Commentary

‘Playing by the Rules’: Not That Easy

This article originally appeared in New York Times on March 28, 1993.

One recurring theme of President Clinton’s economic strategy is that the Government should reward those who “work hard and play by the rules.” While that idea appears reasonable, it actually fails to appreciate the legal dilemmas companies face daily. The sheer number of state and Federal laws has always made compliance difficult and costly, but today companies increasingly find themselves in impossible situations because of conflicting mandates.

In 1989, Exxon was excoriated for the Alaska oil spill. A socially responsible company, it was argued, wouldn’t fill certain tanker jobs with people who had a history of alcoholism. That criticism had validity, of course, and Exxon promptly reviewed, and adjusted, its personnel policies. But it has now been sued for discriminating against the handicapped: a tanker engineer says Exxon unlawfully dismissed him because of his alcoholism.

Johnson Controls was sued for sex discrimination when it excluded some female employees from certain jobs, a policy it began when it learned of possible health risks to fetuses. An explicit warning to all employees might have been the best policy, since that would have left the ultimate decision to individuals. But Johnson had to be concerned about its potential legal exposure, since any person born alive can sue a- third party for prenatal injuries. The Supreme Court, however, said the exclusion was impermissible sex discrimination. While the court’s majority opinion played down the risk of tort liability, four Justices recognized that the ruling’s speculation would be of “small comfort” to companies actually. exposed to possible lawsuits.

Sexual-harassment lawsuits have become more prevalent since the Anita Hill hearings. And most employers are now fully aware of the Federal law that says employees have a right to a workplace free of harassment. But companies are discovering that they can follow that law too zealously. That’s because some of those dismissed - the alleged harassers - have successfully sued for “wrongful dismissal.” Many states have laws that allow discharged employees to sue former employers if they were let go without sufficient cause. Complying with both state and Federal rules is extremely difficult.

Lawsuits appear inevitable in situations where a woman files a harassment complaint against a man with a clean record and there are no witnesses. Management could immediately dismiss the man and risk a wrongful-dismissal suit, or it could postpone a decision until after adequate investigation and risk additional incidents - and even more harassment lawsuits. The choice is a tough one; some discharged employees have recovered damages even while admitting inappropriate conduct.

Some companies have tried to avoid lawsuits by sponsoring sensitivity seminars. But such sessions have come back to haunt companies in litigation. When Lucky Stores was sued for racial discrimination, its executives were dismayed to learn that workshop records could be used by plaintiffs in court. The workshop consultants apparently urged store managers to express their attitudes about workplace experiences. (How else could they identify and counsel potentially biased managers?) Some written materials from the seminars included incriminating stereotypical comments. Thus Lucky’s efforts to fight bias ended up producing evidence supporting claims of violations.

It seems evident that many workplace laws conflict with one another. And company lawyers find it increasingly difficult to keep companies within the law, indicating that the situation is seriously out of hand. President Clinton’s promise to reward businesses that “play by the rules” rings hollow to the scores of people who simply can’t comply with all the incompatible rules. If the Administration is serious about its promise, it will review Federal workplace edicts and eliminate as many conflicts as possible. If the furor over the Zo? Baird nomination taught the new President anything, it should have been that “the rules” can ensnare a lot of decent people.

Timothy Lynch, director of the Cato Institute’s Project on Criminal Justice.