Opinion ID: 1807807
Heading Depth: 1
Heading Rank: 1

Heading: Employment Discrimination Theories.

Text: Blood based her employment discrimination claims on alleged violations of Iowa Code section 601A.6(1)(a). Among other things, this statute prohibits any person from discriminating in employment against any employee because of sex or national origin. The United States Supreme Court recognizes two theories to prove employment discrimination under Title VII of the Civil Rights Act of 1964. One is the disparate treatment theory and the other is the disparate impact theory. Holdeman, Watson v. Ft. Worth Bank & Trust: The Changing Face of Disparate Impact, 66 Den.U. L.Rev. 179, 180 (1989). Because the commission used the two theories, we discuss both. The two theories are defined in International Brotherhood of Teamsters v. United States: Disparate treatment ... is the most easily understood type of discrimination. The employer simply treats some people less favorably than others because of their race, color, religion, sex, or national origin. Proof of discriminatory motive is critical, although it can in some situations be inferred from the mere fact of differences in treatment. .... Claims of disparate treatment may be distinguished from claims that stress disparate impact. The latter involves employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity. Proof of discriminatory motive, we have held, is not required under a disparate-impact theory. Either theory may, of course, be applied to a particular set of facts. 431 U.S. 324, 335, n. 15, 97 S.Ct. 1843, 1854, n. 15, 52 L.Ed.2d 396, 415, n. 15 (1977) (citations omitted). In short, the disparate treatment theory focuses on the employer's motivation; the disparate impact theory focuses on the consequences of the employer's conduct. A. Disparate treatment. We recently summarized the analytical framework for allocating the burden and order of presentation of proof under chapter 601A in Hamilton v. First Baptist Elderly Hous. Found., 436 N.W.2d 336 (Iowa 1989). We borrowed this framework of analysis from two United States Supreme Court decisions, which applied it to Title VII cases: McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973) and Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981). See Hamilton, 436 N.W.2d at 338-39. There are three stages in this analysis. In the first stage the employee must establish a prima facie case of intentional discrimination by a preponderance of the evidence. Hamilton, 436 N.W.2d at 338. An employee establishes a prima facie case by showing that (1) the employee belonged to a protected group, (2) the employee made application and was qualified for a job for which the employer was seeking applicants, (3) the employee was rejected, (4) the position remained open and the employer continued to seek applicants with similar qualifications. Once the prima facie case is established, a presumption arises that the employer discriminated against the employee. Id. In the second stage the employer must go forward with evidence to rebut the presumption of discrimination. The employer does so by producing evidence that the employee was not hired or promoted for a legitimate, nondiscriminatory reason. Id. In the third stage the employee has the burden to show that the employer's proffered reason was not the true reason for the employment decision. The employee may meet this burden in two ways. The employee may directly persuade the fact finder that a discriminatory reason more likely motivated the employer or may indirectly show the employer's proffered reason is not worthy of belief. Id. at 339. In all three stages the burden of persuasion rests with the employee. The only burden the employer shoulders is the burden to go forward with the evidence to rebut the presumption of discrimination. Id. at 338. McDonnell Douglas and Burdine involved pretext casesthe employer's stated reasons for the employment decision are false. Until Price Waterhouse v. Hopkins, 490 U.S. ___, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989), there was no Supreme Court decision on mixed motive cases those cases in which both legitimate and illegitimate considerations played a part in the employment decision. A plurality of the Court in Price Waterhouse fashioned a different framework of analysis for the mixed motive cases. Under this analysis, the employee must first establish by a preponderance of the evidence that a discriminatory reason played a part in the employment decision. Price Waterhouse, 490 U.S. at ___, 109 S.Ct. at 1787, 104 L.Ed.2d at 285. The employer's burden at this point is most appropriately deemed an affirmative defense rather than a shift in the burden of proof. If the employer wishes to prevail, it must prove by a preponderance of the evidence that its legitimate