113 Yale L.J. 955 (2004)

This Article provides a theory for deciding when a spending program should be implemented through the tax system. The decision is traditionally thought to be based on considerations of tax policy. The most common theories are the comprehensive tax base theory and the tax expenditures theory, both of which rely on tax policy to make the determination. This Article argues instead that the decision should be based solely on considerations of organizational design. Activities should be grouped together in a way that achieves the best performance, much like how a corporation decides to divide its business into divisions. Tax policy is entirely irrelevant to the decision. This Article begins the process of applying organizational design theory to the integration problem, considering theories of hierarchies based on the needs for specialization in and coordination of activities. It then analyzes whether food stamps and the Earned Income Tax Credit should be implemented through the tax system based on this analysis.

113 Yale L.J. 1093 (2004)

In Grutter v. Bollinger, the much-anticipated case challenging affirmative action practices at the University of Michigan Law School, the Supreme Court held for the first time that "obtaining the educational benefits that flow from a diverse student body" represents a compelling state interest. Adopting much of Justice Powell's analysis from the landmark Bakke case, the Grutter majority emphasized that racial diversity within a student body promotes the "'robust exchange of ideas,'" and renders classroom discussions "'more enlightening and interesting.'" The Court further reasoned that universities deserve substantial leeway in making admissions decisions because they are uniquely positioned to assess the pedagogical values associated with racial diversity.

Notably, however, the Court did not confine its analysis of the educational benefits of diversity to matters concerning the quality of the educational experience at the University of Michigan. Rather, it relied heavily on a separate strand of argument that emphasized the need to produce students whose training or experience "'prepares them as professionals'" to function effectively within "'an increasingly diverse workforce.'" To underscore this point, the Grutter majority described the American military's reliance on race-conscious recruitment and admissions policies for its service academies and Reserve Officer Training Corps (ROTC) programs. Citing claims raised by a group of retired military personnel in an amicus filing, the Court intimated that the return to a racially homogenous officer corps would compromise the military's ability to provide national security. From here, "'only a small step'" was required for the Court to conclude that the "'country's other most selective institutions'" likewise depend on racially diverse leadership to ensure their continued success. Hence, the majority explained that in the realm of business, "exposure to widely diverse people, cultures, ideas, and viewpoints" cultivates skills necessary to succeed in today's "increasingly global marketplace." Likewise, it described the visible presence of minority lawyers in the upper echelons of politics and the judiciary as crucial to the public's continued confidence in these institutions.

What is striking about these claims is that they regard the project of diversifying higher education as a means of populating the professional ranks with a new generation of racially diverse, or at least racially attuned, leaders. In effect, it is the Court's appeal to these occupational needs for diversity, as opposed to the intrinsic importance of cross-racial understanding, that forms much of the basis for its conclusion that the educational benefits of diversity constitute a compelling state interest. The notion that racially diverse leadership contributes to the functionality of certain professions is not a recent innovation. Rather, such claims have been advanced by numerous industry leaders, sociologists, and historians. In the legal context, occupational need arguments have most often arisen as defenses against allegations of racially biased hiring practices. Accordingly, both Congress and the courts have grappled with the question of how to strike the proper balance between catering to important occupational needs and upholding the law's broader prohibition against racial discrimination. During the legislative debate over Title VII of the Civil Rights Act of 1964, Congress resolved this dilemma by unambiguously rejecting the concept that a person's race could ever constitute a "bona fide occupational qualification" (BFOQ). Underpinning this decision was the overriding fear that employers might otherwise hire only whites, claiming that this was essential to the smooth functioning of their businesses.

In light of this statutory barrier, no court has ever accepted occupational need defenses where racially discriminatory employment practices have been challenged under Title VII. Paradoxically, however, where such practices have instead been challenged on Fourteenth Amendment grounds, courts have increasingly allowed a small number of professions--such as law enforcement and prison administration--to raise valid occupational need defenses. On these occasions, judges have distinguished between employers merely catering to client preferences and those whose race-conscious decisionmaking reflects a genuine concern about the functionality of their profession.

