Religious Freedom Restoration Act (Indiana): Use of Religion as a Cudgel and Shield for GOP’s Political Policy Preferences

[Update (April 3, 2015): The State of Indiana has revised IC-34-13-9 so that the law would not affect “services, use of public accomodations, goods, employment, or housing on the basis of race, color, religion, ancestry, age, national origin, disability, sex, sexual orientation, gender identity, or United States military service.” (See Indiana Senate Enrolled Act No. 50, 2015 session.)]

It appears that the Republicans (GOP) has the mindset of using religion to cover for unpalatable policy preferences. In the Indiana Religious Freedom Restoration statute, IC-34-13-9, effective July 1, 2015, religion is defined broadly (section 5 of the statute) as is the definition of person (section 7 of the statute). With these two broad definitions, this statute could be used as the vehicle to oppose (or support) policy that the GOP opposes or supports. [In contrast, the federal Religious Freedom Restoration Act, P.L. 103-141, is specific (addresses particular Supreme Court decisions).]

These religious freedom bills destroy the meaning of religion in order to use “religion” as a political instrument. Section 5 of the Indiana law is so broad such that any claim of “religion” is enough to trigger the law against a disfavored government policy. Seemingly, the disfavored policies could be those which conflict with GOP tenets (for example, the Affordable Care Act, or ObamaCare (Indiana uses the federal marketplace.)).

The statute’s weakness is its vagueness. This same vagueness makes it a strong vehicle for “religion-” based policy preferences.

The logical structure appears to be the following:

GOP policy preference is not palatable with the broad society, thus there should be a mechanism to enforce that preference through an alternative means. For example, the vehicle in this case is “religious freedom.” (The logical structure is explained through the chart below.)

GOP logical argument Indiana Religious Freedom Restoration Statute, IC-34-13-9
Free exercise of religion is protected by the First Amendment of the U.S. Constitution.
Religious beliefs are also Constitutionally protected.
Religious beliefs belong to persons. Sec. 7: “As used in this chapter, ‘person’ includes the following: (1) an individual, (2) an organization, religious society, a church, a body of communicants, or a group organized and operated primarily for religious purposes, (3) a partnership, a limited liability company, a corporation, a company, a firm, a society, a joint-stock company, an unincorporated association, or another entity that: (A) may sue and may be sued, (B) exercises practices that are compelled or limited by a system of religious belief held by: (i) an individual; or (ii) the individuals; who have control and substantial ownership of the entity, regardless of whether the entity is organized and operated for profit or nonprofit purposes.”
Those religious beliefs may have policy preferences deriving from that belief, which should also be protected.
These preferences may include preferences similar to those of the GOP. Sec. 5: “As used in this chapter, ‘exercise of religion’ includes any exercise of religion, whether or not compelled by, or central to, a system of religious belief.”
If so, that religious belief AND its derivative policy preferences should be Constitutionally protected.
Religious Freedom Restoration statutes recognize the tie between religious belief and its derivative policy preferences.
(But the concern is only for government.) Sec. 11: “The chapter is not intended to, and shall not be construed or interpreted to, create a claim or private cause of action against any private employer by any applicant, employee, or former employee.”

The problem with the GOP’s use of religion is that it disrespects religion in order to use it as a policy weapon exclusively in order to force GOP policy preferences on the society. This activity is unfortunate, but policymakers must be aware of the technique, especially when crafting legislation.


Federal Reserve Board: Brief for case involving claim of racial discrimination; Artis v. Bernanke, 2011 decision of the D.C. Circuit Court of Appeals

Author’s note: This post will differ from previous posts in that it will feature a longer exposition. It is important to be a little longer because the case involving the class plaintiffs and the Federal Reserve Board has been ongoing for about 18 years. This case before the D.C. Circuit was decided in January 2011. On September 29, 2014, the district court denied class certification to the plaintiffs. See Artis v. Yellen, Civil Action No. 01-400 (EGS). The case remains active as of the date of this post.

[Note (July 23, 2015): The U.S. District Court for the District of Columbia, Judge Emmet G. Sullivan, dismissed this case with prejudice. (In September 2015, the plaintiffs filed an appeal with the federal circuit court of appeals.)]

