Richard Epstein from the US: Abercrombie’s Hijab Problem

This past week, the United States Supreme Court heard oral arguments on a contentious employment discrimination case, Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores. 

The conflict arose when Samantha Elauf, a Muslim teenager, applied for a position as a sales-floor employee for Abercrombie & Fitch. Abercrombie has always referred to its sales-floor employees as “Models.” Ms. Elauf claimed that during the interview she wore a headscarf, or hijab, as required by her religious beliefs. Ms. Elauf’s religious commitment collided with Abercrombie’s long-standing “Look Policy,” which bans models from wearing any black clothing or “cap” on the sales floor.

Abercrombie’s dress code was not adopted casually. It was done pursuant to its view that its stores all had to project a uniform brand image that in its words “exemplifies a classic East Coast collegiate style of clothing.” The company’s “Look Policy” treated its models as a seamless extension of the basic brand, which turned them into walking advertisements of Abercrombie’s clothes. Violation of that policy could lead to serious discipline, including dismissal.

No one in this case doubted Abercrombie’s critical interest in strong brand promotion. No one thought that its policy was crafted to covertly discriminate against Muslims or members of any other religion. The matter of trade dress assumes especial importance for a clothing chain that has to project an appropriate and consistent image through multiple outlets to give consumers the confidence that they can get the same services and goods wherever they shop. It is indeed just this concern that led McDonald’s to standardize for its franchises all aspects of its business (including trade dress). That business practice has now entered center stage in its conflict with the National Labor Relations Board over the Board’s claim that its brand control somehow makes McDonald’s a joint employer with the individual franchisee.

In this case the conflict between brand and employment practices does not arise in the union arena, but under the employment discrimination laws, which state that, “It shall be an unlawful employment practice for an employer - (1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”

Title VII offers a clear mandate only in those cases where a firm hangs up a sign that says something like, “No Muslims need apply.” The most sensible reading of Title VII knocks out Ms. Elauf’s case at the opening gate. She was refused employment “because of” Abercrombie’s policy that was made prior to and independent of Ms. Elauf’s case. But unfortunately, the current expansionist view of Title VII rejects that sensible interpretation whenever the particulars of the plaintiff’s status are known to the employer. To see just how restrictive Title VII is, just ask what would happen if, as I have long urged, Title VII were repealed tomorrow.

Here is how it would go. Ms. Elauf would apply for a job. Without Title VII’s external constraints on hiring, the company would ask whether she was prepared to take off her hijab on the floor. At that point, she would have to make a decision. Decide no, and she would be told that no offer could be extended. It would be totally irrelevant whether she insisted on wearing the hijab because of religious, cultural, or personal beliefs. But if she were prepared to do without the headscarf, then she would go through Abercrombie’s normal hiring process, until a final decision were made.

At that point, any contract depends only on the joint consent of the two parties. The deal once struck would thereafter be enforced in accordance with its terms. But if Ms. Elauf refused to follow the rule, she would have to look elsewhere for a job. Abercrombie has no monopoly position in labor markets, or even in clothing stores. Other stores that wish to project different images may well be quite pleased to hire her with or without her headscarf.
One of the great advantages of unregulated labor markets is that they lead to better fits between workers and their positions. Forced associations may externally require accommodations that often prove unstable in the long run. Allowing the voluntary market will reduce the overall cost of hiring and firing and will therefore systematically increase job opportunities across the board. Title VII provides no exception to the general rule that regulated labor markets underperform competitive ones.

This point is brought home with exceptional clarity by looking at the tortured record in Ms. Elauf’s case. First, did Ms. Elauf have a religious belief that prevented her from taking the job on the terms customarily offered? In this case, the parties sparred over whether Ms. Elauf wore the hijab because of religious beliefs or to affirm her cultural and social ties. The issue was complicated by evidence in the record that her friend, Farisa Sepahvand, who had worked at Abercrombie, had mentioned the dress code to Ms. Elauf and stated that the code should not raise any conflict if she wore a white headscarf.

Perhaps for that reason, Ms. Elauf wore her headscarf during her initial job interview, but at no point announced that she wore it to comply with her religious beliefs. Yet when the matter went to an Abercrombie supervisor, he lowered her application score on the critical question of appearance, which made it crystal clear why she did not get an offer. Once it was decided that Ms. Elauf wore the scarf for religious reasons, the outcome in the case turned solely on whether Abercrombie went through all the EEOC’s elaborate hoops governing the hiring process.

