The Employee's Perspective

The Ricci case came under intense scrutiny after Judge Sonia Sotomayor was nominated to the Supreme Court. Judge Sotomayor served on the panel for the Second Circuit that issued the per curiam opinion affirming the trial court's grant of summary judgment for the City of New Haven. The public discourse revealed that many believe that employers can use “objective” tests regardless of their impact. Many seemed unaware that the law permits challenges even to facially neutral selection devices, and were under the misunderstanding that Title VII merely prohibits intentional discrimination. Many seemed to believe that Ricci was a case of first impression and failed to appreciate the history and rationale underlying disparate impact theory.

As Justice Ginsburg noted, the majority in Ricci “barely acknowledges the pathmarking decision in Griggs v. Duke Power” nearly 40 years ago. Indeed, the majority's decision suggested that the disparate impact theory first laid out in Griggs created a tension with Title VII's prohibition on employers' taking adverse employment actions “because of” race. Justice Scalia went further by alluding to “the war between disparate impact and equal protection.”

The Griggs Decision

When the Supreme Court first recognized the disparate impact theory of liability with the Griggs decision in 1971, the Court sought to conform with the letter of the law, not to create a new standard at odds with Title VII's protections. In Griggs, the Duke Power Company required a high school diploma or a minimum score on professionally developed aptitude tests for certain positions. These tests had the effect of eliminating disproportionate numbers of African-Americans who applied for the positions. By a unanimous vote, the Court invalidated these requirements, finding that the employer failed to demonstrate the link between the requirements and job performance, even in the absence of any intent to discriminate. Chief Justice Warren Burger's opinion recognized that the original text of Title VII:

proscribes not only overt discrimination but also practices that are fair in form, but discriminatory in operation. The touchstone is business necessity. ' [G]ood intent or absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as “built-in headwinds” for minority groups and are unrelated to measuring job capability.

Albemarle Paper

Four years later, the Court elaborated on disparate impact liability under Title VII. In Albemarle Paper Co. v. Moody, the Court explained that even if the employer demonstrates a “manifest relationship” between the test and the job, the employer is still liable if alternative tests or selection devices, without similar racial effects, would also serve the employer's business interests.

Disparate Impact

The 1991 amendments to the Civil Rights Act codified the rules set out in Griggs and Albemarle Paper. The amendments prohibited employment practices that result in a “disparate impact” if the employer cannot prove that the practice is required by “business necessity.” Furthermore, the 1991 amendments clarified that even if the employer proves that the practice is required by business necessity, the practice cannot stand if the plaintiff demonstrates that another practice with “less disparate impact” would “serve the [employer] as well.”

On June 29 of this year, the Supreme Court not only applied a new standard to disparate impact theory, but also offered a stringent interpretation of that new standard. In Ricci, the five justices in the majority ruled that an employer must have a “strong basis in evidence” to scrap a test that disproportionately screens out a protected group. The most surprising aspect of the decision was not really the new standard. The majority's standard was not exceptionally different from the dissenters' proposed standard that employers “must have good cause to believe the device would not withstand examination for business necessity.” Perhaps the most surprising aspect of the decision was the rigid manner in which the majority applied the new standard.

It was largely expected the Court would merely define the appropriate standard and remand the case for a determination as to whether the city had satisfied the standard. Indeed, the Solicitor General recommended such a course of action. Instead, the majority not only issued the new standard, but went on to rule that the city failed to satisfy that standard. The majority ruled in favor of the Ricci plaintiffs, concluding that the city of New Haven lacked a strong basis in evidence to support its decision to decline to certify the results of the promotional tests.

An Anomaly

To be sure, the Ricci plaintiffs' ultimate victory ' without ever having to prove their case at trial ' stands as an anomaly. Employment discrimination plaintiffs rarely succeed in court. The Harvard Law and Policy Review recently published a study entitled “Employment Discrimination Plaintiffs in Federal Courts: From Bad to Worse.” The study found that plaintiffs in employment discrimination cases win less than 4% of their pretrial adjudications. In district court, plaintiffs win just 11% of cases. On appeal, plaintiffs win reversal of trial court decisions only 9% of the time. It is virtually unheard of for a plaintiff to obtain a favorable judgment in an employment discrimination suit without going to trial.

The majority's bleak assessment of New Haven's actions stands in complete opposition to the assessment by the trial court and the court of appeals. Convinced that the city acted to comply with the law, the district court granted summary judgment in favor of the city. On appeal, the Second Circuit affirmed the “thorough, thoughtful and well-reasoned” opinion of the district court.

