Alert > Employment and Labor
Supreme Court Rules That Fear of Litigation Alone Does Not Justify City of New Haven’s Reverse Discrimination
In a 5-4 decision, Ricci v. DeStefano, 2009 WL 1835138 (U.S.), the U.S. Supreme Court held that the City of New Haven violated federal employment discrimination law (Title VII of the Civil Rights Act of 1964) by refusing to certify results of a promotional examination based on the City’s belief that doing so could have a disparate impact on minorities. The Court addressed the following workplace dilemma: what is an employer to do when a facially neutral selection test (or other policy) results in a disparate impact on a protected group of employees or applicants? Should the employer abandon the facially neutral test or policy due to the threat of a “disparate impact” claim by members of the adversely affected protected group? Or should the employer stick with the facially neutral test or policy because to do otherwise subjects the employer to liability for “reverse discrimination?” Fear of a disparate impact claim alone is not enough to abandon ship, says the Court. If an employer is to ignore the results of a facially neutral test or policy, it must have a “strong basis in evidence” that the test is not job-related or consistent with business necessity or that an equally valid, less discriminatory alternative to rejecting the test or policy is not available.
This alert describes the case and identifies its lessons for employers, including private companies making voluntary efforts at diversity and inclusion.
The Decision
New Haven, Connecticut used an objective examination to identify firefighters best qualified for promotion to open lieutenant and captain positions. The stakes were high, because promotion examinations were infrequent and the positions were prized. Many of the firefighters “studied for months, at considerable personal and financial cost.”
The tallied results revealed a significant racial disparity. Seventeen white, two Hispanic and no African American candidates would have been promoted even though 40% of the City’s population was African American, 30% of the City’s firefighters were African American (about 25% of the lieutenant and 32% of the captain candidates), and 16% were Hispanic (about 19% of the lieutenant and 19% of the captain candidates). Given this obvious racial disparity and the City’s belief that use of the results could have a disparate impact on minorities, with mounting opposition on both sides, and fearful of a disparate impact lawsuit, the City rejected the test results. The white firefighters and one of the Hispanic firefighters who were denied the promotion sued.
The lower courts sided with the City, granting and upholding summary judgment that, in abandoning the test, it had not unlawfully discriminated against the white and Hispanic firefighters. The Supreme Court reversed and awarded summary judgment to the firefighters under Title VII, declining to make any ruling under the Equal Protection clause of the Constitution.
Title VII prohibits both intentional discrimination, known as “disparate treatment,” and practices that are not intended to discriminate but in fact have a disproportionately adverse effect on minorities, known as “disparate impact.” The Supreme Court majority noted that the two provisions can be at odds in situations such as this one and attempted to provide guidance to employers in such situations. The Court warned that “[f]ear of litigation alone cannot justify” invalidating an already established policy, even one that presents a threshold showing of significant statistical disparity. Instead, an employer needs a “strong basis in evidence” that the test is not job-related or consistent with business necessity or that a less discriminatory alternative to rejecting the policy is not available. Here, the Court ruled that the City had neither.
What’s An Employer To Do?
The Supreme Court’s ruling is a softening of the Court’s 1971 landmark decision in Griggs v. Duke Power, 401 U.S. 424 (1971), in which the Court recognized Title VII prohibited facially neutral policies that have a disparate impact on minorities absent “business necessity.” The Ricci decision makes it more difficult for employers to abandon facially neutral policies, even if they appear to have the disparate impact warned of in Griggs. As the dissent points out, “[t]he strong-basis-in-evidence standard. . .makes voluntary compliance a hazardous venture.” Rejecting the results of facially neutral criteria is now more likely to result in employer liability for “reverse discrimination.” Employers are therefore cautioned to enlist the aid of counsel to identify and assess the strength of the evidence that would support a disparate impact claim when deciding whether to ignore established criteria based on disparate impact concerns. At the same time, the decision shows the importance of carefully crafting selection methods — whether for hiring, promotion or layoff — that are job-related and consistent with business necessity. Such well-crafted criteria, which have always been recommended, are now more likely to withstand disparate impact challenges.
This alert was prepared by Bingham labor and employment partners Debbie Fischer and Doug Schwarz and associate Jacqueline Bronson. For more information on this alert or any other labor and employment issues, please contact any of the lawyers listed below:
Boston
John Adkins, john.adkins@bingham.com, 617.951.8551
Louis Rodriques, Co-chair, Labor and Employment Group, louis.rodriques@bingham.com, 617.951.8340
Los Angeles/Orange County
Jacqueline Aguilera, jackie.aguilera@bingham.com, 213.229.8439
Debra Fischer, debra.fischer@bingham.com, 213.680.6418
San Francisco
Alan Berkowitz, alan.berkowitz@bingham.com, 415.393.2636
James Severson, james.severson@bingham.com, 415.393.2242
Walter Stella, walter.stella@bingham.com, 415.393.2750
Silicon Valley
Wendy Lazerson, Co-chair, Labor and Employment Group, wendy.lazerson@bingham.com, 650.849.4840
New York
Douglas Schwarz, douglas.schwarz@bingham.com, 212.705.7437
Tokyo
Mie Fujimoto, mie.fujimoto@bingham.com, 81.3.6721.3138
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