The Death Throes of Affirmative Action? - The Adarand and Kalanke Decisions and Implications for Australia


Current Issues Brief 1 1996-97

Ian Ireland
Law and Public Administration Group

Contents

Major Issues

Introduction

Legal Implications of Adarand and Kalanke Decisions for Australia

Other Implications

Arguments For and Against Equal Opportunity Programs and Laws

Eckhard Kalanke v. Freie Hansestadt Bremen

Adarand Constructors, Inc. v. Pena

Endnotes

Major Issues

In 1995 both the United States Supreme Court and the European Court of Justice delivered landmark rulings on affirmative action laws.

On 12 June 1995 the United States Supreme Court in Adarand Constructors, Inc v. Pena(1) (Adarand), by a five to four majority, overturned the Court's previous position on affirmative action programs and held that 'strict' scrutiny is the standard of constitutional review for federal, state or local government affirmative action programs making decisions based on racial or ethnic classifications. The court held that such laws or programs must be 'narrowly tailored measures that further compelling governmental interests'.

On 17 October 1995 the European Court of Justice in Eckhard Kalanke v. Freie Hansestadt Bremen(2) (Kalanke) unanimously held as contrary to a Council of the European Communities Directive, a Bremen law giving female candidates with the same qualifications as male applicants preference in areas where women were under-represented.

While neither of these decisions have direct legal impact in Australia they have ignited a world-wide debate on race or gender-based equal opportunity and the philosophy underpinning them.

In Australia, the Adarand decision has been used to urge policy makers and legislators to impose closer scrutiny on Australia's affirmative action laws.

Key issues include:

  • whether governments should grant preference to individuals because of their race or gender;
  • whether affirmative action programs and/or laws provide a valid remedy for past disadvantage; and
  • whether existing affirmative action programs and laws are an unnecessary regulation of the private sector.

Introduction

(a) Federal Equal Opportunity Laws

Persons are provided with equal opportunity if they are not discriminated against on the basis of certain irrelevant characteristics such as age, race, sex, or social status.(3) Equal opportunity legislation aims to prohibit individual instances of discrimination and places certain specified obligations on people not to do certain acts and a remedy when prohibited acts occur. All Australian jurisdictions have enacted equal opportunity legislation. The following federal equal opportunity legislation is currently in force:

  • Disability Discrimination Act 1992
  • Human Rights and Equal Opportunity Commission Act 1986
  • Racial Discrimination Act 1975
  • Sex Discrimination Act 1984

(b) Federal Affirmative Action Laws

In contrast to equal opportunity legislation, which aims to prohibit individual instances of discrimination, affirmative action legislation aims to overcome entrenched discrimination.(4)

The principal affirmative action legislation in Australia is the Affirmative Action (Equal Opportunity for Women) Act 1986. This legislation aims to improve the status of women in employment by requiring certain employers to promote equal employment opportunity for women by developing and implementing an affirmative action program.(5)

The Affirmative Action (Equal Employment Opportunity for Women) Act 1986 covers all higher education institutions and employers (other than public sector employers) employing 100 or more employees. They are required to develop and implement affirmative action programs for women and to submit annual reports on the progress of those programs. Public sector employers are covered by public sector equal employment opportunity legislation. For example, section 22B of the Commonwealth Public Service Act 1922 requires federal government departments to implement affirmative action programs in relation to certain disadvantaged groups.

There are eight steps to an affirmative action program, as described in the Affirmative Action (Equal Employment Opportunity for Women) Act 1986, which an employer must take, namely:

  • issue an affirmative action policy statement to all staff
  • appoint a senior manager to oversee the program
  • consult with employees, particularly women
  • develop a profile showing jobs where men and women work
  • review personnel policies and practices
  • set goals for the program
  • monitor the program and evaluate its achievements.

The Affirmative Action Agency, which administers the Affirmative Action (Equal Employment Opportunity for Women) Act 1986, names organisations failing to submit a report or providing a program. The report is tabled in the Australian Parliament.

