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Use Of Race- Or Sex-Conscious Measures Or Preferences To Remedy Discrimination In Page 1 of 14 Published on Washington State (httg://www.atg.wa.gov) Home > Use Of Race- Or Sex-Conscious Measures Or Preferences To Remedy Discrimination In State Contracting Attorney General Bob Ferguson LAW AGAINST DISCRIMINATIONAFFIRMATIVE ACTIONDISCRIMINATION CONTRACTSCONTRACTORS AND SUBCONTRACTORSUse Of Race- Or Sex- Conscious Measures 0r Preferences To Remedy Discrimination In State Contracting 1. Initiative 200 does not categorically prohibit all uses of race- or sex- conscious measures in state contracting. The measure allows the use of measures that take race or gender into account in state contracting without elevating a less qualified contractor over a more qualied contractor. In narrow circumstances, an agency may be allowed to use a narrowly tailored preference based on race or sex when no other means is available to remedy demonstrated discrimination in state contracting. State agencies may also employ race- or sex-based preferences when necessary to do so in order to avoid losing eligibility for programs providing federal funds. 2. The conclusions summarized above do not solely depend on whether an agency receives federal funds. The conclusion that Initiative 200 allows race- or sex-conscious measures that do not amount to preferences applies without regard to whether the agency receives federal funds. The conclusion that agencies may use preferences based on race or sex in order to remedy sufficiently documented discrimination in state contracting also applies without regard to whether the agency receives federal funds. The conclusion that an agency may employ a preference when necessary to do so in order to avoid the loss of eligibility for federal funds necessarily depends upon the agency's receipt of federal funds in that program or some other program. March 20, 2017 Chris Liu Director, Department of Enterprise Services Cite As: 1500 Jefferson Street SE AGO 2017 No. 2 Olympia, WA 98501 http://www.atg.wa.gov/print/12452 10/ 1 7/201 7 Use Of Race- Or Sex-Conscious Measures Or Preferences To Remedy Discrimination In Page 3 of 14 [original page 3] 2. Our answer to your rst question depends only partially upon whether the contracts at issue are being awarded by a state agency that receives federal funds. Our conclusions summarized in items 1 (a) and 1(b) above do not depend on whether the agency receives federal funds. Our conclusion in item 1(c) above is based upon RCW 49.60.400(6), which provides an exception to l-200's prohibition against the use of preferences when necessary to avoid a loss of federal funds. ANALYSIS In 1998, Washington voters approved l-200, which added one section to the Washington Law Against Discrimination. Laws of 1999, Reg. Sess., ch. 3, 1 (codied as RCW 4960400). The initiative provides: "The state shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting." RCW 49.60.400(1). It then includes a number of clarications, exceptions, and other provisions. RCW 49.60.400(2)(10). The Washington Supreme Court has construed the statute to "prohibit[] reverse discrimination where race or gender is used by government to select a less qualied applicant over a more qualied applicant." Parents Involved in Cmty. Schs. v. Seattle Sch. Dist. 1, 149 Wn.2d 660, 689-90, 72 P.3d 151 (2003). Your questions address the application of this statute in the context of public contracting, assuming that signicant racial and gender disparities are documented in a disparity study and that race-neutral measures are insufcient to remedy those disparities. Three preliminary observations are in order before turning to your questions. First, our analysis is necessarily general. You have not asked us to offer any views on the factual or legal sufciency of any disparity study as evidence of underlying racial or gender disparities, and properly so. Our opinions process is not well-suited for consideration of factual questions. A valid disparity study evaluates statistical evidence, other factual evidence, and legal standards to determine whether a legally signicant disparity exists. See 49 C.F.R. 26.45. We accordingly accept the assumption in your question that a disparity study documents disparities without attempting to evaluate any specic circumstance. Second, our opinion expresses no view as to what the law should be, but rather simply provides our best analysis of what the law currently is, without advocating