What Must Be Proven in a Systematic Discrimination Lawsuit?

And how Texas employers can defend such EEOC claims

By Super Lawyers staff | Reviewed by Canaan Suitt, J.D. | Last updated on May 4, 2023 Featuring practical insights from contributing attorney Bryan P. Neal

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At the federal level, the U.S. Equal Employment Opportunity Commission (EEOC) has the authority to sue Texas-based employers for acts of illegal employment discrimination.

Many of these cases revolve around a single employee or small group of workers. But sometimes the EEOC may aim higher and accuse an employer of engaging in systemic discrimination. So what does this term mean exactly? And how can employers prevent—or defend against—such allegations?

Defining Systemic Discrimination

The EEOC itself defines systemic discrimination as any “pattern or practice, policy and/or class cases where the discrimination has a broad impact on an industry, profession, company or geographic location.”

Essentially, systemic discrimination is more than just a single manager who takes an adverse action against an employee because they are female or Black. Instead, it refers to a situation where there is proof of widespread institutional bias against certain protected groups of employees or job applicants.

Another way to look at systemic discrimination is that it creates an environment where certain categories of employees are more advantaged–or disadvantaged–than others, for reasons having nothing to do with merit or legitimate business interests. It does not necessarily matter how many people are in the affected group. The EEOC has held that systemic discrimination can impact small numbers of employees.

Bryan P. Neal, an employment litigator at Holland & Knight in Dallas, says some clients may not be aware just what systemic discrimination is—or, they believe it only applies to overtly discriminatory policies.

“‘We only hire men for these roles, we only hire women for these roles’—sort of the Mad Men mentality,” he says. “When, in reality, systemic discrimination can arise in a lot of different ways. It can come up in hiring and promotion policies or practices because criteria that are being used have a discriminatory effect.”

Common Examples of Systemic Discrimination

Systemic discrimination is not a single action or practice. And in many cases, an employer may create an appearance of intentional discrimination without consciously realizing it. Here are just a few hypothetical examples of practices and policies that may lead to an EEOC investigation with respect to a discrimination claim:

  • When advertising new positions on job websites, you use exclusionary language, such as saying you only want young candidates or only women should apply.
  • Alternatively, you never formally advertise job openings at all, and rely entirely on word-of-mouth from existing employees.
  • You tend to hire or steer members of a particular group towards certain types of jobs within your organization, for example: You only hire African American workers to work in your warehouse but never offer them management positions.
  • You rely too heavily on data-based algorithms to make hiring decisions, even when there is evidence such data analysis tools are biased for or against certain groups.
  • You do not run a religious organization, yet you mandate employee participation in religious practices.
  • You impose a mandatory retirement age or limit contributions to company pension plans based on age.
  • You implement family leave policies that give unequal benefits to mothers and fathers.
  • You implement mandatory layoffs—i.e., a reduction in force—that disproportionately impacts members of protected groups.

“Where more people miss out [on noticing systematic discrimination] are on things that involve neutral practices or criteria,” says Neal.

“It may be that most employers think, ‘If it’s a neutral standard, it’s not overtly discriminatory—how can I be accused of discrimination?’ The classic example there was that needing a high school diploma to be hired had an adverse effect on African American applicants. More recently, a hot area has been with criminal background checks or credit checks. There are arguments and statistical support for the idea that that can have an disparate impact.”

Ultimately, it is up to EEOC investigators to evaluate evidence of discrimination, including circumstantial evidence, and assess if the discrimination is systematic.

You want to look over your decision-making process with respect to employees at all levels: hiring, promotion, compensation, discipline… At the same time, don’t forget about those things that on their face look neutral but can have an adverse effect on a particular protected class.

Bryan P. Neal

Defending Against Systemic Discrimination Charges

When it comes to any form of employment discrimination—and especially allegations of systemic discrimination—the best policy is to be proactive. Texas employers should always keep three things in mind on this front:

  1. Make sure all managers and supervisory employees receive appropriate ongoing training on how to comply with all federal and state employment discrimination laws. The major federal laws include Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA).
  2. Implement, and revise as needed, internal policies and procedures designed to identify and address any actions that may qualify as a discriminatory act.
  3. Keep detailed personnel files and incident reports to provide a paper trail of how the company deals with alleged discrimination. This can provide valuable evidence if it is later necessary to defend against an EEOC charge.

If you have further questions about this subject, it is best to consult with a qualified Texas employment litigation attorney. Neal says a lawyer can review a company’s written policies and practices, and then advise on ways a business can help prevent systematic discrimination cases from arising.

“You want to look over your decision-making process with respect to employees at all levels: hiring, promotion, compensation, discipline,” he says. “Make sure your system is set up so that those decisions are being made on qualifications and abilities when it’s hiring and promotion; consistent application of rules when it’s discipline; and consistency based on qualifications when it’s compensation… At the same time, don’t forget about those things that on their face look neutral but can have an adverse effect on a particular protected class.”

If you’d like to learn more about this area of the law, please see our overviews of employment litigation and employment law.

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