The appropriateness of survival analysis for determining lost pay in discrimination cases: Application of the 'Lost Chance' doctrine to Alexander v. Milwaukee

Abstract

In equal employment cases concerning fair hiring or promotion, the number of eligible candidates often exceeds the number of available positions.When a group of plaintiffs showthat theywere discriminated against in the selection process, one cannot determine with certainty which ones would have been chosen. Several decisions from the Seventh Circuit observed that this situation is similar to the loss of chance in tort law where due to negligence the survival probability of a patient has been diminished. In both settings the plaintiffs' loss can be regarded as probabilistic, i.e., in the discrimination context they lost their chance of obtaining the job or promotion. This article shows how survival analysis provide statistically sound estimates of the compensation due to a plaintiff.At each time an employment decision is made, all eligible candidates are considered. Job related factors such as seniority or special skill can be incorporated in the estimates of the probability each candidate would be employed or promoted. These probabilities are used to weight the salary differentials to provide an estimate of the lost salary. The loss in accrued pension benefits is also weighted by probability of being promoted before retirement. The methodology is illustrated on data from the Alexander v. Milwaukee promotion discrimination case. The survival analysis also confirmed the original finding of liability as the chances of promotion of white males were statistically significantly lower. Because seniority was an important factor our estimates differ from those suggested in the opinion which followed the Biondo v. City of Chicago decision. That opinion assumed a plaintiff who ultimately received a promotion would have been promoted during the period of discrimination. This assumption is questionable when seniority has a role since an individual's seniority increases over time. © The Author [2012]. Published by Oxford University Press. All rights reserved.