On 1 January 1993 the Keating Government introduced a policy of contract compliance under which organisations failing to comply with the Affirmative Action (Equal Employment Opportunity for Women) Act 1986 are ineligible for government contracts and specified forms of industry assistance.(6)

Neither the Affirmative Action (Equal Employment Opportunity for Women) Act 1986 or any other Australian equal opportunity legislation imposes quotas. No Australian legislation requires that a certain number of women or other persons be employed.

Legal Implications of Adarand and Kalanke Decisions for Australia

The Adarand and Kalanke decisions have no direct legal implications for Australian equal opportunity and affirmative action laws. Australian courts and legislators are not bound by American or European law.

Australia is not subject to the European directive on equal treatment for men and women as regards access to employment, and does not have the same legislative or constitutional provisions relied on in the US case.

Australian equal opportunity and affirmative action legislation has little in common with the United States or Bremen models. Australian legislation is designed to eliminate discrimination by employers, as distinct from proscribing, equal opportunity. As the federal director of the Australian Affirmative Action Agency has said:

Ours is very pro-active. It is a form of legislation that is promoting companies into best practice human resource management as opposed to any reverse discrimination, ... I think the Australian version works much more effectively because ours is really an educative form of legislation, as opposed to quotas.(7)

A similar view has been expressed by the president of the New South Wales Anti-Discrimination Board, Mr Chris Puplick, who said:

Australia did not have formal affirmative action programs in the same sense as the US and special exemption provisions under the Anti-Discrimination Act were granted on a different basis. Most discrimination questions in Australia involve individuals rather than groups, whereas the Americans are much more inclined to make broad generalisations about groups.(8)

Other Implications

While the Adarand and Kalanke decisions cannot be said to have direct legal implications for the application of Australian equal opportunity and affirmative action laws, the two cases have given an impetus to an often heated global debate on the rationale for affirmative action. The central debating points, equally applicable to Australia, include:

  • Whether equal opportunity programs and/or laws are a valid remedy for past disadvantage. For example, United States House of Representatives Speaker, Newt Gingrich, is reported as saying:
It is antithetical to the American dream to measure people by the genes of their great-grand mothers.(9)
  • Whether issues of group differences are matters which should be dealt with by legislation and the courts.
  • Whether existing equal opportunity programs and laws are an unnecessary regulation of the private sector.
  • Whether existing equal opportunity programs and laws encourage formal compliance in lieu of real commitment on the part of employers.
  • Whether governments should grant preferences to some individuals and not to others because of their race or gender.

In Australia, the Adarand decision has been used to urge policy makers and legislators to scrutinise our laws more closely. For example, the director-general of the Australian Chamber of Commerce and Industry, Bryan Noakes, is reported as saying that the Affirmative Action Agency:

had required employers to provide information which his organisation did not believe was relevant and that some employers had complained both to his organisation and the agency itself of being harassed.(10)

Arguments For and Against Equal Opportunity Programs and Laws

Arguments used by opponents of equal opportunity programs and laws include:

  • That race and gender based programs and laws are no more that a euphemism for race or sex discrimination.(11)
  • That the rationale for using race and gender based programs and laws to remedy past disadvantage is invalid. Opponents maintain that if disadvantage were the real concern, then disadvantage would be the sole criterion. They maintain that race or gender cannot be used as a rationale because not all, and not only, women and ethnic minorities have been disadvantaged.(12)
  • Race and gender based programs and laws impose additional burdens, such as reporting requirements, on private businesses which must be passed on to consumers.
  • Gender based preference leads to lower standards in professions where physical strength is a prerequisite, are an invitation to fraud in the context of government contracts and lead to polarization, conflict and ill-will.(13)

Supporters of equal opportunity programs and laws argue otherwise. They say:

  • That equal opportunity programs and laws aim to elimination existing disadvantage rather than past disadvantage, that they are an effective means of allowing women and minorities to have a greater role in today's society and eliminate requirements unrelated to ability to perform a particular job.(14)
  • That goals and timetables focus attention on progress towards non-discriminatory practices.
  • There is no evidence that equal opportunity programs and laws give preference to unqualified women and minorities, displacing qualified persons.
  • Equal opportunity programs and laws enable women and minorities to compete for jobs they are qualified for but previously were unable to obtain because of requirements unrelated to ability to perform the jobs.(15)

Eckhard Kalanke v. Freie Hansestadt Bremen

(a) The Facts

Kalanke involved a challenge to an equal employment opportunity law of the German State of Bremen. Two candidates for the post of Section Manager in the Bremen Parks Department were shortlisted, the plaintiff, Eckhard Kalanke and Heike Glissman. They were equally well qualified.

