How the EEOC built America's secret police, and got companies to pay for it

Last Wednesday in Baltimore, the Equal Employment Opportunity Commission filed a suit against the convenience store chain Sheetz, arguing that their use of criminal background checks in hiring violates federal civil rights law.

To be clear, the government hasn’t found any evidence that Sheetz deployed the background checks in a racially conscious way — the EEOC is challenging the use of criminal background checks per se.

“Federal law mandates that employment practices causing a disparate impact because of race or other protected classifications must be shown by the employer to be necessary to ensure the safe and efficient performance of the particular jobs at issue,” EEOC attorney Debra M. Lawrence said in a statement.

“Even when such necessity is proven, the practice remains unlawful if there is an alternative practice available that is comparably effective in achieving the employer’s goals but causes less discriminatory effect,” Lawrence said.

EEOC’s enforcement guidelines say the same — though their section on “less discriminatory alternatives” doesn’t actually suggest any alternatives.

The government intends to force Sheetz to hire applicants who were previously denied employment, providing them with “back pay” and retroactive seniority.

In a similar case in 2012, Pepsi was ordered to pay $3.13M and invited in the future to “take into consideration the nature and gravity of the offense, the time that has passed since the conviction and/or completion of the sentence, and the nature of the job sought in order to be sure that the exclusion is important for the particular position.”

In other words, the government won’t tell you what the rules are: you have to guess.

They dangle multimillion-dollar payouts in front of “marginalized” employees, and demand that employers anticipate what the EEOC’s subjective judgment of their actions might be.

Discrimination complaints of this kind are heard by your local EEOC investigator, who takes statements and makes a “preliminary” determination as to whether illegal discrimination has occurred.

But the EEOC gets the outcome they want from the district judge 96% of the time — and attorneys on both sides know this — so only 0.1% of cases go to court. If the EEOC bureaucrat says to pay up, you pay up.

The investigator has no obligation prove anything; they just have to find “sufficient reasonable cause” to believe that discrimination occurred.

And discrimination can be defined as broadly as “unwelcome verbal conduct” (i.e. saying things the complainant doesn’t like), so long as the investigator believes that the conduct is motivated by a discriminatory attitude toward protected characteristics.

In other words, you don’t have to shout slurs — if you criticize an employee’s performance, and the investigator thinks your criticism is unfair and that you are some flavor of bigot, that’s enough to justify a shakedown.

This means that virtually any interpersonal conflict in the workplace might cost hundreds of thousands of dollars and years of litigation — and employees in protected categories have massive incentives to generate or fabricate such conflicts.

This risk is existential for small and medium-sized businesses, which is one reason that labor-intensive businesses are dominated by massive conglomerates. You have to pay to play.

Conservative commentators love to characterize HR and DEI as “dead weight” patronage jobs, as if they were the product of bureaucratic bloat or laziness — but DEI mandarins aren’t lying when they say they perform a business-critical function.

If you are identified as a thought-criminal with respect to any legally-protected category, and your employer fails to discipline or terminate you, then any gender creature at the office can decide that you make them Feel Unsafe, and start building a case to put their hand in the company’s pocket.

Corporations don’t hire sprawling HR and DEI departments out of inertia, or because they’re afraid of popular pressure: they do it because they need an internal constituency that is as crazy as their craziest employee — that can keep the organization up to date with the latest progressive moral panic, and punish dissenting employees long before they generate a lawsuit. A DEI department is as practically necessary to the modern American corporation as Legal or Accounting.

Your local Chief Inclusion Officer is an agent of US state security, empowered to conduct intelligence and enforcement operations against ideological enemies beyond the jurisdiction of the regular authorities.

It’s a brilliant workaround — it would, of course, be unconstitutional for the regular police to monitor your private communications and punish you for ideological crimes — but the EEOC built a $30B network of internal informants and political officers (twice the size and 3X the budget of the KGB at its peak) who are not accountable to the Constitution, and got your boss to pay for it.

Which is to say: HR is a secret police.

This police force was established by America’s 1964 Constitution, and over the course of three generations, the business, academia, and government ladders have ruthlessly selected for individuals who are willing to keep themselves above political suspicion — either out of apathy, or cowardice, or sincere conviction.

Under these conditions, institutional pressure can only ratchet in one direction: away from acknowledging any human distinctions which pertain to the categories protected by the Civil Rights Act of 1964 (which is literally all human distinctions.)

