Lewis v. City of Chicago, 78 U.S. 4437 (May 24, 2010) is a recent U.S. Supreme Court case that may be a wake-up call for employers using employment practices without regard to their potential disparate impact. Lewis involves a written, entry-level test administered by the city of Chicago in 1995 to applicants seeking firefighter positions with the city.
In early 1996, the city used the test results to classify candidates into one of three groups based on their test results: not qualified, qualified and well-qualified. The city then announced that those candidates in the unqualified group would not be considered for hire, those in the qualified group would not likely be called for further processing and those in the well-qualified group would be selected for further processing by using a random lottery. The city also announced that it was disappointed by the racial make-up of the three groups. Notably, there were many more whites than minorities in the well-qualified group.
In March 1997, several African-American applicants whose scores were in the qualified range filed discrimination charges, alleging unlawful disparate impact under Title VII of the Civil Rights Act of 1964, as amended ("Title VII"). These charges were filed within 300 days of when the city used the results from the 1995 firefighter exam to select candidates for further employment consideration. However, the charges were filed more than one year after the city announced how it would use the firefighter test results.
Under Title VII, individuals have 180 days from the date of an alleged violation to file a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC") in a state that does not have a state or local administrative agency authorized to remedy Title VII violations. If a state has such an agency, as does Illinois, an individual must file a charge of discrimination within 300 days of an alleged Title VII violation.
In Lewis, the U.S. Supreme Court was asked to determine whether a plaintiff asserting a disparate impact claim must file an EEOC charge within 180 or 300 days of:
- when an employer adopts an alleged unlawful employment practice; or
- when the employer uses the alleged unlawful employment practice to make an employment decision.
The U.S. District Court for the Northern District of Illinois found that the plaintiff firefighters' claim was timely and that the city's actions violated Title VII. The city appealed the timeliness issue to the U.S. Court of Appeals for the Seventh Circuit.
The Seventh Circuit reversed the district court and ruled that the plaintiff firefighters' claim was untimely. In reaching this decision, the Seventh Circuit measured the statute of limitations from when the city adopted its test score cutoffs and notified the candidates of how they were classified based on their test scores, not from when the city used the resulting eligibility lists in its hiring decisions.
In a unanimous decision authored by Justice Scalia, the U.S. Supreme Court reversed the Seventh Circuit's ruling. The Supreme Court held that an aggrieved individual can state a valid disparate impact claim based upon an employer's use of an unlawful employment practice, as well as upon an employer's adoption of an unlawful employment practice. Accordingly, the Supreme Court viewed each use of an employment practice with a disparate impact as a "present violation" of Title VII—not solely a consequence of a prior unlawful act.
In reaching its decision, the Supreme Court acknowledged that because disparate impact claims, unlike disparate treatment claims, do not require discriminatory intent, some claims "would be doomed under one theory [but] will survive under the other. " Justice Scalia further commented, "that is the product of the law Congress has written."
What Effect Does the Supreme Court's Decision Have on Employers' Use of Employment Practices Over Time?
As a result of the Supreme Court's decision, it may be more difficult to fully assess an employer's potential exposure to Title VII disparate impact liability. Not only do employers face risk exposure in adopting an employment practice that could have an unlawful disparate impact, but now employers also face potential liability each time they use an employment practice with an unlawful disparate impact.
Additionally, employers may face serious hurdles in defending against disparate impact claims arising from employment practices adopted many years ago. Some of these hurdles may include mobility of the workforce, deceased or otherwise unavailable witnesses, faded memories and lost or destroyed documentation.
The Supreme Court recognized the dilemma its decision presents for employers, specifically acknowledging that evidence and/or witnesses may be unavailable by the time a lawsuit is brought. However, Justice Scalia commented that if its ruling was not the effect that Congress intended, "it is a problem for Congress, not one the federal courts can fix."
What Can Employers Do?
This decision demonstrates that employers need to continually assess their employment practices, regardless of when they were adopted. Complicating matters, however, is the reality that such assessments may not be protected from disclosure in subsequent litigation challenging the legality of the employment practices. Accordingly, employers should consult with counsel to determine if, when and how to conduct audits of their ongoing employment practices.
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