The Legal And Practical Value Of Promoting Diversity In Your Workforce

Tuesday, March 1, 2005 - 01:00

Among the more fundamental and well-established concepts of our society is that "variety is the spice of life." Indeed, our culture's appreciation of differences among people is at the very core of our Nation's foundation. Our history speaks volumes to the struggles and achievements as pertain to individual civil rights and diversity. The American workplace is increasingly becoming an example of our celebration of individual differences and distinctions. Separate from the legal realities that often prompt employers' commitments to diversity are the underlying "practical and intrinsic" benefits of a diverse workforce.

Many would debate whether the true impetus for today's current dedication to workplace diversity is the result of pure benevolent/altruistic motives, as opposed to the aftermath of costly and damaging legal battles that have marred many corporations. But, regardless of whether it be driven by corporate America's focus upon its moral compass or simply its fixation on its wallets in this era of jaw-dropping settlements and expensive employment discrimination lawsuits, the fact remains clear. Today, employers are eagerly embracing the concept of promoting diversity.

Within Metropolitan New York City, employers should be aware that the number of minority individuals has dramatically increased in the past decade. By way of example, according to recent United States Census Bureau's statistics, the Hispanic population has reached 39.9 million, the Asian population grew to 13.5 million, and the African-American population totaled 38.7 million.1 These statistics are far from stagnant, and the Census Bureau estimates that the Hispanic and Asian population will triple over the next half century. Moreover, in the context of today's workforce itself, previously issued reports from the Equal Employment Opportunity Commission ("EEOC") reveal that: (1) 502,769 of 1,383,168 employees in New Jersey were classified as minorities; (2) 844,914 of 2,548,265 employees in New York were classified as minorities; (3) 235,752 of 1,176,697 employees in Massachusetts were classified as minorities; and (4) 136,935 out of 576,970 employees in Connecticut were classified as minorities.2 These numbers confirm that, regardless of an employer's motivation, a sincere commitment to workplace diversity should be a core component of any corporate operation.

Legal Considerations

It is no secret that the United States has been referred to as a litigious society, and this no more evident than in the context of employer-employee relationships. In the last year alone, the EEOC resolved 85,259 discrimination cases and collected a record amount of $420 million for aggrieved workers.3 An explanation for the rising number of discrimination claims may be the fact that various states have enacted what many construe as "employee-friendly" laws.

Those who tend to be more pessimistic in their views believe the recent push to promote workplace diversity has been forced upon the corporate world as a result of costly litigation. This is in contrast to some sort of necessary "awakening" or voluntary valuing of a heterogeneous workforce. In terms of examples of some corporate legal woes in the employment discrimination context, one can take their pick - Mitsubishi paying $34 million, Texaco paying $176 million, Coca-Cola paying $192.5 million, or the litany of much smaller companies also spending large amounts to avoid their "day in court."

As a result of employee favorable laws in the employment context, as well as the large payouts in settling discrimination suits, employees may very well be easily enticed to bring a suit against their employer. Thus, regardless of the impetus, employers must commit to promoting diversity in the workplace. Implementing the necessary human resource tools and legal mechanisms to both promote diversity and eradicate employment discrimination are no longer interesting options, but necessary fundamental cogs for any company . It is senseless for today's employers, whether they be "mom and pop" type operations or multi-state conglomerates, not to utilize progressive employment policies for the purpose of promoting a diverse workforce. Further, hand-in-hand with such, is the need to then foster sensitivity to such characteristic differences (i.e., race, religion, disability, ethnicity, sexual orientation, etc.) through; (1) diversity training; and (2) other programs/policies focused upon educating employees to accept and value differences among them and their co-workers.

What Can Happen When Diversity Is Not Promoted!

The litany of examples of poorly operated workplaces where "diversity" is more akin to a "dirty word" than a proud company mantra is, unfortunately, significant. Yet, one of the more glowing examples of where someone missed the proverbial "diversity enhancement/awareness boat" comes from a recent Eighth Circuit case. In this case, the Plaintiff, George Williams, an African-American employee, brought a race discrimination and wrongful termination lawsuit against his former employer, ConAgra Poultry Company.4 Several of Williams' co-workers testified about certain acts of discrimination that occurred in the workplace. Specifically, nooses were left at the workstations of African-American employees, a black doll hung by a noose was left in the factory, and African-American employees were invited to attend Ku Klux Klan hunting parties where they would be hunted. The end of this tale of intolerance is that Williams was awarded $927,788.90 in compensatory damages and $6,063,750 in punitive damages on his wrongful termination claim and $1,001,397.40 in compensatory damages and $6,063,750 in punitive damages on his hostile work environment claim. Although his underlying damages award was subsequently remitted, the point is inescapable - employers must be proactive in creating work environments embedded with tolerance for all and free of discrimination! This is so, whether or not they are fundamentally driven by an appreciation of the true wonder and inherent value of diversity or simply oriented towards protecting themselves legally.

