Pennsylvania Labor and Employment Lawyer & Attorney : McNees Wallace & Nurick Law Firm : Human Resources, Workplace and Business Law : Harrisburg, Lancaster, Allentown, Lehigh

On September 23, 2008, the EEOC filed a lawsuit in the United States District Court for the Western District of New York against Sterling Jewelers Inc., the largest specialty retail jeweler in the United States. The EEOC's Complaint alleges that Sterling "pays its female retail sales employees less than male employees performing substantially equal work and denies female employees promotional opportunities for which they are qualified." The lawsuit seeks relief on behalf of a class of potentially thousands of current and former female employees of Sterling throughout the U.S. Sterling owns and operates the Kay Jewelers and Jared The Galleria of Jewelry stores and various regional retail jewelry establishments.

In both the Complaint and press release issued by the EEOC on September 24, 2008 to announce the lawsuit, the EEOC claims that Sterling's system for making promotion and compensation decisions is "excessively subjective" and has resulted in both disparate treatment and disparate impact sex discrimination. The "excessive subjectivity" claim is the primary allegation of unlawful discrimination in the complaint.

The use of subjective criteria in employment decisions often is unavoidable. Simply put, purely objective criteria is not always available or appropriate for hiring, compensation, promotion, and discharge decisions. "Excessive" subjectivity, however, can give rise to allegations of discriminatory treatment and systematic bias. Employers and their counsel often struggle to balance the desire to use all appropriate criteria when making employment decisions, including both objective and subjective criteria, with the knowledge that "excessive subjectivity" in the decision-making can create perceptions of bias and increase the potential for discrimination claims. 

Of course, determining what is "excessive subjectivity," as opposed to typical subjectivity common in many employment decisions, can be difficult. This problem is more significant for larger employers that lack a centralized structure for employment decision-making. An employer with more independent decision-makers has a greater chance for "excessive subjectivity," especially if the employer has not promulgated clear guidelines or requirements for the decision-making process.

The EEOC has made clear that it views "excessive subjectivity" in compensation and promotion systems as a high priority enforcement issue for the agency. The Sterling case, with its nationwide scope and focus on this issue, emphasizes the EEOC's commitment. Employers and their counsel should be aware of this issue and review their hiring, compensation, and promotion procedures to determine whether changes could produce a better structured, less subjective system.

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In Makky v. Chertoff, the Third Circuit Court of Appeals recently addressed the importance of objective job qualifications in evaluating the merits of a discrimination claim. Employers that establish clear baseline standards for position through their job descriptions, advertisements and other records are better able to defend discrimination claims by showing that the applicant or employee does not meet minimum qualifications for the position.

The Makky case involved the termination of employment of Dr. Wagih Makky who was employed by the United States government in the Federal Aviation Administration and Transportation Safety Administration for fifteen years. In his various positions, Dr. Makky was required to obtain security clearance. A descendant of Egypt, Makky was the only Muslim and only person of Arab descent in his division. Makky's security clearance was suspended due to safety concerns, including his dual citizenship with Egypt, foreign relatives and associates, foreign countries visited, and alleged misuse of his government computer. Makky was placed on paid administrative and subsequently terminated when the TSA issued its final denial of security clearance. Although Makky appealed the determination through the government's processes, the determination was upheld.

Makky filed a lawsuit including a claim for employment discrimination under Title VII of the Civil Rights Act. Makky's Title VII claim was premised on a mixed motive theory of discrimination which recognizes that an employment decision can at times be based on both (1) a legitimate non-discriminatory reason and (2) discriminatory animus. Here, Makky argued that while he was suspended without pay and terminated because he did not pass the security clearance, the TSA's actions were also motivated by discriminatory animus based on his national origin because the agency did not offer him other positions or keep him on paid leave. Although the Court recognized that the analysis is factually sensitive , it held that when a plaintiff does not possess the objective baseline qualifications to do his or her job, the discrimination claim will fail on its face because he or she cannot establish a prima facie case of discrimination. Applying the holding to the facts at hand, the Court found that Makky's inability to retain a security clearance rendered him expressly unqualified for the TSA position. Analogizing Makky's situation to a more mainstream occupation, the Court explained, "if the hospital employing a person who has been performing surgery learns that the employee falsified his or her qualifications and never went to medical school, that employee could not establish a prima facie mixed-motive case irrespective of allegations of racial or ethnic discrimination."

So what can an H.R. specialist take away from Makky? When a position requires a baseline objective qualification, like a license or degree, make sure it is expressly stated in all hiring materials including: (1) job advertisements; (2) position descriptions; and (3) application materials. Notably, if the degree or license it is merely the company's "preference" for someone in the position, it is important to consider whether making the "preference" appear as a "qualification" may lead to problems in the future. For example, suppose that Company X states that a sales position requires a Bachelor's Degree. When Company X interviews its two top choices, however, the female candidate who possess a Bachelor's Degree has the personality of dry toast, while the male candidate who has waitered all his life and does not have a Bachelor's Degree has a dynamic sales personality and will surely do well with Company X. If Company X believes that the male applicant is better suited for the position than the female applicant, should the Bachelor's Degree have been a required qualification in the first place? Probably not. Accordingly, it is important to have a process in place to review your company's job advertisements and position descriptions before posting for openings. While certain baseline objective qualifications can often be beneficial in refuting a prima facie discrimination claim, turning a mere "preference" into a "qualification" can have the opposite result because it may be used as evidence of a discriminatory motive.

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