Justices Ignite "Fire" In Disparate Impact Case

Supreme Court Ruling Extends Period For Workers To Sue For Bias

With Justice Antonin Scalia writing a unanimous opinion, the U.S. Supreme Court ruled in a case brought by a group of African-American firefighter applicants who alleged that the city of Chicago’s applicant selection process had a disparate impact on African-Americans in violation of Title VII of the Civil Rights Act of 1964. Specifically, the applicants challenged the city’s decision to exclude employment applicants who did not achieve a certain score on an examination –  but not the city’s decision to adopt that employment practice. The Court ruled that a plaintiff who does not file a timely charge challenging the adoption of a practice nevertheless may assert a disparate impact claim in a timely charge challenging the employer’s later application of that practice so long as he or she alleges each of the elements of a disparate impact claim. Lewis v. City of Chicago, No. 08- 974, U.S. Supreme Court (May 24, 2010).

Factual Background

In July of 1995, the city of Chicago administered a written examination to over 26,000 applicants seeking to serve in the Chicago Fire Department. The city then drew randomly from the applicants who scored 89 or above – so-called “well-qualified” applicants – to proceed to the next phase. Those who scored below 65 were notified that they had failed the test and would no longer be considered for a firefighter position.

The applicants who scored between 65 and 88 – referred to as “qualified” applicants – were notified that they had passed the examination but that it was not likely they would be considered. Over the next six years, however, the city exhausted the list of well-qualified applicants and started drawing from the qualified applicant list.

On March 31, 1997, Crawford Smith, an African-American applicant who had scored in the “qualified” range and had not been hired, and five others each filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC). After receiving right-to-sue letters, the applicants filed suit under Title VII alleging that the city’s practice of selecting only applicants who scored over 89 for advancement had a disparate impact on African-Americans. Title VII prohibits both intentional discrimination (“disparate treatment”) as well as unintentional discrimination that results from practices that, while not intended to discriminate, have a disproportionately adverse effect on members of a particular classification (“disparate impact”).

The city argued that the applicants had failed to file EEOC charges within 300 days of the time that their claims accrued. The district court sided with the applicants, concluding that the city’s “ongoing reliance” on the 1995 test results constituted a “continuing violation” of Title VII. The court also rejected the city’s argument that its cutoff score of 89 was justified by business necessity. The court ordered the city to hire 132 randomly-selected members of the class and awarded back pay to be divided among the rest of the class members.

The Seventh Circuit Court of Appeals reversed this ruling, holding that the suit was untimely because the earliest EEOC charge was filed more than 300 days after the only allegedly discriminatory act occurred – sorting the scores into the “well-qualified,” “qualified,” and “not-qualified” categories. The later hiring decisions were immaterial, the court ruled, because they were an automatic consequence of the test scores. The case eventually reached the U.S. Supreme Court.

Legal Analysis

The “real question” in this case, the Court ruled, was whether the practice challenged by the applicants – excluding those who scored under 89 until the well-qualified applicant list was exhausted – could be the basis for a disparate impact claim. Title VII prohibits employers from using employment practices that cause a disparate impact on the basis of race. The Court ruled that the city’s practice of selecting only those who had scored 89 or above on the 1995 examination to advance qualifies as an “employment practice” under Title VII. Although the city had adopted the eligibility list earlier, “it made use of the practice of excluding those who scored 88 or below each time it filled a new class of firefighters.”

The Court next rejected the city’s argument that the unlawful employment practice in this case occurred in 1996 when it “used the examination results to create the hiring eligibility list, limited hiring to the `well qualified’ classification, and notified petitioners.” Although that decision may have been unlawful, the city argued, it could not be the basis for liability because a timely charge had not been filed challenging the decision. Moreover, no new violations had occurred, the city argued, since the exclusion of the applicants during the selection process followed directly from the earlier decision to adopt the cutoff score.

The Court reasoned that even if the city is correct that a timely charge was not filed challenging its decision to adopt the cutoff score, “it does not follow that no new violation occurred – and no new claims could arise – when the City implemented that decision down the road.” According to the Court, if the applicants could prove that the city “use[d]” the “practice” that “causes a disparate impact,” they could prevail.

Finally, the Court considered the city’s argument that its interpretation “will result in a host of practical problems for employers and employees alike.” For example, the city noted that employers may face suits for practices they have used regularly for years and in which evidence essential to a business necessity defense might be unavailable. Acknowledging that both interpretations “produce puzzling results,” the Court noted that “it is not our task to assess the consequences of each approach and adopt the one that produces the least mischief.” “Our charge,” the Court concluded, “is to give effect to the law Congress enacted.”

Practical Impact

According to Michael Cramer, a shareholder in Ogletree Deakins’ Chicago office: “Years after initially deciding to exclude job applicants who scored below a certain threshold on a test (a decision that had a disparate impact on African-American applicants), the city of Chicago kept excluding such applicants. The Supreme Court’s Lewis decision clarifies that, in the disparate impact context, each subsequent `use’ of an impermissible policy constitutes a new violation – even if the statute of limitations ran long ago on the initial decision to implement the policy. The fact that a policy was implemented well outside the limitations period does not protect an employer that continues to use and reuse that policy.”