March, 1994

LENGTH: 7201 words

HEADLINE: Job-Breakers;
The EEOC's assault on the workplace.

BYLINE: James Bovard;
James Bovard is the author of Lost Rights: The Destruction of American
Liberty, to be published in April by St. Martin's Press.

President Clinton is still struggling to name a chairman for the Equal
Employment Opportunity Commission, perhaps the federal government's most revered
symbol of coercive good intentions. In January, the administration was on the
verge of nominating Ida Castro, a female Hispanic labor lawyer, but backed off
because civil rights groups complained of Castro's lack of experience in job
discrimination lawsuits. At press time, top Clinton officials were reportedly
searching for some other qualified Hispanic to head the agency.

It's unlikely the nomination will raise many eyebrows, for few federal
agencies have received as much power and as little scrutiny as the Equal
Employment Opportunity Commission. Shrouded in a cloak of good intentions, the
EEOC represents the epitome of the paternalist state's contempt for rendering
justice to individuals. The EEOC exists largely to compel employers to treat job
applicants and employees unequally, and thus generates an unending series of
harebrained lawsuits.

Mass Guilt by the Numbers

The 1964 Civil Rights Act created the Equal Employment Opportunity
Commission. The act explicitly banned racial quotas, declaring:

It shall be 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.

The 1964 act also specifically required that an employer have shown an intent
to discriminate in order to be found guilty.

But, by the late 1960s, the EEOC had intentionally subverted the law by
establishing a definition of discrimination far wider than Congress authorized.
EEOC chairman Clifford Alexander announced in 1968: "We . . . at EEOC believe
in numbers. . . . Our most valid standard is in numbers. . . . The only
accomplishment is when we look at all those numbers and see a vast improvement
in the picture." From the 1970s onward, the EEOC, through its regulations and
lawsuits, created an overwhelming legal presumption that employers who do not
hire ample numbers of blacks, Hispanics, and other minorities will be found
guilty of discrimination. The result is racial hiring quotas via threat of
federal and private lawsuits. Though the Reagan administration in principle
opposed such policies -- and the Bush administration paid lip service to such
opposition -- neither administration made any fundamental changes in the federal
regulations defining discrimination in the private sector.

In 1991 EEOC chairman Evan Kemp warned of a "crime wave of discrimination."
What type of crime wave was the EEOC battling at that time? The EEOC had sued
the Daniel Lamp Company in 1991 for allegedly discriminating against blacks. The
company was in a Hispanic neighborhood in Chicago and relied on Hispanic
organizations to refer job-seekers. All of the company's twenty-six employees
The American Spectator, March, 1994

were either black or Hispanic. The EEOC ran a computer test, compared Daniel
Lamp to much larger employers within a three-mile radius, and informed the
company that it was guilty of breaking federal law because it did not have 8.45
black employees. The EEOC also based its lawsuit on the complaint of one black
woman who applied but was not hired. According to Richard Epstein's Forbidden
Grounds: The Case Against Employment Discrimination Laws, the EEOC "demanded
that Daniel Lamp not only pay her back wages of some $340, but also that it
spend $10,000 in advertisements to detect other blacks who might have answered
want ads, and to pay them another $123,000 in back pay."

Morley Safer of CBS's "60 Minutes" noted: "Daniel Lamp Company is in an old
building on the southwest side, broken into so many times that (the owner) has
had to bar every window in the place." Though the city of Chicago was unable to
provide basic police protection to the company, the federal government had
sufficient resources to punish the company for hiring too many of the wrong
minorities. EEOC officials publicly asserted that Daniel Lamp had refused to
hire any blacks; but "60 Minutes" found that during the time that the EEOC said
Daniel Lamp was discriminating, the company had actually hired eleven black
employees.

Safer interviewed Jim Lafferty, the EEOC's director of legislative affairs,
and asked him if an employer "has three black employees and doesn't hire a
fourth for whatever reason, and that fourth accuses him of discrimination, do
you prosecute?"

Lafferty replied, "Yes we do."

Such a standard gives almost any frustrated minority job applicant a legal
bomb to throw at potential employers. Lafferty also commented on the 8.45
number: "All too often when confronted with such numbers, employers have assumed
that they represent quotas. Consequently, many employers have come to believe
the law requires quotas and have surreptitiously hired by numbers to avoid
challenges."

