Supreme Court Creates New Defense to Adverse Impact Discrimination Claims

Updated: July 02, 2009

On June 29, 2009, the Supreme Court issued its 5 to 4 decision in Ricci v. DeStefano, holding that white firefighters had been subjected to intentional discrimination when New Haven refused to certify the results of a test because they disproportionately favored white firefighters to the detriment of black firefighters. Importantly, the Court's decision is based on an interpretation of Title VII, NOT on Constitutional grounds, and thus has applicability to every employer covered by Title VII.

The test in question consisted of 100 written questions, which accounted for 60% of a candidate's score, and an oral exam consisting of hypothetical questions, which counted for 40%. The exam was developed after intensive job analysis by outside experts, which included oversampling of minority firefighters to combat discrimination. Outside fire officers were brought in to score the oral portion, and each oral panel consisted of one white, and two minority, examiners. Nevertheless, whites passed the exam in significantly disproportionate numbers to African Americans and Hispanics. The results meant that virtually all available promotions would go to white firefighters. After public debate, and hearing from various experts, the Civil Service Board refused to certify the test results on a divided vote. The asserted justification of the City was fear of disparate impact lawsuits over the exam by minority firefighters.

The trial court and the Court of Appeals (in a panel including Supreme Court nominee Sonia Sotomayor) ruled that the fear of disparate impact litigation was sufficient to take the racially-based action to throw out the test. But the Supreme Court majority disagreed. In reaching its ruling, the Supreme Court held that where employers are confronted with a selection process that causes numerical adverse impact, they may only invalidate that selection process if there is "a strong basis in evidence" that the selection process will itself be judged a violation of Title VII's prohibition against selection procedures which create disparate impact. Significantly, the Court found that the City's "fear of litigation" because the test had an admitted disparate impact against minorities was NOT a "strong basis in evidence" for the City to junk the test. Instead, the Court said that the factors determining whether a strong basis in the evidence existed centered around: 1) whether the test was job related and consistent with business necessity; and 2) whether there was evidence of a lesser discriminatory alternative. While the City did not have to show that it would lose a disparate impact case, the Court said that in order to throw out an already administered selection procedure, the city had to show strong evidence that an adverse impact plaintiff could show that the test or selection criteria the City used likely violated one of these two factors.

In applying the test here, the Court found for the white firefighters because "no reasonable jury" could find that the City had produced the strong basis in evidence that showed that its use of the test was a violation of the disparate impact prohibitions of Title VII. The Court reached this ruling relying in large measure on the detailed process, lead by outside experts, by which the City developed the test.

Justice Ginsburg's lengthy dissent from the decision, joined by Justices Stevens, Souter and Breyer not only concluded that the test used by the Court was wrong but also found that there was the requisite strong evidence, that the test was not business related and that there were other less discriminatory alternatives to determine whom to promote. Showing how split this Court is, the dissent concluded, from the same evidence relied on by the majority, that no reasonable jury could conclude anything other than that strong evidence existed that supported the City's conclusion that it would lose a disparate impact case.

This decision will have a major impact on an array of employer decision-making. For example, employers who administer professionally developed tests and other selection procedures can now take substantial comfort in enforcing results of these procedures, even in the face of disparate results. Similarly, employers who audit their pay practices and insure they are professionally constructed and based on appropriate criteria also can take similar guidance from this case, something that is of substantial importance in light of the Lilly Ledbetter Fair Pay Act.

Indeed, although not directly addressed in this case, the logical result of this Supreme Court decision seems to suggest that the Court has created a new defense in adverse impact cases. Specifically, the absence of a strong showing that an employer would lose an adverse impact case along with a fear of being sued for reverse intentional discrimination would now seem to be sufficient to defend against any subsequent adverse impact case brought by minority group members disappointed with the results of an appropriately constructed pay or selection process.

Want more information?

Instant Impact webinar with Reed Seminars Tuesday, July 7th at 3:30 p.m. EDT, 2:30 p.m. CDT on "What Ricci v. DeStefano Means for Labor & Employment Lawyers, Their Clients & Workplace Discrimination Issues." If you are interested in attending, you can use the discout code authorspecial to receive 20% off registration. If you cannot call-in from your office or mobile phone to attend the seminar and view the presentation, Reed Seminars will email you the PowerPoint and audio files later that day for viewing on your computer at your convenience (you simply need to register before the seminar occurs). To register, please call 415-331-1122 or visit http://reedseminars.com/details.asp?id=370

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