Jurisprudence: Price Waterhouse v. Hopkins

In 1989, Ann Hopkins sued Price Waterhouse under Title VII of the 1964 Civil Rights Act, alleging that Price Waterhouse had denied her the chance of becoming a partner at the firm because she was a woman. Her case traveled all the way to the Supreme Court, where a plurality held that, given a set of both discriminatory and nondiscriminatory factors, an employer does not violate Title VII if it can prove by a preponderance of the evidence that it would have made the same employment decision even absent the discriminatory factor. In Bostock v. Clayton County (the case next term for which I will write my own opinion), the employees alleging discrimination make a litany of citations to Hopkins’ case in their briefs—especially its discussion of sex stereotyping under Title VII. Consequently, I take a look at the Supreme Court’s 1989 decision in Price Waterhouse v. Hopkins and assess subsequent legal developments and its relevancy today.


Background

Ann Hopkins was a senior manager in Price Waterhouse, an accounting firm known today as Price Waterhouse Coopers (PwC). In 1982, partners at the firm nominated her for partnership, but upper-level management postponed her candidacy for reconsideration the next year. That following year, partners at the firm did not re-propose her for partnership. They acknowledged that Hopkins was “an outstanding professional” with a “deft touch,” a “strong character, independence and integrity.” But she was also known throughout her office as “sometimes overly aggressive, unduly harsh, difficult to work with and impatient with staff.” Additionally, some partners who were against Hopkins’ bid for partnership disliked her personality traits because they did not fit the paradigm of a woman. One partner, for instance, called her “macho”; one suggested she take “a course at charm school”; and another said Hopkins should “walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry.”

After she was not re-proposed for partnership, Hopkins sued Price Waterhouse for sex discrimination under Title VII of the 1964 Civil Rights Act, which prohibits discrimination in the workplace on the basis of “race, color, religion, sex, or national origin.” At trial, the district court admitted that the concerns about Hopkins’ aggressive personality and interpersonal skills were legitimate to a business decision, and that Price Waterhouse took such personality traits seriously when considering an employee for partnership. Nonetheless, the district court held that Price Waterhouse had violated Title VII and discriminated against Hopkins on the basis of sex because it had done nothing to cabin the negative comments partners made toward Hopkins regarding her femininty—comments that stemmed from inherent sex stereotyping. The district court then ruled that while Price Waterhouse could avoid equitable relief by proving by clear and convincing evidence that the partners still would not have re-proposed Hopkins for partnership even without sex discrimination, it had not met that burden here.

On appeal, the D.C. Circuit Court of Appeals mostly affirmed. It differed from the district court on one crucial point: Price Waterhouse would not violate Title VII if it could prove by clear and convincing evidence that it would not have re-nominated Hopkins for partnership even absent sex discrimination.

Notice the difference here: Given the presence of both discriminatory (here, sex stereotyping) and nondiscriminatory (here, concerns over her interpersonal skills) factors, the appeals court held that an employer does not violate Title VII if the employer can prove by clear and convincing evidence that it would have made the same employment decision absent the discriminatory factor. The district court, on the other hand, held that such a set of mixed-factors is a Title VII violation, and if the employer can prove the same by clear and convincing evidence, it only escapes equitable relief, not the overarching Title VII liability.

Price Waterhouse then appealed to the Supreme Court, asking the Justices to determine both the correct Title VII approach—was the district court or the appeals court right—and the correct burden of proof—clear and convincing evidence or a preponderance of the evidence.

Justice Brennan’s Plurality Opinion

In a small win for Price Waterhouse, Justice William J. Brennan, joined by Justices Thurgood Marshall, Harry Blackmun, and John Paul Stevens held that the appeals court got the approach right, but it erred with respect to the burden of proof.

Title VII, with regard to sex, says the following: An employer cannot “fail or refuse to hire or to discharge any individual, or otherwise to discriminate with respect to his compensation, terms, conditions, or privileges of employment,” or to “limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s . . . sex” (emphasis added). “We take these words,” Brennan then declared, “to mean that gender must be irrelevant to employment decisions.”

