CIVIL RIGHTS ACT OF 1991

The Civil Rights Act (CRA) of 1991, enacted into law on 21 November, was the most comprehensive civil rights legislation to pass Congress since the Civil Rights Act of 1964. Like the 1964 landmark, the 1991 act prohibits all discrimination in employment based on race, gender, color, religious, or ethnic considerations. The 1991 CRA amended the 1964 law —it did not replace it—in an attempt to strengthen the earlier law, especially in the realm of employer liability and the burden of proof. The new law was in large part a response to a major 1989 Supreme Court ruling that eroded employees' ability to successfully sue their employers for discrimination. Restoring some of this ability and adding new ways to sue employers, the 1991 CRA is widely regarded as a major defeat of corporate interests concering discrimination litigation.

Ignoring social or political philosophies, many consider the 1991 law a failure on practical and technical grounds. Although it attempted to create a consistent body of rules to support the principles declared in the 1964 law, the 1991 CRA was marred by the contentious legislative proceedings from which it took shape. As a result, the law enunciated contradictory principles and ambiguous definitions so that courts have sometimes found it difficult to enforce even its plainly stated objectives.

The factors leading to the passage of the Civil Rights Act of 1991 were as controversial and complex as the law itself. Prior to 1964, the only major civil rights legislation to emanate from Congress was the post-Civil War Civil Rights Act of 1866, Title 42 of United States Code, Section 1981, which was often quoted and cited in the debates surrounding the 1991 act. The 1866 law applied only to black employees, giving them the right to sue their employers for punitive and compensatory damages in cases of employment discrimination. In addition, the law permitted jury trials in such cases. In different forms, the same issues and remedies were addressed by the 1991 CRA.

CIVIL RIGHTS ACT OF 1964

The 1964 CRA was the most important civil rights legislation since the Civil War, and many of its provisions are still in effect today. It outlawed discrimination in employment not only based on race but on color, religion, sex, and national origin, as well. The 1964 act, however, didn't permit jury trials for most people seeking redress, as did the law of 1866 (which applied only to racial discrimination). In addition, the burden of proof under the 1964 law was ambiguous—some court rulings assumed the burden to be the employer's, others required more from employees. Lastly, the Civil Rights Act of 1964 did not allow damages or compensation for the injured party beyond backpay or similar routine obligations.

The 1964 CRA helped promote affirmative action programs in businesses and institutions to encourage the hiring of women and minority persons. This encouragement in some businesses took the form of employment tests on which scores were adjusted in favor of disadvantaged minorities. The subsequent charges of "reverse discrimination" and hiring "quotas" would plague these policies into the 1990s.

A number of court rulings helped bolster the 1964 law and define its practical scope. Some of these decisions came from liberal or activist courts that, as proponents of judicial restraint would claim, read more into the law than was appropriate. Most important was the 1970 Griggs v. Duke Power Co. Supreme Court decision. In Griggs, the Court articulated the so-called disparate impact theory, which prohibited nonessential employment practices that may not appear intentionally discriminatory but have as their effect a systematic exclusion of protected groups. While not all disparate impact policies were considered illegal, the body of court cases, including Griggs, established a narrow range of valid defenses businesses could claim when their practices had disparate impact. These defenses mostly involved demonstrating a "business necessity" for practices that yielded disparate outcomes.

DIMINISHED SUPPORT FROM THE
COURTS

The broad judicial mandate assumed under Griggs was dealt a major setback by a 1989 Supreme Court decision in Ward's Cove Packing Co., Inc. v. Antonio. In this case the Court reversed a lower court ruling that a company needed to prove that its hiring practices were a "business necessity" once a plaintiff demonstrated that those practices were having disparate impact. The case also raised questions about what constituted appropriate evidence of disparate impact.

The employees of two salmon cannery companies operating in Alaska alleged that their employers discriminated racially by the disparate impact of their hiring processes. They supported their claim based on statistics indicating that nonwhite workers were hired for the companies' noncannery jobs, which included both skilled and unskilled positions, at a much lower rate than they were for unskilled cannery jobs. The company thus had a relatively large minority representation among its cannery work force and a very small minority presence in the ranks of its noncannery positions, where the litigants claimed the discrimination was occurring. Moreover, the employees linked this imbalance to the company's demonstrated separate hiring practices for cannery and noncannery work.

