An administrative law judge (ALJ) ordered Enterprise RAC Company of Baltimore LLC to pay out "$6,645,444 in lost earnings and benefits to 2,336 African-American applicants for the company's management trainee program." Then you add interest, and the cost of giving jobs to applicants they previously rejected, and your total now stands at $16.3 million dollars.

When the lawsuit was filed in 2016, Enterprise RAC spokeswoman, Christine Cavallini said, in an email to the Baltimore Sun, "We're disappointed that, after all this time, the Department of Labor has apparently chosen to ignore the evidence and proceed with this action. We work hard to ensure that our workforce mirrors the diversity of the communities we serve. That's why we are moving immediately to defend against the Department's decision."

The ALJ disagreed and ruled against Enterprise. But, the direct financial costs are not the only punishment. The ALJ also announced an indefinite debarment and the Department of Labor explained in a press release:

The ALJ based the debarment ruling in part on internal audits conducted by Enterprise RAC Company of Baltimore LLC that showed its hiring practices had an ongoing disparate impact on minority applicants since 2007, and the company's decision to take no steps to address that pattern and practice of racial discrimination.

Employment Attorney Kate Bischoff explains, "The debarment is a MUCH bigger deal, especially in Baltimore where a lot of federal employees are who might need to rent a car."

Federal agencies contract with many businesses and a debarment means that they can no longer contract with Enterprise RAC Company of Baltimore LLC. The ALJ made this determination based on the ongoing behavior and the lack of correction.

This is an example of why it is critical to regularly audit your policies, programs, and pay and make corrections as soon as you spot an error. Not all discrimination is done purposely, but if you refuse to correct things when an error appears, you can bring cause continued problems.

Every company, but especially ones with federal contracts, needs to regularly look at your data--not just based on your gut feelings or what you see at meetings. You need to analyze your data regularly. If you have one group that isn't advancing as quickly as another, you need to figure out why and fix and document the problem. Keep an eye out for disparate impact as well. The last thing you want is a judgment like this one.

Published on: Aug 5, 2019
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.