For starters, the EEOC has stated that “an applicant’s religious affiliation or beliefs . . . are generally viewed as non job-related and problematic under federal law,” and should therefore not be raised in an interview. But that rule does not mesh well with this basic EEOC guideline: “Unless it would be an undue hardship on the employer's operation of its business, an employer must reasonably accommodate an employee's religious beliefs or practices.” It takes no eagle eye to realize that both undue hardship and reasonable accommodation raise delicate questions of degree that can be resolved only after some detailed factual investigation of each case.

The EEOC guidelines then observe: “When an employee or applicant needs a dress or grooming accommodation for religious reasons, he should notify the employer that he needs such an accommodation for religious reasons.” The exhaustive opinion of the Tenth Circuit majority held that this was a categorical requirement. Ms. Elauf therefore lost at the starting gate by not raising the issue during her interview. The anguished response of the EEOC was that since Ms. Elauf was wearing the headscarf, the interviewer was put on notice to ask about her religious requirement, even though Ms. Elauf did not verbally call the point to the interviewer’s attention. The Supreme Court was asked whether Title VII was triggered “only if the employer has actual knowledge that a religious accommodation was required” by explicit employee notice.

Last week’s oral argument before the Supreme Court was trapped by a lengthy digression as to how certain Abercrombie’s knowledge was that Ms. Elauf needed an accommodation. The transcript reads like an episode straight out the theater of the absurd, with the justices asking tough questions on such delicate niceties matters as whether it must be “that the employer know, rather than just correctly understand, the need for an accommodation.” After that simple remark, the argument veered from bad to worse as the justices struggled to determine whether it mattered that the employer had formed accurate odds about the need for a religious accommodation. Thereafter, the justices speculated whether the employer should take the initiative, or whether that issue should be left to the employee. Chief Justice John Roberts thought that it might be unwise to require the employer to begin the dialogue on the ground that this very question might well “promote the stereotypes” that Title VII is meant to avoid—although why an honest inquiry should have that effect was left unexplained.

It is instructive to note the peculiar way that Supreme Court argument distracts from the central problems of the employment relationship. Looking only at the narrowest issue, it makes no sense for the Supreme Court justices to spend their valuable time speculating about the appropriate rules for conducting job interviews for large and heterogeneous classes of employers and employees. It makes equally little sense for the EEOC to pretend that it has any expertise in dealing with these sensitive human resource issues either. At this point, the EEOC should try to give some general guidance that avoids case-by-case determinations.

A more sensible approach is for the EEOC to create a safe harbor for any employer that posts on its website the simple announcement that any applicant who wants a religious accommodation should just ask for it. It can then supplement that rule by asking employers to pose the question routinely in all interviews. Unless the answer is in the affirmative, the claim is waived. The point here is to forestall repetitions of Abercrombie, not to relive them.

The notice point, however, leaves untouched the larger question of what should be done when the issue is now on the table. Under current EEOC doctrine, the undue hardship constraint is construed so narrowly that Abercrombie will lose if it asks Ms. Elauf to compromise her religious beliefs. The firm can therefore insist on the white hijab, but not on none at all. But that relatively clear outcome ducks the larger question. Why use this, or indeed any other public balancing test, at all? Sadly, any effort to second guess these accommodations reduces the flexibility that every responsible firm needs to run its own business. Abercrombie thinks any relaxation of its Look Policy will generate systematic losses that extend beyond the individual case. It is just absurd for the EEOC to ask lifetime professionals to run expensive independent empirical studies to show that it knows how to run its own business: the firm’s local knowledge is likely to be far more reliable.

Indeed, there is no telling what will happen now that Abercrombie will surely face new pressures to relax that policy in other cases. Yet those system-wide losses never make it onto the EEOC’s radar, which is why Title VII is such a crude and unwelcome system of social control. My own sense is that times are changing, and that in time Abercrombie may change its policy in response to pressure from its own customer base. But that is just the point. I have no idea how Abercrombie should run its business. Sadly, neither does the EEOC. 

Richard A. Epstein, the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution, is the Laurence A. Tisch Professor of Law, New York University Law School, and a senior lecturer at the University of Chicago.