public policy. See AGO 2016 No. 1, at 3 (describing the focus of our opinions process); Frias v. Asset Foreclosure Servs., Inc., 181 Wn.2d 412, 421, 334 P.3d 529 (2014) ("In matters of statutory construction, we are tasked with discerning what the law is, not what it should be."). Finally, the use of race- and sex-conscious measures to address contracting disparities is also covered by a body of United States Supreme Court precedent applying federal constitutional principles. See, e.g., City of Richmond v. J.A. Croson Co., 488 US. 469, 109 S. Ct. 706, 102 L. Ed. 2d 854 (1989) (rejecting on equal protection grounds a requirement that construction [original page 4] http://www.atg.wa.gov/print/12452 10/17/2017 Use Of Race- Or Sex-Conscious Measures Or Preferences To Remedy Discrimination In Page 5 of 14 RCW 49.60.400(1), (3), (6). The three quoted paragraphs establish the statute's general rule, a limitation on that general rule, and one of several exceptions to the general rule.[1 a. RCW 49.60.400(1) And (3) Prohibit Only "Reverse Discrimination" In Which Government Uses Race Or Gender To Select A Less Qualied Contractor Over A More Qualified Contractor The Washington Supreme Court has construed RCW 49.60.400(1) and (3) in the context of considering a program for assigning students to specic high schools within a public school district. Parents Involved, 149 Wn.2d at 682-90. Parents Involved concerned a process that the Seattle School District used in assigning students to the various high schools in the district, which involved consideration of race as one of several "tie breakers" when more students wanted to attend a particular school than that school could accommodate. Parents Involved, 149 Wn.2d at 666-68. The educational context of Parents Involved affected the court's analysis because the court relied in part on the mandate of the Washington Constitution for the state to provide a general and uniform basic education to all children regardless of race. Parents Involved, 149 Wn.2d at 679-82 (discussing Const. art. IX, 1). The Court reasoned that "the justications for racial integration are strong and lie close to the central mission of public schools." Parents Involved, 149 Wn.2d at 680. Nonetheless, the reasoning of Parents Involved applies more broadly than the educational context, because ultimately the Court's task was to construe the language of RCW 49.60.400. By its terms that statute applies to "operation of public [original page 6] employment, public education, [and] public contracting" without distinction. RCW 49.60.400(1). The Court's reliance upon article IX, section 1 of the Washington Constitution adds weight to the Court's analysis, but does not suggest that the words of RCW 49.60.400 mean anything different in the educational context than they do when applied to public employment or public contracting. The decision in Parents Involved focused on the phrases "discriminate against" and "grant preference to," occurring in both RCW 49.60.400(1) and (3). Parents Involved, 149 Wn.2d at 684. "Grant preferential treatment" denotes giving an advantage to members of one race over another. Id. at 685. "Discriminate" has two common meanings: "to distinguish between" or "to show prejudice against." Id. at 686. Based on legislative history and other interpretive aids, the Court accepted the second meaning as applicable to I-200, holding that it prohibits only "reverse discrimination," elevating a less qualied applicant over a more qualied applicant. Id. at 687. Applying the maxim that courts construe statutes to give effect to all their terms, the Court concluded that some race-conscious decisions are acceptable under l-200 because otherwise the statute would contain surplusage. Id. at 684-85 (citing Cox v. Helenius, 103 Wn.2d 383, 387, 693 P.2d 683 (1985)). "Subsection (3)," the Court reasoned, "unequivocally states that some government action within the subject area of the initiative would not be affected, and thus strongly suggests . . . that some race conscious action by the government is permissible." Id. at 685. http://www.atg.wa.gov/print/12452 10/17/2017 Use Of Race- Or Sex-Conscious Measures Or Preferences To Remedy Discrimination In Page 7 of 14 ban all race-conscious decisions or actions. Parents Involved, 149 Wn.2d at 684-85. Our Court also distinguished California case law based on the fact that Proposition 209 amended the state constitution, while [-200 is statutory. Id. at 688-89. And, noting the absence of any provision comparable