However, a recommendation that Kalanke be awarded the job was rejected because of paragraph 4 of the 1990 Bremen Law on Equal Treatment for Men and Women in the Public Service. It stipulated that in areas where women are under-represented, like the Parks Department, a qualified woman must be appointed ahead of a man with the same credentials.

Paragraph 4 reads:

Appointment, assignment to an official post and promotion

  1. In the case of an appointment (including establishment as a civil servant or judge) which is not made for training purposes, women who have the same qualifications as men applying for the same post are to be given priority in sectors where they are under-represented.
  2. In the case of an assignment to a position in a higher pay, remuneration and salary bracket, women who have the same qualifications as men applying for the same post are to be given priority if they are under-represented. This also applies in the case of assignment to a different official post and promotion.
  3. ...
  4. Qualifications are to be evaluated exclusively in accordance with the requirements of the occupation, post to be filled or career bracket. Specific experience and capabilities, such as those acquired as a result of family work, social commitment or unpaid activity, are part of the qualifications within the meaning of subparagraphs (1) and (2) if they are of use in performing the duties of the position in question.
  5. There is under-representation if women do not make up at least half of the staff in the individual pay, remuneration and salary brackets in the relevant personnel group within a department. This also applies to the function levels provided for in the organisation chart.(16)

In proceedings before the Labour Court, Mr Kalanke argued that he was better qualified than Ms Glissman, and that by reason of its quota system, the 1990 Bremen Law on Equal Treatment for Men and Women in the Public Service was incompatible with the Bremen Constitution, the German Constitution and the German Civil Code. Kalake's application was dismissed by the Labour Court and, on appeal, by the Regional Labour Court.

In subsequent proceedings before the Federal Labour Court, the Court accepted the Regional Labour Court's finding that Kalanke and Ms Glissman were equally qualified for the position and that it was bound by the Regional Labour Court's finding that women were under-represented in the Bremen Parks Department. The Federal Labour Court held that the quota system was compatible with German constitutional and statutory provisions. However, the Federal Labour Court considered that doubts remained whether the quota system was compatible with the Council of the European Communities Directive 76/207.

Articles 1 and 4 of Council of the European Communities Directive 76/207 provide:

Article 1

1. The purpose of this Directive is to put into effect in the Member States the principle of equal treatment for men and women as regards access to employment, including promotion, and to vocational training and as regards working conditions and, on the conditions referred to in paragraph (2), social security. This principle is hereinafter referred to as 'the principle of equal treatment.'

2. With a view to ensuring the progressive implementation of the principle of equal treatment in matters of social security, the Council, acting on a proposal from the Commission, will adopt provisions defining its substance, its scope and the arrangements for its application.

Article 4

Application of the principle of equal treatment with regard to access to all types and to all levels, of vocational guidance, vocational training, advanced vocational training and retraining, means that Member States shall take all necessary measures to ensure that:

(a) any laws, regulations and administrative provisions contrary to the principle of equal treatment shall be abolished;

(b) any provisions contrary to the principle of equal treatment which are included in collective agreements, individual contracts of employment, internal rules of undertakings or in rules governing the independent occupations and professions shall be, or may be declared, null and void or may be amended;

(c) without prejudice to the freedom granted in certain Member States to certain private training establishments, vocational guidance, vocational training, advanced vocational training and retraining shall be accessible on the basis of the same criteria and at the same levels without any discrimination on grounds of sex.

The Federal Labour Court stayed the proceedings and sought a preliminary ruling from the European Court of Justice on the following questions.

