On June 29, 2009, the U.S. Supreme Court issued a 5-4 decision in Ricci v. DeStafano, a case brought by white and Hispanic firefighters in New Haven, Conn., who passed promotional exams but were denied a chance at promotions based on the test when the city refused to certify the results because of a statistical racial disparity.

Petitioners argued that the city engaged in unlawful race discrimination when it disregarded the test results because the results had a disparate impact on African-American candidates. The Supreme Court held that the city violated Title VII of the Civil Rights Act of 1964 by disregarding the results.

This decision means that employers using employee tests to make job decisions must be more careful than ever in both implementing the tests and in discarding the results if faced with a statistical disparity among races. Even well-intentioned efforts can run afoul of Title VII.

Background

In 2003 the City of New Haven offered promotional examinations to its firefighters. The city hired a third-party administrator to develop and design the examination, and to do so in a manner that was nondiscriminatory. The administrator took numerous precautions to ensure a nondiscriminatory examination.

The results of the examinations would be used to determine which firefighters were eligible for promotion to lieutenant or captain within the next two years. The examinations were taken by 118 firefighters. Many took months to study for the exam, some even taking time off work at their own expense. The results of the examination demonstrated that white candidates scored higher than minority candidates.

A public debate ensued with many arguing that the results should be thrown out as discriminatory. Some even threatened to sue the city if the tests were used as a basis for promotional decisions. The city ultimately threw out the results of the tests to avoid potential disparate impact liability. White and Hispanic firefighters who likely would have been promoted based on their test results sued the city arguing that it had discriminated against them based on their race.

The decision

The Supreme Court held that race-based decision-making violates Title VII unless there is some other justification. Title VII protects employees and applicants from discrimination not only on the basis of “disparate treatment,” being treated differently based on membership in a protected category, but also on the basis of “disparate impact.” Disparate impact occurs when a facially neutral decision or conduct has a disproportionately adverse effect on a protected group.

The question before the Court in Ricci was whether the avoidance of liability for disparate impact discrimination would excuse disparate treatment based on race. The Court determined that the answer was “yes,” but only where there is “a strong basis of evidence” that the disparate impact liability would otherwise result. A statistical disparity in the test results was not enough to meet this standard. A showing of disparate impact discrimination would also require proof that the promotional exams were not job-related and consistent with business necessity, or that there existed an equally valid, less discriminatory alternative that the city failed to use—a showing that could not be made under these facts.

Conclusion

The takeaway from this case is that employers should be careful whenever making race-based decisions, regardless of their good intentions. Employers using exams or other measurements of their employees’ abilities or performance will be unable to discard results due to statistical disparities among races or other classes protected by Title VII unless the exam or measurement was not based on business necessity or an equally valid, less discriminatory alternative was available.