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

About a year ago, the EEOC sued a Hampton Inn franchise for racial discrimination and retaliation (see http://www.eeoc.gov/eeoc/newsroom/release/9-30-10.cfm). This particular franchise was located in Indianapolis, Indiana. That lawsuit was on behalf of a class of terminated black housekeeping employees as well as a class of black housekeeping applicants. The EEOC alleged that the general manager of the hotel told her employees that she favors Mexicans because they “clean better and complain less” than black housekeeping staff. The EEOC also alleged that the company destroyed employment records for a period of well over a year, thus widening the potential class.

At the time, I thought the case was interesting, but not worthy of an alert (so many cases, so little space). Now comes another EEOC lawsuit against a Hampton Inn in an entirely different locale that raises the same two issues. The more recent lawsuit features a Hampton Inn franchise in Craig, Colorado (see http://www.eeoc.gov/eeoc/newsroom/release/10-3-11b.cfm). Here, the alleged victims are three white employees, and the allegation is that franchise owners believed that “white or non-Hispanic workers” are “indolent” (i.e., they are lazy and lack energy). As in the prior case, there is the additional allegation that the federal recordkeeping laws were violated by failure to “archive and preserve employment records for at least one year.”

The lesson seems simple enough. When individual high ranking employees (owners, general managers, front line managers, etc) can make subjective discretionary decisions linked to stereotypical beliefs, and the outcome could be discrimination based on whatever stereotypical beliefs exist in the minds of the high ranking officials. Therefore, they can favor one group in one area of the country and another group in another areas of the country. What’s needed, particularly in companies that have multiple franchises in multiple locations, is a structured selection process that circumvents subjective, discretionary decision-making.

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