"Strong Basis In Evidence" - Supreme Court Establishes New Standard For Discard Of Administered Promotional Examinations

Tuesday, September 1, 2009 - 00:00

The U.S. Supreme Court's recent decision in Ricci v. DeStefano generated significant headlines and interest as a result of its subject matter (white firefighters alleging discrimination in promotional testing) as well as its impact on the confirmation hearings of U.S. Supreme Court nominee Sonia Sotomayor. As a Second Circuit Court of Appeals judge, Sotomayor joined in a cursory opinion upholding the decision of the City of New Haven, Connecticut to scrap test results it perceived as racially biased. Notwithstanding the political attention the case received, the practical effect of Ricci is that it raises more questions than it answers.

In 2003, New Haven administered examinations to city firefighters seeking promotion to the ranks of lieutenant and captain. A total of 118 firefighters took the tests, some at great personal cost in terms of purchasing or adapting study materials (including one firefighter who paid a neighbor to read the study materials onto audio tapes for him because of a reading disability). Although New Haven went to great lengths to ensure that the tests were not racially biased, the results indicated that virtually no minorities would be eligible for promotion to any of the 15 vacancies.

The city recognized the racial disparity and was alerted by its counsel of the possibility of a Title VII disparate impact claim (i.e., a claim that the test, while neutral on its face, nevertheless had a racially discriminatory impact on minority candidates) by minority firefighters. The city held numerous public hearings on whether the test results should be certified. At these hearings, which were described as both heated and politically divisive, the contractor that created the tests stated that they were free of bias. However, another witness - a competitor of that contractor - testified that the tests showed more disparity than was typical. The city heard further testimony from witnesses both for and against certification. Multiple witnesses threatened legal action if the tests were - or were not - certified. Ultimately, the city's civil service officials voted not to certify.

A group of white and Hispanic firefighters who scored well on the test sued New Haven and a handful of city officials, alleging race discrimination in violation of Title VII and the Equal Protection Clause of the U.S. Constitution. The city defended its actions in discarding the test results on the grounds that it had a good faith belief that if it certified the test results, it would have been subject to a disparate impact claim by minority firefighters. The plaintiff firefighters, however, argued that the city did not have sufficient evidence to perceive a legitimate threat of a disparate impact claim; they contended, rather, that the city caved to political pressure. The district court granted summary judgment for the city and the Second Circuit affirmed.

The Supreme Court reversed the decision, finding that New Haven violated Title VII's prohibition on intentional "disparate treatment" discrimination when it threw out the test results on the basis of nothing more than the race of the successful applicants. The Court noted that all evidence indicated that the city's decision not to certify the test results was based solely on the racial disparity among successful and unsuccessful applicants. The decision was, therefore, race-based and, without some other justification, violated Title VII's prohibition on an employer taking action "because of race." The Court noted that the two lower courts ignored this principle, focusing instead on the city's motivation - that is, its objective of avoiding disparate impact liability. But those courts ignored the city's actions , which invariably violated Title VII because they were taken "because of race," according to the Court.

Therefore, the question before the Court was "whether the purpose to avoid disparate impact liability excuses what otherwise would be prohibited disparate treatment discrimination." The Court first rejected the plaintiff firefighters' "strict approach," which argued that it is not permissible under any circumstances for an employer to take a race-based action, even if the intent in doing so is to avoid disparate impact liability. This approach, the Court held, ignores Congress's codification of the disparate impact provisions of Title VII in the Civil Rights Act of 1991.

However, the Court similarly rejected New Haven's argument that its "good faith" belief in disparate impact liability should be sufficient to justify its disparate treatment of the white firefighters. The Court noted that this approach would "encourage race-based action at the slightest hint of disparate impact." A standard that low would amount to a de facto quota system focusing on the statistical results only, and would allow an employer to re-test until it reached the racial balance it wanted, in violation of Title VII's ban on outright racial balancing.

Therefore, the Court turned to what the appropriate standard would be, looking to its previous decisions in similar cases, albeit in the Equal Protection Clause context. The Court noted that, in those cases, government actions intended to remedy past racial discrimination, even if truly remedial in nature, are only constitutional when there is a "strong basis in evidence" that such actions are necessary. The Court held that the use of this standard in Title VII cases is appropriate because it will allow both the disparate impact and disparate treatment provisions to retain their effect, and would ensure that allowing violations of one of those provisions in the name of compliance with the other will only occur in very rare circumstances.

The Court held that, to present sufficient evidence of a threat of disparate impact liability, the city would need to show that there was a strong basis in evidence to believe a potential plaintiff could show that the exams were not job-related and consistent with business necessity, or that there was a less discriminatory alternative to the test that the city refused to adopt. Based on the record of the city's public hearings, the Court held that there was not a strong basis in evidence that either deficiency existed. Holding that "fear of litigation alone cannot justify an employer's reliance on race to the detriment of individuals who pass the examinations and qualify for promotions," the Court held the city's actions violated Title VII.

Justice Ginsburg dissented, joined by Justices Stevens, Breyer and Souter. The dissent took issue with the very basis of the majority opinion - that is, that when an employer changes an employment practice in an effort to comply with Title VII's disparate impact provisions it acts "because of race" in violation of Title VII. The dissent noted that the Court held in previous disparate impact precedent that an employer can maintain particular employment criteria that operates to the disadvantage of minorities only if the practice is justified by business necessity. Therefore, if an employer rejects such criteria because of reasonable doubts about its reliability, the employer can hardly be held to have engaged in discrimination "because of race," since clearly the employer acted to comply with Congress's mandate, via Title VII, regarding disparate impact. The dissenting justices would have held that if an employer has "good cause" to believe that a particular selection device will not withstand scrutiny for business necessity, it cannot be held to have engaged in disparate treatment against the majority when it discards the device upon recognizing its disproportionate racial impact.

The dissent's argument about the majority holding is compelling. Justice Ginsburg essentially argues that the majority opinion is based on a flawed perception that the city only looked at one factor in making the decision to scrap the test results - the race of the candidates. However, the city looked at a much broader set of criteria in reaching that decision, according to the dissent - including the lengthy history of discrimination against African Americans and other minorities seeking promotion within fire departments. Therefore, it is too simplistic - and perhaps too easy - to attribute the city's decision to having been made "because of race."

Further, while the majority holding clearly makes new law on how such promotional tests will be interpreted in the future, it leaves a glaring hole - it does not set forth a standard for when an employer can be confident that it has the requisite "strong basis in evidence" that its test is likely to result in a disparate impact claim to justify scuttling the results of an administered test that the employer has selected and advocated as the means of promotion. As the dissent notes, since that standard is drawn from "inapposite" Equal Protection Clause precedents that dealt with intentional acts by employers, we are left with an "enigmatic" standard that is not readily applicable in the unintentional , disparate impact context.

In light of the murkiness of some of the majority's reasoning, the salient points raised by the dissent, and the likelihood of future litigation to fill in the holes, it is likely that this decision will be revisited.

Ryan J. Fleming, a Member of Stradley Ronon Stevens & Young's employment and labor practice group, focuses on employment litigation including discrimination and wrongful discharge claims and counsels employers on a variety of employment-related issues.

Please email the author at rfleming@stradley.com with questions about this article.