Questioning the Unquestionable

Forbidden Grounds: The Case Against Employment Discrimination Laws, by Richard Epstein, Cambridge, Mass.: Harvard University Press, 530 pages, $39.95

Richard Epstein's Forbidden Grounds: The Case Against Employment Discrimination Laws, is perhaps the most politically incorrect book ever written. It violates the most sacred of contemporary taboos by calling for repeal of major portions of the nation's civil-rights statutes.

This sweeping treatise by the nation's most provocative legal scholar has the potential to revitalize a debate that has been silenced for a generation. As Epstein's Takings fostered a revolution in property-rights jurisprudence, so could Forbidden Grounds provide an intellectual foundation for a revolution in civil-rights law aimed at replacing the current regime of government coercion with freedom of contract and association.

And none too soon. For the direction our nation takes on civil-rights issues will greatly influence not only the future of race relations in America but also our ability to survive as a free and prosperous society.

The reach of the complex maze of employment discrimination laws is pervasive and ever-growing. "The imperialism of the movement is such," writes Epstein, "that there is no issue within the realm of employment, and indeed within the larger realm of social endeavor, on which the civil rights laws do not exert a heavy, and baleful, influence."

The Bush administration's shocking capitulation on the 1991 Civil Rights Act completed the transformation of a reasonable 1964 antidiscrimination statute into a powerful engine of social engineering. Epstein's book examines the explosive growth and perverse effects of government regulation of employment decisions and makes a compelling case for a radical change in direction.

Epstein begins with a discussion of the evolution of rules of freedom of contract and association that promoted harmony and economic progress. But in human nature, Epstein observes, individuals often discriminate against one another for a variety of reasons, some rational and some not.

In a free society, the costs of irrational discrimination fall on the discriminator, making irrational discrimination somewhat self-correcting. "The greater the class of persons who are regarded as off-limits, and the more irrational the preferences," Epstein argues, "the more the decision will hurt the people who make it, and the more numerous the options it will open to rival traders."

The 14th Amendment and civil-rights laws passed after the Civil War were designed to protect the essential freedoms of contract and property against infringement by abusive state governments. But, as Epstein observes, the Supreme Court nullified this protection in two stages. In the 1896 Plessy v. Ferguson decision, the Court upheld the view that racial discrimination was within the "police power" of the state. And starting with the late 1930s, the Court eliminated judicial protection for freedom of contract and other economic liberties.

These decisions unleashed a torrent of economic regulations at every level of government that destroyed freedom of contract, to the detriment of economic outsiders generally and blacks specifically. The 1964 Civil Rights Act was the culmination of attempts to establish equality under law and to obtain economic emancipation for blacks.

"So great were the abuses of political power before 1964," Epstein writes, "that, knowing what I do today, if given an all-or-nothing choice, I should still have voted in favor of the Civil Rights Act in order to allow federal power to break the stranglehold of local government on race relations."

The employment provisions of the Civil Rights Act imposed a modest restraint upon the free market. As Sen. Hubert Humphrey declared, "Employers may hire and fire, promote and refuse to promote for any reason, provided only that individuals may not be discriminated against because of race, religion, sex, or national origin."

Initially, the law was enforced by courts in a common-sense manner, applying a "disparate treatment" model. When an employer treats similarly situated people differently, a presumption arises that the reason for the different treatment is race (or sex, etc.). Under the disparate-treatment model, the employer could rebut this presumption by demonstrating a nondiscriminatory reason for its conduct.

But before long, the Supreme Court created out of thin air a new construct of discrimination, "adverse impact," under which plaintiffs may establish a case of discrimination merely by demonstrating statistically that employment standards (such as tests) produce different outcomes for different groups. As Epstein observes, this almost always happens, given the different education and workforce-experience levels of different groups.

Despite the weak inference such statistics establish in the absence of proof of discriminatory intent, the Court created a nearly impossible standard of "business necessity" for employers to rebut such evidence. Notes Epstein, "The weaker the plaintiff's [case], the more obstacles are placed in the path of a defendant who seeks to rebut it—exactly the opposite of what any sensible system of law should require."

Adverse impact impels employers to seek the safe harbor of racial quotas to avoid almost certain liability. But as Epstein observes, it also leads to consequences harmful to its purported beneficiaries. For instance, employers can relocate to all-white suburbs and never have to worry about discrimination charges, because the local population contains no members of minority groups. Those companies that adopt quotas typically compete for the best-qualified minority candidates. Either way, less-qualified minorities, who could compete in a free market by working for lower wages, are left behind.

Applying freedom-of-association principles, Epstein defends voluntary affirmative action, particularly in the private sector. Once again, Epstein argues that the costs of affirmative action, like all forms of discrimination, are borne by those who engage in it.

Outside the area of race, Epstein charges that the justification for interference with freedom of association is even weaker, since discrimination on the basis of sex, age, and handicap is often rational. Strict antidiscrimination principles in these areas also have produced perverse and costly effects. The often overlooked Age Discrimination in Employment Act, for instance, is enforced to compel employers to ignore costs in employment decisions, with devastating economic consequences.

Epstein's prescription is to repeal the antidiscrimination laws and restore freedom of contract and association, which were the original goals of the civil-rights movement. The current antidiscrimination regime, Epstein says, is "redistributive," "capricious," "expensive," and "wasteful." By contrast, Epstein concludes that "freedom of association works, because it means that both sides stand to gain from the transaction."

For the most part, Epstein's analysis is keen, his conclusions sound. He has correctly identified adverse impact as an intellectually and legally unsound doctrine that imposes serious societal costs. But he overlooks the most pernicious ramification.

By establishing a legal presumption that different outcomes among racial groups are caused by discrimination (a presumption now enshrined by the 1991 legislation), the law necessarily presumes the cause is not other factors, such as inadequate skills, welfare dependency, and cultural isolation. So long as we sweep these serious problems under the carpet of racial quotas, we will never solve them.

Epstein also characterizes too much discrimination as "rational," particularly in the area of gender. He contends that "the biology of sex differences is profound" and influences virtually "every aspect of human conduct," thus making a great deal of sex discrimination rational. But sex-based generalizations are often untrue in individual instances, and blanket discrimination in the job context is almost always irrational. Epstein goes far beyond the argument he needs to make to demonstrate the superiority of freedom of contract to coercion, and in so doing he undermines his own arguments.

Epstein concedes his ideas are radical and well outside the mainstream. Given the consensus supporting the antidiscrimination laws, is Epstein merely tilting at windmills?

Perhaps not. Twenty-eight years of social engineering disguised as civil rights have done little to help the most disadvantaged yet have polarized Americans along racial lines more bitterly than ever.

Yet Epstein's prescription for repeal is hardly viable. So long as the legacy of discrimination manifests itself in contemporary exclusions based on race, strong enforcement of the 1964 Civil Rights Act (as originally designed) is necessary to make good our nation's promise of equal opportunity.

But the perversions of the antidiscrimination laws are steadily eroding opportunities for everyone. A change of policy direction is urgently needed, emphasizing empowerment through economic liberty. By boldly trespassing upon forbidden grounds, Epstein's devastating critique of the current regime calls conventional wisdom into question and, we may hope, will inspire a spirited debate that is long overdue.

Clint Bolick is vice president and director of litigation of the Institute for Justice in Washington, D.C., and author of Unfinished Business: A Civil Rights Strategy for America's Third Century.