Threat of Litigation is Not an Excuse to Discriminate
by: Carl Fessenden
In Ricci v. DeStefano, the United States Supreme Court addressed a dilemma faced by many public entities. In a 5 - 4 decision, the Supreme Court held that the mere threat of litigation from one group of employees alleging discrimination does not justify an employer intentionally discriminating against another group.
In Ricci, the city of New Haven, Connecticut ("City") required its firefighters to take promotional exams to determine who qualified for promotions. The City went to great lengths to ensure its promotional exams would be objective - including the hiring of a third-party contractor to create the exams and conducting rigorous mock-testing with candidates from varied racial backgrounds. Satisfied the test was racially neutral, the City utilized the exam. After administering the test, City officials discovered that the pass rate for African-American candidates was approximately half the pass rate of Caucasian candidates. African-American candidates threatened litigation if the City did not refuse to certify the results of the test. At that point, the City was faced with a dilemma: Certify the results and be sued by those who believed the test had a discriminatory impact on African-Americans, or refuse to certify the results and be sued for intentional discrimination by those who passed the test. The City decided not to certify the test results. The firefighters who would have been eligible for promotion sued.
Employees may sue employers for discrimination under Title VII through the use of two theories: "disparate-treatment" or "disparate-impact." Under a "disparate-treatment" claim, employees allege their employer intentionally discriminated against them, whereas under a "disparate-impact" claim, employees allege that a facially-neutral practice has the effect of disproportionately excluding members of a protected class.
The plaintiffs argued that when the City refused to certify the exam results because of the racial composition of the successful candidates, it intentionally discriminated against them in violation of the disparate-treatment provision of Title VII. The City argued that it had a "good faith belief" that if it certified the exam results, it would have violated the disparate-impact provision of Title VII. The question addressed by the Supreme Court was whether the purpose to avoid "disparate-impact" liability excuses what would otherwise constitute prohibited "disparate-treatment" discrimination. Essentially, the issue in this case came down to whether an employer's fear of litigation under the disparate-impact provision of Title VII justifies that employer's decision which directly and intentionally discriminates against another group in violation of the disparate-treatment provision of Title VII.
The Court adopted the "strong basis in evidence" standard and found the City should not have refused certification of the test results. Under the "strong basis in evidence" standard, intentionally discriminatory actions are impermissible under Title VII unless the employer can demonstrate a "strong basis in evidence" that, had it not taken action, it would have been liable under the "disparate-impact" theory. As Justice Kennedy stated, "fear of litigation alone" or a "threshold showing of significant statistical disparity, . . . and nothing more[,] is far from a strong basis in evidence that City would have been liable under Title VII had it certified the results."
The Court's decision was based on the fact that the City would only be liable under the "disparate-impact" theory if the exam was: (1) neither job-related nor consistent with business necessity; or (2) the City had refused to adopt an available alternative practice that had a less disparate-impact but served the City's needs. The Supreme Court relied heavily on statements made by City Officials in public and in emails. Considering the great lengths the City had gone through to make the test objective and the record of testing necessity, the Court found that the exam was job-related and consistent with business necessity. Further, the Court found insufficient evidence of viable alternatives. Accordingly, the Court concluded that the City did not have a "strong basis in evidence" that it would have been liable under Title VII for disparate impact.
Employers should be careful when creating and administering exams to avoid disparate- impact claims by their employees. Check with the Equal Employment Opportunity Commission ("EEOC") which has issued a "Best Practices for Employment Tests and Selections Procedures" when creating examinations. The EEOC guidelines are a valuable resource to help keep employers on legally-sound ground when administering examinations.
Where there is a bias in exam results, employers should carefully and fully investigate whether there are any available alternative practices which would serve the employer's purpose with less of an impact toward any protected class. As long as an employer can show the exam is: (1) job-related and consistent with business necessity; and (2) there is not an available alternative practice with less of a disparate impact, they should accept examination results.
As numbers alone are not sufficient to justify abandoning a set decision-making process, employers should consider evaluating more factors when making their decisions. Broadening the criteria beyond numerical tests results when making decisions on selection, advancement, and termination can provide a more defensible and sound approach for employers.
Employers should use caution when taking race, or other protected classifications, into consideration when making decisions, even if these decisions are made to try and avoid a race discrimination claim. "Fear of litigation" and "raw racial statistics" alone are not enough to justify intentional race-based decisions affecting employees.
Finally, employers should understand that while the Court has not applied this case to other areas, the logic of the decision seems to be applicable to other practices where an employer might use examinations - e.g. selection and termination. Employers should use the same diligence when administering any type of examination.