United States Supreme Court Issues Key Disparate Impact Ruling

Yesterday, the United States Supreme Court issued a key decision in a disparate impact case involving written exams in the City of Chicago firefighter application process. In a unanimous decision written by Justice Scalia, the Supreme Court discussed an issue of high importance to employers.

In 1995, the City of Chicago required all firefighter applicants take a written examination. The City announced in January 1996 that it would draw random candidates from the applicants that scored at least 89 out of 100 points. These applicants were designated as "well qualified." Applicants scoring between 65 and 88 were designated as "qualified" and were told they would be kept on an eligibility list. Any applicants that scored below 65 were informed they failed the exam and would not be considered for any firefighter positions. In March 1997, a group of black applicants that scored in the "qualified" range filed Charges of Discrimination with the EEOC and received Notices of Right to Sue. They ultimately filed suit and the lower court certified their lawsuit as a class action. The firefighters prevailed at the lower court level. On appeal, the Seventh Circuit reversed the lower court's decision and found the lawsuit was untimely because the earliest EEOC Charge of Discrimination was filed more than 300 days after the January 1996 decision to sort the test scores into three categories. The firefighters appealed to the Supreme Court.

As an initial matter (and as pointed out by Justice Scalia in the opinion), Title VII of the Civil Rights Act of 1964 prohibits employers from using practices (even if those practices are on their face non-discriminatory) that cause a disparate impact on the basis of race. Tests such as those at issue in this case are often the impetus for disparate impact cases. Title VII also requires plaintiffs to file a Charge of Discrimination within 300 days of the complained-of act prior to filing a lawsuit. The firefighters in this case argued that each time the City used the test scores to make a hiring decision, a new disparate impact cause of action accrued which began the 300 day deadline. The City argued the January 1996 decision to sort the scores was the only relevant date for disparate impact purposes and that each hiring decision thereafter was not a new discriminatory act because the City was only implementing the prior January 1996 decision.

The Supreme Court held that each hiring decision gave rise to a new disparate impact claim. The Court based this decision on the language in Title VII itself that states a plaintiff establishes a disparate impact claim when he or she shows an employer "uses a particular employment practice that causes a disparate impact." The Court said the City's exclusion of applicants (based on test scores) in each round of selection was a "use" as defined by Title VII. Thus, each hiring decision started the 300 day clock and the firefighters in this case timely filed Charges of Discrimination.

So what should employers take away from this key decision? It is important for any employer that utilizes tests and other similar employment practices that may create a disparate impact on its employees to constantly re-evaluate those practices and their impacts. An employer cannot avoid a lawsuit simply by relying on the fact the practice was implemented years ago. If an employer still makes decisions based on the practice at issue, each new decision gives rise to a potential cause of action. Employers, make sure your practices are sound and stay diligent and up to date.