Price Waterhouse, seeking to have the entire suit against it dismissed, argued that “because of . . . sex” should be read as a canon of “but-for” causation—that is, that an employer would have made the opposite employment decision (and thus would not violate Title VII) “but for” the employee’s sex. In other words, Price Waterhouse argued, to be liable under Title VII, the factor—the sole factor—that motivated an employer’s decision must be the employee’s gender.

But such a reading is a “misunderstand[ing]” of Title VII, Brennan replied. “[T]he words ‘because of’ do not mean ‘solely because of.'” (Indeed, when Congress debated the passage of the 1964 Civil Rights Act, it rejected an amendment that would have added the word “solely” in front of “because of.”) In light of this, it is clear that Congress intended Title VII to forbid employment decisions based both on discriminatory and nondiscriminatory considerations. “When . . . an employer considers both gender and legitimate factors at the time of making a decision,” Brennan said, “that decision was ‘because of’ sex and the other, legitimate considerations—even if we may say later, in the context of litigation, that the decisions would have been the same if gender had not been taken into account.” Thus, to Brennan, Title VII prohibits an employer from making an employment decision on the basis of the employee’s gender, whether or not that be the only factor taken into consideration.

But this is not the be-all and end-all. Title VII, while codifying the protections against discrimination directed toward an employee, also “preserv[es] . . . an employer’s remaining freedom of choice.” This necessarily involves considering an employee’s or an applicant’s other factors that relate to the qualifications for a job. Therefore, “[t]he central point,” Brennan stressed, “is this: while an employer may not take gender into account in making an employment decision . . . it is free to decide against a woman for other reasons.” He concluded: “[O]nce a plaintiff in a Title VII case shows that gender played a motivating part in an employment decision, the defendant may avoid a finding of liability only by proving that it would have made the same decision even if it had not allowed gender to play such a role.”

Now, the differences between Price Waterhouse’s and Hopkins’ arguments, and the conclusion drawn by Justice Brennan, can be made clear: Hopkins would have the court hold that an employer violates Title VII whenever sex plays a motivating factor—whether that be the sole factor or one of many factors—in an employment decision. Next, if the employer can prove it would have made the same decision absent the employee’s sex, then that only limits the relief the court may give to the employee. The burden, then, is on the employer.

On the other side of the spectrum, Price Waterhouse would have the court hold that an employer violates Title VII only if sex was the sole motivating factor in an employment decision (sex here being a “but-for” causation). Put differently, if an employer considers a number of permissible factors, even if another factor is sex, no violation occurs. The burden here is on the employee to prove sex was a but-for factor.

But Brennan took the middle route: An employer violates Title VII if sex plays a motivating factor in an employment decision, and the burden is on the employee to prove sex played a role. Once that is established, an employer can escape liability under Title VII only if it can prove it would have made the same employment decision absent the employee’s gender—and here, the burden shifts to the employer to prove such an outcome.

After comparing this conclusion to prior, related cases, Brennan addresses sex stereotyping. “In the context of sex stereotyping,” he wrote, “an employer who acts on the basis of a belief that a woman cannot be aggressive, or that she must not be, has acted on the basis of gender.” But while such a dictum may be all well and good rhetorically, what about the legal significance of sex stereotyping under Title VII? Brennan didn’t directly answer that question. He again stated that “we are beyond the day when an employer could evaluate employees by assuming or insisting that they matched the stereotype associated with the group.” This is of course because Congress, “[i]n forbidding employees to discriminate against individuals because of their sex, . . . intended to strike at the entire spectrum of disparate treatment of men and women resulting from sex stereotypes.” But Brennan left unaddressed the specific question of whether an employee may bring a Title VII claim on the basis of sex stereotyping (not just sex)—a crumb the dissent later pounces on.