to RCW 49.60.400(3), our Court has held that California cases construing Proposition 209 are of limited value in construing l-200 because the text and context of the two states' measures are dissimilar. Id. at 688. We therefore conclude that RCW 49.60.400(1) and (3) do not prohibit actions that, although race- or sex-conscious, do not elevate a less qualied contractor above a more qualied contractor. Such measures are not "preferences" prohibited by RCW 49.60.400 (1). Parents Involved, 149 Wn.2d at 689-90. [original page 8] b. RCW 49.60.400(1) And (3) Allow Preferences Based On Race 0r Gender To Avoid Discrimination Against Women And Minorities Under Some Circumstances RCW 49.60.400(1) and (3) also leave room under very narrow circumstances for actions that do favor female or minority contractors over other contractors. We conclude that a proper construction of RCW 49.60.400 combined with a strong parallel to a line of reasoning applied by the United States Supreme Court in interpreting a federal civil rights law support the conclusion that some preferences used to remedy demonstrated disparities may be allowed under narrow circumstances. This is so because otherwise circumstances could arise in which agencies nd it impossible to simultaneously comply with two prohibitions set forth in RCW 49.60.400(1). We emphasize, however, that for reasons explained in our analysis these circumstances may be strikingly rare; we nonetheless consider them in order to fully respond to your question. RCW 49.60.400(1) prohibits both discrimination against women and minorities and preferential treatment in favor of women and minorities. This dual prohibition could lead to legally and factually complex choices for a state agency if a facially neutral policy (such as contracting rules) has the result of discriminating against women or minorities, but the agency has been unable to overcome that through measures short of preferences. For example, if a disparity study documented signicant evidence of disparities based on race or gender in the state's contracting practices, the study could be evidence of discrimination that could violate the rst prohibition in RCW 49.60.400(1). But to use a preference in favor of that group as a remedy could similarly violate the second prohibition against the use of preferences. The result would be to leave the state without any option that complies with the law. Evidence of discrimination based on race or gender in this scenario may result from a disparate impact analysis. Under federal law, disparate impact evidence may be used to prove discrimination under Title VI of the federal Civil Rights Act. Darensburg v. Metro. Transp. Comm'n, 636 F.3d 511, 519 (9th Cir. 2011); Comm. Concerning Cmty. Improvement v. City of Modesto, 583 F.3d 690, 702-03 (9th Cir. 2009). The Washington Supreme Court has applied disparate impact analysis in cases arising in the employment context under the Washington Law Against Discrimination (WLAD). Oliver v. Pac. Nw. Bell Tel. C0,, 106 Wn.2d 675, 681-82, 724 P.2d 1003 (1986). Though the Washington Supreme Court has never addressed whether RCW 49.46.400 similarly prohibits disparate http://www.atg.wa.gov/print/12452 10/17/2017 Use Of Race- Or Sex-Conscious Measures Or Preferences To Remedy Discrimination In Page 9 of 14 A city faced much the same dilemma under a federal civil rights statute in Ricci v. DeStefano, 557 US. 557, 129 S. Ct. 2658, 174 L. Ed. 2d 490 (2009). The city in that case discarded the results of a promotional test for captains and lieutenants in its re department based on allegations that the test results showed that the test was discriminatory. White and Hispanic reghters, who likely would have been promoted based on the examination results, sued alleging disparate treatment based on race. The city defended based on the argument that using the exam results would have resulted in disparate impact liability. Ricci, 557 US. at 562-63. The Court therefore faced the question of "whether the purpose to avoid disparate-impact liability excused what othen/vise would be prohibited disparate-treatment discrimination." Id. at 580. This is much like the situation the state could face if it believed that its contracting practices resulted in discrimination against a protected class, but that simultaneously the only [original page 10] available remedy would also be prohibited as preferential treatment in favor of a protected class. RCW 49.60.400(1). The Court in Ricci concluded that the city's action in