When companies face lawsuits over gender or racial discrimination, does change follow? Researchers looked at 171 lawsuits that occurred between 1997 and 2008 to study how litigation affected the managerial diversity of the companies involved. Overall, results showed, a discrimination lawsuit led to measurable gains in representation for black women, black men, and white women. However, the outcomes were influenced by media coverage, whether and how policy changes were mandated, and how large payouts were. The authors caution that although litigation can be an effective tool for fighting harassment, lawsuits alone aren’t enough to make changes stick.

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Taking it to the courts has a long history in the struggle for employment equality. Look at the finance industry, for example. In the late 1990s, fed up with gendered cultures, harassment, and toxic work environments, women in finance sued their employers in droves. There was the infamous “boom-boom room” suit against Smith Barney, as well as sex and race bias suits against Merrill Lynch, Morgan Stanley, and other Wall Street giants. In the years that followed, the finance sector — though still dominated by white men — saw notable improvements in female and minority representation. For instance, in investment banking, female representation in management grew from 28.7% in 1995 to 32.6% in 2000, while minority representation increased from 12.6% to 14.3%.

But a few stories of change don’t necessarily mean litigation is, in general, an effective tool for fighting harassment and bias in companies. By most accounts, diversity gains have leveled off over the last decade, and high-profile companies continue to rack up fines for discrimination. Fortune 500 companies alone have paid out nearly $2 billion (in disclosed penalties) since 2000, with many repeat offenders. My recent research with Youngjoo Cha, published in the American Journal of Sociology, looks at whether such lawsuits bring about gender and racial equity, especially when accompanied by market pressures, press coverage, and mandated policy changes.

In an analysis of 171 high-profile lawsuits filed against private companies from 1997 to 2008, we examined how the verdicts and settlements affected subsequent levels of gender and racial diversity in management. Specifically, we wanted to know whether lawsuits led to measurable gains in managerial diversity. Using statistical models, we isolated the effect of lawsuits on the percentages of white women, black women, and black men in management, by comparing the numbers in the year before a lawsuit with the three years following it. We focused on white women, black women, and black men in management because, unfortunately but perhaps not surprisingly, the numbers for Hispanic and Asian American women and men in management were too small to get accurate results. Our analysis controlled for all other sources of year-to-year shifts in managerial diversity in each company and its local economy.

Overall, we found that lawsuits did have equity-enhancing effects: Regardless of whether it involved sex, race, color, or national origin, a discrimination lawsuit produced measurable gains in managerial representation for all three of the groups we studied. In the three years following a lawsuit’s resolution, the percentage of white women in management increased, on average, from 18.7% to 21.8%; black women from 2.1% to 2.3%; and black men from 3.0% to 3.4%. Though these changes are small in absolute terms, they indicate gains of 10% for black women and 13% for black men — which are significant given the low representation of these groups in management. All of these changes were statistically significant, meaning they were not due to chance and could be attributed only to the lawsuit, not to other things going on in the company or economy.

But the conditions of the legal resolutions mattered considerably. We found that the impact of lawsuits varied depending on whether shareholders and the national media took notice and by whether the resolutions brought monetary payouts or additional pressures for change, including policy change mandates.

Shareholder and media response. Because all of the lawsuits we studied involved public companies, we could measure how markets responded to lawsuits. To be clear, shareholders don’t like discrimination litigation. In our past work on this topic, Cha and I found that defendants’ stock prices dropped nearly one percentage point, on average, in the 11-day window surrounding the announcement of a lawsuit’s resolution.

What is more, in looking at the effects of litigation on managerial diversity, we found that when lawsuits led to negative stock returns, companies posted larger increases in diversity, as compared with cases where lawsuits did not lower the share price. Diversity gains were larger still when share prices dropped and the resolutions attracted national media coverage. (Our measure of national coverage was stories in the New York Times.) The reason is simple: Shareholder value and corporate image matter. When stock prices drop and the media take notice, corporations respond with diversity-enhancing measures. On the other hand, if lawsuits escape the notice of shareholders and the media, corporate leaders feel less pressure to take action on managerial diversity.

Policy change mandates. Lawsuits were also more effective in producing diversity gains when resolutions involved mandated policy changes. But not all policy changes are created equal. Mandates to adopt “symbolic” policies — such as diversity training and posting notices regarding Equal Employment Opportunity practices and employees’ legal rights — had little impact on diversity outcomes, and in some cases, led to declines in diversity. This shouldn’t come as a surprise, since such policies, although well-intended, fail to dislodge entrenched forms of bias.

However, when lawsuit resolutions required companies to develop specific diversity goals for hiring and promoting women and minorities, and to assign accountability for reaching those goals to executives or unit managers, gains in managerial diversity were larger than when lawsuits didn’t mandate such policy changes or mandated only “symbolic” policies, such as diversity training. Notably, those larger gains lasted for up to five years following litigation (which is as long as our research tracked them). In a related study of roughly 500 lawsuit resolutions, we found that post-lawsuit monitoring is key. When lawyers, HR professionals, or the EEOC monitored corporate diversity numbers following a lawsuit, the numbers improved and the improvements lasted.

Monetary payouts. What about multimillion-dollar settlements? The logic of punitive damages suggests that the larger the payout, the larger the impact. Yet our research shows the opposite: We found that when cases were settled for half a million dollars or more, companies had fewer white women, black women, and black men in management three years following the suit, compared with companies that faced lawsuits with modest or no monetary penalties. This finding is consistent with organizational research that shows that negative incentives don’t necessarily encourage firms to learn. They may make headlines, but costly payouts can put corporate leaders on the defensive, leading them to retaliate against the very groups that brought the suit and to avoid hiring other members of the group as a litigation-prevention strategy. And because financial settlements typically don’t involve admissions of wrongdoing, plaintiffs walk away without any acknowledgement that their experiences were discriminatory. Women and minority employees may simply get fed up with recalcitrant companies and leave. When fined, corporations tend to pay up and move on, leaving the tough work of de-biasing workplace practices unfinished.

In the wake of #MeToo, #TimesUp, #BlackLivesMatter, and recent accounts of racial profiling in commercial settings, issues of gender and racial bias are center stage. The corporate world has taken notice, and many high-profile companies are parting ways with perpetrators, revisiting their diversity records, and revising their policies for addressing complaints of bias. For corporations that are addressing discrimination claims, and that are interested in taking an evidence-based approach to remedying discrimination — in the wake of litigation or otherwise, what to do is simple: Set diversity goals, make staff accountable, and monitor progress toward them.