The workers lost their case in U.S. District Court, but prevailed on appeal. It then went before the Supreme Court. In its decision, the Supreme Court rejected the evidence cited by the employee litigants because the statistics purportedly showing disparate impact failed to address the size and character of the qualified applicant pool for the noncannery positions. The workers' case implied that the large minority pool filling the cannery jobs was also the pool for noncannery candidates. Not so, ruled the Court, because the employees didn't offer any evidence concerning the qualified pool of applicants for noncannery jobs or show that being a cannery worker for the company was itself a qualification for one of the noncannery positions.

Further, the Supreme Court majority argued, the workers failed to establish adequate support for the next step of proving a discrimination case, identifying specific hiring practices that cause disparate impact. The workers' case cited a number of general practices that might have led to discrimination, but they failed to show to the Court's satisfaction any specific causal link between a company practice and the disparate outcome.

Finally, the ruling in Ward's Cove stated that even if such a causal relationship were shown, the company would only have to produce evidence of a business justification for the practice, and the plaintiffs would need to further show that an alternative practice exists that meets the business objective without causing the disparate outcome. In other words, if the company's policy was resulting in unintended discrimination, there would need to be a reasonable alternative to the practice that doesn't result in such discrimination. To establish what is reasonable, moreover, the employer—and the court—could consider cost-efficiency and other business concerns that aren't directly part of the hiring outcome.

EFFECTS OF THE RULING

The Ward's Cove ruling must be considered in detail because it became the primary impetus for the passage of the 1991 Civil Rights Act. The decision, along with a few others that were handed down around the same time, presented a challenge to the way many had understood the employee right to sue under the 1964 act.

One of the other notable rulings, another from the Supreme Court's 1989 docket, was in Price Waterhouse v. Hopkins. Ann Hopkins was an accountant who sued her employer for sexual discrimination because she was bypassed for a promotion. Even though Hopkins showed that gender was a consideration in the denial of her promotion, the Supreme Court ruled in the company's favor.

The rationale was that, under the 1964 CRA, an improper consideration was not grounds for a civil rights grievance if it wasn't the cause of the decision not to promote her. The company claimed just this: it argued that Hopkins wouldn't have been promoted anyway due to other, legally sound considerations. Although the logic regarding the company's liability in the Price Waterhouse decision was not any departure from that used before in similar cases, its timing and surface effect of denying a civil rights claim appeared to some to be setting a dangerous pattern. On a more technical note, the ruling muddied the legal precedents for which party in such a suit bears the burden of persuasion in court.

Specifically, the strict interpretations embodied in Ward's Cove and similar court decisions altered civil rights jurisprudence in three ways:

1. They insisted that employees bringing civil rights claims must build persuasive cases based soundly on a complete set of facts. Since the law had specific requirements for what constituted prohibited discrimination, the plaintiffs were expected to present compelling facts that addressed all the requirements under the law, as opposed to making a more general allegation and expecting the company to disprove it with the facts.
2. The employer's burden of proof in a civil rights lawsuit was reaffirmed as one of producing enough clear evidence to outweigh the charges against it, rather than one of persuading or convincing the court. Some believed this had always been the proper evidentiary role for the defendant in such cases, and that overly sympathetic judges had occasionally—and improperly—granted plaintiffs a lighter burden than the law provided for.
3. Specific to the company's burden, Ward's Cove interpreted "business necessity" much more broadly than many court cases before it, which had focused the term to relate only to job performance issues. This meant that it was easier for a company to show it had a legitimate business need that happened to result in disparate impact, and therefore it was not liable under the CRA of 1964.

CONGRESSIONAL RESPONSE

DEMOCRATIC FAILURE.

By February 1990, civil rights groups were determined to strengthen the provisions of the Civil Rights Act of 1964, and they applied pressure on Congress. A comprehensive civil rights bill, introduced by Representative Hawkins and Senator Kennedy, was subject to intense controversy right up through its death by veto under President Bush in the fall of 1990.

President Bush, who had opposed the Civil Rights Act in 1964, strenuously objected to a Democratic-sponsored bill that he and other Republicans feared would lead to racial hiring quotas. This fear stemmed from the 1990 bill's provision that allowed hefty punitive and compensatory damages to employees in cases of proven discrimination, which conservatives thought would encourage firms to establish hiring quotas to avoid being sued. Opponents of affirmative action also decried the retroactive clause, which allowed the bill, if turned into law, to be applied to cases of discrimination that were either pending or had happened years earlier. Strangely enough, a vocal minority of civil rights activists also opposed the bill on grounds that it favored well-educated, well-heeled middle-class minority men and women and did nothing for the poor underclass.

