Ever since the landmark U.S. Supreme Court decision in Griggs v. Duke Power Co. in 1971, the law relating to the concept of "disparate impact" in employment cases has been fairly clear and predictable. However, the Court's recent decision in Ricci v. De Stefano, has cast the area into doubt and presented employers with a difficult dilemma.
In Griggs, the Supreme Court held that when a facially neutral employment selection method, such as passing a written test or requiring a high school diploma, is found to have an "adverse impact" on a protected class or classes, use of the method violates Title VII of the Civil Rights Act of 1964, unless the employer can show that the test is job-related and consistent with business necessity. The 1991 Civil Rights Act codified these principles and added one more: Even if the employer can show that its test is job-related and consistent with business necessity, the adversely affected individuals can still prevail if they can identify an alternative selection practice that would have had less adverse impact, but that the employer refused to adopt.
The Ricci case involved written and oral tests for firefighter captain and lieutenant positions in New Haven, Connecticut. The tests resulted in total exclusion of African-Americans from consideration for both positions and exclusion of Hispanic applicants from consideration for the lieutenant positions. New Haven's corporate counsel advised the City Civil Service Board against certifying the results because of significant disparate impact. The Civil Service Board held several days of hearings on the validity of the tests. There was considerable evidence questioning the validity of the tests. Following the hearings, New Haven refused to certify the test results.
One Hispanic and several white firefighters, who had scored well on the tests, challenged New Haven's decision to reject the test results, claiming that New Haven was engaging in intentional race discrimination stemming from a desire to have more minority employees in high-level positions.
Because of the large disparate impact on African-American and Hispanic applicants, together with the questions concerning the validity of the tests, both the District Court and the Court of Appeals held that New Haven was justified in rejecting the test results. The Court of Appeals' opinion was only one paragraph long.
To the surprise of some, the Supreme Court reversed, holding that the plaintiff firefighters were victims of intentional race discrimination. In so holding, the Court rejected New Haven's argument that certifying the test results could have led to disparate-impact liability to the lower-scoring applicants. The Court held that to reject test results, the employer must have a "strong basis in evidence of disparate impact liability." In the Court's view, New Haven's concerns of possible liability did not rise to that level.
The Supreme Court's new standard is amorphous. It is not clear why several days of hearings on the validity of the firefighter exams--as well as evidence that many other cities used other selection methods with less adverse impact--were not sufficient to meet the standard. Additionally, while the Court states in its opinion that the standard is not so high as to require "a probable, actual violation," it is impossible to tell from the opinion what evidence would be deemed sufficient to pass muster.
In light of this lack of clarity, prudent employers should reject the results of a test only when they have very strong evidence that the selection method violates Title VII's disparate-impact provisions. If employers ensure in advance that their selection process is job related and defensible, and if they have investigated alternative selection methods, they should ordinarily not reject the test results, even if they yield a statistical disparity.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
