quoted the Supreme Court’s Wal-Mart ruling on this point: “demonstrating the invalidity of one manager’s use of discretion will do nothing to demonstrate the invalidity of another’s. A party seeking to [bring] a nationwide class [action] will be unable to show that all the employees’ Title VII claims will in fact depend on the answers to common questions.” In other words, if the only thing promotion decisions have in common is that managers make those decisions however they want, the company as a whole is not liable for resulting discrimination. In contrast, if the company disseminates guidelines for making promotion decisions that result in discrimination, the company can be held liable.

Smart companies will adopt best practices like enforcing uniform criteria for promotion decisions, both to retain and get the benefit of employing talented people and to avoid discrimination suits by individuals, which are not affected by the Wal-Mart and Costco decisions.

The Court of Appeals sent the Costco class action case back to the trial court for reconsideration, giving the plaintiffs another chance. But the trial court will labor under the higher court’s instruction (again, quoting the Wal-Mart decision) that it “must determine whether there was ‘significant proof that [Costco] operated under a general policy of discrimination.'” Proving that Costco operated under a general policy of laissez faire will not suffice to save this sex discrimination case.

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Bloomberg did not discriminate against women by treating new mothers the same as other leave-takers

Article first published as Judge: Bloomberg Did Not Discriminate Against Women on Blogcritics.

The judge who ruled that Bloomberg LP did not illegally discriminate against women for taking pregnancy leave raised an important policy question in her written opinion. Judge Preska did not drop “an anvil…on the work-life balance scale,” despite commentators’ efforts to portray her decision as a calculated blow against work-life balance; in deciding in Bloomberg’s favor, all she did was follow the existing law. In her commentary, however, she questioned the wisdom of the law itself, and noted that one alternative might be for employers to “treat pregnant women and mothers better or more leniently than others.” Judge Preska did not say whether she thinks that would be a good idea. It is a dreadful idea.

The judge’s legal reasoning in the Bloomberg ruling is by the book. The federal law bans pregnancy discrimination as a form of gender discrimination, as it should – only women get pregnant. The law does not require employers to treat pregnant women better than other employees, just not to treat them worse. Based on the evidence Judge Preska summarized in her decision, Bloomberg LP did not treat women who took pregnancy leave worse than other leave-takers; to the contrary, if that evidence is to be believed (in an earlier ruling Judge Preska threw out the Equal Employment Opportunity Commission’s expert witnesses, leaving the evidence lopsided in Bloomberg’s favor), women returning from maternity leave may have fared slightly better in terms of compensation than employees returning from other kinds of leave.

The evidence also showed that taking leave for any reason is not a wise career move at Bloomberg. The company policy is, in essence, that employees must put Bloomberg LP ahead of God, country, family, and whatever else figures in their particular pursuits of happiness. Bloomberg scoffs at work-life balance, and while that might be poor business judgment or even reprehensible, Judge Preska was correct that it is not against the law.

Judge Preska makes it clear that the law, whether she likes it or not, grants employers the right to ignore and even discourage workers’ lives outside of work. She quotes former General Electric CEO Jack Welch’s grim assessment that there is “no such thing as work-life balance. There are work-life choices, and you make them, and they have consequences.”

The judge writes that “it is not the Court’s role to engage in policy debates or choose the outcome it thinks is best. It is to apply the law.” Judge Preska goes on to discuss all the things that courts do not have the power to police. She includes in that list what she calls “work-family tradeoffs” – she does not believe one can have it all. But maybe one can have more than Bloomberg gives: the judge observes that it “may be desirable” and “may make business sense” for companies to “treat pregnant women and mothers better or more leniently than others.”

I disagree. Treating pregnant women and mothers more leniently than other employees is not desirable. The view that pregnant women and mothers deserve special treatment may appear feminist, but it actually serves the interests of those who want women pregnant and at home while daddy wins the bread. The law already bars employers from discriminating against women because of pregnancy and related medical conditions, so this policy question is not about whether women’s biology holds them back in the workplace. It is about whether some mothers’ choices to spend more time away from work than fathers and non-parents do should be underwritten by the government and employers.

