Statement of Administration Policy: H.R. 4000 - Civil Rights Act of 1990

(House)
(Hawkins (D) California and 183 others)

If H.R. 4000 were presented to the President in its current form, or with only the amendments under the rule relating to quotas and damages, the President's senior advisers would recommend a veto. If H.R. 4000 were presented to the President in the form of the LaFalce substitute, the President's senior advisers would recommend approval.

The remainder of this Statement is divided into two parts: (1) the reasons for the Administration's opposition to H.R. 4000; and (2)  the reasons for the Administration's positions on the amendments.

H.R. 4000

On May 17, 1990, the President stated three principles that must guide any new civil rights legislation. The committee amendment in the nature of a substitute to H.R. 4000 meets none of them.

First, civil rights legislation must operate to obliterate consideration of factors such as race, color, religion, sex, or national origin from employment decisions. However, Section 4 as drafted would inevitably lead employers to adopt hiring and promotion quotas. This would result from the bill's unfair alteration of longstanding rules of civil litigation as they apply to "disparate impact" cases under Title VII of the Civil Rights Act. Unless an employer's bottom-line numbers are "correct," he or she will face the almost certain prospect of lawsuits in which a successful defense will be virtually impossible. Similarly, Section 6 would in certain circumstances insulate unlawful quotas from challenge in court.

Section 4 also violates the second principle stated by the President: any bill must reflect the fundamental principles of fairness that apply throughout our legal system. In addition, Section 6 would encourage the settlement of certain cases at the expense of innocent non-parties; close the courts to some individuals whose civil rights have been violated; and insulate some consent decrees that impose quotas from appropriate judicial review. Similarly, Section 13 would shield "affirmative action, " "court-ordered remedies, " and "conciliation agreements" from the neutral application of the bill's other provisions.

Third, a civil rights bill should contain a deterrent against workplace harassment, but it must do so in a manner that is reasonable and does not produce a windfall for lawyers. Section 8 would provide for jury trials and the award of compensatory and punitive damages in Title VII cases. This would radically transform the Civil Rights Act by undermining its carefully balanced system of mediation and conciliation.

The Administration also believes that the protections of any civil rights bill should be extended to employees of Congress in a meaningful way, which necessarily includes redress in the courts. It is fundamentally unfair to allow potential defendants to decide how complainants may present claims and to pass on their merits.

Other provisions are also objectionable, including: ill-advised rules on attorneys fees; an unclear provision affecting "mixed motive" discrimination cases; unconstitutional retroactivity provisions; unnecessarily open-ended and excessive "limitations periods;" and an improper rule of construction.

Amendments

The rule on H.R. 4000 makes three amendments in order.

Quotas. The first amendment would amend Section 4 of the bill in two respects. It would specify that the "mere existence of a statistical imbalance in the employer's workforce... is not alone sufficient to establish a disparate impact violation," and it would specify that nothing in the bill would "require an employer to adopt hiring or promotion quotas.... " These provisions are purportedly intended to address the Administration's stated objection that H.R. 4000 will coerce employers into adopting quotas. In fact, these provisions do nothing of substance.

As to the first provision, it is never the "mere existence of a statistical imbalance" that is alleged in a disparate impact case, but rather an imbalance caused, albeit unintentionally, by a challenged practice. Thus, the "exception" created by the first provision is really no exception at all. As to the second provision, it is the Administration's view that H.R. 4000 will result in quotas, not by requiring them directly, but by inducing employers to adopt surreptitious quotas in order to avoid the cost and trouble of disparate impact lawsuits — which H.R. 4000 makes extremely difficult for employers to win. Finally, neither provision addresses those features of Section 6 of the bill which would insulate many illegal quota agreements from challenge.

Damages. The second amendment provides a limited "cap" to the compensatory and punitive damages provision in Section 8 of H.R. 4000. As the Administration has noted before, however, Section 8 discards the carefully balanced remedial framework of Title VII of the Civil Rights Act of 1964 and replaces it with a radically different tort-style approach. In our view, Title VII has worked quite well for the last 26 years. Putting a cap only on punitive damages that is available only for companies of less than 100 employees — and putting no cap at all on the award of compensatory damages, including payments for pain and suffering and emotional distress awarded by a jury — is a minor change at best.

LaFalce Substitute. The third amendment — the LaFalce substitute bill — is not perfect, but it goes a long way toward correcting the objectionable provisions of H.R. 4000. If Congress passed the LaFalce substitute, the President's senior advisors would recommend that he sign it.