Issues to Consider Before Implementing a “Rooney Rule” to Increase Racial Diversity in Employment

By Jackie Wernz and Erin Walsh - Franczek P.C.

April 17, 2019

With recent news of a new Goldman Sachs policy requiring managers to interview two diverse candidates for any open job, there is no question that the “Rooney Rule,” first adopted by the National Football League (NFL) in 2003, has reached far beyond the football field. Since the NFL first adopted its rule requiring every team with a head coach vacancy to interview at least one or more diverse candidate, the practice of “tagging” minority applications to diversify the workforce has become more and more common. As employers in a diverse range of industries begin to consider using their own Rooney Rules, it is important to remember some key legal limitations on such practices to correctly balance the legal interests that may come into play.

The NFL’s Rooney Rule was named after late former Pittsburgh Steelers owner and chairman of the NFL’s diversity committee, Dan Rooney. In late 2018, the NFL presented modifications aimed at strengthening the policy, which has been credited with increasing the percentage of minority coaches from eight to twenty percent. The rule has reached far beyond the football field; in addition to Goldman Sachs’ recent diversity push, technology giants such as Amazon and Facebook have also adopted their own similar rules. Even the legal world has felt the impacts, with thirty large law firms agreeing to abide by their own version of the Rooney Rule in hiring and promotions of attorneys.

From the beginning, critics have claimed that such a rule violates prohibitions against race-based discrimination. Specifically, detractors claim that Rooney Rules is a form of reverse discrimination that violates Title VII of the Civil Rights Act of 1964. Title VII prohibits discrimination on the basis of a number of classifications, including race, in employment.

These policies are not quotas, however, which have been deemed to violate Title VII and other civil rights laws prohibiting discrimination on the basis of race. Quotas have a fixed number or proportion of opportunities reserved exclusively for certain minority groups. In the well-known Supreme Court case City of Richmond v. J.A. Croson Co., for instance, the Court said “[w]hile there is no doubt that the sorry history of both private and public discrimination in this country has contributed to a lack of opportunities for black entrepreneurs, this observation, standing alone, cannot justify a rigid racial quota . . . .”. Under that precedent, courts have found plans aimed at diversifying the workforce to be impressible quotas under Title VII.

Unlike a quota, the purpose of the Rooney Rule is to eliminate racial imbalance in traditionally segregated job categories by increasing the number of minority candidates who make it past the first round of the hiring process, which is a well-documented barrier for candidates because of both explicit and implicit biases on the basis of race. Expanding the pool of candidates to include more racial/ethnic minorities (and, in some related cases, women) allows employers to identify more diverse candidates and possibly those with a broader range of skills and abilities than might otherwise be identified when relying on more traditional recruitment strategies. The Supreme Court recognized a decade ago in Ricci v. DeStefano that Title VII does not prohibit an employer from considering how to design a practice in order to provide a fair opportunity for all individuals, regardless of their race, as long as the employer does not engage in race-based decision-making.

Because the ultimate decision under the Rooney Rule remains with the employer, and minority status is not the deciding factor in the hiring decision, courts have found similar rules to be valid under Title VII. For example, in decision by the Seventh Circuit Court of Appeals, Mlynczak v. Bodman, which has jurisdiction over Illinois, the court held that an affirmative action plan designed to promote workplace diversity through efforts to expand the pool of candidates for hiring and/or promotion and expressly prohibited decisionmakers from basing hiring and/or promotion decision on race, ethnicity, and/or gender was lawful under Title VII.

The concept of a “plus factor” has also been upheld in the public-sector context, which, in addition to Title VII concerns, implicates equal protection concerns and subjects affirmative action plans to a strict scrutiny analysis. In the well-known Grutter v. Bollinger Supreme Court case from 2003, the Court said that a university could not use a race-based quota system, but could consider race as a “‘plus' factor in the context of individualized consideration of each and every applicant” in an effort to obtain a diverse student body). Similarly, the Seventh Circuit in Petit v. City of Chicago upheld the city’s affirmative action plan on equal protection grounds when one rationale for considering race and ethnicity in hiring decision was the “operational need for a diverse police department.”

Of course, as many commentators have pointed out, the addition of Supreme Court Justice Neil Gorsuch to the Supreme Court has led some to question whether the Court will continue to support affirmative action and diversification methods, including in the workplace. Even without a major shift in the Court’s jurisprudence on the issue, affirmative action and diversity initiatives have typically been required to be temporary measures. Given the complexity of this ever-changing area of law, it is prudent to involve legal counsel when making decisions to implement or update employment policies that consider race as a factor. We will continue to track and update clients on these issues, and you may direct any questions regarding this issue to Jackie Gharapour Wernz, Erin Walsh, or any other Franczek attorney.