As a result of these developments, the statutory and constitutional frameworks governing racial discrimination now provide contradictory responses to occupational need defenses raised by certain professions. This inconsistency was prominently on display in the recent case of Patrolmen's Benevolent Ass'n v. City of New York, in which Judge Scheindlin found that racially motivated employment decisions furthered the state's compelling interest in effective law enforcement--thereby satisfying the first prong of the court's equal protection analysis--yet held that the police were nonetheless barred from mounting an occupational need defense under Title VII.

Against this backdrop, the Grutter Court further expanded the boundaries of the constitutional occupational need defense in two important respects. First, it suggested that a profession's reliance on racially diverse representation may warrant use of race-conscious admissions procedures at the stage of professional education. Logically, those professions citing an occupational interest in the continued use of affirmative action at universities should be doubly justified in granting preferences to racial minorities who have actually graduated and entered the labor market. Rather than consider the tensions that this reasoning would generate with current Title VII law, however, the Court simply reiterated that its holding reaches only educational--rather than hiring--decisions. Second, the Grutter Court identified occupational needs for diversity in fields such as business and law, which differ substantially from the more public-safety-oriented occupations that have successfully raised occupational need defenses in the past. By grouping together professions such as business and law with the military, whose unique features have entitled it to a special exemption under Title VII, the Court proceeded on the questionable assumption that these professions are equally dependent on racially diverse leadership.

These problematic implications of the Grutter Court's approach were not lost on the dissenting Justices, who warned that occupational need logic could not be easily cabined within formal educational settings or confined to the field of law. Instead, as Justice Scalia lamented, the Court's reasoning might be used to support discriminatory hiring on the ground that it injects minority representation into a profession solely to enhance the "'cross-racial understanding'" of nonminority coworkers. Wary of the potential for occupational need defenses to shield discriminatory practices across a limitless array of professions, the dissenting Justices in Grutter sided with the framers of Title VII by resisting such arguments altogether.

For all its intellectual clarity, however, the Grutter dissent's categorical rejection of occupational need claims proved no more nuanced than the majority opinion. Justice Scalia's scathing critique of the Court's logic, while useful in highlighting the extremes to which occupational need arguments may be taken, recognized no contexts in which such claims could be appropriate. Conspicuously absent from his dissent was any mention of the military's distinctive justification for affirmative action. Likewise, no consideration was given to other professions that might raise compelling arguments along similar lines.

Taken as a whole, the Supreme Court's discussion of occupational need in Grutter proved unsatisfactory in two respects, both of which this Note addresses. First, both the majority and the dissent adopted a polarized, all-or-nothing approach to occupational need defenses instead of acknowledging the possibility that such arguments may be persuasive in certain contexts while pernicious in others. As an alternative to the Court's stark approach, what is needed is a theoretical framework for determining when occupational need arguments should be accepted as compelling state interests and when they should be rejected as pretextual grounds for racial discrimination.

This Note begins to develop such a framework through the case study of the military, the profession that has most often framed its defense of affirmative action in terms of occupational need. Once the link between racial awareness and occupational performance is more precisely understood, we may then consider what institutional features make the military particularly dependent on racial diversity. To the extent that similar features exist in other contexts, the military experience should be seen as translatable, rather than entirely exceptional.

Rather than draw an arbitrary line between higher education and work settings, this Note proposes that occupational need arguments should be evaluated according to the characteristics of each profession. Taking into account the social urgency of a profession as well as the degree to which its basic functionality depends on race-conscious decisionmaking, I argue that occupational need defenses should generally be limited to a small subset of professions that address public safety matters rather than extended to encompass professions such as business and law. While the appropriate outer bounds of the occupational need defense will undoubtedly remain subject to disagreement, the Grutter Court's treatment of occupational need claims clearly overlooks crucial differences in the nature and degree to which various professions rely on racially diverse leadership.

