Settling for Less? Organizational Determinants of Discrimination-Charge Outcomes

Law & Society Review, Jun 2008 by Hirsh, C Elizabeth

Although more than 60,000 workers formally charge their employers with unlawful sex or race employment discrimination annually, fewer than one in five charges results in outcomes favorable to the complainant. Building on sociolegal and organizational theory, this study examines how employing organizations avoid unfavorable discrimination-charge outcomes. Using EEO-1 establishment reports matched to discrimination charge data provided by the Equal Employment Opportunity Commission, I assess the effect of employers' legal experience, resources, and indicators of legal compliance on the likelihood that complainants receive favorable charge outcomes, benefits, monetary settlements, and policy change mandates. In general, I find that legal experience, establishment size, and indicators of legal compliance insulate employers from unfavorable charge outcomes. However, in situations where employers are willing to settle claims, legally experienced establishments are more likely to pay monetary damages and receive mandates to change their workplace policies.

In August 2004, the U.S. Equal Employment Opportunity Commission (EEOC) announced the resolution of a class-wide discrimination lawsuit against Home Depot in which several workers alleged unlawful treatment on the basis of sex, race, and national origin (U.S. Equal Employment Opportunity Commission 2005). The resolution mandated that Home Depot should pay $5.5 million to current and former workers as well as appoint an equal employment opportunity (EEO) coordinator, provide antidiscrimination law training to managers, and remain under EEOC monitoring for more than two years. While this resolution afforded legal redress for those subjected to sex and race discrimination at Home Depot, such far-reaching settlements are the exception rather than the norm for discrimination disputes. Of the 60,000 sex and race discrimination complaints filed annually with the EEOC-the federal agency that Congress created to receive, investigate, and resolve employment discrimination claims-fewer than one in five claims results in outcomes favorable to the complainant (U.S. Equal Employment Opportunity Commission 2004). Thus although EEO law enforcement provides redress for a few, most workers who file formal complaints of employment discrimination receive no remedy.

This mixed scorecard for antidiscrimination enforcement embodies a long-standing question for law and society scholarship regarding the capacity of the law to provide redress for its intended beneficiaries. Federal EEO laws give workers who perceive unlawful employment discrimination the right to file formal charges of discrimination with the federal EEOC or a local fair employment agency; indeed all workers must file with the EEOC or a local agency before initiating a private lawsuit. However, as EEOC enforcement statistics reveal, employers prevail in the vast majority of discrimination claims.

A host of factors are potentially responsible for this employer advantage: workers may bring erroneous complaints, employers may be especially adept at defending claims, or the increasingly subtle nature of discrimination in the post-civil rights era may complicate EEOC investigations. In an effort to understand how workers, employers, and regulatory agents negotiate discrimination disputes, this article explores the conditions that produce (or fail to produce) favorable outcomes for workers who file charges of sex or race discrimination under federal EEO laws. More specifically, I consider how defending organizations influence the charge resolution process to their advantage.

A long tradition in law and society research recognizes that legal resolutions do not unfold in a vacuum; rather, structural features of the law and regulated actors shape the legal process and its outcomes. For instance, in his classic article "Why the 'Haves' Come Out Ahead: Speculation on the Limits of Legal Change," Galanter (1974) argues that because legal disputes often occur between parties with unequal resources and experience, the more powerful players can strategically manage their engagement with the legal system to maximize their long-term interests and minimize losses. In addition, new institutional theory in sociology draws attention to the myriad ways in which organizations respond to the law and regulatory efforts. For example, a convincing body of research demonstrates that organizations responded to civil rights law by adopting employment practices-such as EEO offices, affirmative action plans, and due process procedures-to demonstrate their commitment to the law and the normative ideals that it embodies (Edelman 1990; Dobbin et al. 1993; Sutton & Dobbin 1996). More recently, institutional scholars have noted the capacity of such organizational structures to inform common understandings of what it means to comply with the law (Edelman 2005; Edelman et al. 1999; Nelson & Bridges 1999), such that organizational practices and routines geared toward managing diversity become tantamount to EEO legal compliance.