July 2009 E-Alert
The U.S. Supreme Court Issues
The Highly Anticipated Decision in Ricci vs. DeStefano

On June 29, 2009, the United States Supreme Court issued its decision in Ricci vs. DeStefano, 557 U.S. ___ (2009). The Supreme Court's ruling was highly anticipated for two (2) reasons: (1) the legal issues presented; and (2) the role of Supreme Court nominee Sonia Sotomayor in the 2nd Circuit Court of Appeals' decision upholding the decision of the City of New Haven, Connecticut to discard test results which would have resulted in the promotion of seventeen white candidates, two Hispanic candidates, but no African-American candidates.

While the political implications are of significant interest, the Ricci decision also provides valuable lessons for public and private employers faced with balancing the disparate-impact and disparate-treatment causes of action under Title VII of the Civil Rights Act. Specifically, all public and private employers utilizing oral or written tests for hiring and/or promotional purposes are impacted by the Court's decision.

All Choices Lead to Litigation

The City of New Haven used objective written and oral examinations to determine which firefighters were best qualified for promotion to vacant lieutenant and captain positions. When the results showed that white candidates significantly outperformed minority candidates, rancorous public debate ensued.

The firefighters arguing that the tests should be discarded threatened race discrimination litigation on the basis of disparate impact, on the theory that the tests resulted in a racial disparity by making significantly more white firefighters eligible for promotion than their minority counterparts. The firefighters arguing that the tests should be honored threatened reverse race discrimination litigation on the theory of disparate treatment, contending that the tests were fair and neutral and that they could not be denied promotions solely because of a statistical disparity in objective test results based on race.

Disparate Treatment vs. Disparate Impact

In reversing the 2nd Circuit, the Court ruled that the City's attempt to avoid disparate-impact discrimination may have been well intentioned, but its decision to reject the test results based solely on racial considerations constituted impermissible disparate-treatment discrimination under Title VII. 42 U.S.C. §§ 2000e-2(a)(1). In an effort to give effect to both the disparate-treatment and the disparate-impact provisions and to promote the overall goal of Title VII to eradicate workplace discrimination, the Court adopted the "strong basis in evidence" standard.

The "Strong Basis in Evidence" Standard

Under the "strong basis in evidence" standard, a race based action like the City's discarding of test results is permissible under Title VII only if the employer can demonstrate a strong basis in evidence that, had it not taken the action, it would have been liable for disparate-impact discrimination, not just that it had a "mere good-faith fear of disparate-impact liability." The Court concluded the City of New Haven did not have such a basis on the facts presented because the test was job related for the position in question, the test was consistent with business necessity, and there was no evidence the City refused to adopt an available alternative employment test that had a less disparate impact that would meet its legitimate needs. Accordingly, the Court concluded there was no strong basis in evidence that a disparate-impact action could have been sustained against the City.

The new "strong basis in evidence" standard applicable to Title VII actions, involving judgment decisions by employers whether to risk lawsuits under a disparate-treatment or disparate-impact theory, does not offer a bright-line test for insulating employers from litigation. The standard does, however, provide the analytical framework needed to best insulate employers from ultimate liability under Title VII in these circumstances.

Should you have any questions about this alert or how it impacts your company, please do not hesitate to contact any of the lawyers at the Lowenbaum Partnership L.L.C.

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