Diversity v. Title VII

Thursday, February 1, 2007 - 01:00

Introduction

Your company has eight vice presidents. Seven are male and all eight are white. One of the white men gives notice of his retirement.

You are excited that his retirement provides you with a welcome opportunity to increase diversity. But, you also understand that, while Title VII was designed to protect women as well as racial and ethnic minorities (among others) from discrimination, it also imposes obstacles to creating opportunities specifically for those protected groups.

This article will give you some practical tips on how to increase your organization's focus on diversity without engaging in blatant reverse discrimination in violation of Title VII.

Diversity Means Business

As we all know, there is a human tendency to feel more comfortable with those who are similar to us. The EEOC calls this the "like me" bias, which may be a disadvantage to women and racial and ethnic minorities in organizations where white men have disproportionate power.

But this tendency also may work to the disadvantage of organizations that lack real diversity, particularly in power positions. The reality is that the demographics of your business customers are changing. And this changing demographic can have profound consequences for business opportunities.

For example, the Selig Center for Economic Growth has reported that:


The purchasing power of minorities in the United States will quickly outpace that of whites in the next five years.


In 2009, the combined buying power of African-Americans, Hispanics, Asian-Americans and Native Americans is expected to exceed $1.5 trillion dollars, more than triple the level in 1990. This is a gain of $1.1 trillion dollars or 242 percent.


In contrast, the buying power of whites will increase by only 140 percent.

(Lockwood, Nancy. "Workforce Diversity: Leveraging the Power of Difference for Competitive Advantage." SHRM June 2005 Research Quarterly ).

If an organization fails to reflect the diversity of the business community it serves, the organization may lose out on business opportunities when key decision makers in the business community exercise their human tendency to work with people who are "just like them." While diversity itself does not guarantee business, the absence of real diversity almost surely guarantees the loss of some business opportunities.

Employee diversity also increases a company's chances of success by increasing its human intellectual capital. If employees have real diversity in backgrounds - social, economic, educational and regional, as well as gender, racial and ethnic diversity - they will tend to have different life experiences and viewpoints that can increase the quality of a company's collective thinking (and its ability to internally critique that thinking). Not only does the quality of work increase, but also the likelihood that the work product itself will meet the equally diverse needs of the company's customers.

For example, at the most senior levels of the world's best known multi nationals, and on those corporations' boards of directors, executive search companies like Heidrick & Struggles are often asked by clients to present a slate for C-level positions that includes diverse candidates. Heidrick & Struggles' ability to deliver those diverse slates of candidates is often the direct result of its emphasis on expanding the diversity of its own search consultants.

And, of course, the applicant pool is becoming increasingly diverse too. For example, according to the U.S. Census Bureau, in 1983, 86 percent of the students enrolled in colleges were non-Hispanic Whites. Ten percent were Black, four percent were Hispanic, and four percent were other races (including Asian). The picture is quite different 20 years later. In 2003, only 68 percent of students enrolled in colleges were non-Hispanic Whites. Thirteen percent were Black, ten percent were Hispanic, and seven percent were Asian.

The Legal Blocks

While the business benefits of increasing diversity are clear, there are also some real legal obstacles to corporate "diversity" programs that focus solely on increasing minority and female representation. As noted at the outset, the law that prohibits unlawful discrimination makes unlawful some affirmative efforts that help women and minorities.

Although the U.S. Supreme Court has permitted limited voluntary affirmative action by an employer, so far it has done so generally, and only where the program is to remedy the employer's own past discrimination or where there is a current statistically demonstrated "manifest imbalance." [For governmental employers, voluntary affirmative action is generally limited to remedying the employer's own past discrimination.]

The question that the Supreme Court has not directly resolved is whether an employer can take voluntary affirmative action to promote diversity in the absence of a remedial purpose. In 1996, the Third Circuit answered "No" in Taxman v. Board of Education of the Township of Piscataway , 91 F.3d 1547 (3d Cir. 1996).

In that decision, a school district's affirmative action plan laid off white teachers ahead of minority teachers even though their qualifications were equal. Since black teachers were not underrepresented, the plan did not have a remedial purpose. Rather, the plan served what the appellate court acknowledged was the laudable goal of having a culturally diverse workforce. But, while the court found the employer's goal laudable, it still found it unlawful, holding that "there is no congressional recognition of diversity as a Title VII objective requiring accommodation."

Taxman stands for the general proposition that an employer cannot justify considering race, gender or any other factors protected by Title VII in decision making under the general rubric of increasing diversity. Rather, an employer can consider Title VII factors in decision making only as part of a remedial effort for its own past discrimination or the effects of past discrimination (manifest imbalance).

