The Nightmare World of Anti-Discrimination Law

The United States today has employment discrimination laws that could have been written by the Queen of Hearts in Alice in Wonderland. They are a tangle of contradictions that stand the most elementary notion of fairness on its head. They are the all-too-real horrors that govern employment decisions every day in America.

The law, in its majesty, specifically forbids an employer to discriminate by race. Yet, the law punishes an employer who does not discriminate by race. The law specifically forbids racial quotas in hiring. Yet it punishes those who do not hire by racial quota.

The law is in manifest contradiction with itself because what its language requires — non-discrimination — will never produce what social dogma demands: equal results. Whenever the law of non-discrimination conflicts with the dogma of equal results, it is the law that must be changed, reinterpreted, or simply ignored. Thus, in the name of non-discrimination America practices discrimination; in the name of equality it practices injustice. The results are hypocrisy, cynicism, and a seething resentment that will only grow with the passage of time.

The Theory of Non-Discrimination

Though scarcely anyone dares take this position any longer, there is much to be said for giving employers the freedom to discriminate entirely as they see fit, and letting the laws of the market punish those who make irrational choices. Americans lost this freedom nearly 30 years ago, and ever since the Civil Rights Act of 1964, it has been illegal for an employer to consider race as a criterion for employment. Most Americans have been taught to think that this is fair.

It was about the time of the Civil Rights Act that it became obligatory for Americans to believe that people of all races are equally capable in every field. Inherent equality, combined with equal treatment under the law, would quickly produce a society in which there were just as many blacks as whites who were doctors, lawyers, and millionaires.

This theory had an important corollary that few people understood at the time: For as long as there continued to be disproportionately more white lawyers and doctors, it would be proof that white racism was holding blacks back. This is the crucial assumption behind today’s employment laws. They are based on a syllogism that is almost never made explicit and certainly must never be examined: All races are inherently equal; whites are better off than blacks; therefore, the difference must be due to racism.

This explains why our employment laws are such a swamp of contradictions. They require equal treatment of the races and equal results. Since this is impossible, they require equal results and the pretense of equal treatment. Maintaining the pretense of equal treatment is a matter of definitions. Any selection process, no matter how fair it may appear to be, is discriminatory by definition if it results in success rates that differ by race. This is one of the unquestioned dogmas of American employment law, and has given rise to such doubtful and even hilarious notions as “test bias” (see following article) and “disparate impact.”

Disparate impact doctrine was built up through court decisions in the early 1970s, and formalized as law in the Civil Rights Act of 1990. It ensures that employers get minimally qualified workers, and it works like this. If an employer requires that his clerks be high school graduates, and if he selects those clerks without regard to race from among the available pool of high school graduates, he is probably guilty of racial discrimination. The reason is that more whites than blacks graduate from high school. Requiring clerks to have a diploma has a “disparate impact” because it keeps out more blacks than whites.

Congress passes another civil rights bill.

Obviously, there must be job standards of some kind. Clerks should presumably be able to read, but must they be high school graduates? The employer might prefer that they be, but the 1990 law requires that all employment standards be “job related” and have a significant relationship to “business necessity.” No one knows exactly what these phrases mean, but Congress was trying to codify the thinking of dozens of court decisions. It will take years of litigation to tease out the ultimate legal definition of “business necessity,” but the end result will be that employers must lower hiring standards to the minimum. Anything else will be seen as discrimination against blacks, since blacks are less qualified, across the board, than whites.

A society not obsessed with equal results would want job standards to be as high as possible. There is nothing racially discriminatory about requiring clerks to have not just a high school diploma but a college degree. In today’s America, that would not be considered an attempt to get the finest possible workforce. It would be clear evidence of racial discrimination, since more whites than blacks have college degrees.

Since the 1970s, when “disparate impact” slipped into the corporate lexicon, many companies have sidestepped the question by quietly establishing hiring quotas. So long as blacks are present in the workforce in the same proportion as in the surrounding population, the question of “disparate impact” does not usually arise.