Maintaining a workforce saturated with distinct races, religions, ethnicities, and other related protected characteristics serves and benefits an employer both legally and in many other ways. Make no mistake, the press, competitors, and even the public eagerly absorb the publicity that results from allegations that a company is not promoting diversity, but engaging in acts of employment discrimination. Specifically, a discrimination lawsuit (whether based in truth or fiction) can tarnish a corporation's image. For example, Abercrombie & Fitch, a clothing retailer, paid $40 million to settle a federal class-action lawsuit. African-American, Hispanic, and Asian employees and potential job applicants accused the retailer of employing discriminatory practices. As a result of these allegations, outraged citizens circulated petitions via the Internet, lobbying for the boycott of Abercrombie & Fitch merchandise.

Similarly, two years after Coca-Cola settled its racial discrimination lawsuit and agreed to pay a $192.5 million settlement, African-American workers staged a protest at the company's annual shareholders' meeting because they felt that the settlement did not resolve the allegations of discrimination.

The ramifications of a boycott or public protest can be devastating. Just another reason why employers must take preemptive measures to prevent occurrences of discrimination. Indeed, the most compelling response to any such claims of institutionalized discrimination is to be able to direct such antagonists to your anti-discrimination policies, training programs, outreach efforts, and the like. It's a quick way to quiet a crowd!

Commit To Setting A Good Example

Despite the above, there are some excellent corporate models illustrating the commitment to diversity in the workplace. In 2004, Fortune magazine ranked McDonalds as the number one company for minorities to work. Women and minorities represent more than 50 percent of McDonald's workforce, and nearly half of McDonald's restaurant management workforce is women and minorities.5 Similarly, in 2003, Fannie Mae's workforce was comprised of 44 percent minorities, with 25 percent as officers, 24 percent as directors, and 25 percent within the management group.

Also, it is never too late for any company to "turn things around" and improve its blemished image. For example, in 1995, Denny's paid $54 million to settle a federal class-action lawsuit. While that case stemmed from customer claims of discrimination and not an employment litigation matter, the point is that rehabilitation of one's negative corporate image can occur. Indeed, thereafter, the NAACP named the CEO of Denny's parent company as "CEO of the Year." Furthermore, to achieve its recovery, the Company implemented various training procedures that have become an integral part of Denny's corporate and work culture.

How To Encourage Diversity

In order to hedge against the threat of litigation, an unfavorable jury verdict, and bad publicity, employers must be proactive in educating their employees on diversity. Diversity training and implementation of appropriately drafted employment policies and procedures are indispensable tools in countering litigation costs. Diversity training is especially important in situations where an employee may unintentionally act in a discriminatory manner. To avoid such, an employer should work to create training programs to eradicate even potential stereotypes and preemptively stop such issues from resulting in inadvertent acts of discrimination.

Diversity training can provide comfort and security to a minority employee. Oftentimes, a minority employee may feel alone or ostracized because there is no one to identify with. As a result, this may affect the employee's productivity and deprive the corporation of the invaluable insight gained from a different cultural perspective. Discrimination is often the result of simply having uninformed co-workers or supervisors. An unenlightened employee may feel uncomfortable around a minority employee, which in turn, creates an unhealthy tension. A diversity program can assist employees in embracing certain cultural differences and acclimating them to a multi-cultural state of mind.

Conclusion

Employers must continue to be committed to diversity in the workplace in order to promote a positive environment for its employees. Albeit somewhat simplistic, the old adage that "a happy employee is a loyal employee" is worthy of remembrance. Failure to embrace diversity can result in dire consequences, including legally, practically, and otherwise. As such, employers should recognize the importance and value in promoting, advocating, and attempting to maintain variety among their workforce.

1 www.census.gov
2 www.eeoc.gov
3 www.diversityinc.com
4 Williams v. ConAgra Poultry Company , 378 F.3d 790 (8th Cir. 2004).
5 www.mediamcdonalds.com

Tedd J. Kochman is a Principal at the law firm of Grotta, Glassman & Hoffman, P.C. He and his Firm specialize in representing companies with labor, employment counseling, employment litigation, and immigration matters. He may be reached at (973) 994-7548. Mr. Kochman would sincerely like to thank Katy Shi-Klepper, an Associate at GG&H, for her outstanding contribution and assistance with preparing this Article.

Please email the author at kochmant@gghlaw.com with questions about this article.