Equal Employment Opportunity Commission v. Consolidated Services Systems
58 Empl. Prac. Dec. (CCH) 41,307, 1991 U.S. Dist. LEXIS 12481, 777 F. Supp. 599 (1991)
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Rule of Law:
Statistical evidence in a disparate impact discrimination claim is unreliable and fails to establish a prima facie case if it does not properly define the relevant labor market to include only those individuals who are both qualified for and genuinely interested in the specific jobs offered, considering factors such as low pay, part-time hours, and lack of benefits.
Facts:
- In January 1983, Andrew Hwang, who is Korean, purchased Consolidated Service Systems, a janitorial company.
- Between 1983 and 1987, Consolidated's workforce was primarily of Korean national origin.
- The janitorial positions offered by Consolidated were almost all part-time (under five hours per day), paid low wages (around $4.50-$5.00 per hour), and provided no fringe benefits.
- Consolidated had no formal application process or written hiring criteria; most applicants learned of jobs through word-of-mouth within Hwang's community.
- Hwang did not actively recruit, but hired individuals who approached him, some from his church or referred by the Korean Association of Greater Chicago.
- Consolidated placed one three-day advertisement in a Korean-language newspaper, which resulted in no hires.
- The company also placed advertisements in the Chicago Tribune, a general circulation newspaper, but hired no one from them, as applicants were not interested in the jobs.
- For a specific government contract in Las Vegas, Consolidated hired nine people, all of whom were non-Korean.
Procedural Posture:
- The United States Equal Employment Opportunity Commission (EEOC) filed a lawsuit against Consolidated Service Systems in U.S. District Court.
- The EEOC's complaint alleged a pattern and practice of discrimination against non-Koreans in recruitment and hiring in violation of Title VII.
- The court bifurcated the trial issues of liability and damages.
- The case proceeded to a bench trial before the district court judge on the issue of liability.
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Issue:
Does statistical evidence showing a disparity between a company's predominantly Korean workforce and the general labor pool establish a prima facie case of disparate impact discrimination when the statistics fail to account for whether the general labor pool is actually interested in the low-wage, part-time, no-benefit janitorial jobs offered by the company?
Opinions:
Majority - Holderman, District Judge
No, statistical evidence showing a disparity between a company's workforce and the general labor pool does not establish a prima facie case of disparate impact discrimination when it fails to account for applicant interest. The court found that the EEOC's statistical evidence was unreliable because it failed to properly define the relevant labor pool. The EEOC's expert, Dr. Bloch, did not account for a major non-discriminatory variable: whether members of the general labor pool were actually interested in the undesirable positions offered by Consolidated, which were part-time, low-wage, and without benefits. The court reasoned that a proper comparison must be between the employer's workforce and the pool of qualified applicants who would realistically seek such jobs. Because the EEOC's data included many people who would not have been interested in Consolidated's jobs, the statistics were not probative of discrimination. The court also rejected the disparate treatment claim, finding no evidence of discriminatory motive in Consolidated's passive, word-of-mouth hiring practices or its limited advertising.
Analysis:
This case significantly refines the requirements for establishing a prima facie case of disparate impact discrimination, particularly in the context of low-wage or undesirable jobs. It establishes that a plaintiff's statistical analysis must go beyond general demographics and account for applicant interest, a key non-discriminatory factor. This ruling raises the evidentiary bar for plaintiffs, requiring them to present more sophisticated statistical proof that the labor pool they use for comparison is not just qualified but also genuinely interested in the specific employment opportunities. The decision makes it more difficult to prove disparate impact based on word-of-mouth hiring in ethnic communities, especially for small businesses with unattractive job offerings.
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