First, let me establish a few background facts. Several years ago I headed an attempt to put a Constitutional amendment legalizing gay marriage on the ballot here in Arizona. As far back as 2004 I had a gay couple running a campground, and faced a customer petition demanding we remove them because they promoted moral degeneracy by being gay (it's for the children!). I told those customers to camp somewhere else, as we were not changing our staffing. Since then I have probably hired more gay couples to run campgrounds than anyone else in the business.
After a period of foreshadowing and rumor, the Equal Employment Opportunity Commission has now gone ahead and ruled that employment discrimination on the basis of sexual orientation is forbidden under existing federal civil rights law, specifically the current ban on sex discrimination. Congress may have declined to pass the long-pending Employment Non-Discrimination Act (ENDA), but no matter; the commission can reach the same result on its own just by reinterpreting current law.
There are multiple problems with non-discrimination law as currently implemented and enforced in the US. Larger companies, for example, struggle with disparate impact lawsuits from the EEOC, where statistical metrics that may have nothing to do with past discrimination are never-the-less used to justify discrimination penalties.
Smaller companies like mine tend to have a different problem. It is an unfortunate fact of life that the employees who do the worst job and/or break the rules the most frequently tend to be the same ones with the least self-awareness. As a result, no one wants to believe their termination is "fair", no matter how well documented or justified (I wrote yesterday that I have personally struggled with the same thing in my past employment).
Most folks grumble and walk away. But what if one is in a "protected group" under discrimination law? Now, not only is this person personally convinced that their firing was unfair, but there is a whole body of law geared to the assumption that their group may be treated unfairly. There are also many lawyers and activists who will tell them that they were almost certainly treated unfairly.
So a fair percentage of people in protected groups whom we fire for cause will file complaints with the government or outright sue us for discrimination. I will begin by saying that we have never lost a single one of these cases. In one or two we paid someone a nominal amount just to save legal costs of pursuing the case to the bitter end, but none of these cases were even close.
This easy ability to sue, enabled by our current implementation of discrimination law, imposes a couple of costs on us. First, each of these suits cost us about $20,000 to win (insurance companies are smart, they know exactly how this game works, and will not sell one an employment practices defense policy without at least a $25,000 deductible, particularly in California). It takes a lot of effort for the government, even if neutral and not biased against employers as they are in California, to determine if the employee who was fired happened to be Eskimo or if the employee was fired because he was an Eskimo. Unfortunately, the costs of this discovery are not symmetric. It costs employees and their attorneys virtually nothing to take a shot at us with such discrimination cases, but costs us$20,000 each to defend and win (talk about Pyrrhic victories). Which is why we sometimes will hand someone a few bucks even if their claim is absurd, just to avoid what turns out to be essentially legal blackmail.
Second, the threat of such suits and legal costs sometimes changes our behavior in ways that might be detrimental to our customers. A natural response to this kind of threat is to be double careful in documenting issues with employees in protected groups, meaning their termination for cause is often delayed. In a service business, almost anyone fired for cause has demonstrated characteristics that seriously hinder customer service, so drawing out the termination process also extends the negative impact on customers.
To make all this worse, many employees have discovered a legal dodge to enhance their post-employment lawsuits (I know that several advocacy groups in California recommend this tactic). If the employee suspects he or she is about to be fired, they will, before getting fired, claim all sorts of past discrimination. Now, when terminated, they can claim they where a whistle blower that that their termination was not for cause but really was retaliation against them for being a whistle-blower.
I remember one employee in California taking just this tactic, claiming discrimination just ahead of his termination, though he never presented any evidence beyond the vague claim. We wasted weeks with an outside investigator checking into his claims, all while customer complaints about the employee continued to come in. Eventually, we found nothing and fired him. And got sued. The case was so weak it was eventually dropped but it cost us -- you guessed it -- about $20,000 to defend. Given that this was more than the entire amount this operation had made over five years, it was the straw that broke the camel's back and led to us walking about from that particular operation and over half of our other California business.