Order in the Court: The Influence of Firm Status and Reputation on the Outcomes of Employment Discrimination Suits

American Sociological Review (Forthcoming)

54 Pages Posted: 4 Jan 2014 Last revised: 10 Mar 2019

Date Written: February 1, 2018

Abstract

This article explores the mechanisms by which corporate prestige produces distorted legal
outcomes. Drawing on social psychological theories of status, we suggest that prestige
influences audience evaluations by shaping expectations, and that its effect will differ
depending on whether a firm’s blameworthiness has been firmly established. We empirically
analyze a unique database of more than 500 employment discrimination suits brought
between 1998 and 2008. We find that prestige is associated with a decreased likelihood of
being found liable (suggesting a halo effect in assessments of blameworthiness), but with
more severe punishments among organizations that are found liable (suggesting a halo
tax in administrations of punishment). Our analysis allows us to reconcile two ostensibly
contradictory bodies of work on how organizational prestige affects audience evaluations
by showing that prestige can be both a benefit and a liability, depending on whether an
organization’s blameworthiness has been firmly established.

Keywords: reputation, status, employment discrimination, corporate misconduct, punishment

Suggested Citation

McDonnell, Mary-Hunter and King, Brayden, Order in the Court: The Influence of Firm Status and Reputation on the Outcomes of Employment Discrimination Suits (February 1, 2018). American Sociological Review (Forthcoming). Available at SSRN: https://ssrn.com/abstract=2373974 or http://dx.doi.org/10.2139/ssrn.2373974

Mary-Hunter McDonnell (Contact Author)

The Wharton School - The University of Pennsylvania ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Brayden King

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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