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

On April 26, 2011, the OFCCP proposed a rule requiring federal contractors to establish annual benchmarks for hiring veterans under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). The potential implications for employers have been previously discussed on this website. The purpose of this alert is to discuss the implications of veteran’s preference on women. The case law is sparse, but revealing. Two cases of interest include the Supreme Court’s 1979 ruling in Personnel Administrator of Massachusetts v. Feeney [442 U.S. 256] and the 7th Circuit’s 1989 ruling in Fallon v. Illinois [882 F.2d 1206].

In the Massachusetts case, Helen Feeney was a 12-year public employee who lost out to veterans with lower qualifying test scores on several occasions based on a Massachusetts law requiring preference for qualified veterans. For example, she had the second highest score for a job with the Board of Dental Examiners in 1971 and the third highest on a test for an Administrative Assistant position with a mental health center in 1973. Nevertheless, she was placed 6th after the 1971 exam and 12th after the 1973 exam, in both cases, behind veterans with passing, but lower scores. This happened on other occasions as well. Feeney lodged a 14th Amendment Equal Protection lawsuit in 1975 after her job was abolished.

At the time the suit was filed, more than 98% of veterans in Massachusetts were male. Initially, the district court favored Feeney because the Massachusetts law adversely impacted females. However, in 1977, the Supreme Court vacated and remanded the case back to the district court in light of its ruling in Washington v. Davis (1976) [426 U.S. 229], involving a 14th Amendment claim of race-based adverse impact based on a civil service exam. In Davis, the Supreme Court ruled that adverse impact is not a valid claim under constitutional. Law. Nevertheless, on remand, the district court again favored Feeney based on disparate treatment principles, ruling that:

[T]he criteria set forth in the challenged statutory formula failed to measure job performance, that statistical evidence demonstrated a pattern of exclusion of women from the civil service, and that there were less drastic alternatives available to the state to achieve its purpose of aiding veterans.

The Supreme Court then reversed in a 7-2 ruling in which Justice Stewart, speaking for the majority, stated:

[A]lthough the result of the statute had a disproportionate impact on women, it had not been enacted in order to discriminate against women. The statute contained gender neutral language. Because the statute was gender-neutral on its face, the Court considered first whether the statutory classification was neutral and then whether the adverse effect reflected invidious gender-based discrimination. The statutory classification was neutral because it was intended to discriminate against non-veterans, not against women. Female veterans were entitled to its benefits. Moreover, the legislative purpose had not been to invidiously discriminate against women.

The two dissenters (Marshall & Brennan) disagreed, and opined that “Massachusetts' choice of an absolute veteran’s preference system evinced purposeful gender-based discrimination and could not withstand scrutiny under the equal protection clause because the statutory scheme bore no substantial relationship to a legitimate governmental objective.”

Fallon v. Illinois (1989) was a pay discrimination case where a female Veterans Service Officer Associate (VSOA) lost under both the Equal Pay Act (EPA) and Title VII. A male Veterans Service Officer (VSO) was paid more than Fallon for jobs that, otherwise, were substantially equal in skill, effort, responsibility, and working conditions. The key to the case was that only military veterans could be VSOs, whereas non-veterans could only be VSOAs. The district court ruled for Fallon under the EPA and Title VII and the 7th Circuit reversed. The 7th Circuit agreed that the jobs were substantially equal, but that the requirement to be a veteran was a valid FOS (factor other than sex).

To this point, there has been no case claiming adverse impact from a veteran’s preference policy on females via Title VII. However, that’s not the key issue. Clearly, there will always be adverse impact on females based on veteran’s preference. Furthermore, regardless what the statutes say, there is a difference between affirmative action (AA) based on veteran status as opposed to discrimination because of failure to hire a veteran. AA principles generally demand enhanced recruitment and outreach, as well as equal opportunity training; they do not mandate preference in selection. VEVRAA is an affirmative action statute. Therefore, if employers feel compelled to hire albeit qualified, but less qualified individuals to meet a quantitative goal, it defies the spirit of what AA means. This is particularly the case if the means used to meet a quantitative goal have an adverse impact on another protected group. Also, if the Feeney case related to AA based on race, there is no doubt the employer would lose under the Civil Rights Act of 1991 by automatically providing higher rankings for lower scoring blacks than higher scoring whites.

In short, whether knowingly or not, the proposed OFCCP rule may place an inferred threat on the part of employers to hire less qualified veterans under the assumption they will be subject to an unfavorable audit if they do not meet a quantitative goal. This may be a step past traditional affirmative action, and this preference could have an adverse impact against females. Whether this impact would be defensible is unclear.

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