Written Testimony of Diane Smason Supervisory Trial Attorney EEOC Chicago District Office

Meeting of June 22, 2011 - Disparate Treatment in Hiring

Good morning, I am Diane Smason, a Supervisory Trial Attorney in the Chicago District Office. I have been with the Commission since January, 1998, and have been a supervisor since 2004. I have had the privilege of supervising the Commission's lawsuit against Scrub, Inc., a janitorial company providing services for various entities throughout the Chicagoland area, including for the City of Chicago at O'Hare Airport. In our lawsuit, EEOC alleged that Scrub discriminated against African-American applicants for janitorial positions, the vast majority of which were at O'Hare.

EEOC filed suit on July 15, 2009, based upon a charge filed by Jeanette Wilkins, who is here with me today to testify about her personal experience in applying for employment at Scrub. EEOC's complaint alleged that Scrub discriminated against a class of individuals based on their race (Black) and national origin (African-American) by failing to hire them into entry-level janitorial positions. We alleged both discrimination through disparate impact based on subjective hiring and disparate treatment. With respect to disparate treatment, we alleged that Scrub's subjective decision-making provided a ready mechanism for intentional discrimination and that Scrub recruited through media directed at Eastern European immigrants and Hispanics. We also brought a claim for failure to file EEO-1 reports.

There were approximately 5,000 unsuccessful African-American applicants during the relevant period, October 2004 through December 2009, and EEOC sought relief for about 550 of them who expressed interest in participating in the case.

Based on her experience in applying at Scrub, Jeanette Wilkins had a very strong suspicion that Scrub was discriminating against African-Americans. Through the development of evidence during our investigation and ultimate litigation, EEOC discovered that Ms. Wilkins' suspicion was very well-founded. We quickly learned that Scrub had a history of discrimination against hiring African-Americans. The Office of Federal Contract Compliance Programs had previously found that in 2003 and 2004, Scrub discriminated against African-Americans in hiring. Under their conciliation agreement, Scrub was required to change its hiring practices. However, Scrub failed to do so, by its own admission, because it believed that it had done nothing wrong.

EEOC had both excellent anecdotal and expert evidence to support our claims in litigation. Scrub's former HR manager testified that the president of the company yelled at her for hiring too many "N-word" and then fired her shortly thereafter. The president told the HR manager that Scrub is a Polish company and that she needed to recruit more Europeans and not African-Americans. When the HR manager recruited from an African-American community, she was reprimanded by the president.

We heard from a claimant that when she was applying at Scrub's office, Scrub denied her request to use the restroom and told her she needed to use the restroom at the gas station down the street. At the same time, Scrub permitted Hispanic applicants to use its restroom.

EEOC's expert labor economist Louis Lanier opined in a written report and at deposition that the statistical disparity in hiring rates between African-American applicants and non-African-American applicants was so high that there is effectively zero probability that Scrub's failure to hire African-Americans occurred by chance. Dr. Lanier opined that when compared to the relevant labor market segment, there was a shortfall of 828 African-American hires that is statistically significant at 24.6 standard deviations. When the African-American hire rate at Scrub was compared to applicant data provided by Scrub there was a shortfall of 394 African-American hires that is statistically significant at 14.3 standard deviations. Scrub was unable to provide any non-racial explanation for this disparity. Indeed, Scrub's own expert, Dr. Malcolm Cohen, opined that when the African-American hire rate was compared to Scrub's applicant data, there is a statistically significant disparity, but to a lesser degree of significance than that asserted by EEOC's expert.

The case was ultimately resolved through the entry of a consent decree on November 9, 2010. The terms of the consent decree are extensive and required creativity in that it was important to EEOC to make sure that Scrub would finally stop discriminating against African-Americans and offer jobs to our class members. Scrub agreed to monetary relief of $3,000,000, which will be paid over a period of three years. In addition, the decree, which lasts for a period of four years, includes substantial non-monetary relief. The key provisions are:

• an injunction against discrimination on the basis of race or national origin and retaliation;
• a revision of Scrub's employment practices with respect to recruiting, hiring and its complaint procedures;
• a requirement that Scrub offer make whole instatement relief--that is, jobs--to eligible claimants who were actual applicants and were rejected for hire because of their race but who still want the job. Specifically, for every third opening, Scrub is required to hire an applicant from a list of eligible claimants;
• After the instatement list is exhausted, and in order to correct Scrub's long record of discrimination, going forward Scrub's hiring is supposed to look more like its pool of actual applicants. The company will therefore be exercising its best efforts to hire blacks at the approximate level that they are actually applying;
• Scrub must engage in recruiting efforts through specified media outlets targeting the African American community. Specifically, Scrub is required to advertise monthly in certain African American newspapers, attend job fairs in African American communities, and provide notice of open positions to certain agencies identified by EEOC which assist African Americans in obtaining employment;
• Scrub is required to provide annual Title VII training by an outside provider to all employees involved in the hiring process;
• Scrub is required to post a notice of the decree in its office in prominent and conspicuous locations that applicants frequent; and
• Scrub has to maintain and make available to the EEOC and the monitor all applications for employment and other documents relating to applicants, its efforts to recruit African-Americans and documents relating to any applicant complaint of race or national origin discrimination.

The decree also requires the appointment by the court of a decree monitor, who will oversee Scrub's implementation of the hiring relief. The monitor must provide a written report to the parties and the court every six months with respect to Scrub's progress in implementing the decree.

The bulk of the monetary recovery was divided evenly among all EEOC claimants, such that the average payment was approximately $5500 per person, which is the approximate back-pay to which each claimant was entitled assuming that she or he had been hired and worked at Scrub for about one year. We agreed that Scrub could pay the $3,000,000 over a period of three years, contingent on an agreement that all future payments would be personally guaranteed by Scrub's owner.

The Chicago District Office is pleased and proud of its litigation and settlement of this case. We hope that this lawsuit will send a message to employers that making hiring decisions based on race or national origin is against the law. We also hope that our efforts will provide real job opportunities for people of all races at Scrub.

Finally, I would like to acknowledge the teamwork that went into investigating and litigating this case. Our investigative team consisted of investigator Louis Rodriguez, lead systemic investigator Andrew Daley, and supervisory investigator Monique Debusmann. Our legal team was headed by lead trial attorney Laurie Elkin, and included trial attorneys Ann Henry and Brandi Davis, paralegal Kimberly Braden, and clerical LaTricia Phillips. We could not have accomplished such terrific results without the hard work of these dedicated staff members of the Chicago District Office, in addition, of course, to the leadership of District Director Jack Rowe, Deputy Director Julianne Bowman and Regional Attorney John Hendrickson.

Thank you very much for inviting us here to speak with you today.