Finally, Brennan ascertained the correct burden of proof. Recall that, to avoid liability under Title VII, the lower courts held that an employer must prove by clear and convincing evidence that it would have made the same employment decision even if the discriminatory motive was not present. But this is not the correct burden of proof, Brennan said. Rather, an employer must so prove by a preponderance of the evidence—in other words, that it was more likely than not. “Conventional rules of civil litigation generally apply in Title VII cases,” Brennan wrote, “and one of these rules is that parties to civil litigation need only prove their case by a preponderance of the evidence.” In addition, deviations from this framework “are uncommon, and in fact are ordinarily recognized only when the government seeks to take” action that is “more dramatic than entering an award of money damages or other conventional relief” against an individual. Examples of such pronounced action include the termination of parental rights, involuntary commitment to an institution, deportation, or denaturalization. “Only rarely have we required clear and convincing proof where the action defended against seeks only conventional relief,” Brennan asserted, and this case does not require such an exception.

In sum, four Justices held that “when a plaintiff in Title VII cases proves that her gender played a motivating part in an employment decision, the defendant may avoid a finding of liability only by proving by a preponderance of the evidence that it would have made the same decision even if it had not taken the plaintiff’s gender into account.”

Justice White’s Concurrence

Justice Byron White penned a short concurrence in which he agreed that Price Waterhouse should be reversed in part and remanded since the lower courts used an incorrect standard of proof.

Next, in a situation where an employment decision was motivated by both legitimate and illegitimate factors, White advocated for using the approach set forth in Mt. Healthy City Bd. of Ed. v. Doyle. In Mt. Healthy, a city employee was fired for multiple reasons: in part because he exercised his First Amendment rights (an illegitimate reason for his firing) and in part because of other legitimate reasons. The Mt. Healthy approach to determining the proper procedure of the employee’s workplace discrimination claims is laid out as follows:

Initially, in this case, the burden was properly placed upon [the employee] to show that his conduct was constitutionally protected, and that his conduct was a ‘substantial factor’—or, to put it in other words, that is was a ‘motivating factor’ in the [employer’s] decision not to rehire him. [The employee] having carried that burden, however, the District Court should have gone on to determine whether the [employer] had shown by a preponderance of the evidence that it would have reached the same decision as to [the employee’s] reemployment even in the absence of the protected conduct.

Notice that the Mt. Healthy approach is virtually the same as the Price Waterhouse approach: The burden is first on the employee to prove that an illegitimate factor was motivating factor in an employment decision. Once so proved, the burden shifts to the employer to prove by a preponderance of the evidence that it would have made the same employment decision even without considering the illegitimate factor.

Where White disagreed with the plurality had to do with its evidentiary standard once an employee makes a preliminary showing of employment discrimination. The plurality noted that when the burden shifts back to the employer, the employer “in most cases . . . should be able to present some objective evidence as to its probable decision in the absence of an impermissible motive” (emphasis added, footnote omitted). But White didn’t see the necessity of mandating “objective evidence.” “In my view,” he said, “there is no special requirement that the employer carry its burden by objective evidence.” “In a mixed motive case,” he continued, “where the legitimate motive found would have been ample grounds for the action taken, and the employer credibly testifies that the action would have been taken for the legitimate reasons alone, this should be ample proof.”

Justice O’Connor’s Concurrence

Justice Sandra Day O’Connor similarly concurred in the judgment. She agreed with the plurality that once an employee proves the existence of an illegitimate motive in an employment decision, the burden should shift to the employer to prove by a preponderance of the evidence that it still would have made the same decision absent the illegitimate factor. But like Justice White, O’Connor honed in on the “objective evidence” standard the plurality evinced. In her view, this evidentiary standard should be regarded as a supplement to the evidentiary framework the Court laid out in McDonnell Douglas Corp. v. Green and Texas Dept. of Community Affairs v. Burdine (more on this below).

First, O’Connor devoted eight pages to responding to the dissent’s principal argument that Title VII’s “because of . . . sex” language should be read as a “but-for” causation construction (see infra, at Justice Kennedy’s dissent).