reason, standing alone, would have induced it to make the same decision. Price Waterhouse, 490 U.S. at ___, 109 S.Ct. at 1792, 104 L.Ed.2d at 289. Stated another way, [w]hen a plaintiff... proves that [a discriminatory reason] played a motivating part in an employment decision, the defendant may avoid a finding of liability only by proving by a preponderance of the evidence that it would have made the same decision even if it had not taken the [discriminatory reason] into account. Price Waterhouse, 490 U.S. at ___, 109 S.Ct. at 1795, 104 L.Ed.2d at 293. Such an approach is justified in mixed motivation cases because the employer has created uncertainty as to causation by knowingly giving substantial weight to an impermissible criterion. Price Waterhouse, 490 U.S. at ___, 109 S.Ct. at 1796, 104 L.Ed.2d at 295 (O'Connor, J., concurring). B. Disparate impact. The United States Supreme Court first applied the disparate impact theory to a Title VII claim in Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971). Later in Albemarle Paper Co. v. Moody, 422 U.S. 405, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975), the Court more fully developed the elements of proof under this theory. Under the disparate impact theory as it developed under Griggs and Albemarle, a disparate impact caselike a disparate treatment caseproceeds through three stages. In the first stage the employee must show that a particular employment practice has an adverse impact on a protected group in marked disproportion to its impact on employees outside that group. Holdeman, 66 Den.U.L.Rev. at 182. This stage depends almost entirely on statistical evidence. According to one commentator, this stage often requires voluminous discovery, thorough and detailed analysis of the employer's total organization and operation, and expert testimony by statisticians, industrial psychologists, and personnel managers. The statistical comparisons must be valid in terms of significance (based on a sample large enough to yield reliable results), scope (covering an appropriate category of employees), and time (covering an appropriate length of time). Id. Once the employee has established a prima facie case, the case proceeds to the second stage. At this point, the burden of persuasion shifts to the employer to show the business necessity of the challenged employment practice. Albemarle, 422 U.S. at 425, 95 S.Ct. at 2375, 45 L.Ed.2d at 301; Griggs, 401 U.S. at 432, 91 S.Ct. at 849, 28 L.Ed.2d at 158; Holdeman, 66 Den.U.L. Rev. at 182. The quality of proof here under Albemarle and Griggs is important: The employer must show that the employment [practice] is manifestly job related or necessary to [the employer's] business purpose, despite its disparate effect upon protected groups. Holdeman, 66 Den.U.L.Rev. at 182. If the employer succeeds in showing the business necessity of the employment practice, the case enters the third stage. In this stage, the employee must show there are other reasonable alternatives that would have less adverse impact. Albemarle, 422 U.S. at 425, 95 S.Ct. at 2375, 45 L.Ed.2d at 301; Holdeman, 66 Den.U.L. Rev. at 183. The next development in the disparate impact theory came in Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 108 S.Ct. 2777, 101 L.Ed.2d 827 (1988). Before Watson Supreme Court cases on the disparate impact theory had only dealt with employment decisions based on objective criteria. See, e.g., Connecticut v. Teal, 457 U.S. 440, 443, 102 S.Ct. 2525, 2528, 73 L.Ed.2d 130, 134-35 (1982) (written examination); Dothard v. Rawlinson, 433 U.S. 321, 323-24, 97 S.Ct. 2720, 2724, 53 L.Ed.2d 786, 794 (1977) (height-weight requirement); Albemarle, 422 U.S. at 411, 95 S.Ct. at 2368, 45 L.Ed.2d at 293 (intelligence test); Griggs, 401 U.S. at 428, 91 S.Ct. at 852, 28 L.Ed.2d at 162 (intelligence test). The federal circuit courts were split on the question whether the theory could be applied to employment decisions based on subjective criteria. So the Supreme Court granted certiorari in Watson to resolve the question. Holdeman, 66 Den.U.L.Rev. at 189. In Watson all the justices, except Justice Kennedy who took no part, agreed that the disparate impact theory applies to employment decisions based on subjective criteria. Watson, 487 U.S. at 980, 108 S.Ct. at 2781, 101 L.Ed.2d at 849. The plurality opinion, written by Justice O'Connor and joined by three other justices, undertook to reexamine the allocation of the burden of proof in disparate impact cases. This re-examination became the basis of the majority opinion in the next case on the subject: Wards Cove Packing Co., Inc. v. Atonio, ___ U.S. ___, 109 S.Ct. 2115, 104 L.Ed.2d 733 (decided June 5, 1989) (5-4 decision). Although Watson expanded the disparate impact theory to include subjective criteria, Wards tightened the proof requirements for disparate impact cases. Id. at ___, 109 S.Ct. at 2115, 104 L.Ed.2d at 733. Wards significantly affects all three stages of proof. Now in the first stage of proof, the [employee's] burden in establishing a prima facie case goes beyond the need to show that there are statistical disparities in the employer's work force. The [employee] must begin by identifying the specific employment practice that is challenged. . . . Especially in cases where an employee combines subjective criteria with the use of more rigid standardized rules or tests, the [employee] is. . . responsible for isolating and identifying the specific employment practices that are allegedly responsible for any observed statistical disparities.  