When Organizations Rule: Judicial Deference to Institutionalized Employment Structures1

This article offers a theoretical and empirical analysis of legal endogeneity—a powerful process through which institutionalized organizational structures influence judicial conceptions of compliance with antidiscrimination law. It finds that organizational structures (e.g., grievance and evaluation procedures, antiharassment policies) become symbolic indicators of rational governance and compliance with antidiscrimination laws, first within organizations, but eventually in the judicial realm as well. Lawyers and judges tend to infer nondiscrimination from the mere presence of those structures. Judges increasingly defer to organizational structures in their opinions, ultimately inferring nondiscrimination from their presence. Legal endogeneity theory is tested by analyzing a random sample of 1,024 federal employment discrimination opinions (1965–99) and is found to have increased over time. Judicial deference is most likely when plaintiffs lack clout and when the legal theories require judges to rule on unobservable organizational attributes. The authors argue that legal endogeneity weakens the impact of law when organizational structures are viewed as indicators of legal compliance even in the face of discriminatory actions.