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UNITED STATES DEPARTMENT OF LABOR

For law and markets: Employment discrimination lawsuits, market performance, and managerial diversity (Hirsch & Cha, 2018)

Review Guidelines

Causal Evidence Guidelines

Absence of conflict of interest. 

Citation

Hirsh, E., & Cha, Y. (2018). For law and markets: Employment discrimination lawsuits, market performance, and managerial diversity. American Journal of Sociology, 123(4), 1117-1160. https://doi.org/10.1086/694887 [Lawsuit resolutions]

Highlights

  • The study’s objective was to examine the impact of employer discrimination lawsuit resolutions on the representation of white women, black men, and black women employed in managerial positions. The authors investigated similar research questions for other interventions, the profiles of which can be found here:

  • The study used a nonexperimental design to estimate the impact of employer discrimination lawsuits on the representation of white women, black women, and black men in managerial positions one year and three years after the resolution of the lawsuits. Study authors used data from the U.S. Equal Employment Opportunity Commission (EEOC) to analyze the impact of lawsuit resolutions on changes in sex and race composition of managerial positions. 

  • The study found a significant relationship between employer discrimination lawsuit resolutions and lower odds of white women represented in management one year following the lawsuit resolution. The study also found a significant relationship between employer discrimination lawsuit resolutions and lower odds of black women represented in management three years following the lawsuit resolution.  

  • This study receives a low causal evidence rating. This means we are not confident that the estimated effects are attributable to employer discrimination lawsuits only; other factors are likely to have contributed. 

Intervention Examined

Lawsuit resolutions

Features of the Study

When compared to declines in market value as a result of employer discrimination, legal action through discrimination lawsuits is theorized to be more effective in decreasing future discrimination. The study identified a sample of high-profile employment discrimination lawsuits based in race, sex, or national origin discrimination.  

The study used a nonexperimental design to examine the impact of high-profile lawsuit resolutions on managerial diversity. Lawsuits in the sample were not categorized separately according to the basis of discrimination lawsuits such as race or gender. The sample included 171 lawsuits, involving 104 firms and 29,736 establishments of the firms. To be eligible for inclusion into the sample, lawsuits were required to be publicly traded and provide workforce demographic data via the Equal Employment Opportunity Commission database. The study sample involved employees that were employed at an establishment that had a resolved employer discrimination lawsuit or operated under a firm with a resolved lawsuit. Using data from 1997 to 2007, the authors conducted statistical models to examine the impact of lawsuit resolutions on managerial diversity one year and three years following lawsuit resolution.  

Findings

Employment 

  • The study found that the lawsuit resolution was significantly related to lower odds of white women in management positions one year following the lawsuit resolution. No significant relationship was found three years following lawsuit resolution.  

  • The study found that the lawsuit resolution was significantly related to lower odds of black women in management positions three years following the lawsuit resolution. No significant relationship was found one year following lawsuit resolution.  

  • The study found no significant relationship on the odds of black men in management one year or three years following a lawsuit resolution.  

Considerations for Interpreting the Findings

Given that high profile lawsuits and their resolutions were public information, it is likely that employees within the sampled establishments anticipated the intervention. Additionally, the data sources used did not provide information on previous policies/outcome data of the establishments prior to the court settlements or verdicts. Because of this, the authors were not able to appropriately control for the anticipation of the lawsuit resolution and associated affected behavior prior to the intervention.  

Causal Evidence Rating

The quality of causal evidence presented in this report is low because the authors did not account for trends in outcomes prior to the participant’s anticipation of the lawsuit resolution. This means we are not confident that the estimated effects are attributable to employer discrimination lawsuit resolutions; other factors are likely to have contributed. 

Reviewed by CLEAR

January 2023

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