On July 19, 2019, federal contractor Enterprise Rent-A-Car Company, was ordered by an administrative law judge to remunerate $6.6M in back pay and to extend job offers to 182 class members after being found in violation of Executive Order 11246 for discriminating against African Americans. The case (OFCCP v. Enterprise, 2019) stemmed from a 2008 Office of Federal Contract Compliance Programs (OFCCP) review of Enterprise’s hiring process for management trainees at its Linthicum, Maryland facility. In the case, the OFCCP alleged that Enterprise discriminated against African-American applicants for employment between August 1, 2007 and July 31, 2017. At issue, specifically, was whether an application review and telephone screen unjustifiably rejected a significantly higher percentage of African Americans than whites in the hiring process.
OFCCP’s statistical expert in the case analyzed Enterprise’s applicant flow log data from 2007–2017 and concluded that African-American applicants were less than half as likely as white applicants to receive job offers. She found a shortfall of 196 offers to African-American applicants for the 11-year period (standard deviation of 12.7 for the timeframe),[1] with most applicants rejected in the application review and telephone screening stage. The expert concluded that the likelihood of that disparity occurring by chance was one million times less likely than winning the Powerball lottery. Also of significance, the expert found through her statistical analysis that African-American applicants were comparable, if not better distributed, than white applicants on minimum requirements for the job.
Labor economist Dr. Paul F. White served as expert witness for Enterprise. He criticized OFCCP’s statistical expert for failing to account for legitimate, business-related reasons applicants did not pass the application review or telephone screen. He argued that, when accounting for disposition codes that indicated why applicants were rejected, the shortfall of African-American applicants would be reduced to zero. He also emphasized that race in the expert’s analysis only explained about 1% of the variance, or “one piece of a 100-piece puzzle,” in who passed the first stage of the selection process—not enough to suggest race was a practically meaningful factor. He further maintained that race was unknown to those reviewing applications and conducting telephone screenings, suggesting that Enterprise could not have intentionally discriminated against African-American applicants at that stage of the process.
In the end, both experts found a statistically significant racial disparity in the hiring of African-American applicants, but the judge did not find Enterprise’s rebuttal of the statistical evidence compelling. Testimony of four African-American applicants and of three Enterprise employees who conducted screening and the review of application files highlighted the arbitrary manner in which information about applicants’ qualifications was assessed, calling into question what Enterprise argued were legitimate business reasons for rejecting applicants. Ultimately, that process resulted in the inconsistent application of criteria that significantly disadvantaged African-American applicants. As part of the ruling, Enterprise is also ordered to immediately comply with the requirements of Executive Order 11246.
By Don Lustenberger, Ph.D., Senior Consultant, Barbara Nett, M.A., Associate Principal Consultant, and Angie Rosenbaum, Ph.D., Principal Consultant at DCI Consulting Group
[1] She found a shortfall of African-American job offers in each year from 2007-2017 with the exception of 2013. The standard deviation was greater than 2.0 in 10 of the 11 years and greater than 3.0 in 7 of the 11 years.