Part of the inevitable unfolding of this process is the type of lawsuit now faced by Sheetz, in which businesses are punished by the state for failing to employ (and retain, and promote) convicted criminals. Why? Because criminality is unequally distributed.

There is no standard of human behavior whatsoever by which humans are equal in practice; therefore it is illegal to hold or advocate any standard of human behavior. Aptitude tests must be eliminated in schools, citizenship requirements waived from law enforcement, creditworthiness ignored in issuing loans.

The only self-limiting factor to this process is collapse: institutions at war with competence will eventually become too incompetent to prosecute the war.

But there’s a great deal of ruin in a nation, and these systems can remain irrational longer than you can remain solvent.

So we have to think about how to navigate within the system as it declines.

It’s true that complex systems have already begun to break down, but it’s worth paying attention to the structure that is generating the decay.

Where is it weak? How are competent people escaping these institutions, or carving out breathing space within them?

It’s true that our society has been captured by roughly the same ideology of Luciferian resentment and spite that produced the Cultural Revolution or the Holodomor — but even if you think we’re headed that way, it matters a great deal that they can’t currently black-bag you in the middle of the night and haul you off to a work camp.

The vestiges of the rule of law that are still respected give shape to the decline, and suggest ways to outrun it, sidestep it, and prepare against it.

The main vectors of ideological coercion in the US today are employment and family law, which has created a bimodal distribution of political dissent.

It’s not an accident that the most outspoken dissidents either have happy family lives and independent income streams, or they have no professional or family relationships to threaten.

It’s also not a coincidence that you see such political polarization in the tech industry. There is no other industry that can provide such massive returns to a team of “picked men” at a scale well below the thresholds of the Civil Rights Act. If you want to make a billion dollars with total freedom of association, it can really only be done in software.

(Which is why software has been the only domain of meaningful American innovation since 1964.)

Simultaneously, there is no other type of company that can become such an irresistible host for leftist parasitism, gargantuan and bloblike in its latter stages. The political orientation of every tech company reflects this life cycle.

Economic sovereignty means earning your living through channels where HR has no legal jurisdiction — profitable businesses with fewer than 15 employees (exempt from Title VII of the Civil Rights Act) or 100 employees (below the threshold of EEO reporting).

Family sovereignty largely depends on keeping your marriage rock-solid, and your kids out of situations where they can be privately manipulated by agents of the state, including doctors, teachers, counselors, and therapists.

This is much more difficult to manage in a dual-income family, so the plan for economic sovereignty has to include both extreme professional dynamism, and careful financial stewardship.

Sovereignty depends on what you want to do.

Software can generate dramatic returns, but you have to be willing to sell out and move on before the rot sets in. Physical small businesses hit this threshold at lower revenues, but are less of a winner-takes-all game.

If you can’t imagine working outside the corporate environment, you can still build significant freedom of action by developing skills and connections that make you difficult to replace.

An expert in a legacy software infrastructure, or a sales rep with a book of loyal clients, may have more meaningful freedom than a freelancer with a large corporate client, even if the latter is technically “self-employed”.

There isn’t one right credential, or industry, or position, or working arrangement that gets all our guys where they want to be — it’s not about white-collar or blue-collar, urban or rural, or even W-2 versus 1099.

The defining question is how much end-to-end control you have over the process of value generation — the extent to which you “own the means of production”. Are you in control of your education and your children’s education? Are you in control of your income? Do you have the respect and loyalty of your family?

If you have all that, there’s very little that these people can do to you. That’s the kind of sovereignty we’re building for ourselves and our families. We have twelve calls a week in which our guys build businesses, develop new skills, launch social projects, and connect with like-minded people. Join us at exitgroup.us.

EXIT News

• Tonight, on the EXIT weekly group call, we’re going to hold a members-only Q&A with Johann Kurtz, on using captured elite institutions as a springboard to build long-term sovereignty. (The recording will be posted for paid subscribers later this week.)

• On last week’s real estate call, we discussed a clubhouse project in Utah Valley, a small single-family development in Texas, and did the math on renting versus buying/selling in the current interest rate environment. The boys are making exciting moves.

• On our investment call, we discussed the future of coal stocks in the larger scheme of energy prices, the state of steel production, ESG, and the decline of US equity and bond markets. For entertainment purposes only etc.

• Last call to sign up for the cocktail hour meetup this weekend in Austin (4/26); invite link for Austin as well as Boston (5/24), and New York City (6/21) below the fold for paid subscribers. Members-only meetup invites will be sent via email.