Supreme Court Decision Creates Conundrum

In the Press · July 9, 2009

Dilemma for Employers:
Supreme Court Decision Presents a Difficult Choice 

On June 29, 2009, the United States Supreme Court, in the case of Ricci et al. v. DeStefano et al., ruled that the City of New Haven discriminated against white applicants when it threw out the results of a civil service examination.  The exam had shown a disparity in favor of white test takers, and the City was concerned that if it certified the test results it would be subject to legal attack by minority test takers under a disparate impact theory.  The Ricci decision highlights the dilemma that employers face when trying to do the right thing by avoiding a disparate impact on minority job seekers while also trying to avoid a discrimination lawsuit.

Disparate impact liability can arise whenever an employer uses a neutral selection process, such as a test, that happens to disproportionately screen out members of a protected class.  In these situations, an employer may avoid liability for disparate impact discrimination by showing that the challenged practice is business-related, and there is no equally adequate test or other selection method that could be used.   

In Ricci, the New Haven Fire Department administered a test to determine which firefighters to promote to officer ranks.  The test had a statistically significant adverse impact on minorities, which ultimately convinced the City to scrap the test, ostensibly out of fear of a disparate impact lawsuit.  The Supreme Court held that the City of New Haven violated Title VII because it did not have a "strong basis in evidence" to conclude that the test would fail a disparate impact challenge.  In their forceful dissent, four of the justices pointed out that the "strong basis in evidence" standard is itself amorphous. 

Ricci poses practical concerns for employers that use tests to screen applicants.  First and foremost, once a test is given, employers cannot decide not to use a test’s results simply because few minorities passed the test.  In addition, once a test has been given with a particular passing score established, the passing score cannot be reset simply because few minorities met the passing score.  If an employer chooses to give a test, and that test happens to have an adverse impact on minority test takers, then the employer will be faced with a conundrum: potentially liable under the disparate treatment theory of intentional discrimination if it does not use the test, and potentially liable under the disparate impact theory if it does.

To avoid or minimize any potential liability, employers should consult an employment law specialist whenever there is a concern that an existing or planned employment test or practice could have an adverse impact on minority employees.  An employment law specialist can analyze the complex legal issues regarding what actions an employer can take to minimize or eliminate adverse impact while, at the same time, minimize the chance of a legal challenge by majority or minority test takers. 

If you would like to learn more about any of the information presented here, or have questions about any employment law matter, please contact Daniel S. Tarlow, the author of this alert, at dtarlow@princelobel.com or 617 456 8013.