discarding the examination was justied if, but only if, the city had "a strong basis in evidence" for concluding that a race-conscious remedy was necessary to avoid liability for disparate impact based on race. Ricci, 557 US. at 582 (emphasis added). That is, the city in Ricci could defend its disparate treatment based on race, in violation of one prong of the federal law, if it had a strong basis in evidence its action was necessary to avoid violating another prong of the same law. Id. at 582-83. We recently advised that "a Washington court would apply a standard similar to the "strong basis in evidence' standard" in determining when a municipality may disregard state law in order to comply with a requirement imposed by federal law. AGO 2016 No. 1, at 9 (discussing Ricci in the context of the federal Voting Rights Act). We there advised that a city could violate a state statute if it had a strong basis in evidence for believing that doing so was necessary to avoid violating federal law. AGO 2016 No. 1, at 9. As applied here, a strong basis in evidence supporting disparities and other requisite evidence of discrimination in state contracting sufcient to give rise to a disparate impact claim that could not be avoided through other means would likely provide a lawful basis for taking an action that would othen/vise be precluded as "preferential treatment" under l-200. RCW 49.60.400(1) (prohibiting both discrimination against and preferential treatment for protected classes); RCW 49.60.020 (requiring liberal construction of WLAD to prevent and eliminate discrimination). Assuming that a Washington court would apply the Ricci standard in this context, it does not follow that |-200 would permit a state agency to use a preference based on race or sex any time that the agency has statistical evidence of a disparity. ln Ricci itself, the Court held that merely establishing a statistical disparity "is far from a strong basis in evidence" for liability under Title VII. Ricci, 557 US. at 587. The Court concluded that the city lacked the requisite strong basis in evidence in that particular case, and ultimately held that discarding the results of the promotional test at issue constituted disparate treatment based on race. Ricci, 557 US. at 585-86. If RCW 49.60.400 was construed to permit preferences any time using them would be permissible under federal equal protection principles, then l-200 would become essentially meaningless. See In re Det. of Strand, 167 Wn.2d 180, 189, 217 P.3d 1159 (2009) (statutes should not be deemed inoperative or superuous unless it is the result of obvious mistake or error). More must be http://www.atg.wa.gov/print/12452 10/17/2017 Use Of Race- Or Sex-Conscious Measures Or Preferences To Remedy Discrimination I... Page 11 of 14 the inquiry. For example, the Department of Health and Human Services has a regulation stating: "In administering a program regarding which the recipient has previously discriminated against persons on the ground of race, color, or national origin, the recipient must take afrmative action [original page 12] to overcome the effects of prior discrimination."[1 45 C.F.R. 80.3(b)(6)(i). If a state agency has evidence of prior discrimination, such as through a disparity study, these regulations would require the agency to take measures to remedy the prior discrimination. Similarly, the US. Department of Transportation requires states, as a condition of receiving federal transportation funds, to establish a program to ensure participation by "Disadvantaged Business Enterprises" in state transportation contracting, and the plan must be approved by the federal government. See, e.g., W States Paving Co. v. Washington State Dept of Transp., 407 F.3d 983, 988-90 (9th Cir. 2005); Mountain W Holding Co. v. Montana, No. CV 13-49-BLG-DLC, 2014 WL 6686734, at *1-2 (D. Mont. Nov. 26, 2014). State agencies commonly receive some federal funding. See, e.g., Laws of 2015, 3d Spec. Sess., ch. 4 (biennial state operating budget for 2015-17, showing federal sources for numerous appropriations to state agencies). Title VI applies to any "program or activity" receiving federal nancial assistance. 42 U.S.C. 2000d. Congress has dened "program or activity" broadly. 42 U.S.C. 2000d-4a. Congress did so to apply Title VI to all activities of a state agency or institution if any part of the agency or institution receives federal funding. 