What Happened inHazelwood: Statistics, Employment Discrimination, and the 80% Rule

Abstract

Tests of statistical significance have increasingly been used in employment discrimination cases since the Supreme Court's decision in Hazelwood. In that case, the United States Supreme Court ruled that “in a proper case” statistical evidence can suffice for a prima facie showing of employment discrimination. The Court also discussed the use of a binomial significance test to assess whether the difference between the proportion of black teachers employed by the Hazelwood School District and the proportion of black teachers in the relevant labor market was substantial enough to indicate discrimination. The Equal Employment Opportunity Commission has proposed a somewhat stricter standard for evaluating how substantial a difference must be to constitute evidence of discrimination. Under the so-called 80% rule promulgated by the EEOC, the difference must not only be statistically significant, but the hire rate for the allegedly discriminated group must also be less than 80% of the rate for the favored group. This article argues that a binomial statistical significance test standing alone is unsatisfactory for evaluating allegations of discrimination because many of the assumptions on which such tests are based are inapplicable to employment settings; the 80% rule is a more appropriate standard for evaluating whether a difference in hire rates should be treated as a prima facie showing of discrimination.