Next, she turned to her discussion of McDonnell Douglas and Burdine. Those cases made clear that the burden of proof should remain throughout the litigation on a plaintiff who alleges individual disparate treatment—not shift to the employer, as the plurality said. In McDonnell Douglas, the Court confronted a Title VII case wherein an employee alleged discrimination in an employment decision but provided no direct evidence that his employer was motivated by a factor Title VII forbids. Instead, the employee relied on the method of proving that each legitimate factor the employer offered was in fact pretextual. Thus, his argument went, once so many of the employer’s proffered legitimate reasons were cast aside, only illegitimate reasons remained. The McDonnell Douglas Court held that, given such an “inferential proof,” the only “burden”—if it could even be called that—placed on the employer was to continue articulating legitimate reasons for the employment decision. The real burden of proof continued to rest with the employee: he must “demonstrate by competent evidence that the presumptively valid reasons for his rejection were in fact a coverup” for an illegitimate, discriminatory factor.

And in Burdine, the Court considered whether, in a McDonnell Douglas-like case wherein there is no direct evidence of workplace discrimination, the burden of proof should ever shift to the employer to show that a non-pretextual, legitimate factor actually existed.

In other words, said O’Connor, Price Waterhouse here, by shifting the burden to the employer at the latter stage, deviated from the evidentiary framework espoused in McDonnell Douglas and Burdine. The dissent seized on this, arguing the plurality should have stuck by McDonnell Douglas and Burdine. But O’Connor countered that there is a good reason for deviating.

McDonnell Douglas and Burdine dealt with cases of workplace discrimination in which the employee does not present any direct evidence of an impermissible motive in an employment decision. Hence, of course, the deference given to the employer and the burden of proof remaining like a cloud over the employee’s head. But here in Price Waterhouse, the lower courts did find direct evidence of an illegitimate factor that contributed to the employment action. Specifically, partners in Price Waterhouse took note of the fact that Hopkins did not conform to the stereotype of a woman and then used that factor (among others) to not re-recommend her for partnership.

Therefore, to O’Connor, Price Waterhouse does not shove McDonnell Douglas and Burdine under the bed, as the dissent submits. Hopkins had already “taken her proof as far as it could go,” O’Connor wrote, and to continue holding the burden of proof on her “would be illogical, indeed ironic.”

Justice Kennedy’s Dissent

Justice Anthony Kennedy, joined by Chief Justice William Rehnquist and Justice Antonin Scalia, dissented. Kennedy led with the following affirmation:

Today the Court manipulates existing and complex rules for employment discrimination cases in a way certain to result in confusion. Continued adherence to the evidentiary scheme established in McDonnell Douglas and Burdine is a wiser course than creation of more disarray in an area of the law already difficult for the bench and bar.

The four-Justice plurality opinion devoted much of its ink to dismissing the idea that Title VII’s “because of . . . sex” phrase is a construction of “but-for” causation. But the “theory of Title VII liability the plurality adopts,” Kennedy responded, “essentially incorporates the but-for standard.” To the lay reader, Title VII’s “because of . . . sex” phrase “conveys the idea that the motive in question made a difference to the outcome”—that is, that sex “caused the decision at issue” (emphasis added).

Moreover, earlier decisions endorse the idea that Title VII’s language construction is analogous to but-for causation. Take Newport News Shipbuilding & Dry Dock Co. v. EEOC, for instance. There, the Supreme Court held that giving different insurance coverage to male and female employees violates the statute at issue because such an action treats employees “in a manner which but-for that person’s sex would be different” (emphasis added).

Next, Kennedy said, the plurality erred by drawing a damning distinction between the phrases “because of” and “solely because of.” The plurality concluded that Title VII is not a but-for construction because the phrase “because of” denotes that sex need only be determining factor, not the sole determining factor. But “[n]o one contends . . . that sex must be the sole cause of a decision before there is a Title VII violation,” Kennedy shot back (emphasis added). “Under the accepted approach to causation” Kennedy put forward, “sex is a cause for the employment decision whenever, either by itself or in combination with other factors, it made a difference to the decision. Discrimination need not be the sole cause in order for liability to arise, but merely a necessary element of the set of factors that caused the decision, i.e., a but-for cause.”

