Risky Business: Age and Race Discrimination in Capital Redeployment Decisions Marley S
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Maryland Law Review Volume 48 | Issue 4 Article 4 Risky Business: Age and Race Discrimination in Capital Redeployment Decisions Marley S. Weiss Follow this and additional works at: http://digitalcommons.law.umaryland.edu/mlr Part of the Civil Rights and Discrimination Commons, and the Commercial Law Commons Recommended Citation Marley S. Weiss, Risky Business: Age and Race Discrimination in Capital Redeployment Decisions, 48 Md. L. Rev. 901 (1989) Available at: http://digitalcommons.law.umaryland.edu/mlr/vol48/iss4/4 This Article is brought to you for free and open access by the Academic Journals at DigitalCommons@UM Carey Law. It has been accepted for inclusion in Maryland Law Review by an authorized administrator of DigitalCommons@UM Carey Law. For more information, please contact [email protected]. RISKY BUSINESS: AGE AND RACE DISCRIMINATION IN CAPITAL REDEPLOYMENT DECISIONS MARLEY S. WEISS* TABLE OF CONTENTS INTRODUCTION .............................................. 902 I. CAPITAL REDEPLOYMENT AND DISCRIMINATION IN EMPLOYMENT: THE NATURE AND MAGNITUDE OF THE PROBLEM .............................................. 907 A. The Scope of the Problem .......................... 907 B. Capital Redeployment: The Need for a Discrimination Theory ............................................. 92 1 II. EXISTING W ORKFORCES ................................. 924 A. Construing the Statutory Language ..................... 924 B. Employment Discrimination and Labor Law Precedents .... 930 1. Title VII and ADEA Prohibitory Language Apart From "Terms, Conditions, or Privileges of Employment" ..... ............................... 933 2. Hishon: Title VII's "Terms, Conditions, or Privileges" .... ................................. 935 3. The Labor Law Gloss on "Terms or Conditions of Employment ..................................... 939 a. Scope of Bargaining Precedents Regarding Capital Redeployment ................................. 939 (1) Section 8(d): First National Maintenance and Fibreboard ......................... 941 (2) Other Scope of Bargaining Precedents Regarding Redeployment .................. 956 b. Section 8(a)(3) and Darlington ............... 968 © Copyright 1989 by Marley S. Weiss. $ Associate Professor, University of Maryland School of Law; J.D., Harvard Law School, 1974; B.A., Barnard College, 1971. From 1974-1984, the author was Assistant General Counsel, and then Associate General Counsel of the International Union, United Auto Workers (U.A.W.). In the course of her work in the U.A.W. Legal Depart- ment, the author participated in the U.A.W.'s legal representation in Arrow Automotive Indus., 284 N.L.R.B. 57 (1987), enforcement denied, 853 F.2d 223 (4th Cir. 1988), dis- cussed infra text accompanying notes 212-215. The author wishes to thank her friends and colleagues whose detailed comments and other contributions were especially help- ful in the completion of this work: David Bogen, Ralph 0. Jones, Maria Makris-Gouvas, Peter Quint, Jana Singer, Ted Tomlinson, Kathy Vaughns, and Robin West. 902 MARYLAND LAW REVIEW [VOL. 48:901 4. Darlington and Effects Tests Under Employment DiscriminationLaw .......................... 976 C. Congressional Employment Discrimination Policy......... 984 III. NEW W ORK SITES ...................................... 1010 C ONCLUSION ................................................ 1016 INTRODUCTION Capital redeployment, the reallocation of employment-related corporate capital investment, has become ubiquitous in today's economy. Management decisions to relocate plants, subcontract work, or consolidate operations, are commonplace. Many factors contribute to the current high rate of capital redeployment: techno- logical advances, tax incentives, product market shifts, and labor cost differentials, among others. Managerial choices about whether and how to restructure en- terprises are sometimes unrelated to workforce demographics. Often, however, the make-up of the current or future employee complement is a decisive factor. An employer might decide to relo- cate its manufacturing operations in order to unload its aging workforce in favor of a pool of younger employees. Another em- ployer, in selecting a new office site, might actively avoid a location where demographics would produce an undesired racial composi- tion among the company's hires. A third company, without ade- quate business justification, might adopt facially neutral site- selection or relocation strategies that tend to exclude from its workforce black or older workers. This article contends that in each of these scenarios the employer has violated the employment dis- crimination laws. Explicitly race- or age-based redeployment decisions are far more common than one might imagine. In addition, many rede- ployment decisions or policies are based on labor force factors heav- ily correlated with race or age, policies that may operate to select for closure facilities with predominantly black or older workforces. This article examines the evidence suggesting that racial or age-re- lated discrimination is implicated in a great many redeployment de- cisions affecting thousands of workers annually. 