Seyfarth Synopsis: In Smith v. City of Boston, Plaintiffs brought suit against their employer, the City of Boston (the “City”), challenging the City’s police promotional exam from sergeant to lieutenant. Plaintiffs alleged that the exam had a disparate impact on racial minorities and was invalid under Title VII of the Civil Rights Act of 1964 (“Title VII”). For the second time, in the same case, District Court Judge William G. Young ruled in favor of Plaintiffs and imposed liability on the City.

The Court’s decision, Smith v. City of Boston, No. 12-CV-10291-WGY (D. Mass. July 26, 2017) (“Smith II”), serves as a cautionary tale about the discretion that trial courts have to distinguish between similar cases and reach conclusions that might appear to be inconsistent with appellate authority.

Case Background

In 2012, a group of African-American police sergeants filed a lawsuit claiming that the City’s exam for promotion from sergeant to lieutenant discriminated against minority candidates in violation of Title VII. In a 2015 decision, the Court agreed with Plaintiffs after a bench trial, holding that the “lieutenants’ exam had a racially disparate impact and was insufficiently job-related to survive the Plaintiffs’ challenge.” Smith v. City of Boston, 144 F. Supp. 3d 177, 180-81 (D. Mass. 2015) (“Smith I”).

In a different case, Lopez v. City of Lawrence, No. 07-11694, 2014 U.S. Dist. LEXIS 124139 (D. Mass. Sept. 5, 2014) (“Lopez I”), a different judge in the District of Massachusetts addressed similar claims. In that case, a group of African-American and Hispanic patrolmen challenged the civil service exam for promotion from patrolman to sergeant, claiming disparate impact discrimination. The presiding judge in Lopez, Judge George A. O’Toole, rejected the plaintiffs’ claim after a bench trial. The trial court reasoned that, although the sergeants’ exam “imposed a significantly disparate impact on minority applicants,” the defendants established that the exam was nevertheless justified by business necessity. Id. at *48, 60-61. The Lopez plaintiffs appealed to the U.S. Court of Appeals for the First Circuit.

Before Judge Young undertook to determine a proper remedy consistent with its ruling in Smith I, the First Circuit issued a ruling affirming the trial court’s decision in Lopez I. Lopez v. City of Lawrence, 823 F.3d 102 (1st Cir. 2016), cert. denied, 137 S. Ct. 1088 (2017) (“Lopez II”). The First Circuit concluded, as did Judge O’Toole, that the sergeants’ exam had a significantly disparate impact on racial minorities, and that Judge O’Toole did not clearly err in concluding that business necessity nevertheless justified the exam. Id. at 107-111.

In light of the First Circuit’s order in Lopez II, Judge Young revisited his earlier ruling in Smith I. The City argued that Lopez II compelled the Court to reach a different conclusion on the issue of business necessity, and to consider whether there existed an equal or better exam that identified the best candidates for the lieutenant position, which had a less disparate impact on racial minorities. The Court disagreed.

The Decision

Job Related & Consistent With Business Necessity

The City advanced several arguments in reliance on Lopez II. First, the City argued that the Court used the wrong legal standard to evaluate the exam’s validity. It argued that Lopez II requires the Court to determine the exam’s validity by utilizing a “better than random selection” standard, not the “representative sample test” established by the Equal Employment Opportunity Commission’s (“EEOC”) Uniform Guidelines on Employee Selection Procedures (“Guidelines”). Smith II, at *15. In its earlier analysis, the Court reasoned that the Guidelines “provide a sensible way of evaluating whether a given test . . . measures an important work characteristic, and whether the outcomes of that test are actually correlated with the characteristic measured.” Id. at *11. Using the Guidelines, and relying on expert testimony, the Court determined that the exam results were not predictive of or correlated with the important work behaviors of police lieutenants. Id. Lopez II, according to the Court, does not require a different conclusion. Indeed, the Court stated that the “First Circuit certainly did not ban the use of the Uniform Guidelines’ representative sample test.” Id. at *15-16. Such a ban, the Court observed, would be “surprising” because they come from the EEOC and “are due an appropriate degree of deference.” Id. at *16.

