In a decision sure to generate increased disparate impact litigation, the U.S. Supreme Court unanimously held on May 24, 2010, that a plaintiff alleging disparate impact under Title VII of the Civil Rights Act of 1964, who does not file a timely charge with the Equal Employment Opportunity Commission (EEOC) challenging the adoption of an alleged discrimination employment practice, may still assert a disparate impact claim based on a timely charge challenging the employer's later application of that practice. (Lewis v. City of Chicago, 560 U.S. _, Case No. 08-974 (U.S. Sup.Ct. May 24, 2010)).
In Lewis, a group of African-American applicants for firefighter positions with the City of Chicago alleged that a written examination administered to over 26,000 applicants had an illegal disparate impact against African-American applicants in violation of Title VII. In July 1995, the City administered a written test to applicants seeking employment with the Chicago Fire Department. The City used the written test to determine eligibility of the applicants for hiring. Individuals who scored 89 or above (out of 100), were considered "well qualified" and would move on to the next phase of the hiring process. Those who scored below 65 were notified that they failed the test and would not be considered for a position. Applicants who scored in the range of 65 and 88 were considered "qualified," but were notified that it was not likely they would be considered for a position. The City further emphasized that the "qualified" applicants' names would be kept on record and used to hire from as long as the list was used from the 1995 test.
The City announced in January 1996 that it had scored and created the hiring classifications from the July 1995 test. It selected its first hiring class based on the test results on May 16, 1996. The City selected a second class of candidates on October 1, 1996, and repeated this drawing process nine more times over a six-year period.
On March 31, 1997, an individual who scored in the "qualified" range on the 1995 test but had not been hired as a firefighter filed a charge of disparate impact race discrimination with the EEOC. Thereafter, five other African-American applicants likewise filed charges. On July 28, 1998, the EEOC issued all of them right-to-sue letters. Upon receiving the right-to-sue letters, the unsuccessful applicants filed a class action lawsuit against the City of Chicago alleging that the City's practice of only advancing the "well qualified" applicants (those who scored 89 or above (out of 100)) resulted in a racially disparate impact in violation of Title VII. The District Court ultimately certified a class of more than 6,000 African-Americans who scored in the "qualified" range but had not been hired.
Before the District Court, among other defenses, the City argued that the case should be dismissed because the plaintiffs had failed to file their EEOC charges within 300 days after the City announced the adoption of the cut-off scores and used the test results in 1996 to create a hiring list, which it conceded was unlawful. Under Title VII, in most circumstances, a charge of discrimination must be filed with the EEOC within 300 days of the challenged discriminatory action in order to later bring a lawsuit in court. The District Court rejected this argument, and held that the EEOC charges were timely because the City's ongoing use of the 1995 test to create later hiring lists was a "continuing violation" of Title VII. Finding for the plaintiffs, the Court ordered the City to hire 132 randomly selected members of the class and awarded back pay to be divided among the remaining class members.
On appeal, the Seventh Circuit Court of Appeals reversed the District Court, holding that the lawsuit was untimely because the EEOC charges were not filed within 300 days after the 1996 discriminatory act of classifying applicants into the classes of "well qualified," "qualified," and "not qualified." (Lewis v. City of Chicago, 528 F.3d 488 (7th Cir. 2008)).
A unanimous U.S. Supreme Court reversed. Finding that the real question was whether the plaintiffs had identified a discriminatory employment practice that could be the basis for a disparate impact claim during a 300-day charge filing period, the Court held that the City's practice of excluding individuals who scored 88 or below until it exhausted the "well qualified" applicant list was an employment practice upon which a disparate impact claim could be predicated. As a result, though the City adopted the hiring list in 1996, "it made use of the practice of excluding those who scored 88 or below each time it filled a new class of firefighters."
Writing for the Court, Justice Scalia rejected the City's argument that the only actionable discrimination occurred in 1996 when it used the examination results to create the hiring eligibility list and notified applicants that it was limiting hiring to the "well qualified" classification. The Court held that "[i]t may be true that the City's January 1996 decision to adopt the cutoff score gave rise to a freestanding disparate-impact claim," but "it does not follow that no new violation occurred -- and no new claims could arise."
The Court also rejected the City and amici's contention that allowing new claims to accrue based upon prior test results would cause a "host of practical problems for employers and employees alike." Not persuaded by this policy argument, Justice Scalia observed that "it is not our task to assess the consequence of each approach and adopt the one that produces the least mischief." Rather, the Supreme Court is "charge[d] to give effect to the law Congress enacted."
The decision in Lewis is important in many aspects. Employers may now face disparate impact lawsuits based on practices or policies that they have relied on regularly for years. It is also important because employees may allege disparate impact claims every time an employer takes action under an alleged discriminatory practice, even if the practice originated well outside of the 300-day charge filing period.
The decision in Lewis, along with Congress' enactment of the Lilly Ledbetter Fair Pay Act in 2009, verifies that employers must continue to be cognizant of potential claims based upon the application of long-standing policies or practices even when those policies and practices have never before been subject to a claim or charge of discrimination.
We hope you find this information helpful. If you have any questions regarding the application of this case to your workplace policies and practices, please contact any member of our Employment and Labor team.