Artis v. Bernanke, No. 09-5121 (D.C. Cir. 2011)

Summary: D.C. Circuit Court of Appeals held that class members claiming racial discrimination at the Federal Reserve Board (Board) did satisfy the Board’s Equal Employment Opportunity (EEO) regulations requiring a counseling session with the Board’s EEO office because the class did provide information about specific instances of discrimination and offered corresponding allegations of discrimination against individual class agents. The D.C. Circuit determined that such information was enough for the Board to investigate and try to resolve the class claims.

Facts: The plaintiffs, a class of secretaries currently and formerly employed by the Board, claimed that the Board systematically discriminated against them on account of their race in violation of Title VII of the Civil Rights Act of 1964 (42 U.S.C. §2000e et seq.).

On January 15 and February 13, 1997, several class members, with counsel, initiated counseling with the Board, in accordance with Board regulations 12 C.F.R. §268.104(a). (Board EEO counselors, with a Board lawyer, held group counseling sessions on these days.)

On January 17, 1997, class members, responding to the Boards request for information, submitted 14 identical copies of a document, “Resubmission of Class-Action Complaint.” In the January 17 document, the secretaries alleged a systemic and pervasive pattern of discrimination against African American secretaries by the Board. Particularly, that the Board–

  • Paid them lower salaries than non-minority secretaries,
  • Awarded them fewer and smaller bonuses,
  • Granted them fewer promotions,
  • Deflated their performance appraisals,
  • Denied them privileges and training that non-minority secretaries enjoyed,
  • Unfairly enforced leave procedures against them, and
  • Discriminated against them in the quantity and quality of work assignments.

Between January 24 and February 18, 1997, Board EEO counselors met individually with nine secretaries, in which those secretaries confirmed the general allegations in the January 17 Resubmission document, and some of them recounted specific instances of discrimination from personal experience. The Board’s EEO counselors prepared reports based on the notes they took in these counseling sessions.

The class members filed an administrative complaint on March 3, 1997, but the Board dismissed the complaint on July 23, 1997. And, the U.S. Equal Employment Opportunity Commission affirmed the Board’s dismissal on November 18, 1998. The class filed a complaint in the federal district court on February 22, 2001.

The Board filed a motion to dismiss, which the district court denied. The district court ordered discovery on the issue of exhaustion, “whether the plaintiffs have satisfied their obligation to engage in counseling” and whether “the administrative counseling process was a futile exercise,” citing Artis v. Greenspan, 223 F. Supp. 2d 149 (D.D.C. 2002).

After five years of contentious discovery, the Board renewed its motion to dismiss in 2005, which the district court granted on January 31, 2007, holding that the court lacked subject matter jurisdiction over the class because the class members failed to exhaust the counseling requirement because the class failed to provide any meaningful information about specific instances of discrimination. The class members appealed.

Holding: The D.C. Circuit, vacating the decision of the district court and remanding the case to the district court, held that where counseling produces sufficient information to enable the agency to investigate the claim, that counseling purpose has been served. The court determined that the class members did provide meaningful information about specific instances of discrimination in the January 17 Resubmission document and offered corresponding allegations of discrimination against individual class agents. Such information, the D.C. Circuit reasoned, was enough for the Board to investigate and try to resolves the claims of the class members. (See pages 9-12 of the opinion for the specific allegations and the individual experiences of discrimination.)

Moreover, the court stated that it reviews challenges to dismissals for lack of administrative exhaustion de novo, as it is a question of law, citing Brooks v. Dist. Hosp. Partners, L.P., 606 F.3d 800 (D.C. Cir. 2010).

Analysis: The purpose of counseling, the court explained, in the Title VII context, is clear from the text of the Board’s regulation–to enable the agency and its employee “to try to informally resolve the matter,” citing 12 C.F.R. §268.104(a), Wilson v. Peña, 79 F.3d 154 (D.C. Cir. 1996), and Blackmon-Malloy v. United States Capitol Police Bd., 575 F.3d 699 (D.C. Cir. 2009).

