Thursday, March 21, 2013

Inventing racism: Obama Labor nominee's love of "disparate impact" theory

As American society attempts to move beyond racial politics and racism in society, Thomas Perez the Obama administration's nominee to head the Department of Labor is hell-bent on turning back the clock by advocating a controversial legal doctrine which imagines racism and assumes guilt on the part of businesses with no evidence of wrongful actions or malicious intent necessary.

The doctrine of "disparate impact" is a legal doctrine which assumes that discrimination can be proven simply by looking at outcomes. If no discriminatory practices or malicious intent can be identified, the finding that a policy or practice resulted in outcomes in which "protected groups", such as women and minorities, were disqualified more or qualified less is all that is needed to assume some form of "unintentional discrimination" took place - no actual evidence of discriminatory intent is necessary.

A recent Wall Street Journal story discussed Perez' ambitious efforts to aggressively pursue actions by applying disparate impact theory while an Assistant U.S. Attorney General, even to the point where he may have undermined civil cases to seek a deal which protected his efforts from going to the Supreme Court:

Mr. Perez is a champion of disparate-impact theory, which purports to prove racial discrimination by examining statistics rather than intent or specific cases. Soon after Mr. Perez assumed his job in October 2009, Attorney General Eric Holder established a unit under Mr. Perez to examine loans to minorities. The unit proceeded to threaten a series of lawsuits against banks under the 1968 Fair Housing Act.

The lenders quickly settled these cases rather than run the reputational risk of being called racist in court. But on November 7, 2011 the Supreme Court agreed to hear the City of St. Paul's appeal in Magner v. Gallagher, which concerned the legality of disparate-impact theory in housing. St. Paul believed it had an excellent chance to prevail because the text of the Fair Housing Act doesn't explicitly allow for disparate impact.

A story on The Examiner website explores the St. Paul case further, finding the case could have been worth as much as $180 million, pointing out that Perez has compared bankers to Klansmen.

One area where employers are being hit with this theory is in the growing scrutiny being placed upon background checks for employees. The federal Equal Employment Opportunity Commission is taking a dim view of employers using background checks because of findings that they end up often disqualifying minorities more - putting employers between a rock and a hard place as they have to choose between protecting employees and assets and avoiding federal discrimination allegations.

That's the kind of job-killing witch-hunt that Perez could very well expand if given control of the Department of Labor. We agree with the Wall Street Journal, which cautions that "the Senate needs to ask during confirmation hearings is whether a man who is willing to play politics with disparate-impact law and the Supreme Court can be trusted with the vast enforcement power of the Labor Department?"

Given Perez' background and record of using federal power to engage racial politics, it seems  a fair question to ask. We'll wait to see if our Senators have the guts to ask it.


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