Id. at ___, 109 S.Ct. at 2124, 104 L.Ed.2d at 751 (quoting the plurality in Watson ) (emphasis added). In short, the employee must show a causal link between the challenged employment practice and the disparate impact. To establish this link, an employee may not simply rely on statistics that show an imbalance of a protected class in the work force. By rejecting such statistical comparisons in the work force, the Court significantly limited the role of statistics in the first stage. According to the Court, the proper comparison now is between the [protected class] composition of [the at-issue jobs] and the [protected class] composition of the qualified... population in the relevant labor market. It is such a comparisonbetween the [protected class] composition of the qualified persons in the labor market and the persons holding at issue jobsthat generally form the proper basis for the initial inquiry in a disparate impact case. Id. at ___, 109 S.Ct. at 2121, 104 L.Ed.2d at 747 (citations omitted). Hazelwood School Dist. v. United States, 433 U.S. 299, 97 S.Ct. 2736, 53 L.Ed.2d 768 (1977) provides an example of such a comparison. There the Court found that the proper comparison was between the racial composition of the [employer's] teaching staff and the racial composition of the qualified public teacher population in the relevant labor market. Id. at 308, 97 S.Ct. at 2742, 53 L.Ed.2d at 777. If the employer's practices deter or create barriers to the members of the protected class, however, the [statistical] analysis would be different. Id. ___ U.S. at ___, 109 S.Ct. at 2122 n. 7, 104 L.Ed.2d at 748, n. 7. The Court does not specify what that analysis would be. But the implication of the Court's statement seems to be that internal work force comparisons would then apply. This is so because the employer's deterrence skews the proper comparison. Cf. id. at ___, 109 S.Ct. at 2136, 104 L.Ed.2d at 754 (Blackmun, J., dissenting) (the structure of an industry may render meaningless any statistical comparison other than an internal work force comparison). Under the Court's revamped disparate impact theory in Wards, the dispositive issue in the second stage is whether a challenged practice serves, in a significant way, the legitimate employment goals of the employer. The touchstone of this inquiry is a reasoned review of the employer's justification for his use of the challenged practice. A mere insubstantial justification in this regard will not suffice, because such a low standard of review would permit discrimination to be practiced through the use of spurious, seemingly neutral employment practices. At the same time, though, there is no requirement that the challenged practice be essential or indispensable to the employer's business for it to pass muster: this degree of scrutiny would be almost impossible for most employers to meet, and would result in a host of evils.... Id. at ___, 109 S.Ct. at 2125-26, 104 L.Ed.2d at 752-53 (citations omitted). The employer's burden in the second stage is now clearly one of producing evidence of a business justification and not a burden of persuasion. Id. at ___, 109 S.Ct. at 2126, 104 L.Ed.2d at 753. The Court acknowledges that some of its earlier decisions can be read as suggesting the burden of persuasion in this stage was on the employer. Id. In the third stage of proof, the employee can still prevail even though the fact finder believes the employer had a business justification for its employment decision. To prevail, the employee must convince the fact finder that (1) the employer has alternative hiring practices that could reduce the disparate impact and (2) the employer refuses to adopt these alternatives. Id. at ___, 109 S.Ct. at 2126, 104 L.Ed.2d at 753-54. Like the disparate treatment theory in pretext cases, the burden of persuasion in a disparate impact case now rests with the employee in all three stages of proof. Id. at ___, 109 S.Ct. at 2119, 104 L.Ed.2d at 733. In our view this is the most significant effect of the Court's redefinition in Wards of the burden of proof under the disparate impact theory.