8. Rep. No. 100-64, at 2 (1987), reprinted in 1988 U.S.C.C.A.N. 3, 4. Courts have consistently applied Title VI in this manner. See, e.g., Braunstein v. Arizona Dep't of Transp., 683 F.3d 1177, 1188 (9th Cir. 2012) (interpreting "program or activity" under Title VI); Thom/ison v. City of Omaha, 63 F.3d 786, 789 (8th Cir. 1995) (interpreting "program or activity" under the Rehabilitation Act); Homer v. Kentucky High Sch. Athletic Ass'n, 43 F.3d 265, 271 (6th Cir. 1994) (interpreting "program or activity" under Title IX). But the state as a whole is not subject to Title VI just because some of its agencies or institutions receive federal funding. Ass'n of Mexican-American Educators v. California, 183 F.3d 1055, 1067-68 (9th Cir. 1999), rev'd in part on othergrounds en banc, 231 F.3d 572 (9th Cir. 2000). This means that if part of an agency's budget is federally funded, the entire agency is subject to Title VI, but not all of state government. US. Dept of Justice, Title VI Legal Manual V|l(D), https://www.justice.gov/crt/title-vi-legal- manual#State (last visited Jan. 24, 2017). Thus, if an agency receives federal funding, the entire agency is at risk of losing federal funding if the agency discriminates on the basis of race, color, or national origin in any of its programs. This includes programs that do not receive federal funds. It therefore follows that an agency with evidence of disparate impact discrimination may be required under federal law to take afrmative action to resolve any signicant disparities, even in programs that are not themselves federally funded. See, e.g., Larry R, 793 F.2d at 982- 83. If a disparity study documents signicant disparities in contracting, an agency may face a risk of losing federal funds. That said, the requirements for maintaining eligibility for federal funds differ from one federal agency to another, based on the relevant statutes and rules http://www.atg.wa.gov/print/12452 10/17/2017 Use Of Race- Or Sex-Conscious Measures Or Preferences To Remedy Discrimination I... Page 13 of 14 Substantial overlap is likely between situations in which the use of preferences could be permitted or required based on the analysis under parts 1(b) and 1(c) above. But a different showing is needed to satisfy each. An agency could use preferences under part 1(b) above based on evidence of discrimination with regard to state contracting that cannot be resolved through race- or sex-neutral means, without a necessity for showing that federal funds are at risk. RCW 49.60.400(1), (3). But l-200 similarly permits the use of preferences based on race or sex if needed to avoid a loss of eligibility for a program providing federal funds, without separately demonstrating discrimination. RCW 49.60.400 (6). If the agency is at risk of losing federal funds, this may be true because of evidence of prior discrimination, but RCW 49.60.400(6) does not itself require such evidence. We trust the foregoing will be useful to you. ROBERT W. FERGUSON Attorney General JEFFREY T. EVEN Deputy Solicitor General 360-586-0728 WI'OS [1] A "set-aside" means that an entire contract or project is set aside in the procurement process so that a designated category of contractor is allowed to bid. See 49 C.F.R. 26.5, 26.43. A goal means that a certain percentage of dollars, or a certain percentage of contracts, or both, are designated as a target for the participation of a certain category of contractor. See RCW 39.19.020(5); 49 C.F.R. 26.45. When we refer to a goal as being "aspirational," we refer to objectives that are not mandatory. [2] We use the phrase "race- or sex-conscious measure" in this opinion broadly, to describe measures taken with conscious awareness of race or gender. The term is sometimes used more narrowly to mean either an expressly race- or sex-based classication or a classication that is facially race- and sex-neutral but results in discriminatory effects as implemented. See Fisher v. Univ. of Texas atAustin, 136 S. Ct. 2198, 2212-14, 195 L. Ed. 2d 511 (2016) (discussing the overtly race-conscious aspects of the holistic review that is part of the University's admissions process, and the facially race-neutral top 10 percent plan that has a raceconscious purpose); Texas Dep't of Hous. & Cmty. Affairs v. Inclusive Cmtys. Project, Inc., 135 S. Ct. 2507, 2525, 192 L. Ed. 2d 514 (2015) (discussing disparate impact claims and noting that "mere awareness of race in attempting to solve the problems facing inner cities does not doom that endeavor at the outset"). http://www.atg.wa.gov/print/12452 10/17/2017
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