“Treat[ing] pregnant women and mothers better…than others” would be an insult and a disservice to several groups of “others.” First, fathers: why should employers treat mothers better than fathers? To ensure that women take more time off work and that men don’t? To reinforce sexist stereotypes that, compared to men, women are better at/prefer/should be raising children? Those stereotypes don’t need much reinforcement: studies have shown that men who take paternity leave are later penalized in terms of compensation and promotion compared to men who leave all the child-rearing to women. The attitudes behind those penalties are the same attitudes that support treating mothers better than other employees.

The second group of slighted “others” is the ill and disabled: why should pregnant women and new mothers be treated better than employees who take leave that is necessary for different medical reasons? Pregnant women at least chose to suffer their medical condition, unlike people who have to take leave for, say, a kidney transplant, or to care for a dying parent. Pregnant women and new mothers should not be treated worse than others with medical conditions, and they should not be treated better.

Third, non-mothers: treating female employees who choose to bear children better than those who do not (and in some cases cannot) devalues the lives of women without kids. Requiring employers to treat mothers better in the workplace than women who are not mothers would divert both public and private resources to subsidize the individual lifestyles of people who choose to have children. People do not have children for the greater good or out of a sense of civic duty – they have children because they want to. It makes no sense to force employers to grant preferential treatment to women who choose to spend their time and resources having children over women who choose to spend their time and resources doing something else. It is not up to employers to value any of these private, non-employment-related choices over the others.

Judge Preska put a point on this policy debate by referring to “work-family tradeoffs” rather than “work-life tradeoffs.” But these are not the same thing. Family is not a substitute for life; family is a part of life, but there is more. For most people blessed with the resources to choose how to spend their time, life includes friends, the arts, physical activity, spirituality, or any of many other interests. The judge’s phrase, “work-family tradeoffs,” frames the issue as a question of trading family time for work time, implying that family is the only thing that could possibly merit time off of work. In the context of a gender discrimination case like this one, this framing is not only reductionist, it is frightening in its confinement of female employees to only two spheres: family and making a living.

Judge Preska merely outlines the policy choice of favoring mothers over other employees. She does not claim it as her own. But it is not a straw man: it is at the heart of many “work-life balance” criticisms of the judge’s ruling. Critics are not satisfied with the law’s requirement that employers treat women who take medical leave related to pregnancy the same as other employees who take leave for other reasons. They want pregnancy and motherhood to be privileged.

I am not on Bloomberg’s side. Expecting employees to put work above all else is a recipe for misery for all but workaholics, and an ugly manifestation of corporate greed. But putting children above all else is not the answer for everyone either.
Judges lack the power to force employers to facilitate humane work schedules, and in a free market with more workers than jobs, employees lack the leverage to reach company- or industry-wide bargains for a better balance. At least for now, people who choose to have children will have to make trade-offs to pursue their dreams the same way that people without children do. Under the Pregnancy Discrimination Act and Judge Preska’s ruling, pregnancy and related medical conditions are not a part of that trade-off – they should have no different effect than any other medical condition.

If other “work-family” trade-offs continue to fall more heavily on mothers than fathers, they will have a discriminatory effect. The most immediate and attainable palliative is for fathers to step up and mothers to step back. As more fathers take more parental leave the stereotype of women as children’s natural caretakers will begin to erode, and if women take less leave, the stereotype that women are not as committed to their work as men are may begin to erode too. Parents who can afford for mom to take non-medical time off with the kids should not wait for the courts or the legislature to solve their childcare challenges. They should tap underutilized in-house talent instead: dads.

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Jamie Leigh Jones Loses Her Rape Case in Court

The news this week brings a reminder that while mandatory arbitration infringes on employees’ rights to a full trial in court, sometimes a full trial in court is no great shakes either. Jamie Leigh Jones, the Halliburton employee who accused seven of her co-workers of brutally raping her, lost her case when a jury ruled that the sex was consensual. One of Jones’s attorneys suggested that the verdict may have been different if the jury had been allowed to hear evidence about “her rapist’s criminal history, including violence against women.” He said that the jury did hear evidence about Jones’s “entire personal history.”

This story may not be over: I expect that Jones’s attorneys will appeal the verdict based on those evidentiary decisions and possibly on other grounds as well.

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