19891 AGE AND RACE DISCRIMINATION 903 Very few discriminatory redeployment cases have been brought;' even fewer have been successful.2 In none of these cases have the courts squarely confronted the cognizability of such claims under federal employment discrimination laws. This article argues, based on the language and legislative history of these statutes, as well as precedents interpreting similar wording in other labor laws, that discrimination in redeployment decisionmaking violates Title VII of the Civil Rights Act of 1964 (Title VII) s and the Age Discrimi- nation in Employment Act of 1967 (ADEA).4 Where redeployment decisions are based, at least in part, on age or race, the claim is one of "disparate treatment," or intentional discrimination.5 Where such decisions are based, at least in part, on labor factors strongly correlated with age or race, this article urges that a cognizable "dis- parate impact" claim has been made out. Unless the employer can justify the exclusionary effect on black or older workers on grounds of business necessity, a violation of Title VII or the ADEA should be found.6 To the extent that both disparate treatment and disparate I. Successful cases are cited infra note 2; some unsuccessful cases include Bailey v. Delta Air Lines. 722 F.2d 942, 944-45 (1st Cir. 1983) (plaintiffs unsuccessfully sought preliminary injunctive relief to prevent their overwhelmingly black skycap operations from being subcontracted) and Payne v. Bobbie Brooks, Inc., 505 F. Supp. 707, 709 (N.D. Ohio 1980), aff'd mein.. 701 F.2d 180 (6th Cir.), cert. denied, 459 U.S. 858 (1982) (plaintiffs unsuccessfully challenged company's movement of work back and forth be- tween facilities, denying transfer rights, rehiring preference, and notice of openings to workers laid off or terminated upon the closing of the predominantly black inner city plant). 2. Measured by the size of the verdict, one of the most successful capital redeploy- ment discrimination cases is Adama v. Doehler-Jarvis, 419 Mich. 905, 353 N.W.2d 438 (1984). Under Michigan's age discrimination statute, the Doehler-Jarvis plaintiffs recov- ered lost back and future wages and benefits totaling about $ 1.5 million. Id. at 906 n. 1. 353 N.W.2d at 439 n. I. Measured by injunctive relief preventing the redeployment or restoring the status quo ante, Cannistra v. FAA, 24 Fair Empl. Prac. Cas. (BNA) 1621 (D.D.C. 1979), may rate as the greatest success. In Cannistra the plaintiffs won a prelimi- nary injunction preventing the FAA from transferring the location of their two divisions, which were allegedly singled out for relocation because of their older employee comple- ment. Id. at 1622-24. The most successful settlement is probably the one in Bell v. Auto- mobile Club, 34 Fair Empl. Prac. Cas. (BNA) 3,4. 5, 7 (E.D. Mich. 1983) (approving race discrimination case settlement containing S4.7 million in monetary relief plus broad in- junctive relief requiring, intealia, that employer which had moved from the inner city to the suburbs provide transfer opportunities and assistance to black employees willing to work at the new location). 3. 42 U.S.C. §§ 2000e to 2000e-17 (1982). 4. 29 U.S.C. §§ 621-634 (1982 & Stipp. V 1987). 5. See International Bhd. of Teamsters v. United States, 431 U.S. 324, 335-36 n.15 (1977). 6. See id.; see also, e.g., Wards Cove Packing Co. v. Atonio, 109 S. Ct. 2115, 2121-26 (1989) (refining statistical proof methodology and altering allocation of burdens of proof): Watson v. Fort Worth Bank & Trust. 108 S.Ct. 2777, 2796-97 (1988) (applying 904 MARYLAND LAW REVIEW (VOL. 48:901 impact theories are viable under Title VII and the ADEA, 7 both the- ories should apply to capital redeployment discrimination claims.' Labor lawyers litigating under the National Labor Relations Act (NLRA),0 unlike those bringing suits under the equal employment laws, have attempted to address systemic issues of this sort. The results, however, have been mixed. NLRA case law acknowledges that redeployment decisions affecting the workforce in the aggre- gate are employment decisions. Nevertheless, the cases subject only certain redeployment decisions to the statutory limitations imposed on decisions affecting individual workers and their jobs. Labor law interpretations in this area are particularly incoherent and difficult to reconcile with the language and purposes of the statute.'0 This