The Taxman holding has not yet been expressly adopted by any other appellate courts. However, the Fifth Circuit applied a very similar analysis under the Constitution's Equal Protection Clause: "Diversity programs, no matter how well-meaning, are not constitutionally permissible absent a specific showing of prior discrimination, because "good intentions" alone are not enough to sustain a supposedly "benign" racial classification." Messer v. Meno, 130 F.3d. 130 (5th Cir. 1997).

Moreover, the EEOC already appears to have adopted Taxman as its enforcement position. More specifically, the EEOC published on April 26, 2006 a policy statement on race and color discrimination that states: "Employers are cautioned that very careful implementation of affirmative action and diversity programs is recommended to avoid the potential for running afoul of the law." The EEOC cites Taxman as support for this statement.

The bottom line: employers who consider race, gender or other Title VII factors directly in decision making in the absence of a remedial purpose, even for the laudable purpose of achieving diversity, do so at their legal peril.

Practical Recommendations

Now, let's return to the hypothetical executive search we laid out at the beginning of the article. The employer cannot reserve or set aside the vice presidential position for a woman or person of color, even though all of the current vice presidents are white and only one is female. That's clear. The employer probably cannot even consider gender or race to break a tie, assuming a tie exists. Then, what can the employer do? What follows are, hopefully, seven practical recommendations in response to the question.

1. Recruiters

Provide clear direction to your internal recruiters and outside executive search firms that you seek a diverse applicant pool. This direction is different from saying, "I want to hire a woman or minority." If the recruiter does not understand the distinction, then you may have the wrong recruiter.

2. Targeted Recruiting

Supplement your general recruiting with some targeted recruiting focused on women and/or racial or ethnic minorities.

Employers should include such targeted recruiting as part of their initial recruiting efforts as opposed to waiting to see how diverse the applicant pool may be. Engaging in targeted recruiting only after initial efforts have failed to produce a diverse applicant pool may, in conjunction with other factors, carry with it an inference of discrimination. See Rudin v. Lincoln Land Community College , 420 F.3d 712 (7th Cir. 2005).

3. Job Description

Consider carefully the requirements you establish in job descriptions. Discrimination, past and present, may limit the experience that women and minorities have in certain traditionally white male-dominated power positions. You don't want to draft job requirements that include levels of experience so high that many women and minorities may not yet have, simply because they have been shut out from such opportunities in the past.

This is not to suggest that employers can, should or need to "lower" their standards. The point is that employers need to consider carefully what is truly required.

4. Subjective Factors in Decision Making

Build in safeguards to minimize the risk of the inevitable consideration of subjective factors in the decision making process. For power positions, more subjective interpersonal skills are often as important as the more objective technical skills. But subjective considerations are also more susceptible to conscious or unconscious bias.

You can minimize this risk by having a diverse team relative to gender, race, national origin, etc., assess the candidates for such power positions. A diverse team, by definition, cannot select its mirror image.

You can further minimize the risk of conscious or unconscious bias by ensuring that all applicants are asked preliminarily the same core questions.

5. EEO as Plus

Do not consider race, gender or any other Title VII factor as a "plus" in the selection process, even if only to break a tie. However, you can consider diversity in experience, style, contacts, perspective, etc., which may correlate with EEO diversity, so long as you do not consider EEO diversity directly.

For example, assume you want to generate additional business in the Chinese American community, and you have a vacant sales position. You could not reserve a spot for someone who is Chinese or give the Chinese applicant the nod because of her national origin. However, you could indicate, at the outset of the search for the salesperson, that you want someone who has substantial contacts in the Chinese American community.

Some non-Chinese will meet those requirements; some Chinese won't. So you don't have impermissible requirements. But, by setting up your search in this way, you will almost certainly get the kind of diverse applicant pool you desire.

6. Define Diversity Broadly

As explained above, while employers generally cannot consider Title VII diversity in employment decisions, employers can consider non-EEO diversity, such as diversity in style, contacts, perspective and experience. It is important that any definitions of diversity (in policies, training or otherwise) include both the EEO and non-EEO aspects of diversity for three reasons.

First, a broad definition of diversity is consistent with the business justification for diversity. Second, by being more inclusive, you minimize covert and overt resistance. Third, the inclusion of non-EEO factors provides the critical basis for legitimate employer decision making.

7. Training

Train managers on non-discrimination in general and diversity in particular. The difference between EEO and non-EEO diversity in terms of legitimacy in decision making is complicated enough for lawyers familiar with legal complexities. In the absence of training, it is likely that the distinction would be extremely difficult for a lay person to comprehend fully.

Jonathan A. Segal is a Partner and Vice Chair of the Employment Services Practice Group at WolfBlock, Philadelphia. K. Steven Blake is Chief Legal Officer and Corporate Secretary at Heidrick & Struggles, Chicago. This article should not be construed as legal advice or as pertaining to specific factual situations.

Please email the authors at jsegal@wolfblock.com or sblake@heidrick.com with questions about this article.