July 7, 2009
On June 29, 2009, the Supreme Court issued its decision in the case of Ricci v. DeStefano (see June 15, 2009 blog post for an explanation of the case and the positions of the parties). In a 5-4 decision, the Supreme Court reversed the Second Circuit Court of Appeals, holding that the City of New Haven violated Title VII of the Civil Rights Act by refusing to certify the results of firefighter promotional examinations because too few minority candidates passed.
The Supreme Court agreed with the plaintiffs that an employer must have a "strong basis in evidence" to believe it will be subject to disparate impact liability in order to make a race-conscious decision such as the one made by the City of New Haven. The Supreme Court rejected the position of the City of New Haven (and the position taken by the U.S. Government in its amicus brief) that an employer need only have a "reasonable basis" for believing it might be liable under a disparate impact theory. In prior decisions (such as Richmond v. J.A. Croson Co., 488 U.S. 469 (1989)), the Supreme Court has applied this same "strong basis in evidence" standard in determining whether certain types of race-conscious government actions to remedy past racial discrimination are justified under the Equal Protection Clause of the U.S. Constitution. Therefore, it appears that the Supreme Court's decision is consistent with, rather than a deviation from, the current legal standards.
Upon examining the record, the Supreme Court held that the City of New Haven did not have a strong basis in evidence to believe it would have been subject to disparate impact liability. The Supreme Court found that the City of New Haven's decision to throw out the results of the promotional examinations was based only on the statistical disparity in the number of white and minority candidates who passed. The Supreme Court held that the statistical disparity alone was insufficient to justify the City of New Haven's race-based decision to reject the results of the examinations. The City of New Haven would only have been liable under a disparate impact theory if the examinations were not job-related and consistent with business necessity, or if there existed a less discriminatory alternative that the City refused to adopt. The Supreme Court found that there was no evidence that the examinations were not job-related and consistent with business necessity, or that there were less discriminatory alternatives available. The Supreme Court held that "fear of litigation alone cannot justify an employer's reliance on race to the detriment of individuals who passed the examinations and qualified for promotions."
The lesson of the Ricci v. DeStefano case is that employers must be extremely cautious about making race-based employment decisions (or employment decisions based on any protected category) simply to avoid a disparate impact lawsuit. Employers that find themselves in the difficult position faced by the City of New Haven should do a thorough analysis in order to determine whether there is a strong basis in evidence to support a disparate impact theory of liability, and should not make race-based employment decisions in the absence of such evidence.