When the EEOC filed its lawsuit, it announced:

This is an action . . . to correct unlawful employment practices on the basis of
race (Black) and to make whole Lucille John-son, and all other Black applicants
and Black potential appli-cants for employment aggrieved by the unlawful
employment practices.

Mike Welbel, the owner and manager of Daniel Lamp Co., observed two years
later, "The government went through our records of job applicants, and called up
people and asked, 'Are you white, Hispanic, or black? Did you know you may
have been discriminated against and that you may have money coming to you?' What
really burnt me and hurt me is that the government said that other people came
forward (and alleged discrimination). Other people did not know about the case
-- the government solicited other people."

Welbel was shocked at the government's overreaching, but, his lawyer
explained to him, "They are the government -- they can do anything." Welbel
eventually settled the EEOC's lawsuit by agreeing to pay $8,000 a year for three
years into a settlement fund. Welbel observed, "My whole life was fighting this
thing. And I could not do it any more. My family and I could not function."
Welbel agreed to the settlement partly because he just wanted to be "left
alone." Welbel noted that he and his black and Hispanic employees "got along
just fine -- until Big Brother came in. We never had a racial incident -- we
never had anything -- the church and civic and community leaders backed us up."

The EEOC will sue a company over almost any procedure that results in an
"inappropriate" number of minority employees. It spent seven years suing
Consolidated Services Company, a Chicago janitorial service owned by Koreans.
Federal judge Richard Posner noted in his March 1993 decision:

There is no direct evidence of discrimination. The question is whether the
circumstantial evidence compels an inference of discrimination -- intentional
discrimination. . . . Mr. Hwang relies on word of mouth to obtain employees
rather than reaching out to a broader community less heavily Korean. It is the
cheapest method of recruitment. . . . Persons approach Hwang or his employees --
most of whom are Korean too -- at work or at social events, and once or twice
Hwang has asked employees whether they know anyone who wants a job. . . . Hwang
did buy newspaper advertisements on three occasions -- once in a Korean-language
newspaper and twice in the Chicago Tribune -- but these ads resulted in zero
hires. . . . The EEOC was unable . . . to find a single person out of the 99
rejected non-Koreans who could show that he or she was interested in a job that
Mr. Hwang ever hired for. Many, perhaps most, of these were persons who
responded to the ad he placed in the Chicago Tribune for a contract that he
never got, hence never hired for.

At the federal trial of Consolidated Services, the EEOC provided only four
witnesses: a secretary who Posner believed did not honestly want a janitorial
job, a second whose testimony was judged "incredible" and who openly
contradicted himself, a third whose testimony was also dismissed as
unbelievable, and a fourth who had been fired from his last job for stealing and
who insisted that he saw Hwang's ad in the Chicago Sun-Times, where Hwang never
advertised. Posner observed, "This was a sorry parade of witnesses, especially
when we recall that the (EEOC) culled it from a list of 99." Posner concluded:

It would be a bitter irony if the federal agency dedicated to enforcing the
anti-discrimination laws succeeded in using those laws to kick (immigrants) off
the ladder by compelling them to institute costly systems of hiring. . . .
Consolidated has been dragged through seven years of federal litigation at
outrageous expense for a firm of its size.

In a similar case in late 1991, the EEOC compelled a $2 million settlement
out of World's Finest Chocolate, a Chicago candy maker; EEOC's Allison Nichol
explained, "Their method of recruitment was primarily by word-of-mouth through
their existing work force, which at the time, was primarily white, thereby
excluding blacks from knowing about the jobs."

Felons' Best Friend?

The EEOC often argues that "discrimination" against ex-convicts is simply a
pretext for discriminating against minorities, hence illegal. (A 1986 New York
Times editorial noted that "national surveys estimate that blacks commit robbery
at a rate 10 times that of whites.") In the 1970s the EEOC began suing companies
that refused to hire people with criminal records. The EEOC announced in 1987:

It is the Commission's position that an employer's policy or practice of
excluding individuals from employment on the basis of their conviction records
has an adverse impact on Blacks and Hispanics in light of statistics showing
that they are convicted at a rate disproportionately greater than their
representation in the population.