These factors contributed to President Bush's vetoing of the 1990 Civil Rights Act. However, sensitive to the rising number of sexual harassment suits in the country as well as to the unpopularity of his action, he sent to the House a Republican-sponsored civil rights bill that resembled the 1990 version in almost all respects.

REPUBLICAN COMPROMISE.

In the Republican version, President Bush included the provision that shifted the burden of proof in discrimination cases to the employer rather than to the employee. However, he omitted the retroactivity clause from the new bill. Nonetheless, because the two bills were so similar, Republicans criticized their own version of the civil rights bill as much as they had the Democratic version. President Bush, whom the media dubbed the "veto President," vowed to veto the bill again. What ultimately restrained him from doing so was the extremely negative political impact of the widely publicized Clarence Thomas Supreme Court nomination hearings, in which Thomas's former subordinate Anita Hill accused him of sexual harassment before a Senate committee, in the fall of 1991. A veto was unthinkable when public opinion from coast to coast was denouncing sexual harassment in the workplace.

MIXED-MESSAGE LAW.

As a result, President Bush signed the 1991 Civil Rights Act, but not before White House counsel C. Boyden Gray directed federal departments and private businesses with federal contracts to end affirmative action programs. The reason for this unusual action was a clause Democrats inserted into the final version of the 1991 civil rights bill that strictly prohibited employers from considering race, gender, or ethnic/religious minority status in an employment practice. Republican opponents interpreted this—the heart of the Civil Rights Act of 1991—as mandating the dismantling of all affirmative action programs, at least in the federal government. But this was far from the intent of Democratic supporters of the bill, who countered by inserting a "saving clause" that affirmed the legality of affirmative action as long as it did not violate the Civil Rights Act, which some critics claimed saved very little indeed, since affirmative action has never been defined.

The law, diluted by amendments and seemingly self-contradictory, explicitly defined its purpose as, in part, to restore the narrow definition of "business necessity" used in Griggs v. Duke Power Co. and undo the easing of the employer burden under Ward's Cove. Ironically, while the law purported to codify the meaning of "business necessity," it never offered any formal definition of the term, and instead proclaimed vaguely that the term meant what it meant under Griggs and similar pre-Ward's Cove rulings—it specifically named the two opposing landmarks.

FEATURES OF THE 1991 CRA

In essence, the new CRA reiterated the principles of the Civil Rights Act of 1964, the law it amended, in making employment discrimination on the basis of color, race, gender, and religious creed illegal. It also incorporated the same features of the old 1866 civil rights employment law by granting punitive and compensatory damages to the injured party, as well as allowing the employee to sue an employer in a jury trial when such damages were claimed. It added to the pool of potential litigants employees covered by the 1967 Age Discrimination in Employment Act and those protected under the 1990 Americans with Disabilities Act. In addition, for the first time, the law covered American employees working for U.S. firms abroad. The Civil Rights Act of 1991, however, didn't apply these rules to businesses that employ fewer than 15 workers, nor did it cover employment discrimination based on sexual orientation.

In another slap at the Supreme Court's Ward's Cove decision, the law reassessed the defendant's burden once disparate impact had been shown by the plaintiffs. That burden, the law said, was one of persuasion, not merely production. This provision would make employers' defense against disparate impact discrimination charges much more difficult and costly.

The Civil Rights Act of 1991, in short, is an employment law that threatens businesses with huge costs if discrimination can be shown. There is a ceiling on the amount of damages and compensatory claims, currently standing at $300,000 for a business that employs 500 or more, and $50,000 maximum for one that employs between 15 and 100. However, the maximum amount for punitive and compensatory damages applies to each person suing, so if five people sue a company for employment discrimination and win, that amount increases fivefold. The maximum amounts also do not include expert witness fees, attorney fees, or back pay. In addition, there is no ceiling at all on damages awarded in cases of racial discrimination. Any employee suing for punitive and compensatory damages is entitled to a jury trial rather than, as under the Civil Rights Act of 1964, to a judge's decision. Juries are considered to be more sympathetic to employee grievances than judges.

IMPACT OF THE ACT ON BUSINESS

The severe penalties for employment discrimination as set out in the Civil Rights Act of 1991 sent shock waves throughout the business community and satisfied those civil rights groups who wanted to put "teeth" into the 1964 Civil Rights Act. The most controversial part of the new act, however, was who held the burden of proof, which had not been enforced consistently under the 1964 version.

DISCRIMINATION AS FACTOR, NOT CAUSE.

