A central issue of public policy in relation to employment behaviour, particularly in the United States and Britain since the 1960s, has been the question of how to deal with discrimination against minority groups. The latter may be taken to include women, coloured employees, immigrants, foreign workers, the young and the elderly, but in this paper we concentrate on race and sex discrimination which have tended to receive most attention from both academics and policy‐makers. Further, attention is focused on the USA and Britain, partly because there is more evidence on the workings of equal opportunity legislation in the USA than in any other country, and partly for the reason that developments in Britain appear to mirror those in the USA. Since it is difficult, if not impossible, to isolate the precise extent of discrimination at the macro‐level, on account of variations in personal characteristics and establishment variables, detailed analysis of the operation of local labour markets and individual enterprises and establishments then becomes crucial. Here a feature of recent empirical work has been the emphasis placed on the internal labour market (ILM) and the related concept of the dual labour market (DLM). This is, in fact, highly relevant to equal opportunity legislation not only because it is at the level of the individual organisation or unit of employment that the laws are to be applied but also because, as will be outlined below, the legislation appears to have certain features which are consistent with a dualist interpretation of the operation of the labour market and the emphasis on equality of training and promotion opportunities is most appropriate and significant in the context of a well‐developed internal labour market.