EEOC policy practically seeks to change criminal records from liabilities into
assets -- into pretexts for lawsuits alleging discrimination.

In 1989, the EEOC sued Carolina Freight Carrier of Hollywood, Florida, for
refusing to hire as truck drivers people who had been convicted of felonies
(especially larceny) and who had served prison time. Carolina Freight truckers
carried such freight as computers, munitions, and drugs. The company's average
loss from a theft exceeded $100,000 and the company attributed 85 percent of the
thefts to employee misconduct. Since drivers were largely unsupervised, the
company believed the drivers were the primary sources of theft losses. The EEOC
sued on behalf of a Hispanic man denied a permanent job who had twice been
arrested and who had served eighteen months in prison for larceny. The EEOC
asserted that since Hispanics have a higher rate of felony convictions than do
whites, the company's policy violated the law because of its disparate impact on
Hispanics. The EEOC argued that the only legitimate qualification for the job
was the ability to operate a tractor trailer.

The EEOC had bad luck in the federal judge who was selected for the case.
The judge -- Jose Gonzalez, Jr. -- was outraged at the EEOC's "condescending
attitude towards Hispanics":

EEOC's position that minorities should be held to lower standards is an insult
to millions of honest Hispanics. Obviously a rule refusing honest employment to
convicted applicants is going to have a disparate impact upon thieves. That
apparently a higher percentage of Hispanics are convicted of crimes than that of
the "white" population may prove a number of things such as: (1) Hispanics are
not very good at stealing, (2) whites are better thieves than Hispanics, (3)
none of the above, (4) all of the above. . . . Regardless, the honesty of a
prospective employee is certainly a vital consideration in the hiring decision.
If Hispanics do not wish to be discriminated against because they have been
convicted of theft then they should stop stealing.

The judge fumed that "to say that an applicant's honest character is
irrelevant to an employer's hiring decision is ludicrous. In fact, it is
doubtful that any one personality trait is more important to an employer than
the honesty of the prospective employee. . . . To hold otherwise is to
stigmatize minorities by saying, in effect, your group is not as honest as other
groups."

Kathleen Courtney of the EEOC's Office of General Counsel stated in October
1993 that the Carolina Freight decision in no way caused the EEOC to rethink its
national litigation policy.

In June 1992, the EEOC sued Continental Air Transport, claiming that its
policy of not hiring people with arrest records violated federal civil rights
law. EEOC attorney Elaine Chaney explained that the law was discriminatory
because "blacks and Hispanics are far more likely than whites to have arrest
records." It is ironic that the government penalizes a private company for
relying on a person's criminal record, since both the federal and state
governments suspend many of a person's civil and constitutional rights once he
is convicted of a felony. Convicted felons are prohibited, for example, from
owning guns or voting in most states. The government declares that a convicted
felon cannot be trusted to pull a lever in a voting booth, yet seeks to penalize
private companies who feel the person cannot be trusted with $100,000 in private
property.

The EEOC has sued companies for firing employees who have violently attacked
other employees on the job. In 1992, the EEOC sued the Flasher Company of
western Oklahoma for firing Edward Perez. Perez, a Hispanic employee, was
discharged after he punched another employee, causing the truck the second
employee was driving to go into a ditch. The EEOC claimed the firing was
based on discrimination against a member of a "protected class" -- i.e., that
the company used Perez's attack on a co-worker solely as a pretext to treat him
unfairly. A federal appeals court rejected the EEOC's claim.

Norming Scores

The EEOC strives to enforce a "know-nothing egalitarianism" on hiring
policies. It routinely presumes that businessmen who seek to hire workers with
more than minimal qualifications are acting unfairly toward less qualified
workers. The EEOC almost always intervenes against competence -- in support of
the notion that workers do not need to be as intelligent, as literate, or as
capable as an employer demands.

Routinely, the EEOC punishes or threatens to punish employers if minority job
applicants give the wrong answers to test questions. As Robert Holland of the
Richmond Times-Dispatch noted, "The EEOC's chief psychologist has promoted a
definition of 'test fairness' that condemns any test, no matter how job-related
or unbiased, as 'unfair' when racial groups differ in their score averages."