1. Must Article 2(4) of Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions, be interpreted as also covering statutory provisions under which, when a position in a higher pay bracket is being assigned, women with the same qualifications as men applying for the same position are to be given priority if women are under-represented, there being deemed to be under-representation if women do not make up at least half of the staff in the individual pay brackets in the relevant personnel group within a department, which also applies to the function levels provided for in the organisation chart?

2. If Question 1 is answered in the negative:

Must Article 2(1) of Council Directive 76/207/EEC be interpreted, having regard to the principle of proportionality, as meaning that it is not permissible to apply statutory provisions under which, when position in a higher pay bracket is being assigned, women with the same qualifications as men applying for the same position are to be given priority if women are under-represented, there being deemed to be under-representation if women do not make up at least half of the staff in the individual pay brackets in the relevant personnel group within a department, which also applies to the function levels provided for in the organisational chart?(17)

(b) The European Court of Justice Decision

The European Court of Justice held that the exemption in Articles 2(4) of the Council of European Directives 76/207 precluded national rules like the Bremen law.

The Court held that, as a derogation from an individual right, Article 2(4), must be interpreted strictly. The court said while Article 2(4) allows for national measures to help women compete in the job market on an equal footing with men, the Bremen law went further than this.

National rules which guaranteed women absolute and unconditional priority for appointment or promotion went beyond promoting equal opportunities and overstepped the limits of the exception in Article 2(4) of the Directive.(18)

Further more, in so far as it seeks to achieve equal representation of men and women in all grades and levels within a department, such a system substitutes for equality of opportunity as envisaged in Article 2(4) the result which is only to be arrived at by providing such equality of opportunity.(19)

Adarand Constructors, Inc. v. Pena

(a) The Facts

Adarand involved a constitutional challenge to a federal Department of Transport program compensating government contractors who hire subcontractors certified as small businesses controlled by socially and economically disadvantaged individuals.

The legislation established a government-wide goal that 5% of the total value of all prime contract and subcontracts be awarded to these companies each financial year.

In Adarand, the prime contractor awarded a subcontract to Gonzales Construction, a company controlled by socially and economically disadvantaged individuals.

Adarand Constructors, a company not controlled by socially and economically disadvantaged individuals, had submitted the lowest bid. It sued the Department of Transport, claiming that the Department of Transport program, with its racial classifications, was in breach of the equal protection guaranteed by the U.S. Constitution's Fifth Amendment.

The United States District Court for the District of Colorado granted summary judgment for the Department of Transport. The Court of Appeals for the Tenth Circuit affirmed the district court's judgement, holding that the Department of Transport's action satisfied the requirements of 'intermediate scrutiny', which it determined was the applicable standard of review for racial and ethnic classifications under the US Supreme Court's decisions in Fullilove v. Klutznick(20) and Metro Broadcasting, Inc. v. FCC(21).

In Metro Broadcasting, Inc. v. FCC, a case which involved a challenge to two race-based policies, Justice Brennan, in delivering the opinion of the Supreme Court stated what intermediate scrutiny required.

We hold that benign race conscious measures mandated by Congress - even if those measures are not remedial in the sense of being designed to compensate victims of past governmental or societal discrimination - are constitutionally permissible to the extent that they serve important governmental objectives within the power of Congress and are substantially related to achievement of those objectives.(22)

(b) The United States Supreme Court Decision

By a five to four majority, the Supreme Court in Adarand overruled Metro Broadcasting's more lenient standard of constitutional review, and held instead, that 'strict scrutiny' was the standard for federal, state or local government affirmative action programs making decisions based on racial or ethnic classifications.