The court noted that Title VII’s exhaustion requirement should not be read to create useless procedural technicalities, citing President v. Vance, 627 F.2d 353 (D.C. Cir. 1980). An agency risks misusing the counseling requirement, the court explained, when it demands excessively detailed support for a class-wide complaint alleging a pattern and practice of subtle financial and professional discrimination.

Claims of systemically depressed salaries, performance ratings, advancement opportunities, and the like can often be proven only by statistical comparison of the employer’s treatment of the class to its treatment of non-minority employees, the court noted. The court continued, stating that such an analysis will only be possible after employees obtain data from their employer, informally or through discovery.

Thus, the court concluded that it would be perverse to dismiss a complaint for failure to provide adequate detail in counseling when all of the relevant data is in the employer’s exclusive control.

In addition, the court noted that the class status of the plaintiffs allows a representative plaintiff to satisfy the counseling requirement on behalf of similarly situated class members. As a result, the entire class exhausted administrative remedies by virtue of the class agents successful completion of counseling.

Moreover, the court noted in a footnote that failure to exhaust administrative remedies under Title VII is not jurisdictional because Title VII does not include a clear statement of that intent.

CFPB: OIG’s Wordy, Pusillanimous Audit Report (2015-MO-C-002) Mostly Non-Responsive to Congressional Questions; Failed to Assess Whether CFPB Practices Contribute to Systemic Discrimination

The Office of the Inspector General (OIG) for the Consumer Finance Protection Board (CFPB) recently issued an audit report stating that the CFPB can enhance its diversity and inclusion efforts. I am deeply disappointed with this report as it dares to be self-satisfied and committed to the status quo of the CFPB’s operations. The reality is that the report was produced by external agency forces, the American Banker article and the Democratic members of the House Financial Services Committee (see pages 64-65 of the report), not through the ongoing work of the CFPB’s OIG.

Overall, however, with current circumstances going on in the nation, such as the events in Ferguson, Missouri (and the significant systemic discrimination practiced there), this is the time for more in-depth investigation than is present is this very light, analytically speaking, yet very lengthy and wordy, report from the OIG.

Furthermore, the OIG’s audit report is a public document, yet it is written in a way that the findings could only be understood by a CFPB insider. This outcome is problematic because the taxpayer must be able to understand on what programs tax dollars are being spent, for what reason, and with what effect. For example, a thorough explanation of the performance appraisal process (before and after the American Banker article), including its attendant policies and management’s actions with it, would have been helpful to the reader.

The third-party report, produced by DCI Consulting (pages 75-101), however, is more responsive to examining structural discrimination at the CFPB through its practices. (This blog post is focused on the OIG-authored portion of the report.)

The report’s self-satisfaction comes from the report’s authors use of CFPB operations when it may well be those operations that themselves contribute to the problems with diversity and inclusion. The CFPB’s OIG does not even assess this possibility, even though the American Banker article already pointed out issues with the performance evaluation process. Given the changes that have occurred, with the leadership of Director Richard Cordray and some members of Congress, well before the issuance of the report, the OIG should have performed this assessment. Its absence is notable. (It is exasperating that Director Cordray must lead all of the change himself, without reliance on the well-paid (perhaps overpaid) high-level management staff.)

[Author’s note: A mere mention that the OIG-authored report’s scope is (severely) limited and then producing a recitation of the Office of Personnel Management’s definition of workforce diversity and inclusion seems to be a convenient escape hatch (page 2), one that I refuse to grant to this unacceptable audit report.]

Hearings of the House Financial Services Committee, Oversight and Investigations Subcommittee, CFPB, 2014
Date Title of Hearing Witnesses Hearing Report Number
4/2/2014 Allegations of Discrimination and Retaliation within the Consumer Financial Protection Bureau Ms. Angela Martin and Ms. Misty Raucci 113-72
5/21/2014 Allegations of Discrimination and Retaliation within the Consumer Financial Protection Bureau, part 2 Mr. Benjamin Konop and Ms. Liza Strong 113-81
6/18/2014 Allegations of Discrimination and Retaliation within the Consumer Financial Protection Bureau, part 3 Mr. Ali Naraghi and Mr. Kevin Williams 113-85
7/30/2014 Allegations of Discrimination and Retaliation and the CFPB Management Culture The Honorable Richard Cordray 113-96

Moreover, the basis of the report being an audit report and not an analytical report makes it non-responsive to the questions presented by the American Banker article and the questions from the members of the congressional committee. The issue of diversity and inclusion is not a matter found in financial documents and spreadsheets. It is found in examining agency activities and evaluating them with the applicable laws and regulations. Appendix B (pages 66-68) demonstrates the extremely thin foundation for the report.