The second shortcoming of the Grutter decision lies in its failure to address the growing divide between statutory and constitutional approaches to occupational need defenses. Where racial discrimination has been alleged, there is now a pressing need for a more unified legal response to such defenses. As a simple matter of intellectual coherence, Congress and the courts should agree on the extent to which American law recognizes that a person's race may affect her ability to perform certain tasks within an organization or profession. From a judicial perspective, the current inconsistency between the statutory and constitutional precedents in this area creates unnecessary confusion, undermining the clarity and force of opinions that must address occupational need claims. Finally, in the context of public employment discrimination, where Title VII and the Fourteenth Amendment are most obviously in tension, the success of occupational need defenses turns primarily on the nature of the allegations raised, which may be a function of little more than the plaintiff's degree of legal sophistication. Rather than countenance such anomalies, we should reconsider the proper place of such arguments within antidiscrimination law more broadly.

Accordingly, this Note proposes that Congress amend the language of Title VII to remove the statutory barrier against race-based bona fide occupational qualification defenses. Courts should then permit occupational need defenses only in those narrow circumstances where a profession establishes that racial discrimination is vital to the essence of its business. Where state actors differentiate on the basis of race, courts should impose the additional requirement that a profession demonstrate how its disruption would compromise public safety. By building upon the doctrinal approach used in response to similar arguments in the sex discrimination context, courts could construct a limited occupational need defense that would reduce the potential for abuse while still allowing racial preferences where they legitimately further a compelling state interest.

The Grutter Court's turn toward occupational need as a prominent justification for race-conscious decisionmaking is unsettling, even for proponents of affirmative action. The doctrine of occupational need is malleable and may be used to defend forms of racial discrimination that do not comport with societally held conceptions of racial justice. Insofar as we would balk at the notion of discriminating against racial minorities for the sake of preserving an occupation's survival, we should question whether concern over occupational needs is what truly motivates our support for affirmative action policies at institutions such as the University of Michigan Law School. If instead our commitment to affirmative action stems from some deeper value, then this value should be openly acknowledged and discussed rather than hidden behind the guise of an occupational need rationale. Indeed, occupational need arguments risk diverting attention from the social justice claims that would otherwise underpin the campaign for affirmative action. For these reasons, I sympathize with the outcome in Grutter yet remain wary of expanding the occupational need rationale as it pertains to race.

To warn against the potential excesses of occupational need defenses is not to preclude their use under all circumstances, however. By advocating rigorous scrutiny of occupational need claims, this Note seeks to limit such claims to situations where race-conscious measures genuinely contribute to an occupation's functionality and where the smooth operation of that occupation is of paramount interest.

Part I of this Note situates the Grutter outcome within the context of the Supreme Court's earlier affirmative action jurisprudence. This Part begins by examining how the Court's understanding of what constitutes a compelling state interest has expanded to include forward-looking or nonremedial justifications for affirmative action. The remainder of the Part outlines the salient features of what I have identified as the Grutter Court's occupational need rationale for diversity.

Part II considers the most serious criticisms of the occupational need rationale, comparing claims that appear in the Grutter dissents with similar arguments that have arisen in previous cases and legislative debate. Part III evaluates the case for affirmative action in military higher education with an eye toward assessing which features make certain institutions better able to invoke occupational need arguments than others.

Drawing lessons from the military case study, Part IV suggests a framework for how to approach occupational need defenses in the future, arguing that a limited occupational need defense would strike the proper balance between preserving occupational performance and creating a dangerous precedent that invites invidious discrimination. Part V then advances a two-part proposal for harmonizing the statutory and constitutional approaches to occupational need defenses. It concludes by underscoring the important role that judges must play in limiting race-based occupational need defenses once the statutory barrier against such claims has been removed.