This is why the idea behind the “Good Faith” clause of the Employment Non-Discrimination Act (enacting Title VII of the Civil Rights Act of 1964, and subsequently codified as 42 U.S.C. § 2000e-2 (2006)) is so important.
The Good Faith defense is usually used when a business firm is sued for discrimination against employees. The idea is the employer will only be forced to defend the company in court if it has a good faith belief that its actions are not discriminatory.
This defense requires the company to prove that it had a good faith belief that it was not discriminating. The standard is a high one because, it is assumed that even if a company is not aware of an employee’s race or sex, it is highly unlikely it would have discriminated had the employee not been a member of a protected class.
If this is true, then it can also be assumed that such discrimination would have been a serious matter to the company. If the employer is not willing to defend its actions, this will give an employer a big reason to walk away. The employer can then walk away with a lesser amount of damages than it would have had were the case of intentional discrimination.
I have a friend who works for a law firm. He’s a nice guy but also a bit of a scumbag. He’s not a bad guy, he’s just a scumbag. Which is why I think he’s pretty much a perfect example for the rule of law. For example, if he was a scumbag and he’d been outed as gay, he would be likely to be fired.
Sure, in a court of law where the defendant is the good guy, the employer has the upper-hand, but what if the defendant is innocent? Then the employer has a better chance of winning. I think this is the principle behind the defense of good faith in a court of law. The defense works because the defendant has no chance of winning, and a good faith defense gives the plaintiff a chance of winning.
The other factor in this is that in a business, there’s always the chance that the owner may be using the company to commit fraud or other illegal activities. The defense of good faith keeps the company from being found guilty in the eyes of the law.
The owner of a business is responsible for its actions. If a company commits fraud or other illegal actions the owner must be held accountable for the company’s actions. If a company has a good faith defense the owner can point to the good faith of the company and be held accountable for the company’s actions.
Good faith is an affirmative defense. If the owner doesn’t have good faith, the company can defend its actions in court. If the owner uses the company to commit fraud, for example, the defense of good faith is a good defense.
If a company has a good faith defense, the owners are held culpable for the company’s actions. But if the company uses a company owned by the company and that company happens to be acting in good faith, the company can say that the company is being used for its own benefit.