Second, the City argued that the Court should reconsider its rejection of the Education and Experience (“E&E”) component of the lieutenants’ exam. Because the First Circuit found in Lopez II that the E&E component of the sergeants’ exam was useful to assess qualities important to a sergeant’s daily work, the City argued that the Court should not have excluded the E&E component from its validity analysis of the lieutenants’ exam. The Court was unpersuaded, noting that it did consider the E&E in its ruling, but held that the “E&E did not rescue an otherwise invalid written exam.” Id. at *21. The holding in Lopez II did not change the Court’s opinion given the variations between the two cases. The Court: “(1) relied on expert testimony that the E&E component failed to differentiate among candidates or demonstrate the [knowledge, skills, and abilities] necessary in a lieutenant; (2) had no evidence that incumbent lieutenants performed better on the written exam; and (3) had no evidence to show that the E&E component was valid on its own.” Id. at *21-22 (internal citations omitted). Accordingly, unlike the evidence at issue in Lopez II regarding the sergeants’ exam, the evidence before the Court did “not establish that the E&E measured qualities important to a lieutenant’s daily responsibilities.” Id. at *22.

Third, the City asserted that, in light of Lopez II, the Court “inappropriately applied a heightened validity requirement for rank ordering” and that “rank ordering furthers [the City’s] interest in eliminating patronage and intentional racism.” Id. The Court disagreed. The Court reasoned that “[w]here a selection procedure not only has a disparate impact on a pass-fail basis, but also compounds that effect through use of rank ordering, each hiring decision carries an increased risk of a discriminatory result.” Id. at *24. In that case, the Court held that it “did not err in applying a heightened validity requirement for rank ordering,” and the First Circuit’s decision in Lopez II does not compel a contrary conclusion. Id. Even if the City faced a lower burden, it still failed according to the Court. That is because the evidence before the Court did not support an inference that candidates who performed better on the lieutenants’ exam would be better performers on the job. Id. at *25.

The City also challenged the Court’s finding of liability without first addressing whether an equally valid, less discriminatory alternative test existed to identify successful candidates for the lieutenant position. Specifically, the City argued that the Court could not reject the City’s justification for the lieutenants’ exam absent “some showing that there exists an available alternative with less disparate impact that serves [the City’s] legitimate needs.” Id. at *26. Once again, the Court disagreed. The Court held that the First Circuit’s ruling in Lopez II did not change the burden shifting framework that applies to the analysis of disparate impact cases. Id. If the plaintiff proves that a test has a significant disparate impact, and the defendant then fails to prove that the test is job related and consistent with business necessity, “then the defendant loses, regardless of the plaintiffs’ showing of an alternative.” Id. The City did not convince the Court that the lieutenants’ exam was sufficiently job related and consistent with business necessity. Accordingly, the Court did not change its previous ruling in favor of Plaintiffs.

Implications For Employers

The Court concluded its decision by observing that Lopez and Smith are “significantly different” and “fact intensive cases.” Id. at *29. They involved different evidentiary records and different exams for different positions. Id. The Court held that it did not commit legal error by applying the same law to a different case and reaching a different conclusion. Id. at *29-30.

The Smith II decision should therefore remind employers of the broad authority that trial court judges have when it comes to applying the law to the facts and evidence in order to reach a conclusion. As Judge Young noted in Smith II: “Fact finding is the province of the district courts.” Id. at *29-30. Judge Young applied his understanding of disparate impact law to the evidence before him and determined that the City failed to meet its burden of proof. Would a different judge have reached a different conclusion? Will the First Circuit affirm the Court’s order if the City appeals? These are fair questions, the answers to which are unclear.