Most companies also got rid of job tests, since they had disparate impacts, just like standards. Unless an employer could show in court that a test measured the rock-bottom, minimum requirements for the job — and nothing else — it was racially discriminatory if it had a disparate impact. Any meaningful test has a disparate impact, and the only way that could be justified was by using a separate, narrow, specific, lawyer-proof test for every different job — an approach that was killingly expensive.

In the case of job standards, sometimes the doctrine of disparate impact simply led to their elimination. For example, most fire and police departments used to turn away applicants who had been dishonorably discharged from the military or who had criminal records. As a legal manual for fire departments explains, that would now be racial discrimination:

The EEOC has ruled that a requirement that applicants who have served in the armed forces must have an honorable discharge is not a valid prerequisite. The reason is that twice as many blacks receive dishonorable discharges as whites, indicating “racism” as the most significant factor in this disparity. The commission also has ruled that arrest records cannot be used to disqualify applicants, as experience shows blacks are arrested substantially more frequently than whites in proportion to their numbers. (Callahan & Bahme, Fire Service and the Law, p. 56.)

The EEOC has also ruled that it is discriminatory to examine an employee’s credit history, which is something a company might do if the employee were to be given financial responsibility. Blacks have poorer credit histories than whites — which proves only that credit histories are “racist” — so credit histories can no longer be consulted. Taken to its limit, the logic of disparate impact requires the elimination of every standard, qualification, or test that gives different results by race. Nearly all do, so the effect has been the steady wearing away of standards of any kind.

Race-norming to the Rescue

One of the cleverest and most logical ways America found to get around the problem of disparate impact was “race-norming.” This is a technique that combines the objectivity of standardized testing with guaranteed racial quotas. It was indeed a miracle, but one of duplicity rather than of test-making.

The General Aptitude Test Battery (GATB) is a standardized test that, until recently, was widely used to evaluate potential employees. As with all standardized tests, whites score higher on it than blacks. Since it is a test of general ability, and not one that measures the precise, minimal qualifications for a specific job, the GATB ran afoul of the doctrine of disparate impact. Nevertheless, various versions had been in use since 1947, and it is widely acknowledged to be an excellent way to pick employees for a large number of jobs. It would have been a shame to junk it, just because of the new doctrine.

In 1981, the U.S. Department of Labor skirted the problem by establishing a new way to score the test. If a black, a Hispanic, a white, and an Asian each got the same raw score of 300, for example, the black would be ranked in the 87th percentile, the Hispanic in the 74th, with the white and the Asian together in the basement in the 47th percentile. According to the Department of Labor, the test could then be used to give the job to the black, since the bias that gave rise to disparate impact had been corrected by race-norming.

The arithmetic of race-norming was simplicity itself. All applicants were compared only with people of their own races. Thus, a black who scored 300 really was in the 87th percentile — for blacks. The white who scored 300 was likewise in the 47th percentile — for whites. Thus, any employer who used race-normed scores was guaranteed to get a perfectly race-balanced workforce.

By 1986, 40 American state governments and a myriad of private companies were race-norming test results. Of the estimated 16 million candidates whose scores have been adjusted this way [Robert G. Holland, Dirty secrets,Chronicles, Feb. 1992, p. 44.], virtually none was ever told about it. Many employers who hired through state employment agencies — companies like Philip Morris, Canon, Nabisco, and Anheuser-Busch — got race-normed candidate profiles whether they knew it or not. As a result, less qualified blacks and Hispanics got the jobs that should have gone to whites and Asians. [Race-norming, WSJ, April 8, 1991, p. A18.]

A few whites eventually got wind of this system and began to complain. Race-norming got some publicity — all of it bad — and the Civil Rights Act of 1990 banned it [Timothy Noah, Agency declines to ban use of test with disparities,WSJ, Dec. 16, 1991, p. A16.] — about the only good thing the Act did.

Nevertheless, what our sage legislators didn’t realize was that forbidding disparate impact and banning race-norming were two contradictory exercises within the same law. People understand race-norming. They understand it and they don’t like it. Even some congressmen don’t like it, so when the public complained about it, it was banned. Virtually no one, certainly not a congressman, understands that the prohibition of disparate impact — the very purpose of the 1990 law — is just a different form of race-norming. It makes employers hire by racial quota. Race-norming was simply the slickest, “fairest” way to ensure competition (if only within each race) and racial quotas too. Most congressmen probably didn’t realize that by voting to ban race-norming they were banning standardized employment tests.