Further, in an unprecedented manner, the law proposed to penalize any discriminatory consideration in employment practices, regardless of whether it could be shown that the consideration didn't result in any harm to the plaintiff. This was the portion of the law that some took to mean a ban on affirmative action. Under the 1964 CRA, gender or race could be a factor in an employment decision as long as the employer could prove that other factors besides race, color, gender, or religious creed had been considered. In other words, employers had only to provide a business justification for their employment action. With the 1991 act, however, none of these factors were permissible, even if no overt or conscious intent to discriminate had existed on the part of the employer.

While the act does punish with severe penalties those employers who discriminate, many discrimination cases are not clear-cut. Most are "dual-motive" or "mixed-motive" cases, in which an employee may sue an employer for discrimination on the basis that gender was a factor in a discriminatory employment action. Even if an employer can cite other motivating factors besides gender, under the 1991 CRA the company would still lose the suit, but the jury may not award full damages to the employee.

As another example, a bodyguard firm that stipulated certain height and weight criteria that effectively barred Hispanics and women from consideration could be sued for damages, even if the firm could prove that it had no intent to discriminate. It was, however, still theoretically possible, albeit much harder, that in such a case a firm could prove there was a legitimate job performance requirement served by using height/weight criteria, and it could not be met by substituting different criteria.

RETROACTIVITY.

Retroactivity proved problematic for the new law. Cases of employment discrimination that were pending at the time of the passage of the 1991 act were not covered by it, even though some civil rights activists, lawyers, and law professors argued that that had been the intent of the law. It would take another two-and-a-half years before the Supreme Court ruled definitively that the Civil Rights Act was not retroactive.

AMBIGUOUS PROTECTIONS.

While affirmative action programs heavily favor such factors as gender and race and are protected in the "saving clause" of the Civil Rights Act of 1991, the advocates of retroactivity have criticized the law for failing to define affirmative action. In the absence of a definition, affirmative action programs are as vulnerable to attack as if there had been no saving clause. The Civil Rights Act specifically prohibited such factors as gender, race, color, ethnic origin, or religious persuasion from being used as criteria by employers or employment agencies. Far from protecting women and minorities from discrimination in employment, the new act could well have the ironic consequence that fewer women and minorities are hired. (Title 11 of the 1991 CRA, however, did provide for a "Glass Ceiling" Commission to study the problem of employment of women and minorities.) Because of the 1991 CRA, businesses began to discard employment tests whose scores were adjusted to favor disadvantaged minority persons; the law prohibited such scoring in one place, but appeared to permit it implicitly—when it benefits protected groups—by upholding affirmative action. By virtue of awarding damages in discrimination cases, the new act may encourage "reverse discrimination" suits.

Another problem of the 1991 act concerns sex discrimination. Because "sexual harassment" is not defined or even mentioned in the 1991 act, women who sue employers on the basis of sexual harassment could have trouble establishing their cases. A corporation's lawyers could take issue with the term and define it in the company's favor.

ACCOMPLISHMENTS OF THE ACT

Despite its flaws, the Civil Rights Act of 1991 has been perceived by the public and especially by businesses as strongly protective of the rights of women and minorities. This perception has resulted in businesses from coast to coast, large and small, either reexamining their hiring and other employment policies, or in the absence of clear-cut policies formulating them. It has led to the imposition of "education" policies so that male employees will recognize entrenched female stereotypes, and it helped curtail blatant sexual harassment in the workplace. Cases in which women and minorities have sued successfully and won large damages have caused businesses to review their employment procedures and, in some cases, hire more minorities and women.

The perception of the Civil Rights Act of 1991 therefore has demonstrated the intent of lawmakers and has not, thus far, resulted in worst-case scenarios, such as dismantling of affirmative action programs and across-the-board racial hiring quotas. (There has been a backlash against affirmative action, particularly in public institutions, but these efforts have not been driven by the 1991 law.)

Arguably, the 1991 CRA has contributed to a rise in the number of discrimination lawsuits brought against employers, but it is difficult to separate the effects of this legislation from related anti-discrimination laws from the same period that work in conjunction with the CRA. These include the Americans with Disabilities Act (ADA) of 1990 and the Older Workers Benefit Protection Act of 1990. In 1997, the U.S. district courts recorded 23,796 new civil rights employment cases, in addition to thousands more that were still pending or in appeal. This level represented an approximately threefold increase in the number of such cases since 1991.

In sum, the Civil Rights Act of 1991 has had dramatic, even sweeping, effects on small businesses and corporations. Small businesses are perhaps most affected by the new regulations, because they have the most to lose if sued, and many are without detailed employment guidelines.