The Boundaries of Litigating Unconscious Discrimination: Firm-Based Remedies in Response to a Hostile Judiciary
75 Pages Posted: 26 Aug 2008 Last revised: 30 Mar 2009
In answering the question of how judges should approach unconscious discrimination claims, scholars ignore a practical solution to this problem: by putting the burden on the firm to reduce the incidence of unconscious bias ex ante, as opposed to putting the burden on the employee of proving it in court ex post. The means of accomplishing this is multifaceted, whereby firms that have been previously exposed to extensive employment discrimination litigation use their market power to force their smaller competitors to adopt a new diversity norm. Delaware law then steps in and memorializes the new norm in the case law, transitioning the norm into a rule of law enforceable through the duty to monitor (a species of the duties of care and loyalty). While this may sound a little unusual, this article will show that it is a meaningful alternative to combating discrimination primarily addressed through Title VII of the Civil Rights Act of 1964 (Title VII) by forcing firms incorporated within the state to create an environment amenable to diversity. Such initiatives could address overt discrimination and also unconscious discrimination, which is more prevalent and the focus of this study. While unconscious discrimination is actionable under Title VII (presumably), scholars are in agreement that court regulation of it has failed. Contrary to the alternatives suggested in the literature, placing the burden on the firm to regulate discrimination ex ante is more likely to minimize unconscious, discriminatory behavior, at least more than tinkering with the ex post remedies available for those few violations that can be proven through Title VII.
This article first explains why courts have failed to address unconscious discrimination, a failure that has emerged largely out of respect for employment at will and an unwillingness to infer differential treatment where other explanations are possible. Courts can address only the most extreme cases of unconscious discrimination, which require the presence of certain factors that will allow the court to isolate the bias. Second, this article proposes other mechanisms for addressing unconscious discrimination that account for its peculiar nature, mainly firm-based remedies that will be more successful than the courts have been in addressing this problem. The difficulty comes in giving the Delaware courts an incentive to become involved in the controversy over unconscious discrimination, or in the alternative, convincing firms to address unconscious discrimination without the impetus of litigation. This article demonstrates that such incentive can come from an unlikely blend of the duties of care and loyalty, corporate norms, and economic pressure from corporate giants like Wal-Mart.
Keywords: unconscious discrimination, Title VII, Delaware, diversity, duty of care, Wal-Mart, corporate norms
JEL Classification: J71, K10, K22, K30, K31
Suggested Citation: Suggested Citation