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California's employment discrimination law: two systems, private and public, separate and unequal

Findings of comprehensive UCLA-RAND study released


Lauri Gavel
Director of Communications
UCLA School of Law
(310) 206-2611
gavel@law.ucla.edu

LOS ANGELES, CA, February 10, 2010 -- Civil rights disputes resolved through the dual system of private representation and public enforcement in California have created a disparity that is neither fair nor nondiscriminatory, according to a report by the UCLA-RAND Center for Law and Public Policy. 

This is one of many conclusions reached by researchers at the center as the result of the most comprehensive study yet conducted of the enforcement of a state antidiscrimination law, California's 50-year old Fair Employment and Housing Act.   

According to the report, "California Employment Discrimination Law and Its Enforcement: The Fair Employment and Housing Act at 50," California has two separate but far from equal systems for enforcing its employment discrimination laws: a civil litigation system for employees able to obtain an attorney (about half of all complainants) and an administrative enforcement system operated by the state's Department of Fair Employment and Housing (DFEH) and Fair Employment and Housing Commission (FEHC). The federal Equal Employment Opportunity Commission (EEOC) handles only about one-fourth of complaints in California.  

Access to the two state systems is determined primarily by lawyers who accept employment discrimination cases on a contingency-fee basis. About half of the approximately 18,000 employment complaints filed with the DFEH each year are immediately removed to the civil litigation system. The study found that these lawyers were much less likely to accept certain kinds of cases, primarily based on expectations about the potential monetary value of the case. 

The result of this system produces dramatic disparities in access to the two systems. For example, controlling for a wide range of other variables:

  • Compared with whites, African Americans have half the chance of obtaining a  lawyer, and other people of color fare only slightly better.
  • Women are 20 percent less likely than men to obtain a lawyer.
  • Employees in lower-wage occupations and particular industries have a much lower chance of obtaining a lawyer. For example, workers in the construction and wholesale trade industries have one-sixth the chance of obtaining a lawyer of those in the government sector.   

The remaining half of employment discrimination complaints are processed by an administrative system with dramatically fewer resources. The DFEH has 16 attorneys to process accusations with the FEHC. By comparison, well over 1,000 attorneys prosecute employment discrimination complaints in court. The DFEH operates with a budget equal to 81 cents per year per California employee. Past budget cuts have resulted in the elimination of training and management positions. Those investigating complaints in the administrative systems are often minimally educated - a high school diploma and four years of service in any state agency satisfies the education and experience requirement - yet they are expected to deal with a complex set of legal rules. In 2009, the FEHC had only one administrative law judge to hear cases.  

The study indicates that important reforms adopted by the Schwarzenegger administration have increased the effectiveness and efficiency of the DFEH. Looking at the enforcement structure more broadly, however, the study documents dramatic differences in outcomes between the two systems: 

  • In the civil litigation system, most cases settle. Of those that go to trial, plaintiffs win 50 percent of the time, receiving a median jury award of $205,000 (in 2007-08).
  • In the administrative enforcement system, cases begin with the filing of a complaint with the DFEH and can conclude with a settlement or a decision by the FEHC. Of those cases closed from 2004 to 2008:  
    • One in 14 obtained a monetary benefit, the median value of which was $4,000.
    • One in 69 resulted in an accusation being filed with the FEHC, which has in recent years issued an average of only five published decisions per year. 
    • Of the cases settled after filing an accusation with the FEHC, the median settlement was $14,842.  

"While our findings regarding the inability of individuals to gain access to the civil justice system are troubling, the inequality in the two systems is clearly the product of the legal systems that have evolved over the past half-century rather than the performance of individuals, many of whom work very hard with inadequate resources," said UCLA School of Law professor Gary Blasi, who co-authored the report. 

"A truly effective administrative enforcement system would benefit both employees and employers, and the DFEH has already made progress toward allocating its resources more efficiently," said Joseph Doherty, director of UCLA Law's Empirical Research Group and co-author of the report. "Our recommendations are designed to minimize both the costs on employers and the use of DFEH resources, but we are mindful that some require additional financial support. For example, imposing a fair employment practices regulatory fee of 10 cents per month on both employers and employees would triple the current budget of the DFEH." 

For a copy of the report, please visit www.law.ucla.edu/UCLARAND.

The RAND Corporation is a nonprofit research organization providing objective analysis and effective solutions that address the challenges facing the public and private sectors around the world. 

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