Racial balance and standards too.

Therefore, although the 1990 law essentially forces employers to hire by quota in order to avoid lawsuits, it deprives them of the best way to do it. Tests like the GATB have a huge disparate impact, but since they can’t be race-normed any more, it is illegal to use them.

Employers like standardized tests. They give a better prediction of how an employee will turn out than interviews, letters of recommendation, or anything else. Given the choice between doing without tests completely, and cooking the scores, employers would rather cook the scores. They know that they are going to have to hire by rough racial quota anyway, and race-norming at least lets them judge blacks against blacks, whites against whites, etc.

One of the great, unsung ironies in all this is that standardized tests were devised so that employers could make decisions according to objective standards rather than subjective preference. Now, America has returned to the days of subjective preference, but with the added bother of racial quotas.

Beyond Disparate Impact

Racial quotas? Really? Today there is not a single law on the books that requires racial hiring quotas. In fact, the Civil Rights Law of 1990 forbids them — a provision its defenders point to with some smugness. However, this prohibition is like ordering the power company to run cables underground but forbidding it to dig holes. Everyone agrees to pretend that the cables somehow got underground without any digging.

“Racial discrimination” suits are now brought strictly on the basis of numbers. It is common to read about companies that have settled “discrimination” cases with large, expensive cash settlements. Intentional discrimination is almost never proven and sometimes it is not even claimed. The charge is usually “unintentional” discrimination, and if a company’s workforce is disproportionately white, it is usually guilty without appeal. Since all races are equal, any disproportion must be the result of prejudice.

A recent suit against Northwest Airlines is entirely typical. In 1991, it gave up its battle with the EEOC and agreed to spend $3.5 million to accelerate the hiring and promotion of blacks. It also agreed to finance scholarships for black trainees, and to pay hundreds of thousands of dollars to blacks who claimed discrimination. It also agreed to pay for hearings in which thousands of non-white employees would have a chance to argue that they should have gotten jobs or promotions. The airline admitted no discrimination; the case against it was based on numbers. [Airline creates affirmative action program to settle job bias suit, NYT, May 12, 1991.] It is entirely possible that Northwest never discriminated at all by race. However, the terms of its settlement require that in the future it will discriminate.

Most of the time, when companies are sued for discrimination on the basis of numbers, it is cheaper for them to negotiate a settlement rather than to do battle in court. One company that valued its good name more than the cost of defending it was Sears Roebuck. It spent 15 years fighting discrimination charges brought by the Equal Employment Opportunity Commission (and financed by the taxpayer). Its actual court trial alone, in 1984 and 1985, lasted more than ten months. The trial was not about discrimination; it was about statistics. When it was over Sears had spent more than $20 million to get a verdict of innocent. [Frederick A. Lynch, Invisible Victims, (New York: Praeger Publishers, 1989), p. 145.] Is it any surprise that companies would rather buy their way out of a suit than litigate to the bitter end?

Even when a company goes out of its way to hire blacks it can still get in trouble with the law. Liberty National Bank & Trust Co. of Louisville (KY) has long had a reputation as an aggressive employer of minorities. In 1989, it made a concerted effort to hire black tellers and clerical staff. Sixteen percent of the 200 such employees the bank hired that year were black. Since this was a higher percentage than the proportion of blacks in the Louisville workforce, the bank thought it had done very well.

Not so. The Labor Department discovered that 32 percent of the applicants for those jobs were black, so the bank broke the law by hiring too few of them. In 1991, Liberty National was ordered to offer jobs to 18 blacks it had turned down two years previously. Whether or not they accepted the jobs, they were to be paid the amount of money they would have earned if they had gone to work at Liberty National in 1989 — a total of $277,833 — minus whatever money they might have made if they had, in the meantime, taken other jobs.

The bank did not discriminate against black applicants; in fact it made a special effort to attract them. Yet, it found itself judged by a standard it had never anticipated. Having attracted a large number of black applicants, it “discriminated” by not having hired more of them. Merely by turning away those whom it thought unsuited for employment, it was guilty of racial discrimination. [How the right thing went awry, Business Week, July 8, 1991, p. 56.]

