Follow-Up Administrative Law Judge (ALJ) Rules Against Bank of America

by Art Gutman Ph.D., Professor, Florida Institute of Psychology

On January 21, 2010 Linda S. Chapman, a Labor Department Administrative Law Judge (ALJ), ruled that Bank of America (BOA) was guilty of a pattern or practice of discrimination against black applicants for four entry-level jobs in administrative/clerical job categories in 1993, and again from 2002 to 2005. BOA was given14 days to appeal the ruling to the Secretary of Labor. Chapman ruled that the OFCCP established a prima facie case of a pattern or practice of discrimination, which BOA could not successfully rebut. The complete ruling is available at

The case originated against NationsBank, which was later acquired by BOA. After a 5-day onsite compliance review at a North Carolina branch, the OFCCP requested additional statistical information from that branch, as well as from branches in Tampa and South Carolina, which had not been a part of the initial audit. NationsBank objected based on the 4th Amendment to discovery at the Tampa and South Carolina branches, and later, to discovery at the North Carolina branch as well. Originally, 4th Amendment rulings were made favoring the bank, both within the Department of Labor and the federal courts. However, these rulings were overturned. The delay afforded the OFCCP the opportunity to add the charges for the later years. BOA argued that the OFCCP was afforded 15 years of discovery, which ALJ Chapman rejected on grounds that the delays were due to the 4th Amendment claim and subsequent appeals.

Two bank recruiters testified that the selection process involved two steps: (1) from application to interview and (2) from interview to job offer. Theresa Simmons, the recruiter for two of the jobs, testified that in the early 1990s, jobs were advertised twice weekly in the local newspaper, and were posted with the EEOC. Applicants then came in to complete applications. An administrative assistant tore off attachments with EEO information (i.e. race/ethnicity and sex), and decisions were made regarding which applicants to interview. According to Simmons, she did not know the race of any applicant until they came in for interviews. The recruiter for the other jobs (Donna Craddock) described a similar process, and both recruiters testified that the major difference in later years was the addition of Internet recruitment. Applicants were excluded at either step based on reference checks, credit history, job-hour compatibility, and after job offers based drug tests.

The prima facie case was based on statistical analyses by Dr. David L. Crawford and the testimony of three excluded applicants. Crawford testified that there were significant applicant flow disparities in both time periods for (1) applicants selected for job interviews and (2) interviewees selected for the jobs, arguing that there were shortfalls in both time periods for both steps of the selection process well in excess of 2 standard deviations. BOA’s expert, Dr. Joan G. Haworth, cited several flaws in Crawford’s analysis, most notably: (1) mistakes in the data that were not corrected; (2) aggregation of the clerical and administrative jobs; (3) inclusion in the analyses of applicants excluded based on credit checks (coded RC) and time incompatibilities (coded RH). When Haworth separated the two job classifications, there were no shortfalls for administrative jobs, and that the shortfalls for the clerical jobs were eliminated when the RC and RH applicants were excluded. Haworth also testified that the charges were fallacious because the allegations involved only 2 of 33 classifications, and there were no shortfalls in the other 31 classifications. Two other points are worth noting. First, there was some debate about whether exclusion decisions based on the RC and RH codes were implemented in a standardized fashion. Thus, in essence OFCCP alleged that discrimination could occur via the subjectivity involved in making those exclusionary decisions. Second, a multiple events Fisher’s exact test was used to measure adverse impact by both sides. This methodology was accepted and not an issue of contention.

There were other criticisms back and forth between Crawford and Haworth. This was clearly a complicated case. Nevertheless, the main issues in the eyes of ALJ Chapman were that Crawford was justified in aggregating the two classifications and by including the applicants coded RC and RH. Based on her interpretations of major Supreme Court pattern or practice rulings in International Teamsters v. United States (1977) [431 US 324] and Hazelwood School District v. United States (1977) [43 US 299], ALJ Chapman ruled there were “gross” disparities sufficient for a prima case of a pattern or practice of discrimination that BOA could not rebut.

It is interesting to consider whether this case would have played out differently in a federal court; let’s imagine this was a pattern or practice case brought to a district court. As such, the plaintiffs would present their statistical evidence together with individual claims of disparate treatment. The defense could then rebut the prima case with its own statistical evidence and the court would decide if there is a prima facie case. For example, in Hazelwood, the Supreme Court accepted the defendant’s statistical rebuttal and ruled there was no prima facie case. In contrast, in Teamsters, there was an “inexorable zero” number of minorities in an at-issue job classification, making the prima facie case irrefutable. In the BOA case, there were two refutable applicant flow disparities, and it is arguable that a federal district court judge would rule there is no prima facie case on two grounds. First, the applicant flow disparities were not statistically significant when proper controls were used, and second, two disparities out of 33 job classifications is insufficient evidence to make a prima facie case of “systemic” discrimination.

Returning to federal court, a successful prima facie claim in either a disparate treatment or pattern or practice case would then pass a relatively light burden to the defendant to articulate (i.e., to explain in words without have to factually prove) a legitimate nondiscriminatory reason for the statistical disparities. That explanation could take several different routes, the most obvious one being that the recruiters did not know the race of the applicants prior to interviews, and that they were unbiased in their decision making. It would now be up to the plaintiffs to prove that the explanation(s) offered are a pretext for discrimination. As the ALJ ruling stands, it appears that a burden was placed on BOA to prove that the various procedures used in the selection process were not discriminatory.

Note that some testimony suggests that the plaintiffs would not succeed in a pretext argument. First, the OFCCP’s auditor himself testified that exclusion based on credit checks is not suspect for bank jobs. Second, Crawford testified that he had no evidence to believe there was bias on the part of the recruiters. Nevertheless, ALJ Chapman ruled that BOA could not prove there was no bias by the recruiters. Is this consistent with the traditional burdens of proof by plaintiffs and defendants in disparate treatment and pattern or practice cases?

What this case illustrates is that the OFCCP may have, in effect, the power to transcend traditional federal court principles. In order to get to federal district court, BOA would have to appeal once again (this time to the Secretary of Labor), and lose again. This is an arduous (and expensive) process. That’s why challenges to OFCCP rulings in federal court are rare. Yet, cases like this one belong in federal court. Traditionally, pattern or practice cases are built on “statistical disparities between composition of the workforce as compared to composition of the labor pool (as in Hazelwood) or composition of two or more jobs within the same company (as in Teamsters). Here, the claim of “systemic” discrimination was based on applicant flow disparities. If there is a legitimate claim here, it may be an adverse impact one, not pattern or practice. But that’s another matter altogether.

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