Race "norming" was a result of the EEOC's attack on private tests.
Race-norming consists of covertly manipulating test scores, effectively lowering
the scores of whites and Asian-Americans and raising the scores of blacks and
Hispanics, in order to reduce differences in test scores. With race norming,
each citizen has an equal opportunity to have his job test scores secretly
raised or lowered in response to government manipulation or intimidation. The
U.S. Department of Labor effectively imposed race norming on state employment
services, changing millions of job applicants' test scores by federal fiat.

The EEOC has long pressured companies either not to use written tests for job
applicants or to change the test scores to provide extra benefits to minority
job applicants. In the prosecution of Atlas Paper Box Co., a Tennessee
corporation, EEOC officials argued that the fact that the company did not
race-norm job applicants' test scores was evidence of bias against black
applicants. When the controversy over race-norming became public in 1991, EEOC
officials admitted that they had threatened to sue other private corporations if
they refused to race-norm test results. Race norming is the perfect example of
the EEOC's concept of "fairness" -- lying about people's ability so that it can
secretly pick the winners and losers among job applicants.

Shakedown City: EEOC Settlement Policy

In 1986 the EEOC sued C.W. Transport Inc., a Wisconsin trucking firm, for not
hiring enough blacks and Hispanics and for not keeping paperwork in order from
the mid-1970s. The EEOC initially demanded $8.6 million, but settled for $1
million in 1987. After the $1 million bounty was rendered to the EEOC, EEOC
lawyer John Milton was placed in charge of finding 200 blacks and Hispanics who
were illegally denied jobs by the company up to fifteen years before. Finding
the rightful recipients of the windfall was especially tricky, since the
company's files of old job applications had been destroyed in a flood. Milton
proved that government employees also have entrepreneurial talents. He cut a
deal to allow personal acquaintances, his brother, three former Yale Divinity
School students, and others to file false claims of having been denied
employment by C.W. Transport. After the discrimination claimants cashed their
$6,000 payoff, Milton permitted them to keep $1,000 to $1,700, and kept the rest
for himself. Milton and his brother were convicted of conspiracy, theft, and
making false statements to the EEOC. Erma Fields, an EEOC paralegal, was also
convicted, after four members of her family received settlement checks.

When the EEOC gets a pot of money to distribute, there are few reasonable
guidelines about who should receive a windfall. Even people who did not apply
for a job can be eligible for a payoff if an EEOC official decides that the
person would have applied except for a company's reputation for discriminatory
hiring. According to lawyer Jeffrey Norris of the Equal Employment Advisory
Council, a private organization in Washington, some EEOC offices make little or
no effort to find people who were actually discriminated against; instead, they
are concerned only with doling out the windfalls to people of the proper race.

The EEOC often attempts to bludgeon small companies with large settlement
demands. Bruce Spitzer, the lawyer for Consolidated Services, a Korean-owned
Chicago janitorial firm, observed that the EEOC demanded that the firm pay
$475,000 in "back pay," primarily to people who never worked for the company, as
a penalty for its alleged discrimination. The EEOC reached that sum simply by
calculating that, since 95 percent of laborers in Chicago are non-Asians,
Consolidated was guilty of discriminating whenever its payroll had more than 5
percent Koreans. The EEOC never even attempted to build up evidence that the
company had actively discriminated against specific individuals; instead, it
assumed that the fact that its employees were almost all Korean proved the
company's guilt, according to Spitzer.

The EEOC then insisted that Consolidated must pay $5,000 each, plus interest,
to "non-Koreans who applied for cleaner positions . . . but were rejected, as
well as to those non-Koreans who did not apply for cleaner employment . . . but
who would have applied for such employment had they been aware that such
employment was available," according to a confidential EEOC settlement proposal.
Consolidated would have been required to identify such non-applicant claimants
by "placing advertisements in the media," among other steps, to find out those
who might have applied for a job if they had known. Consolidated rejected the
settlement and was later vindicated in federal court.

