Outside Counsel Corner

"Supreme Court Tackles Reverse Discrimination"

Barbara L. Johnson [Read Bio]
Partner, Employment Department

Employers committed to increasing racial diversity within their organizations often struggle with a critical issue: when does affirmative action end and reverse discrimination begin? The United States Supreme Court ended its 2008 Term by tackling an important aspect of this complex question. What should an employer do when a validated employment related test results in a statistical imbalance that could give rise to a disparate impact claim? The Court held that, in some contexts, employers violate Title VII when they engage in race-conscious decision-making to address statistical workforce imbalances. The exception requires that employers demonstrate a “strong basis in evidence” that failing to do so will result in disparate-impact liability. Ricci v. DeStefano, 129 S. Ct. 2658, 2681 (U.S., Jun. 29, 2009). The Ricci decision could force employers to re-evaluate the way they approach statistical anomalies that can arise in reductions in force or other employment decision-making processes, and may compel employers to consider formal “validation” studies for a wide variety of decision-making processes that previously were less formally structured.

In 2003, the New Haven, Connecticut Fire Department adopted a testing process to identify qualified candidates for promotion to lieutenant and captain. This examination was a key part of the promotion evaluation process, and was “content-validated” under the EEOC’s Uniform Employee Selection Guidelines, i.e., it was created to be job-related and consistent with “business necessity.”  See id. at 2678-79. Seventy-seven candidates took the lieutenant’s examination: 43 white, 19 African American, and 15 Hispanic. Under the rules of the selection process and based on the test results, all ten firefighters who became eligible for immediate promotion to lieutenant were white. Forty-one candidates took the captain’s examination: 25 white, eight black, and eight Hispanic. As a result of the test, nine candidates were found eligible for immediate promotion to captain — seven whites and two Hispanics. See id. at 2666.

Threatened with a lawsuit by disappointed African American test-takers, the City’s counsel, among others, urged the City to reject the test results and start the promotions process over. After lengthy hearings, the test results were not certified, and the highest-ranking test-passers lost their opportunity to receive immediate promotions.  See id. at 2666-71.

Predictably, 17 disappointed white firefighters and one Hispanic firefighter brought suit against the City. They alleged disparate treatment — intentional discrimination — in violation of Title VII of the Civil Rights Act of 1964 and the Equal Protection Clause of the Fourteenth Amendment.  See id. at 2671. On cross-motions for summary judgment, the district court concluded that the City had acted reasonably in tossing out the test results given the litigation risks inherent in such patent statistical disparities. A panel of the United States Court of Appeals for the Second Circuit, including Circuit Judge and now Supreme Court justice Sonia Sotomayor, affirmed the district court’s decision.

The Supreme Court granted certiorari to hear the case.  See id. at 2672; 530 F. 3d 87 (2d Cir. Jun. 9, 2008). In a 5-4 decision, the majority of the Court reversed the appellate court decision. Because throwing out the test was based unquestionably on the race of those who would have been selected, and operated to the disadvantage of the whites and Hispanics who had passed the test, it constituted disparate treatment of the white and Hispanic candidates. “Whatever the City’s ultimate aim — however well intentioned or benevolent it might have seemed — the City made its employment decision because of race . . . The question is not whether that conduct was discriminatory but whether the City had a lawful justification for its race based action. Id. at 2674.

Ricci brings both good and bad news for employers, but also many unanswered questions. Ricci may have a significant and negative impact on some employer efforts to ameliorate the demographic impact of hiring, promotion, reductions in force or compensation decision-making. Ricci suggests that the use of race statistics alone as the basis for adjusting the results of the employer’s normal decision-making processes may run afoul of Title VII. To make such an adjustment lawfully, the employer would have to have a “strong basis in evidence” to believe that the underlying decision-making process was substantively flawed, i.e., that the decision-making criteria it had used were not job-related or consistent with business necessity. Of course, employers will want to think twice before taking steps to impeach their own selection processes in that way.

Nevertheless, there will be many ways in which employers can take affirmative steps to address anomalies unearthed by statistical analyses without relying on suspect race-based decision-making. For example, Ricci would permit an employer to use statistics to pinpoint individual decisions that appear to be unfair or that are difficult to explain based on the race-neutral criteria; and an employer would be permitted under Ricci to address those specific problems.

In summary, statistics are critical to the defense of affirmative action taken in the name of diversity. Employers should avoid the trap of making employment actions in the name of diversity without having thorough considered the basis for these actions.

Barbara Johnson thanks Neal Mollen and Mitch Mosvick for their contributions to this article.