Employer can avoid disparate-impact liability based evidence that its test was valid

Employer can avoid disparate-impact liability based evidence that its test was valid
Ricci Et Al. V. DeStefano, USSC, No. 07–1428, decided June 29, 2009 [Together with No. 08–328, Ricci et al. v. DeStefano et al.]

NYPPL's summary of the Ricci v DeStefano decision by the United State Court of Appeals, Second Circuit, was captioned “The Merit System and public employment – does it have a future?” [see http://publicpersonnellaw.blogspot.com/search?q=ricci].

New York State’s Constitution mandates that “appointments and promotions in the civil service of the state and all of the civil divisions thereof, including cities and villages, shall be made according to merit and fitness to be ascertained, as far as practicable, by examination which, as far as practicable, shall be competitive” [Article V, Section 6] and other states have adopted similar provisions with respect to appointment and promotion in the public service.

The Second Circuit, however, rejected Ricci’s challenging the City of New Haven’s refusal to certify the results of a fire department promotion examination not because the test was not job-related but because the test results had a disparate impact on African Americans.

In a 5-4 decision spanning 89 pages, the Supreme Court overturned the Second Circuit’s ruling, suggesting that the traditional merit system for public employment may have a future after all if the tests administered in compliance with the concept of merit and fitness are professionally developed and job related and not designed to discriminate because race, religion, national origin or other prohibited reasons.

In the New Haven case, when the examination* results showed that white candidates had outperformed minority candidates, some firefighters argued the tests should be discarded because the results showed the tests to be discriminatory. They threatened a discrimination lawsuit if the City made promotions based on the tests. Other firefighters, however, contended that the tests were "race-neutral" and job related, and they, in turn, threatened to file a discrimination lawsuit if the City ignored the test results. Relying on statistical evidence demonstrating adverse impact on minorities, New Haven ignored the test results, thereby denying promotions to the candidates who had performed well, and voided the examinations.

The majority of the Supreme Court concluded that the race-based action taken by New Haven is prohibited by Title VII unless the employer can demonstrate, by strong evidence, that had if it had not taken such action, it would have been liable under the disparate-impact statute.

New Haven, said the court, cannot meet that threshold standard. Thus the City’s action in discarding the tests was a violation of Title VII.

By way of background, the Supreme Court noted that the City had employed an outside, independent entity, Industrial/Organizational Solutions, Inc. (IOS) -- an Illinois company that specializes in designing entry-level and promotional examinations for fire and police departments -- to develop and administer the examinations, at a cost to the City of $100,000.

In the words of the court: there is “no genuine dispute that the examinations were job-related and consistent with business necessity.”

The Supreme Court rationalized: If an employer cannot rescore a test based on the candidates’ race, then it follows, a fortiori, that it may not take the greater step of discarding the test altogether to achieve a more desirable racial distribution of promotion-eligible candidates in the absence of strong evidence that the test was deficient and that discarding the results is necessary to avoid violating Title VII’s disparate impact provision.

According, said the court, “restricting an employer’s ability to discard test results (and thereby discriminate against qualified candidates on the basis of their race) also is in keeping with Title VII’s express protection of bona fide promotional examinations.”

The Supreme Court, reversing the Second Circuit’s ruling, stated that “under Title VII, 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” [emphasis supplied].

If, after it uses the test results of a challenged examination, the employer is sued on a disparate-impact theory, it appears clear that the employer can avoid disparate-impact liability based on strong evidence that had it not certified and used the results of the examination, it would have been subject to disparate treatment liability.

* The employer may act upon the results of any professionally developed ability test provided that such test, its administration or action upon the results is not designed, intended or used to discriminate because of race.” [AT&T Corp. v. Hulteen, 556 U. S. ___, May 18, 2009, (slip op. at page 8 – see http://www.supremecourtus.gov/opinions/08pdf/07-543.pdf ).

The decision is posted on the Internet at:
http://www.supremecourtus.gov/opinions/08pdf/07-1428.pdf