The EEOC measures its good deeds in part by the size of the cash settlements
it finagles for blacks, Hispanics, and other "protected classes." EEOC acting
General Counsel James Neely announced in August 1993 that the EEOC is resolving
"more charges for more money than ever." The EEOC routinely forces employers to
pay off complainants, even when the EEOC lacks clear evidence that the employer
was guilty of discrimination. The agency has a long history of scorning
evidence in its investigations; a 1981 General Accounting Office report
concluded:

EEOC has obtained negotiated settlements for some charges on which GAO believes
there was no reasonable cause to believe that the charges were true. . . . The
three district offices we reviewed strongly emphasized obtaining negotiated
settlements on all charges -- regardless of the evidence of employer guilt.

The EEOC's open contempt for fairness was reined in during the Reagan and
Bush eras, but the system still has a strong bias in favor of complainants. A
1988 GAO report noted investigative deficiencies in up to 87 percent of cases in
one EEOC office. The EEOC found that of the 60,000 complaints it received in
1987, there was cause to believe discrimination had occurred in fewer than 3
percent. Yet, as GAO noted, "In an additional 12.5 percent of closed charges,
EEOC obtained settlement from the employer in which some relief was provided for
the charging party without determining whether there was cause to believe
discrimination had occurred." GAO further noted:

Investigative staff in four of the six district offices we reviewed said they
were still required to meet headquarters-established production goals, or face
some adverse action such as low performance rating. In one EEOC district office,
some supervisors commented that they frequently placed more emphasis on meeting
their quantitative goals than adhering to the Compliance Manual requirements for
investigators.

As one former high-ranking EEOC official says, "The official line is that we do
not take sides. We just want to find out the truth about how bad the employer
is. But obviously, we are out to suspect the employer."

The EEOC's internal newsletter, Equal Times, frequently lists victories
achieved by regional offices that result in payments of $2,500 or $5,000 to
employees or ex-employees who threatened to sue their employers for
discrimination. While such achievements may look good on a press release, the
EEOC fails to mention that the average cost of defending against a
discrimination lawsuit for an employer is approximately $80,000. The fact that
an employer would settle a charge for a few thousand dollars instead of
spending almost a hundred thousand dollars in court to prove his innocence only
shows that corporate managers are not idiots. The more expensive lawsuits have
become, the more arbitrary the power the EEOC has over employers. The simple
threat of a discrimination lawsuit frequently compels businesses to pay off
complainants, regardless of the merits of their case.

Rescuing Scantily Clad Women

The EEOC also polices and punishes practices that it claims discriminate
against women. Ever since the early 1970s, the EEOC has continually sought to
expand the types of treatment of women which are punished by law. On July 21,
1992, the EEOC announced that it was filing a sex discrimination lawsuit against
Sands Hotel and Casino in Atlantic City, New Jersey, for

maintaining a dress code that is enforced unequally against cocktail servers
based on gender. In addition, the dress policy of Sands Hotel places a disparate
standard on the female cocktail servers based on their sex in violation of Title
VII, by requiring them to wear a sexually provocative and revealing costume, and
high heels, while males wear tuxedo-type uniforms and comfortable dress shoes.

It is strange to characterize requiring the wearing of high heels as a civil
rights violation; millions of women, after all, voluntarily wear such shoes.
This case might have merit if Sands Casino had the power to conscript women at
random and force them into wearing skimpy outfits. There are hundreds of
thousands of jobs in New Jersey for women who do not want to flaunt their
anatomy -- but instead of simply telling the potential plaintiffs to change
their line of work, the EEOC instead tries to force Sands hotel to change its
corporate style.

Other EEOC lawsuits seem devoted to minimizing Americans' freedom of
association. The EEOC has brought several lawsuits against women's health clubs
for their refusal to hire male employees. Women usually choose to join an
exclusively female health club in order to get away from male oglers and sexual
innuendos while doing squats and bench presses. But the EEOC considers health
clubs that serve only females and hire only females to be unfairly
discriminating against men. In a major case in Chicago, EEOC sued the Women's
Workout World (WWW) chain of health clubs for sex discrimination. A federal
judge initially awarded the EEOC summary judgment but then reversed her decision
after WWW provided petitions signed by over 10,000 members who vowed not to
patronize the clubs if males were hired. Daily Labor Report summarized the
dispute in April 1993:

WWW claims that because of the intimate physical contact with members, and
exposure to nudity and partial nudity in showers, locker rooms, and exercise
rooms, the employment of men would violate legitimate privacy interests of the
club members. It argued that the female-only requirement for these jobs is a
bona fide occupational qualification.

