The Practical Impact On Business Is In Regulatory Law Rather Than Constitutional Law

[Bessie Murrillo]

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Practical significance is a conceptual framework for evaluating discrimination cases developed primarily on statistical evidence that is the subject of increasing interest and discussion by some in the equal employment opportunity (EEO) field.

In the EEO context, practical significance refers to whether an observed disparity in employment opportunities or outcomes reflects meaningful harm to the disfavored group. The concept focuses on the contextual impact or importance of the disparity rather than its likelihood of occurring by chance.

Since the "importance" of a disparity is influenced by the magnitude of the impact, the notions of practical and statistical significance are related. Statistical significance is a function of multiple factors, including the magnitude of the disparity, the number of observations in the analysis, and the power of the statistical test used. The purpose of a statistical test is to assess the likelihood that random or legitimate, nondiscriminatory factors rather than discriminatory factors produced an observed disparity. Under certain conditions, a small disparity may be statistically significant due in large part to the size of the data set. OFCCP is mindful that enforcement efforts to eliminate small impacts may prove counterproductive due to the difficulty of an alternative practice improving upon an already small effect.

Yes. The Uniform Guidelines on Employee Selection Procedures (UGESP), codified at 41 CFR part 60-3, contemplate practical significance in Section 4D. "Smaller differences in selection rates [i.e., not meeting the four-fifths rule], may nevertheless constitute adverse impact, where they are significant in both statistical and practical terms."

In addition, the Adoption of Questions and Answers to Clarify and Provide a Common Interpretation of the Uniform Guidelines on Employee Selection Procedures (UGESP Q&A, 44 Fed. Reg. 11996 (Mar. 2, 1979))restates and expands on Section 4D with specific examples.

An impact ratio of 0.8 is a frequently cited benchmark in the equal employment opportunity literature for determining whether the impact ratio of a selection disparity is practically significant, which is why OFCCP has chosen it as the hinge point between a likely and unlikely finding of practical significance for selection decisions. For impact ratios below 0.9, OFCCP will apply its discretion in determining whether to issue a pre-enforcement notice according to the strength or weakness of the evidence in particular cases, but the agency will require strong additional supporting evidence when the impact ratio is between 0.8 and 0.9. In addition, because the impact ratio is a less effective statistical measure when selection rates are very small, OFCCP utilizes a 3% disparity between the selection rates of disfavored and favored groups as a general minimum threshold for a finding of practical significance, although there may be situations with very low selection rates, such as a 4% selection rate for the favored group and a 1% selection rate for the disfavored group, where the odds ratio and other evidence would still support a finding of practical significance.

For compensation disparities above 1%, the agency has discretion in determining whether to issue a pre-enforcement notice according to the facts and circumstances of individual cases, but OFCCP will be unlikely to determine that a compensation disparity below 2% is practically significant unless there is additional strong supporting evidence. When compensation disparities are greater than 5%, OFCCP will nearly always find that a compensation disparity is practically significant if the agency also determines that its statistical model is sound. In rare cases, OFCCP may also apply more rigorous practical significance tests to measure the import of compensation disparities, such as the standardized difference between disfavored and favored groups or the Type II squared semi-partial correlation, which help ensure the agency is applying its practical significance standard relatively uniformly across administrative cases.

OFCCP will use the measures above to make an informed decision on the potential strength of the case and whether, in light of the quantitative and qualitative evidence, the size of an observed disparity justifies moving forward with enforcement procedures.

The contents of this document do not have the force and effect of law and are not meant to bind the public in any way. This document is intended only to provide clarity to the public regarding existing requirements under the law or agency policies.

Charges involving religion, like charges filed on other bases, may give rise to more than one theory of discrimination (e.g., termination, harassment, denial of reasonable accommodation, or other forms of disparate treatment, as well as retaliation). Therefore, these charges could be investigated and analyzed under all theories of liability to the extent applicable.

A Seventh-day Adventist employee follows a vegetarian diet because she believes it is religiously prescribed by scripture. Her vegetarianism is a religious practice, even though not all Seventh-day Adventists share this belief or follow this practice, and even though many individuals adhere to a vegetarian diet for purely secular reasons.

The ministerial exception is not just a legal defense that can be raised by religious institutions, but a constitutionally-based guarantee that obligates the government and the courts to refrain from interfering or entangling themselves with religion.[113] As such, it should be resolved at the earliest possible stage before reaching the underlying discrimination claim.[114] Some courts have held that the ministerial exception is not waivable.[115]

Courts addressing the overlap between EEO laws and rights under RFRA and the Free Exercise Clause have stressed the importance of a nuanced balancing of potential burdens on religious expression, the governmental interests at issue, and how narrowly tailored the challenged government requirements are.[122]

NOTE: EEOC investigators must take great care in situations involving both (a) the statutory rights of employees to be free from discrimination at work, and (b) the rights of employers under the First Amendment and RFRA. Although a resolution satisfactory to all may come from good faith on the part of the employer and employee through mutual efforts to reach a reasonable accommodation, on occasion the religious interests of the employer and employee may be in conflict. EEOC personnel should seek the advice of the EEOC Legal Counsel in such a situation, and on occasion the Legal Counsel may consult as needed with the U.S. Department of Justice.

Charles, the president of a company that owns several gas stations, needs managers for the new convenience stores he has decided to add to the stations. He posts a job announcement at the Hindu Temple he attends expressing a preference for Hindu employees. In doing so, Charles is engaging in unlawful discrimination.[129]

B. Aatma, an applicant for a rental car sales position who is an observant Sikh, wears a dastaar (religious headscarf) to her job interview. The interviewer does not advise her that there is a dress code prohibiting head coverings, and Aatma does not ask whether she would be permitted to wear the headscarf if she were hired. The manager knew or suspected the headscarf was a religious garment, presumed it would be worn at work, and refused to hire her because the company requires sales agents to wear a uniform with no additions or exceptions. Unless the employer can demonstrate that no reasonable accommodation was possible absent undue hardship, this refusal to hire violates Title VII, even though Aatma did not make a request for accommodation at the interview, because the employer believed her practice was religious and that she would need accommodation, and did not hire her for that reason.[130]

Joanne, a retail store clerk, is frequently 10-15 minutes late for her shift on several days per week when she attends Mass at a Catholic church across town. Her manager, Donald, has never disciplined her for this tardiness, and instead filled in for her at the cash register until she arrived, stating that he understood her situation. On the other hand, Yusef, a newly hired clerk who is Muslim, is disciplined by Donald for arriving 10 minutes late for his shift even though Donald knows it is due to his attendance at services at the local mosque. While Donald can require all similarly situated employees to be punctual, he is engaging in disparate treatment based on religion by disciplining only Yusef and not Joanne absent a legitimate nondiscriminatory reason for treating them differently.

A charge alleging the above facts might involve denial of reasonable accommodation if the employee had requested a schedule adjustment. While the employer may require employees to be punctual and request approval of schedule changes in advance,[134] it may have to accommodate an employee who seeks leave or a schedule change to resolve the conflict between religious services and a work schedule, unless the accommodation would pose an undue hardship.

In general, an employer may adopt security requirements for its employees or applicants, provided they are adopted for nondiscriminatory reasons and are applied in a nondiscriminatory manner. For example, an employer may not require Muslim applicants to undergo a background investigation or more extensive security procedures because of their religion without imposing the same requirements on similarly situated applicants who are non-Muslim.[142]

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