Kennedy then turned to the burden of proof standard in McDonnell Douglas and Burdine. Recall that Justice O’Connor distinguished Hopkins’ case from those concerned in McDonnell Douglas and Burdine, and justified the departure on that ground. But Kennedy wasn’t so convinced. As the Court noted in Burdine, the “ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff.” The plurality, of course, wanders from this framework and imposes a new structure for cases where the plaintiff clearly shows that an illegitimate factor undergirded the defendant’s employment decision. This new structure shifts the burden of proof to the defendant to prove it would have made the same employment decision absent the illegitimate factor. But this new approach, Kennedy pointed out, “is not mandated by the statute itself,” “provides limited practical benefits at the cost of confusion and complexity,” and has the “attendant risk that the trier of fact will misapprehend the controlling legal principles and reach an incorrect decision.”

Finally, Kennedy took a few swings at the plurality’s discussion of sex stereotyping. It is “important to stress that Title VII creates no independent cause of action for sex stereotyping,” Kennedy stressed—an assertion neither the plurality nor the concurrences rebutted. Now, if an employee demonstrates evidence of an employer’s use of sex stereotyping in an employment decision, that is “of course[] quite relevant to the question of discriminatory intent” in a Title VII claim. But the only question that matters in a Title VII claim is whether discriminatory factors underlaid an employment decision and therefore caused the employee harm. And, Kennedy added, “[o]ur cases do not support the suggestion that failure to ‘disclaim reliance’ on stereotypical comments” as the district court in Price Waterhouse noted “itself violates Title VII. Neither do they support creation of a ‘duty to sensitize.'” With a little rhetoric, Kennedy highlighted that “acceptance of such theories would turn Title VII ‘from a prohibition of discriminatory conduct into an engine for rooting out sexist thoughts,'” quoting the dissenting judge in the D.C. Circuit.

In any event, the district court determined that the comments made by Price Waterhouse partners regarding Hopkins’ femininity did not prove discriminatory intent and that Price Waterhouse partners had identified credible, nondiscriminatory reasons for which they did not re-propose Hopkins for partnership (those being abrasiveness, poor interpersonal skills, and the like). Because of this and the reasoning just set out, Kennedy would have remanded the case for entry of judgment in favor of Price Waterhouse.

Subsequent Legal Developments

In 1991, Congress passed a supplementary Civil Rights Act that superseded the plurality’s holding here in Price Waterhouse. First, Section 107(a) of the 1991 Act codified the plurality’s conclusion that a Title VII violation is made out even when an illegitimate factor is one of many other legitimate factors in an employment decision:

Except as otherwise provided in this title, an unlawful employment practice is established when the complaining party demonstrates that race, color, religion, sex, or national origin was a motivating factor for any employment practice, even though other factors also motivated the practice (42 U.S.C. § 2000e-2(m)).

And, Section 107(b) codified the conclusion that if an employee presents evidence of an impermissible factor in an employment decision but the employer proves it would have taken the same action absent the impermissible factor, the employer escapes liability under Title VII:

On a claim in which an individual proves a violation under section 703(m) and a respondent demonstrates that the respondent would have taken the same action in the absence of the impermissible motivating factor, the court (i) may grant declaratory relief, injunctive relief (except as provided in clause (ii)), and attorney’s fees and costs demonstrated to be directly attributable only to the pursuit of a claim under section 703(m); and (ii) shall not award damages or issue an order requiring any admission, reinstatement, hiring, promotion, or payment, described in subparagraph (A) (42 U.S.C. §§ 2000e-5(g)(2)(B)(i) and (ii)).

The Supreme Court recognized these subsequent legal developments in Landgraf v. USI Film Products and University of Texas Southwestern Medical Center v. Nassar.

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