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

Review 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 [Court-mandated accountability policies]

Highlights

  • The study’s objective was to examine the impact of court-mandated organizational accountability policies 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 court-mandated organizational accountability policies 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 requiring the intervention. Study authors used data from the U.S. Equal Employment Opportunity Commission (EEOC) to analyze the impact of court-mandated organizational accountability policies on changes in sex and race composition of managerial positions. 

  • The study found a significant relationship between court-mandated organizational accountability policies and higher odds of white women, black women, and black men being 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 court-mandated organizational accountability policies; other factors are likely to have contributed. 

Intervention Examined

Court-mandated accountability policies

Features of the Study

Accountability Policies have been historically intended to establish policies to promote equality from an organizational level. The study identified a sample of high-profile employment discrimination lawsuits based in race, sex, or national origin discrimination that also mandated required organizational accountability policies. To be included, firms were required to have court-mandated implementation of formal grievance complaint procedures, affirmative action plans, recruitment plans, monitoring plans, task forces, progress reports/evaluations, hiring/promotion procedures, or the creation of a new staff position to promote organizational accountability.   

The study used a nonexperimental design to examine the impact of court-mandated organizational accountability policies on managerial diversity. 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 that required the creation of accountability policies. Using data from 1997 to 2007, the authors conducted statistical models to examine the impact of court-mandated organizational accountability policies on managerial diversity one year and three years following lawsuit resolution.  

Findings

Employment 

  • The study found that court-mandated organizational accountability policies were significantly related to lower odds of white women in management positions one year following the lawsuit resolution and higher odds three years following lawsuit resolution.  

  • The study found that court-mandated organizational accountability policies were significantly related to higher odds of black women and black men in management positions three years following the lawsuit resolution. No significant relationship was found one year following lawsuit resolution.  

Considerations for Interpreting the Findings

Given that high profile lawsuits and the court-mandated accountability policies 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 court-mandated accountability policies 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 court-mandated accountability policies. This means we are not confident that the estimated effects are attributable to court-mandated accountability policies; other factors are likely to have contributed. 

Reviewed by CLEAR

January 2023

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