The high cost of bias-law ignorance

Workforce, May, 2002 by D. Diane Hatch, James E. Hall

In response to an advertisement, Anthony Mathis, a 59-year-old African-American with 24 years of car-sales experience, left an application at Phillips Chevrolet. He left a second job application when he heard nothing. The application form asked for the date of his discharge from the military, which Mathis gave as 1959.

Mathis was never interviewed, but Phillips hired seven new salespersons, all younger than Mathis. When Phillips interviewed applicants, its general manager often noted the age of an applicant by hand on the application, as well as making notes such as "bright, young, aggressive."

Mathis sued, claiming that Phillips' failure to hire him was due to his age. A jury agreed and awarded him $100,000 in compensatory and liquidated damages.

On appeal, the U.S. Court of Appeals for the Seventh Circuit found that Phillips' hiring managers had never been trained concerning bias laws and admitted their ignorance. "Leaving managers with hiring authority in ignorance of the basic features of the discrimination laws is an 'extraordinary mistake' for a company to make." Thus, the $50,000 liquidated-damages award--awarded for an employer's willful or reckless indifference to the law--was proper. Mathis v. Phillips Chevrolet Inc., 7th Cir., No. 00-1892 (10/15/01).

Impact: An employer's failure to make its hiring managers aware of basic legal requirements is, in the court words, an extraordinary mistake.