Federal judge Ann Claire Williams conceded that the health club has "articulated
a legitimate privacy interest with regard to nudity." Daily Labor Report noted,
"The court said it also will assume at this point that members of the club have
a privacy interest in preventing the opposite sex from touching their breasts
and buttocks." Yet at the same time the EEOC is prosecuting WWW, it is helping
to create expansive doctrines of sexual harassment to prosecute other companies
for not preventing male employees from asking female employees out on dates.

You Ain't Seen Nothing Yet

Whatever absurdities the EEOC has concocted in recent years are almost
certain to be exceeded in the Clinton era. According to Attorney General Janet
Reno:

Ultimately a failure to vigorously protect civil rights is an intolerable breach
of faith with the people who have entrusted tremendous power to their
government. If we can keep that faith, and bring justice to those seeking the
opportunities in this country, then all Americans will benefit.

It is not so much that people "have entrusted tremendous power to their
government" -- but that government policy-makers have seized far more power over
private employers than most Americans realize. Federal civil rights policy
presumes that politicians should be the ultimate judges of which opportunities
each group of citizens should receive -- that politicians and bureaucrats should
have practically unlimited power to tilt the economic playing field in the
direction of preferred players. Rather than creating equal opportunity, this
process simply led to a general political confiscation and redistribution of
opportunity.

The premise of modern civil rights law is that federal coercion produces a
fairer result than the voluntary agreements of private citizens. And the EEOC
will likely become far more powerful in the coming years. George Bush's
Americans With Disabilities Act of 1990 is already a Pandora's Box for
litigation and a delight for the trial lawyers. The ADA prohibits discrimination
against the disabled, and the EEOC has jurisdiction over most ADA complaints.
The EEOC has already issued numerous bizarre rulings expanding the definition of
"disabled" (holding, for instance, that obese people cannot be discriminated
against because of their fat). And because of the ADA, the EEOC now has the
largest backlog of discrimination complaints in its history -- over 80,000. It
would be in the agency's character and should surprise no one if Clinton's
EEOC decides to resolve the backlog the same way the Carter administration did
the last time the EEOC fell similarly behind: by effectively ruling, without any
hearing at all, that most of the accused employers are guilty as charged.

SIDEBAR:

EEOC HIT PARADE

The EEOC's efforts to restructure society go far beyond the lawsuits it files.
If we also judge it by other lawsuits that make use of its expansive definitions
of discrimination, its mandate can be seen as far more wide-reaching. Here are
some highlights from the last decade:

A Denver teacher sued for racial discrimination when she was dismissed from her
job after school officials caught her helping a student involved in a fight to
hide a knife, and after she pled guilty to Medicaid fraud.

Kemper Life Insurance was sued for racial discrimination after it discharged a
black employee who committed expense-account fraud and missed scheduled
appointments with clients.

An ex-employee sued Buckeye Cellulose Corporation of Georgia, claiming that the
company's policy of terminating employees for "absence and tardiness" was
racially biased because it had a disparate impact on blacks.

Mobil Oil Corporation was sued for racial discrimination after it fired a black
employee who had misappropriated company property, violated conflict-of-interest
policies, and falsified expense reports.

Piedmont Aviation Company was sued for racial discrimination after it fired a
black flight attendant who refused to accept a flight assignment on a specific
flight, forcing Piedmont to cancel it.


The U.S. Postal Service was sued in 1990 by a job applicant whose driver's
license had been suspended four times, and who claimed that the agency's policy
of not hiring individuals as mail carriers whose licenses had been suspended
unfairly discriminated against blacks -- even though carriers must drive
government vehicles to deliver the mail.

The Internal Revenue Service was sued for discrimination after it fired a black
secretary who refused to answer the telephone.

The City of Houston was sued for racial discrimination by a white employee who,
as a federal judge noted, was "repeatedly out of the office for long stretches
of time without explanation, slept frequently at his desk, and shirked direct
requests from his supervisors."