America’s anti-discrimination laws and the mechanisms whereby they are enforced are now in an advanced state of lunacy. After the Civil Rights Act of 1964, many American companies tried very hard not to discriminate by race. They followed hiring criteria that were race-neutral. They almost invariably ended up with a disproportionate number of white employees.

By the mid-1970s it had become clear that such companies could be sued for discrimination — not because they had discriminated, but because they had not. Because they had failed to practice affirmative action, and had failed to grant race-based preferences to non-whites, they had too many white workers. By that time, the dogma of racial equality was so firmly established that such companies had no way out. If they had a disproportionate number of white workers, it could only be because they had discriminated against non-whites. Many companies paid up; others wised up.

Today, there are few major companies left in America that do not systematically slant their hiring practices in favor of non-whites. In a 1989 survey of Fortune 500 executives, only 14 percent reported that they ignored race and hired strictly on the basis of merit. The EEOC would love to know which companies were in that 14 percent. They are perfect targets for discrimination suits.

Free to Choose

Should there be laws against racial discrimination in employment? Most Americans think so. They have been persuaded to forget that discrimination is a form of freedom — and an important one.

The essence of freedom is choice. People choose their employers, their neighborhoods, their pastimes, and their spouses for whatever reasons they like. They needn’t justify those choices to anyone, and certainly not to some busybody from the government.

A decision to take employment, like the decision to take a spouse, is a private one. A man can turn down a job, just as a woman can turn down a marriage proposal, for absolutely any reasons. Those reasons may seem irrational to someone else, but they are certainly not illegal.

Why should people who offer employment have their choices circumscribed by law? Why must an employer justify his choices to the government or to anyone else? Most people are not employers, so they never think about the freedoms that employers have lost. A company can no longer simply hire the people it wants; it must hire only those people whom the government permits it to hire.

The same is true for dismissing employees. In most cases, a worker is free to quit at any time for any reason. Equal freedom for the employer would be the right to fire a worker at any time for any reason. Employers lost that freedom long ago.

In conditions of real liberty, an employer is free to hire only left-handed people over six feet tall, if that is what he wants. And, of course, in conditions of real liberty an employer may hire only whites or only blacks, if that is what he wants. Americans had that freedom until the Civil Rights Act of 1964 was passed.

Did they exercise it? Some did, and some did not. The laws of supply and demand have a remarkable power to match workers with jobs, without regard to race. The reason Jim Crow laws were passed to ban blacks from certain jobs is that was the only way to keep them out. Even in the South of 50 or 60 years ago, whites could not be counted on to put racial solidarity ahead of profits if they could find a black man who could do the job.

More recently, South Africa has had similar laws for similar reasons. Until they were dismantled along with Apartheid, job reservation laws had to be strictly policed. White employers routinely broke them and were fined for doing so. The vast majority of employers are more interested in getting the job done than in keeping the work force white.

Therefore, although popular mythology has it that blacks got white-collar jobs only after the passage of anti-discrimination laws, that is not true. There were innumerable black entrepreneurs and professionals, and some held high positions. Franklin Roosevelt appointed the first black federal judge in 1937, and a black congressman became head of the Government Operations Committee in 1949. In 1940, Richard Wright’s Native Son was a Book-of-the-Month Club selection, and in 1950 Gwendolyn Brooks won the Pulitzer Prize for poetry. During the Second World War, four Merchant Marine ships had black captains who commanded white crews, and in 1945, a black officer was given command of an American military base for the first time. [National Research Council, A Common Destiny, Blacks in American Society (Washington: National Academy Press, 1989), pp. 64ff, 101, 241.]

In pre-Civil Rights days, whites hired blacks and associated with them only if they wanted to. Some did and some didn’t. That is called choice. Blacks rose to high positions because they were capable, not because they were black. Some blacks were doubtless shut out of opportunities because they were black, but at least there was freedom — the freedom to discriminate.

Anti-discrimination is now a national obsession. What we have forgotten, in the Land of the Free, is that discrimination is a form of choice, and that choice is the essence of freedom.