Statement of Administration Policy: H.R. 1 - Civil Rights and Women's Equity in Employment Act of 1991

(House)
(Brooks (D) Texas and 169 others)

If H.R. 1 were presented to the President in the form reported by the House Education and Labor Committee or in the form of the Brooks-Fish substitute or the Towns-Schroeder substitute, the President's senior advisers would recommend a veto. The Administration strongly supports enactment of the Michel substitute.

H.R. l

The President vetoed a very similar bill last year because it did not meet the criteria he announced on May 17, 1990.

Civil rights legislation must operate to obliterate consideration of factors such as race, color, religion, sex, or national origin from employment decisions. But H.R. 1 is a quota bill in at least three respects. The disparate impact sections as drafted would virtually force employers to adopt quotas and unfair preferences. Unless an employer's bottom-line numbers are "correct," he or she will almost certainly face lawsuits in which a successful defense will be virtually impossible. If a suit is brought and a sweetheart deal is struck at the expense of innocent third parties, the Wilks section would then insulate unlawful quotas from challenge in court. And the Zipes section will subject plaintiffs unsuccessfully challenging quota settlements to attorney fees, even where their challenge was not frivolous and was brought in good faith.

By making it virtually impossible for an employer to prevail, the disparate impact sections also violate another principle stated by the President: any bill must reflect the fundamental principles of fairness that apply throughout our legal system. In addition, the Wilks section would encourage the settlement of certain cases at the expense of innocent non-parties; close the courts to many individuals whose civil rights have been violated; and insulate consent decrees that impose quotas from appropriate judicial review. Similarly, one provision would explicitly shield affirmative action, court-ordered remedies, and conciliation agreements from the neutral application of the bill's other provisions.

A civil rights bill should deter workplace harassment, but it must do so in a manner that is reasonable and does not produce a windfall for lawyers. The damages section would provide for jury trials and the award of unlimited compensatory and punitive damages in all Title VII disparate treatment cases. This would radically transform the employment provisions of the Civil Rights Act by undermining its carefully balanced system of mediation and conciliation. This time-tested system would be scrapped and replaced with a new system modeled on our Nation's tort litigation — which is now widely recognized to be in crisis.

The Administration believes that the protections of Title VII should be extended to employees of Congress in a meaningful way, which necessarily includes redress in the courts. It is fundamentally unfair to allow an employer to be the judge of its own case.

Other objectionable provisions include: ill-advised rules on attorney's fees; an unclear provision affecting "mixed motive" discrimination cases; unconstitutional retroactivity provisions; unreasonable new statutes of limitations; and an improper rule of construction.

The Brooks-Fish Substitute

The Brooks-Fish substitute fails to address concerns expressed by the President in vetoing similar legislation in the last Congress. The language in the amendment purporting to prohibit quotas would endorse racial preferences, not eliminate them. The substitute expressly permits plans that use racial preferences as long as the plans are labelled "voluntary." In addition, the proposed definition of business necessity would impose an onerous burden on employers. It would add the requirement that the relationship between the employment practice and the requirements for job performance be "significant" as well as manifest. Moreover, the substitute creates unlimited compensatory damages in cases of intentional discrimination and creates only a partial cap on punitive damages, other amendments amount to only cosmetic changes which fall far short of rendering the substitute acceptable.

The Administration's concerns with the substitute were set forth in detail by the Attorney General in a May 31 report to Representative Michel.

The Administration's Proposal/Michel Substitute

The Administration's proposal (the Michel substitute) would strengthen our Nation's civil rights laws without institutionalizing reverse discrimination or subjecting American businesses and the victims of discrimination alike to endless and costly litigation. Like H.R. 1, the Administration's proposal would overturn the Lorence and Patterson decisions, and would place on the employer the burden of proving the business necessity (as defined by past Supreme Court decisions) of an employment practice that has a disparate impact on a class of workers. The Administration's proposal also makes available new monetary remedies, with a $150,000 cap, for victims of harassment in the workplace. In sum, the Administration's bill achieves every legitimate end of H.R. l. These important new protections for American employers should not be held hostage for measures that will produce quotas, disproportionately disadvantage small and medium-sized businesses, and unduly enrich the plaintiffs' bar.

The Towns-Schroeder Substitute

The Towns-Schroeder substitute is similar in many respects to the Brooks-Fish substitute, but is even more objectionable. In particular, it would promote expensive and prolonged litigation by allowing unlimited awards of both compensatory and punitive damages ln cases of intentional discrimination. In addition, its prohibition of consideration of gender in all contracts would bar, for instance, private and parochial single-sex schools.