The overall goal of the audit report was to collect various elements, then “judgmentally” select a point from one of them to use as a test against a CFPB human-resources-related activity. This method is non-responsive to the questions posed by the congressional committee because the issue of whether the activity itself is causing the problem is left unquestioned and unanswered. With this approach, I find it difficult to see why a CFPB employee would report anything regarding diversity, inclusion, or systemic discrimination to this OIG.

The report authors merely searched for whether there were controls to prevent or detect bias or discrimination. A laudable goal, but the methods used to determine such controls are inadequate. For example, the report cites exit survey data (page 54), and that the report authors found a low level of people leaving reported discrimination as a factor. The CFPB’s Office of Minority and Women Inclusion, or OMWI, stated that its goal is to reduce the perceptions of discrimination and discrimination to zero.

Consumer Finance Protection Bureau’s Exit Survey Data, March 2012 – September 2013
Separations during period 225
Employees that submitted survey 96
Employees that did not submit a survey 129
Percentage taking survey 0.4267
Percentage not taking survey 0.5733

The exit survey alone is insufficient to be a control because the exiting employee simply has no obligation to provide such information to the CFPB. Second, to assess employee perceptions at the time of departure is insulting to the employee and shows a definite lack of effort by the organization to ensure that it is acting fairly and equitably. Third, no mention is made about the effect of so many people electing not to provide exit surveys and its effect on the relevancy of data derived from such a survey.

As a result of the CFPB’s OIG being unable to address issues of systemic discrimination, the CFPB and the Federal Reserve Board should be expected to review these issues more vigorously and be directly accountable to the Congress for successful implementation and compliance with all of the civil rights laws and regulations as well as the federal merit principles.

Authors of CFPB OIG Audit Report, 2015-MO-C-002
Name Title
Anna Saez OIG Manager
Ed Fernandez Senior Auditor and Project Lead
Victor Calderon Senior Forensic Auditor
Saurav Prasad Senior Auditor
Amanda Sundstrom Auditor
Megan Taylor Auditor
Dennis N. Wolley Jr. Audit Intern
Timothy Rogers Senior OIG Manager for Management and Operations
Melissa Heist Associate Inspector General for Audits and Evaluations

Dick Grote: Forced Ranking Procedures Empowers Managers to Take Advantage of Subordinates; Exemplifed in Grote’s Document titled “Performance Appraisal: Solving Toughest Challenges”

Dick Grote advocates for rampant abuse of employees in the forced-ranking process. Specifically, employees are responsible for doing the manager’s job of supervision and of satisfying the whims of their supervisor, and managers are merely expected to pass judgment on their subordinates and then presumably to sit in judgment at the calibration meeting.

Bucket (rank) Percentage [“vitality curve”] (amounts can be adjusted) Effect
A 20 Lavish rewards, encouragement
B 70 Little to paltry increase
C 10 Pressure to quit, firing

At this calibration meeting, some of the beleaguered employees will then be selected for termination, abused during an “improvement period,” then likely fired. It seems that the best method for targeted persons to respond to this abuse is silence after a blanket denial of all accusations.

Selected quotes from Dick Grote (2000), “Performance Appraisal: Solving the Toughest Challenges,” HR Magazine, July.

There are two themes of management abuse of authority in Grote’s advice, which is detailed in the following chart. [My comments are in brackets.]