Justice Sandra Day O'Connor in her majority opinion held:

A free people whose institutions are founded upon the doctrine of equality should tolerate no retreat from the principle that government may treat people differently because of their race only for the most compelling reasons.(23)

Metro Broadcasting's untenable distinction between state and federal racial classifications lacks support in our precedent, and undermines the fundamental principle of equal protection as a personal right.(24)

Citing with approval the words of Justice Stewart in Fullilove v. Klutznick, Justice O'Connor held:

Under our Constitution, any official action that treats a person differently on account of his race or ethnic origin is inherently suspect and presumptively invalid.(25)

Under 'strict scrutiny', affirmative action programs that use racial or ethnic classification as a basis for decision making will only be constitutional:

if they are narrowly tailored measures that further compelling governmental interests.(26)

Justice O'Connor held:

The unhappy persistence of both the practice and the lingering effects of racial discriminations against minority groups in this country is an unfortunate reality, and government is not disqualified from acting in response to it. As recently as 1987, for example, every Justice of this Court agreed that the Alabama Department of Public Safety's 'pervasive, systematic, and obstinate discriminatory conduct' justified a narrowly tailored race-based remedy.(27)

Justices Scalia and Thomas, two members of the majority, wrote separate opinions which took a more stringent position in relation to the standard of constitutional review for federal affirmative action measures.

For example, Justice Scalia held:

In my view, government can never have 'compelling interest' in discriminating on the basis of race in order to 'make up' for past racial discrimination in the opposite direction. Individuals who have been wronged by unlawful racial discrimination should be made whole; but under our Constitution there can be no such thing as either a creditor or a debtor race. ... . To pursue the concept of racial entitlement - even for the most admirable and benign of purposes - is to reinforce and preserve for future mischief the way of thinking that produced race slavery, race privilege and race hatred. In the eyes of government, we are jut one race here. It is American.(28)

The four dissenting Justices in Adarand reaffirmed the intermediate scrutiny standard established in Metro Broadcasting, Inc. v. FCC and would have upheld the Department of Transport program on the basis of Fullilove v. Klutznick.

In Fullilove v. Klutznick, the Supreme Court upheld federal legislation requiring that at least ten percent of certain grants for public works projects must be used to procure goods and services from minority businesses. In Adarand, Justices Stevens and Souter argued that the Department of Transport program was more narrowly tailored than the legislation upheld in Fullilove v. Klutznick.

All four dissenting Justices emphasised that a distinction exists between racial and ethnic classifications designed to help minorities and classifications that discriminate against them. For example, Justice Stevens held:

The consistency that the Court espouses would disregard the difference between a 'No Trespassing' sign and a welcome mat. ... It would equate a law that made black citizens ineligible for military service with a program aimed at recruiting black soldiers. An attempt by the majority to exclude members of a minority race from a regulated market is fundamentally different from a subsidy that enables a relatively small group of newcomers to enter that market. An interest in 'consistency' does not justify treating differences as though they were similarities.(29)

Endnotes

  1. Adarand Constructors, Inc v. Pena, 1995 U.S. LEXIS 4037.
  2. Eckhard Kalanke v. Freie Hansestadt Bremen, European Court of Justice, C-450/93, Oct 17 1995.
  3. Australian & New Zealand Equal Opportunity Law & Practice, CCH Australia Limited, Vol. 1, p. 3,031.
  4. Practitioners Guide To Equal Opportunity Land And Practice, CCH Australia Limited, 1992, p. 41.
  5. Australian & New Zealand Equal Opportunity Law & Practice, CCH Australia Limited, Vol. 1, p. 13,431.
  6. ibid., p. 13,471.
  7. The Australian, 14 June 1995.
  8. ibid.
  9. The Financial Review, 24 February 1995.
  10. The Canberra Times, 25 October 1995.
  11. American Bar Association Journal, May 1995, Vol. 81, p. 40.
  12. ibid.
  13. ibid.
  14. ibid., at p. 41.
  15. ibid.
  16. ibid., at paragraph 3.
  17. ibid., at paragraph 11.
  18. ibid., at paragraph 22.
  19. ibid., at paragraph 23.
  20. U.S. 448.
  21. U.S. 547.
  22. ibid., at pp. 564 and 565.
  23. Adarand Constructors, Inc v. Pena, 1995 U.S. LEXIS 4037, at p. 51.
  24. ibid., at p. 65.
  25. ibid., at p. 64.
  26. ibid., at p. 51.
  27. ibid., at p. 68.
  28. ibid., at pp. 72 and 73.
  29. ibid., at p. 82.
 
 

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