On June 29, 2009, the United States Supreme Court held in a 5-4 ruling that “fear of litigation alone cannot justify an employer’s reliance on race” to the detriment of other candidates for promotion. Ricci v. DeStefano, No. 07-1428 (June 29, 2009).
This ruling overturns Supreme Court Justice nominee Judge Sotomayor’s previous Second Circuit decision, which ruled in favor of the City of New Haven. The ruling also touches off what will likely be a new round of political debate about Judge Sotomayor’s qualifications for the Justice appointment.
Case Background
As summarized in our 6/15/09 article, Ricci involves a reverse race discrimination action by a group of firefighter plaintiffs who scored high on promotional tests administered by the City of New Haven’s Civil Service Board. The Board later questioned the results after analysis showed that white promotional candidates greatly outperformed minority candidates on the same test. Faced with political and legal arguments for and against certifying the results (and likely litigation regardless), the Board and the City of New Haven ultimately threw out the results, citing the test’s alleged statistical, disparate racial impact.
On appeal to the Second Circuit Court of Appeals and the Supreme Court, the plaintiff firefighters argued, among other things, that rejecting the test results violated Title VII. The City argued that the statistical adverse impact ratios for minority test-takers were too low to pass legal scrutiny, and this was enough alone to invalidate the tests and start over.
Recognizing the difficult position faced by the City and the Civil Service Board, the District Court held that the Board’s decision to throw out the test results was a race-neutral action given that all tests were discarded and no one was promoted. In other words, there was no “race-norming” because the test results were discarded, not altered. On appeal, Judge Sotomayor and two other Second Circuit panel members tersely upheld the ruling in a one-paragraph decision, finding that the Board was “in the unfortunate position of having no good alternatives.”
Supreme Court Decision
In an opinion authored by Justice Anthony Kennedy, the Supreme Court reversed, holding that “[u]nder 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 added).
The City failed to meet that burden. Specifically, the Court noted that:
- Although the test results may have established a prima facie case of disparate impact liability, that was merely a threshold showing.
- Liability could only arise upon the additional showing that the exams in question were not job related and consistent with business necessity, or that an equally valid, less-discriminatory alternative existed but was not adopted.
According to the Court, the City erred by focusing on the numbers over the latter two elements. For example, the Court’s majority noted that:
- “There is no genuine dispute that the examinations were job-related and consistent with business necessity.”
- “The City turned a blind eye to evidence that supported the exams’ validity.”
- The City did not request an EEOC guideline-compliant validation study from the test’s creators, despite the fact that such a report was readily available as part of the City’s testing contract.
- The City and the Board entertained only cursory suggestions of alternatives, such as changing the weight of oral and written components, banding scores or using an assessment center process.
Because the City failed to look at the full framework of a potential disparate-impact claim, the Court concluded that there was no “strong basis in evidence” that discarding the test results was truly necessary to avoid Title VII liability. The Court further held that the City’s alleged good faith concerns about disparate-impact claims alone could not justify its actions. According to the Court, permitting disparate-treatment violations based on such fears “would encourage race-based action at the slightest hint of disparate impact.”
A minimal standard could cause employers to discard the results of lawful and beneficial promotional examinations even where there is little if any evidence of disparate-impact discrimination. That would amount to a de facto quota system, in which a ‘focus on statistics . . . could put undue pressure on employers to adopt inappropriate prophylactic measures’. . . . Even worse, an employer could discard test results (or other employment practices) with the intent of obtaining the employer’s preferred racial balance.
Initial Take-Aways
Although the decision leaves open the question of how far an employer must go to demonstrate a “strong basis in evidence” in the context of testing, it is clear that such an inquiry entails looking beyond a mere prima facie case. It is also likely that some of the Court’s language in the ruling may be interpreted as a slap at Judge Sotomayor’s previous decision. For example, the majority noted that:
On the record before us, there is no genuine dispute that the City lacked a strong basis in evidence to believe it would face disparate-impact liability if it certified the examination results. In other words, there is no evidence – let alone the required strong basis in evidence – that the tests were flawed because they were not job-related or because other, equally valid and less discriminatory tests were available to the City. (Emphasis added).
Having said this, the more important, outstanding issue is whether Ricci is merely baiting the hook for later, larger constitutional fish – the striking down of the disparate impact liability theory of discrimination itself as unconstitutional. As Justice Scalia noted in his concurring opinion:
Title VII’s disparate impact provisions place a racial thumb on the scales, often requiring employers to evaluate the racial outcomes of their policies, and to make decisions based on (because of) those racial outcomes. That type of racial decision making is, as the Court explains, discriminatory. . . . To be sure, the disparate-impact laws do not mandate imposition of quotas, but it is not clear why that should provide a safe harbor.
Justice Scalia further concluded that:
The Court’s resolution of these cases makes it unnecessary to resolve these matters today. But the war between disparate impact and equal protection will be waged sooner or later, and it behooves us to begin thinking about how – and on what terms – to make peace between them.
For assistance in analyzing the impact of the Ricci decision on your organization’s current hiring, promotion, reduction in force and other employment practices, please contact the authors or any member of McGuireWoods’ Labor & Employment or Employee Benefits teams.