The dissenting opinion in Ricci suggests that the majority “simply shuts from its sight the formidable obstacles New Haven would have faced in defending against a disparate-impact suit.” At the very least, it would appear that there was some genuine issue of material fact in dispute. Indeed, the record reflects considerable evidence suggesting that the city declined to certify the test results due to flaws in the tests and the availability of alternative tests that would be expected to lessen the disparate impact.

Analysis

There is no doubt that the tests resulted in a stark racial disparity. None of the 27 African-American firefighters who applied for promotion passed the tests. Only two of the 23 Hispanic firefighters who applied passed the tests. By comparison, 17 of the 68 white firefighters who applied were eligible for promotion. The white pass rate was over six times the minority pass rate. The disparity in white and minority pass rates far exceeded the EEOC's 80% rule of thumb, which is used to determine whether a test results in a substantial disparate impact. EEOC guidance instructs that such a substantial disparity raises a red flag.

Upon learning of the test results, the City of New Haven saw the red flag. In response, the civil service board conducted multiple public hearings. The board heard testimony from those in favor of certifying the test results and from those against certifying the results. Some of this evidence raised concerns about the job-relatedness of the tests and indicated that less discriminatory alternatives were available.

Several New Haven firefighters complained that some of the questions were not relevant to the knowledge or skills necessary for the positions. One firefighter noted a question that asked whether to park a fire truck facing “uptown” or “downtown.” Such a question would appear to have been developed for a large city like New York, and does not apply in a small city like New Haven. Another firefighter complained that the study materials were not made readily available. These complaints highlighted the question of whether the tests truly identified the best candidates for captain or lieutenant positions or merely reflected applicants' access to study aids, their reading comprehension, or their rote memorization skills.

Further, at the public hearings, testing experts suggested that alternative testing procedures provide better ways of identifying the best potential supervisors in a fire department. One expert stated that based on his interviews with firefighters, “we know that” a written test is “not as valid as other procedures that exist.” The expert suggested that assessment center processes provide an opportunity for candidates to demonstrate their knowledge of the standard operating procedures and to demonstrate their problem-solving abilities. Similarly, situation judgment tests can lessen adverse impact. In short, the expert testified that more effective tests were available that would be expected to lessen the disparate impact. Another testing expert suggested that the difference in performance on the tests may have been due to differences in opportunities for training and informal mentoring available to minorities.

This expert testimony at the public hearings was echoed later in the Supreme Court amicus brief filed in support of the city by a number of well-regarded industrial-organizational psychologists. Their brief argued that the tests were not valid for several reasons. First, the tests did not attempt to measure command presence, a critical job attribute. Second, the weighting of the multiple-choice and oral interview portions of the exams were arbitrary. Third, flaws in the test development process contributed to the lack of validity. Fourth, the tests could not have been used strictly to rank-order the candidates. The brief asserted that these flaws in the exam exacerbated their adverse impact on minority candidates. Finally, the brief argued that current industrial-organizational psychology research supports the use of promotional assessment centers as a valid, less discriminatory alternative to traditional testing methods.

During the hearings, the city's own counsel advised that certifying the test results “would not be consistent with federal law” and that “[a] test can be job-related and have a disparate impact on an ethnic group and still be rejected because there are less discriminatory alternatives for the selection process.”

Despite this substantial evidence in the record raising concerns about the job-relatedness of the tests and the availability of less discriminatory alternatives, the Supreme Court ruled in favor of the Ricci plaintiffs. The Court concluded that the city did not have a strong basis in evidence to support its decision.

This application of the law leaves many wondering about the future of disparate impact theory and preparing for the “war” that Justice Antonin Scalia sees on the horizon. While this ruling may provide some incentive for employers to do their due diligence in advance to identify selection processes that are both fair and effective, the ruling also provides a powerful disincentive for employers to take action after a selection device proves to have a disparate impact. Time will tell whether the Court has created an insurmountable hurdle for disparate impact theory.

Sarah C. Crawford is Senior Counsel for the Employment Discrimination Project of the Lawyers' Committee for Civil Rights Under Law, Washington, DC. E-mail: [email protected].

In her dissenting opinion in Ricci v. DeStefano, Justice Ruth Bader Ginsburg posited that the disparate impact theory has been central to effective enforcement of Title VII for decades. Indeed, disparate impact cases have successfully challenged unnecessary barriers to equal employment opportunity for decades. Disparate impact theory has prompted employers to develop selection processes that are both fair and effective.

