Testing for Structural Change in Legal Doctrine: an Empirical Look at the Plaintiff's Decision to Litigate Employment Disputes a Decade After the Civil Rights Act of 1991

• Citation: Vol. 18 No. 4
• Publication year: 2010

Testing for Structural Change in Legal Doctrine: An Empirical Look at the Plaintiff's Decision to Litigate Employment Disputes a Decade After the Civil Rights Act Of 1991

Gregory Todd Jones

Introduction

At common law, the employment-at-will doctrine was the touchstone for analyzing the relationship between an employer and employee.^[1] According to this doctrine, either the employer or the employee could terminate the employment relationship at any time, for any reason, or for no reason at all, if no contract expressly dictated otherwise.^[2] Federal antidiscrimination legislation, including Title VII of the Civil Rights Act of 1964,^[3] the Age Discrimination in Employment Act of 1973,^[4] and the Americans with Disabilities Act of 1990,^[5] can be viewed as exceptions to the common law rule.

The Civil Rights Act of 1991^[6] (CRA) extends the reach of federal employment discrimination legislation in the following three ways: First, the CRA which amended Title VII of the Civil Rights Act of 1964,^[7] the Age Discrimination in Employment Act of 1973,^[8] the Americans with Disabilities Act of 1990,^[9] and other federal legislation broadened the scope of the law in ways that will be summarized later in this Note.^[10] Second, the CRA provided for both punitive and non-pecuniary compensatory damages, and gave plaintiffs the right to a jury trial when seeking monetary damages.^[11] Finally, the CRA overturned seven United States Supreme Court decisions that had previously narrowed the scope of federal employment discrimination legislation.^[12]

Individual action, not governmental action, is the primary means of vindicating rights created under Title VII and other federal antidiscrimination legislation.^[13] The Supreme Court has recognized the importance of this distinction:

Congress gave private individuals a significant role in the enforcement process of Title VII. Individual grievants usually initiate the Commission's investigatory and conciliatory procedures. And although the 1972 amendment to Title VII empowers the Commission to bring its own actions, the private right of action remains an essential means of obtaining judicial enforcement of Title VII. In such cases, the private litigant not only redresses his own injury but also vindicates the important congressional policy against discriminatory employment practices.^[14]

Therefore, an examination of the legislation's effect on the plaintiff's decision in favor of private enforcement—that is, the plaintiff's selection of an employment dispute for litigation—is an important part of any study of employment discrimination law and its enforcement.^[15]

The following model of risky decision-making may provide a helpful framework through which to analyze a plaintiff's decision to escalate an employment dispute to litigation.^[16] The plaintiff maintains some subjective estimation that the litigation will be successful (represented by P in the following formula). The plaintiff also estimates the benefits that might come from the litigation in the form of damage awards and injunctive relief (represented by B in the following formula). And, of course, there are costs associated with the litigation (represented by C in the following formula).^[17] In simplified terms, therefore, the expected value [E(x)] of the plaintiff's decision may be represented as:

E (x) = P(B) + (1-P)(-C)

The primary motivation for the hypotheses tested in this Note is Peter Siegelman's 1990 assertion that changes in legal doctrine would not affect the filing rate or the outcome of litigated cases.^[18] In fairness, Siegelman made his observation a year before the CRA—the dramatic doctrinal change underlying the rationale for the model proposed and tested here.

This Note uses outcome data from federal employment discrimination cases filed between 1970 and 1995 to test this proposed model of plaintiff decision-making and empirically examines how the doctrinal change engendered by the CRA has affected this decision-making contrary to Siegelman's assertion. In doing so, this Note is at once descriptive, normative, and prescriptive.^[19] Descriptively, the Note aggregates large volumes of outcome data and provides tabular and graphical summaries of relevant components. Normatively, it presents theoretical models suggesting principles that should guide rational decision-making. Prescriptively, this Note examines deviations from these models following the CRA's enactment and describes policy implications for plaintiffs, defendants, legal representatives for both sides, and legislative bodies that will evaluate the impact of the current law and shape the future of federal antidiscrimination legislation.

