The Importance of Environmental Scans: Avoiding Claims of Systemic Discrimination

Environmental scans can help companies anticipate potential systemic discrimination claims before a lawsuit is filed. While most employment discrimination suits involve individual plaintiffs, this is not always the case. An alternate form of liability to which companies may be subjected is a systemic discrimination claim. See 42 U.S.C. § 2000e-6. Systemic discrimination claims argue that a company pattern or practice systemically discriminates against a protected class. Id. For example, plaintiffs may allege that a company systemically discriminates against women because women are infrequently promoted to management positions.

Relevant statistics on an employer’s workforce are the key evidence when litigating systemic discrimination claims. See Int’l Bhd. of Teamsters v. United States, 431 U.S. 324, 339 (1977). Relevant statistics compare the number of members of the protected class at the company to the number of members of that protected class in the relevant labor market. See Hazelwood Sch. Dist. v. United States, 433 U.S. 299, 308 (1977). Statistics are so important in systemic discrimination claims that it is possible for plaintiffs to succeed on their claims with statistics alone. See Teamsters, 431 U.S. 324. This type of victory is rare, however, as the number of members of a protected class in a company or department must be almost zero for this success to occur. See id.; see also Hazelwood, 433 U.S. 299. In most cases, plaintiffs will need to show both statistics and testimonial evidence of the alleged disparate treatment. Id.

The problem for companies charged with systemic disparate treatment is that, even if your company ultimately succeeds in litigating these claims, the claims can result in thousands of dollars in litigation costs because of the sheer number of plaintiffs. Recently, a New York district court refused to dismiss systemic discrimination claims filed by the EEOC against a New York dairy cooperative. See EEOC v. Upstate Niagara Coop., Inc., No. 16-CV-842S, 2018 U.S. Dist. LEXIS 183904 (W.D.N.Y. Oct. 26, 2018). While the initial charge filed involved a plaintiff’s claims of disparate impact, the EEOC’s broad regulatory powers to prevent employment discrimination allowed it to expand the charges beyond the initial claim based on the results of its initial investigation. Id. at *7. This case shows the importance of ensuring your hiring process is EEO compliant.

Environmental scans help companies avoid systemic discrimination claims because the scan can reveal hiring biases of which company leaders may be unaware. One of the objectives of any HR-focused environmental scan should be to develop a statistical analysis of the demographic breakdown of each department and position compared to the demographic breakdown in the relevant labor market. Employment counsel, like ELS, can help you determine the relevant labor market and whether your demographic breakdown leaves your company vulnerable to claims of systemic discrimination. In addition, if the environmental scan reveals any issues, your employment counsel will work with you to craft solutions to these issues.

~ Author: Holly McDaniel, 2018 ELS Extern, Emory University School of Law, 3rd Year Law Student