Under the Radar: Visibility and the Effects of Discrimination Lawsuits in Small and Large Firms

Abstract

Research on how discrimination lawsuits affect corporate diversity has yielded mixed results. Qualitative studies highlight the limited efficacy of lawsuits in the typical workplace, finding that litigation frequently elicits resistance and even retribution from employers. But quantitative studies find that lawsuits can increase workforce diversity. This article develops an account of managerial resistance and firm visibility to reconcile these divergent findings. First, we synthesize job autonomy and group conflict theories to account for resistance that occurs when dominant groups perceive non-dominant groups to be attempting to usurp managerial authority, in this case through litigation. Second, we integrate insights from organizational institutionalism, which suggests that highly visible firms seek to demonstrate compliance with legal and societal norms. Drawing on this theory, we predict that only large, visible firms will see increases in diversity following lawsuits, and, by the same token, that the most visible workplaces of those large firms, their headquarters, will see the greatest changes. We test our hypotheses with data on litigation and workforce composition from a diverse set of 632 firms that were sued by the EEOC between 1997 and 2006. This study shows that understanding the consequences of lawsuits across firms, and across organizations within them, is key to tackling workplace discrimination.