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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


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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]

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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.


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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

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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

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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

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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").


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