The City of New Haven’s failure to use test results that would have disqualified any African American firefighters from receiving a promotion was discriminatory against the white and Hispanic test takers who received qualifying scores, and was therefore unlawful under Title VII of the Civil Rights Act, according to the U.S. Supreme Court in Ricci v. DeStefano. (pdf)  In this closely decided and much-anticipated decision, the Court held that “before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action.”

Background

In 2003, the City of New Haven, Connecticut issued promotion-qualifying exams to 118 firefighters, as required by union contract. After certifying the test results, the City – pursuant to a municipal regulation – was to promote from the group receiving the top three scores. The City decided against certifying the test scores, however, after it was determined that no African American and only two Hispanic applicants qualified for an immediate promotion. The rationale for failing to certify the results was that the City would subject itself to claims of disparate impact race discrimination under Title VII of the Civil Rights Act. The 17 white and two Hispanic firefighters who comprised the pool of applicants earning the three highest exam scores – and thus would have been among those eligible to receive promotions had the results been certified – filed suit. These plaintiffs argued that the City’s failure to certify the results violated Title VII’s prohibition on racially-based disparate treatment, as well as the Constitution’s Equal Protection clause. The district court granted the City’s motion for summary judgment, finding that the City lawfully acted to insulate itself from charges of disparate impact discrimination. On appeal, a three-judge panel of the U.S. Court of Appeals for the Second Circuit affirmed the lower court’s decision. Judge Sonia Sotomayor – President Obama’s pick to replace Justice David Souter on the U.S. Supreme Court – was a member of that panel. The Second Circuit subsequently voted 7-6 to deny a rehearing en banc. In a 5-4 decision, the U.S. Supreme Court reversed and remanded.

Reasoning

Title VII of the Civil Rights Act prohibits both direct discrimination (disparate treatment) and in certain circumstances indirect discrimination (disparate impact). In the second scenario, an employer’s facially neutral act that has a disproportionate adverse effect on members of a protected class can be deemed discriminatory unless the employer can show that the action causing the disparate impact was job-related and consistent with business necessity. If such a showing is made, an employee can argue that the employer can use alternative means of achieving the same ends that will have less of a discriminatory impact. In the instant case, the City argued that its intent to avoid a disparate impact claim was a justifiable reason for throwing out the test results, even though doing so resulted in an act of “reverse” discrimination against the white and Hispanic applicants. The Supreme Court examined the interplay between the disparate treatment and impact language in Title VII, which makes it unlawful for employers to use employment practices that “that are fair in form, but discriminatory in operation,” while at the same time prohibits employers from taking adverse employment actions “because of” race. In reconciling these Title VII provisions, the Court held that the appropriate standard to use is the “strong basis in evidence standard” used in the context of Constitutional challenges to government actions to remedy past acts of discrimination. In essence, before engaging in an act for the purpose of avoiding or remedying an unintentional disparate impact on a protected class that would in turn discriminate against another group of employees on the basis of race, the employer “must have a strong basis in evidence” to believe it will be subject to disparate impact liability. In the instant case, the Court concluded that the City’s threshold showing of a significant statistical disparity in test results without more is insufficient to meet this “strong basis in evidence” standard. The qualifying exams were job-related and consistent with business necessity, and the City did not show that less-discriminatory alternatives were available that it refused to adopt. Fear of litigation alone could not save the City’s claim. The practical effect of this case for employers is that using qualifying exams has now become less legally precarious.

Justice Kennedy delivered this opinion. 

For more information on this decision and its implications, see Littler's ASAP:  Ricci v. DeStefano: Talk About a Rock and a Hard Place: Employers Required to Pick Between Disparate Treatment and Disparate Impact Claims  by:  Dionysia Johnson-Massie, Holly M. Robbins, Grady B. Murdock, and Cindy-Ann L. Thomas.