Part I provides an historical overview of the legislative and judicial responses to employment discrimination and describes the development of the law in the following three distinct categories of cases: individual disparate treatment, systemic disparate treatment, and systemic disparate impact discrimination. In each category, the Note suggests how the CRA may have altered case outcomes. Part II briefly reviews existing literature on the selection of disputes for litigation. Part III describes outcome data gathered from 210,687 employment discrimination cases filed in federal court between 1970 and 1995, as well as unemployment data covering the same period. Part IV discusses the statistical methods applied to the outcome data to isolate trends in federal employment discrimination litigation and to validate the effect that the CRA may have had upon these trends. Part V summarizes the results of applying these statistical methods to test three hypotheses. The Note's primary hypothesis is that plaintiffs' decisions to litigate employment discrimination disputes have changed in a statistically significant way as a result of the doctrinal shift embodied in the CRA. The second hypothesis is that where the defendant has more to lose in a lawsuit than plaintiffs have to gain, and where there is increased uncertainty as to the outcome, more lawsuits will be filed, defendants are more likely to win, and settlements increase overall. The third hypothesis is that the dramatic increase in the lawsuit filings can be explained by the overly litigious nature of American society. While the results of this study offer support for the first two hypotheses, the third is not supported. Finally, the Note concludes that the CRA has significantly altered the nature of plaintiff decision-making in this arena, and describes some policy implications of these structural changes, including the increased burden on the federal civil caseload^[20] and the concomitant expenses.^[21]

I. History of Employment Discrimination Law

A. Overview

Title VII of the 1964 Civil Rights Act broadly prohibits discrimination in employment.^[22] According to the Act, it is "an unlawful employment practice for an employer . . . to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin."^[23]

The Age Discrimination in Employment Act of 1973^[24] (ADEA) is similar in structure to Title VII, but prohibits only age discrimination in employment, protecting individuals forty years of age or older.^[25] The Americans with Disabilities Act of 1990^[26] (ADA) prohibits employers from discriminating against any "qualified individual with a disability."^[27]

B. Individual Disparate Treatment Discrimination

In International Brotherhood of Teamsters v. United States,^[28] the Court described individual disparate treatment, which is the most frequently litigated form of employment discrimination.^[29] The Court emphasized that individual disparate treatment discrimination is intentional discrimination.^[30] In other words, "[t]he 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."^[31] A plaintiff can prove individual disparate treatment in the following two ways.

1. Direct Evidence or Mixed Motive Approach

Price Waterhouse v. Hopkins^[32] established one method by which a plaintiff can establish a prima facie case of individual disparate treatment discrimination.[33] "That approach is triggered by the plaintiff's introduction of direct evidence, that is, evidence that proves the employer's intent to discriminate without the need to draw any inferences or at least evidence directly connected to the decision the plaintiff challenges."^[34] The CRA statutorily overrules the "substantial factor" test employed in Price Waterhouse, and adopts the more plaintiff-friendly "motivating factor" test,^[35] stating that: "[A]n unlawful employment practice is established when the complaining party demonstrates that race, color, religion, sex, or national origin was a motivating factor for any employment practice, even though other factors also motivated the practice."^[36] However, when an employer can establish that it "would have taken the same action in the absence of the impermissible motivating factor,"^[37] the plaintiff is limited to declaratory or injunctive relief.^[38]

2. Circumstantial Evidence or Pretext Approach

Absent the direct evidence required by Price Waterhouse, the plaintiff must rely on the "pretext" method of proof established in McDonnell Douglas Corp. v. Green.^[39] The "[p]laintiff establishes liability under this approach by introducing circumstantial evidence upon which a factfinder can draw an inference of discrimination."^[40]

C. Systemic Disparate Treatment Discrimination

Systemic disparate treatment describes far-reaching claims of intentional discrimination that stem from an employer's formal policies or general practices.^[41] Offering a valid...