On June 29, 2009, the Court took a step backwards on the path toward fulfilling Title VII's promise of equal opportunity. In another 5-4 decision, the Court ruled that the City of New Haven, CT, violated Title VII when it failed to promote firefighters on the basis of tests that screened out nearly all of the minority firefighters who took them. The Court rejected evidence of flaws in the tests and alternative testing procedures that would be expected to lessen the disparate impact. With this ruling, the Court provided a powerful disincentive for employers to seek less discriminatory alternatives when a screening device proves to screen out members of a protected class disproportionately.

Some History

The Ricci case came under intense scrutiny after Judge Sonia Sotomayor was nominated to the Supreme Court. Judge Sotomayor served on the panel for the Second Circuit that issued the per curiam opinion affirming the trial court's grant of summary judgment for the City of New Haven. The public discourse revealed that many believe that employers can use “objective” tests regardless of their impact. Many seemed unaware that the law permits challenges even to facially neutral selection devices, and were under the misunderstanding that Title VII merely prohibits intentional discrimination. Many seemed to believe that Ricci was a case of first impression and failed to appreciate the history and rationale underlying disparate impact theory.

As Justice Ginsburg noted, the majority in Ricci “barely acknowledges the pathmarking decision in Griggs v. Duke Power” nearly 40 years ago. Indeed, the majority's decision suggested that the disparate impact theory first laid out in Griggs created a tension with Title VII's prohibition on employers' taking adverse employment actions “because of” race. Justice Scalia went further by alluding to “the war between disparate impact and equal protection.”

The Griggs Decision

When the Supreme Court first recognized the disparate impact theory of liability with the Griggs decision in 1971, the Court sought to conform with the letter of the law, not to create a new standard at odds with Title VII's protections. In Griggs, the Duke Power Company required a high school diploma or a minimum score on professionally developed aptitude tests for certain positions. These tests had the effect of eliminating disproportionate numbers of African-Americans who applied for the positions. By a unanimous vote, the Court invalidated these requirements, finding that the employer failed to demonstrate the link between the requirements and job performance, even in the absence of any intent to discriminate. Chief Justice Warren Burger's opinion recognized that the original text of Title VII:

proscribes not only overt discrimination but also practices that are fair in form, but discriminatory in operation. The touchstone is business necessity. ' [G]ood intent or absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as “built-in headwinds” for minority groups and are unrelated to measuring job capability.

Albemarle Paper

Four years later, the Court elaborated on disparate impact liability under Title VII. In Albemarle Paper Co. v. Moody, the Court explained that even if the employer demonstrates a “manifest relationship” between the test and the job, the employer is still liable if alternative tests or selection devices, without similar racial effects, would also serve the employer's business interests.

Disparate Impact

The 1991 amendments to the Civil Rights Act codified the rules set out in Griggs and Albemarle Paper. The amendments prohibited employment practices that result in a “disparate impact” if the employer cannot prove that the practice is required by “business necessity.” Furthermore, the 1991 amendments clarified that even if the employer proves that the practice is required by business necessity, the practice cannot stand if the plaintiff demonstrates that another practice with “less disparate impact” would “serve the [employer] as well.”

On June 29 of this year, the Supreme Court not only applied a new standard to disparate impact theory, but also offered a stringent interpretation of that new standard. In Ricci, the five justices in the majority ruled that an employer must have a “strong basis in evidence” to scrap a test that disproportionately screens out a protected group. The most surprising aspect of the decision was not really the new standard. The majority's standard was not exceptionally different from the dissenters' proposed standard that employers “must have good cause to believe the device would not withstand examination for business necessity.” Perhaps the most surprising aspect of the decision was the rigid manner in which the majority applied the new standard.

It was largely expected the Court would merely define the appropriate standard and remand the case for a determination as to whether the city had satisfied the standard. Indeed, the Solicitor General recommended such a course of action. Instead, the majority not only issued the new standard, but went on to rule that the city failed to satisfy that standard. The majority ruled in favor of the Ricci plaintiffs, concluding that the city of New Haven lacked a strong basis in evidence to support its decision to decline to certify the results of the promotional tests.

An Anomaly

To be sure, the Ricci plaintiffs' ultimate victory ' without ever having to prove their case at trial ' stands as an anomaly. Employment discrimination plaintiffs rarely succeed in court. The Harvard Law and Policy Review recently published a study entitled “Employment Discrimination Plaintiffs in Federal Courts: From Bad to Worse.” The study found that plaintiffs in employment discrimination cases win less than 4% of their pretrial adjudications. In district court, plaintiffs win just 11% of cases. On appeal, plaintiffs win reversal of trial court decisions only 9% of the time. It is virtually unheard of for a plaintiff to obtain a favorable judgment in an employment discrimination suit without going to trial.

