Disparate Impact: How it works

How could disparate impact legislation lead to de facto quotas? Let's check out an NYT article on the gigantic gender discrimination lawsuit against Walmart. Note how frequent (and how uncontroversial) are the article's references to Walmart not being quite aggressive enough in imposing quotas on itself to avoid a huge payout:

More than six years before the biggest sex discrimination lawsuit in history was filed against Wal-Mart Stores, the company hired a prominent law firm to examine its vulnerability to just such a suit.

The law firm, Akin Gump Strauss Hauer & Feld, found widespread gender disparities in pay and promotion at Wal-Mart and Sam’s Club stores and urged the company to take basic steps — like posting every job opening and creating specific goals to promote women and minorities — to avoid liability....

Without significant changes, the lawyers said in their confidential analysis, Wal-Mart “would find it difficult to fashion a persuasive explanation for disproportionate employment patterns.”

In 2001, seven women filed a class-action suit on behalf of all women working at the company. They complained of a general pattern of discrimination in pay and promotions.

Wal-Mart, the world’s largest retailer, has denied any systematic discrimination and asserts that any claims should be tried individually, not as a class action that would sweep in more than a million current and former employees.

Akin Gump estimated that for 1993 alone, Wal-Mart’s potential legal exposure in a class-action sex discrimination suit was $185 million to $740 million. Mr. Seligman said the women suing Wal-Mart were seeking damages for every year since 1997, meaning the company could be on the hook for billions of dollars.

The report examined employment patterns at all Wal-Mart and Sam’s Club stores. It found that men employed by Wal-Mart as department managers, an hourly position, earned 5.8 percent more than women in those positions in 1993 ($236.80 versus $223.70). Men in salaried jobs earned $644.20 a week compared with $540.50 for women.

Akin Gump also found large disparities in job assignments. Fifty-five percent of women were initially hired as cashiers compared with 12 percent of men. Twenty-nine percent of men were initially hired in receiving jobs like unloading, which generally pay at least 20 percent more than cashier jobs, compared with 7 percent of women.

I'm utterly baffled coming up with any reason other than sheer malignant irrational prejudice why Walmart would hire more men than women to unload trucks. What possible reason could there be? Clearly, Walmart is a totally irrational organization that doesn't know anything about how to, say, unload trucks. No doubt, Walmart will become much more efficient after this lawsuit. Walmart should thank the plaintiff's attorneys for helping them get better at unloading trucks.

The law firm found smaller, but still significant, disparities in the company’s employment of black employees.

The report warned that the overall disparities it found were “statistically significant and sufficient to warrant a finding of discrimination unless the company can demonstrate at trial that the statistical disparities are caused by legitimate, nondiscriminatory factors.”

... Mr. Tovar, the Wal-Mart spokesman, also said that in the last five years, Wal-Mart has told its 50,000 managers to promote more women and minorities, with 15 percent of managers’ bonuses tied to achieving diversity goals. Women now hold 45.8 percent of assistant store manager positions — a pipeline to higher-level jobs — up from 39.7 percent five years ago.

Employment experts say there can be innocent reasons for the types of disparities found by Akin Gump. For example, women might apply disproportionately to be cashiers and men disproportionately to work in receiving. But there could be improper discriminatory reasons for the differences, like managers believing that cashier jobs are for women.

Akin Gump recommended that Wal-Mart document applicants’ job preferences, post notice of all openings and training opportunities, establish promotion goals and timetables for women and minorities, and monitor progress. ...

Company documents and depositions in the lawsuit suggest that Wal-Mart’s initial adoption of the report’s recommendations was fitful and incomplete.

Wal-Mart began posting more, but not all, job openings and adopted numerical goals [in business, the term "goals" is interchangeable with the term "quotas"] for promoting women. But in a February 2000 memorandum to Wal-Mart board members, Coleman H. Peterson, executive vice president for human resources at the time, bemoaned the lack of progress toward diversity goals.

“Female management representation at Wal-Mart super centers, Sam’s and logistics and, therefore, total company are worse than prior year,” he wrote in the memorandum, which was turned over to the plaintiffs.

... Mr. Seligman, the plaintiffs’ lawyer, says the Akin Gump report, which he has not seen, would seem to confirm that “top managers were fully aware that women were not getting promoted in proper numbers.”

Let's review the number of references in this one article to de facto quotas:

- creating specific goals to promote women and minorities
- 15 percent of managers’ bonuses tied to achieving diversity goals
- establish promotion goals and timetables for women and minorities, and monitor progress
- adopted numerical goals for promoting women.
- proper numbers

My published articles are archived at iSteve.com -- Steve Sailer