Abuse of Authority Situation Grote Quote or Proposal (and Page Number)
Responsibility shifting
Distant subordinate “The mistake appraisers make in this case is to assume that it’s their job to figure out an answer to the question [how to review someone the manager does not see very often]. It’s not. Make it the subordinate’s job.” (page 2)
Technically superior subordinate The same idea carries to this issue as the distant subordinate–the technically superior subordinate is expected to develop a plan for reviewing. (page 3).In addition, a group assignment is proposed–teaching the manager how to assess their work. (page 3) [Author’s note: Should not the manager be expected to do this on the manager’s own? Because the manager will be the only voice at the calibration meeting, all of this “education” may well be for naught.]
Older, more-experienced subordinate “The best way to deal with the highly experienced individual is to get right to the point at the start of the appraisal discussion: ‘Frank, you’ve been through this drill many times before. Let’s not waste any time on small talk. How do you think your department compares with where it was last year?’ Then shut up and listen, and proceed as you would with anybody else.” (page 4)[The manager should be on top of the business (and not expect the subordinate to do management work on top of his or her other duties (without extra pay)). That is why the extra pay for management is being paid.]
Power and Control; Ambush
Highly compensated individual (situation where the subordinate earns more than the manager (commissions)) [Why would a commission-sales-compensated person need a performance review, especially when earning good commissions?]Regardless, advice is provided: “The answer is also classic: just do what needs to be done. The fact that his compensation structure is different from yours is irrelevant. He’s paid to peddle potatoes (among other things). You’re paid to manage his performance (among other things). Do your job.” (page 4)
Dealing with unrealistic expectations (1) No self appraisal, unless required by company policy. (page 4)(2) For good solid performers [A and B buckets], give the appraisal in advance. (page 4)

(3) “For non contributors [C bucket]–give appraisal (negative) to person in manager-scheduled meeting: “Instead, wait until the person is actually sitting in your office before you give her the evaluation to read. You need to break the bad news face-to-face at the exact moment you’re going to discuss it. Forewarned is forearmed–and you don’t want to forearm a marginal performer.”

[This is an institutionally sanctioned ambush, which is totally unfair, especially since the calibration meeting is conducted in secret.]

Coping with defensiveness [When giving bad review and the response is bad.] “To start, do what every smart manager has learned to do. Put a box of tissues in your desk drawer. If tears start to flow, simply pull it out, put it down, look away for ten seconds or so, and then get back to the matter at hand.” (page 5)Moreover, Grote suggests when a rater faces ratee’s “defensiveness” (page 6)–

  • Allow the ratee to vent and listen to what is said.
  • Agree with the ratee’s right to have his or her own point of view.
  • Restate the ratee’s position, using pauses liberally.

Nowhere in this approach is the place where the rater expected to make any adjustments; therefore, this so-called listening is useless to the ratee. Indeed, the rating is fixed once established in the calibration meeting. [This is manipulation masquerading as managerial authority; companies that use forced ranking must be exposed.]

Dealing with discussion difficulties Grote’s general idea is that the rater accuses and the ratee responds to the accusations. (See page 7.) Should the ratee not respond, this action breaks the expected pattern Grote has established. Thus, Grote recommends asking a question then waiting. Should the ratee maintain his or her silence, Grote suggests repeating the question, and, if that does not work, conclude the meeting and define “insubordination” [?] to the ratee.[This is another example of the rampant abuse of authority present within forced distribution. The manager plans an ambush on the so-called C-ranked person and not only is the manager supposed to control the conversation, the manager is supposed to control the ratee’s reactions as well, as if the ratee was property of the rater. This process is disgusting and unacceptable.]

Should the ratee (unwisely) offer an excuse for the poor rating (implicitly agreeing with it and the bad treatment that will follow for a C-ranked person), Grote advises to make the issue one of “personal responsibility” and turn to the ratee and ask the ratee how they will deal with the comment.

[This is manipulative, especially within the context provided in the document: deadlines changing in the middle of the project. Silent is the reason for the changing deadlines. The situation leaves me with a strong suspicion that it is the rater that created a “crisis” in order to down rate the ratee. Then, this same rater has the gall to make the ratee responsible for the rater’s whims. See the definition of “gaslighting.”]