The majority's bleak assessment of New Haven's actions stands in complete opposition to the assessment by the trial court and the court of appeals. Convinced that the city acted to comply with the law, the district court granted summary judgment in favor of the city. On appeal, the Second Circuit affirmed the “thorough, thoughtful and well-reasoned” opinion of the district court.

The dissenting opinion in Ricci suggests that the majority “simply shuts from its sight the formidable obstacles New Haven would have faced in defending against a disparate-impact suit.” At the very least, it would appear that there was some genuine issue of material fact in dispute. Indeed, the record reflects considerable evidence suggesting that the city declined to certify the test results due to flaws in the tests and the availability of alternative tests that would be expected to lessen the disparate impact.

Analysis

There is no doubt that the tests resulted in a stark racial disparity. None of the 27 African-American firefighters who applied for promotion passed the tests. Only two of the 23 Hispanic firefighters who applied passed the tests. By comparison, 17 of the 68 white firefighters who applied were eligible for promotion. The white pass rate was over six times the minority pass rate. The disparity in white and minority pass rates far exceeded the EEOC's 80% rule of thumb, which is used to determine whether a test results in a substantial disparate impact. EEOC guidance instructs that such a substantial disparity raises a red flag.

Upon learning of the test results, the City of New Haven saw the red flag. In response, the civil service board conducted multiple public hearings. The board heard testimony from those in favor of certifying the test results and from those against certifying the results. Some of this evidence raised concerns about the job-relatedness of the tests and indicated that less discriminatory alternatives were available.

Several New Haven firefighters complained that some of the questions were not relevant to the knowledge or skills necessary for the positions. One firefighter noted a question that asked whether to park a fire truck facing “uptown” or “downtown.” Such a question would appear to have been developed for a large city like New York, and does not apply in a small city like New Haven. Another firefighter complained that the study materials were not made readily available. These complaints highlighted the question of whether the tests truly identified the best candidates for captain or lieutenant positions or merely reflected applicants' access to study aids, their reading comprehension, or their rote memorization skills.

Further, at the public hearings, testing experts suggested that alternative testing procedures provide better ways of identifying the best potential supervisors in a fire department. One expert stated that based on his interviews with firefighters, “we know that” a written test is “not as valid as other procedures that exist.” The expert suggested that assessment center processes provide an opportunity for candidates to demonstrate their knowledge of the standard operating procedures and to demonstrate their problem-solving abilities. Similarly, situation judgment tests can lessen adverse impact. In short, the expert testified that more effective tests were available that would be expected to lessen the disparate impact. Another testing expert suggested that the difference in performance on the tests may have been due to differences in opportunities for training and informal mentoring available to minorities.

This expert testimony at the public hearings was echoed later in the Supreme Court amicus brief filed in support of the city by a number of well-regarded industrial-organizational psychologists. Their brief argued that the tests were not valid for several reasons. First, the tests did not attempt to measure command presence, a critical job attribute. Second, the weighting of the multiple-choice and oral interview portions of the exams were arbitrary. Third, flaws in the test development process contributed to the lack of validity. Fourth, the tests could not have been used strictly to rank-order the candidates. The brief asserted that these flaws in the exam exacerbated their adverse impact on minority candidates. Finally, the brief argued that current industrial-organizational psychology research supports the use of promotional assessment centers as a valid, less discriminatory alternative to traditional testing methods.

During the hearings, the city's own counsel advised that certifying the test results “would not be consistent with federal law” and that “[a] test can be job-related and have a disparate impact on an ethnic group and still be rejected because there are less discriminatory alternatives for the selection process.”

Despite this substantial evidence in the record raising concerns about the job-relatedness of the tests and the availability of less discriminatory alternatives, the Supreme Court ruled in favor of the Ricci plaintiffs. The Court concluded that the city did not have a strong basis in evidence to support its decision.

This application of the law leaves many wondering about the future of disparate impact theory and preparing for the “war” that Justice Antonin Scalia sees on the horizon. While this ruling may provide some incentive for employers to do their due diligence in advance to identify selection processes that are both fair and effective, the ruling also provides a powerful disincentive for employers to take action after a selection device proves to have a disparate impact. Time will tell whether the Court has created an insurmountable hurdle for disparate impact theory.

Sarah C. Crawford is Senior Counsel for the Employment Discrimination Project of the Lawyers' Committee for Civil Rights Under Law, Washington, DC. E-mail: [email protected].