Focus on choices In the case of a discussion that veers away from the offloading of blame on the targeted C-ranked person, Grote offers a way for the rater to dismiss and redirect the conversation. (See page 7)

  • Acknowledge the topic’s importance, then
  • Consign it to the nether world of irrelevancies, and
  • Return to the primary issue on your [the rater’s] agenda
Ultimate solution Grote suggests that the rater develop a clear core message to deliver to the ratee. The ratee is supposed to repeat this core message upon request of the rater [insulting and childish]. (See page 8.)

Dick Grote and the “C Bucket”: “Messy Performance Reviews” Document Explains Forced Ranking Relies on Abuse of Managerial Power and Denial of Information to Affected Employees

This blog covers “rank and yank” , and its apologist, Dick Grote, because of the raw, deceptive use of managerial authority that forced ranking performance management programs permit in the name of being “tough”.

But on whom is this toughness imposed? The vulnerable employee who is left out of the near-conspiratorial management calibration meetings and is completely unaware of the management’s coalition-derived decision to fire the employee.

“But what if a company’s forced ranking procedure, honestly and objectively done, reveals that the blacks or women or disabled employees just aren’t as talented as the white ones? Should they do what some Harvard professors are said to do and award A’s to all the blacks, just to keep them from squawking?” (Grote, page 4 (a quote from a previous post). (Note: Consider this statement from Grote with the ever-present and persistent legacy of slavery and Jim Crow subjugation in the United States of America.)

Take, for example, Dick Grote’s PowerPoint presentation (titled “Messy Performance Reviews”) to managers about so-called messy performance reviews. Grote’s document presents an internal inconsistency, considering employees imperfect and managers as perfect, although both are imperfect human beings.

Grote argues differently. Employees, on page 26 of the Grote PowerPoint, are self-deluded; however managers (also supposedly human beings) are not subject to self-delusion and are deemed to be objective and to act with integrity (page 24). I suggest that mere job titles does not change human behavior.

Because of this reality, I would consider as suspect any mere supervisory “opinions,” which are the exclusive basis of the performance appraisal. Grote notes that expectations of quantifying performance with firm facts is a “myth” (page 10). Moreover, no one but the management determines whether the ranking is fair or objective (page 22). And, the employee has no real ability to change or contribute to the document (pages 28, 29, 30, 33, 34).

The inhumanity and psychological cruelty of forced ranking is revealed in the treatment of the so-designated “low performers. (That numerous organizations have adopted this financially destructive plan to apply exclusively to their subordinates is galling.)

Bucket (rank) Percentage (amounts can be adjusted) Effect
A 20 Lavish rewards, encouragement
B 70 Little to paltry increase
C 10 Pressure to quit, firing

Page 51 explains that low performers (the “C bucket”)–

  • Are not provided a copy of the appraisal in advance (A- and B-designated employees are provided with the appraisal in advance (page 34). No explanation is provided for this difference in treatment.).
  • The point is delivered bluntly: there is “bad news,” the appraisal is not good, and the affected employee, now flustered and surprised, is given the document to read (while the manager has long prepared for such an ambush (unacceptable abuse of authority)).
  • The subordinate then reads the document right there in the meeting.

This is unacceptable treatment based on an arbitrary ranking. Close examination of the operation of rank-and-yank programs shows why these rank and yank systems simply do not work because of institutional abuse of authority and rampant lack of accountability or fairness.

What it [rank and yank] does depend on is the willingness of managers to fight for valued employees during what can swiftly become a brutal horse-trading session. “Even if everyone did great,” says the former Enron employee, “someone has to fall into the ‘needs improvement’ category.” (John Greenwald (2001). “Rank and Fire.” Time. (June 11)).

Here is Grote’s method of dealing with so-called messy issues (page 54, seemingly the manager’s justification for the low rating, established in a secret calibration meeting):

  • Manager’s perception the crucial factor for deciding whether the issue is important (one of the issues is “credit grabbing”),
  • The targeted employee is responsible for managing the manager’s perceptions, and
  • The targeted employee is responsible for finding and implementing a solution (to the manager’s own perception (!))

Employees often are unaware at the level of planning that is involved in the execution of targeted employees’ careers and financial security. Hence, there is a need for all people who work for a living to be aware of the rickety mechanics underlying rank and yank programs.

[Author’s note: Enron declared bankruptcy on December 2, 2001.]