In Ricci v. DeStefano, the U.S. Supreme Court held that the refusal by the city of New Haven, Connecticut to certify the results of a firefighters’ exam due to its racially skewed results constituted disparate treatment under Title VII, even though the city’s refusal was based on its interest in avoiding disparate impact liability under Title VII.

In 2003, New Haven issued a test to its firefighters to assist with decisions about promotions to lieutenant and captain. When the test results demonstrated that white candidates had outperformed minority candidates, a public debate ensued. Certain firefighters argued to city officials that the racially skewed performance results proved that the test had been racially biased, and they threatened to bring a Title VII disparate impact suit if the city made promotional decisions in reliance on the test results. Title VII’s disparate impact prong prohibits employer practices that, although neutral on their face, are “discriminatory in practice.”

Swayed by this threat, New Haven discarded the test results. A group of white and Hispanic firefighters, whose strong test performance would have likely earned them a promotion, sued the city alleging that its refusal to certify the test results based on the race of the successful candidates constituted a violation of Title VII’s disparate treatment prong. That prong, which prohibits intentional discriminatory practices, makes it unlawful for an employer “to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” A district court dismissed the lawsuit, and a court of appeal affirmed the dismissal. The Supreme Court agreed to hear the case, and reversed, holding that New Haven engaged in disparate impact discrimination.

The Supreme Court held that it is impermissible under Title VII for an employer to discard test results based on the race of the outperforming candidates absent a strong basis in evidence that, had it not taken the action, the employer would have been liable for disparate impact discrimination. In applying this newly-enunciated standard to New Haven, the Court concluded that the city had not met this evidentiary threshold. Specifically, while the Supreme Court acknowledged that the minority firefighters likely would have established a prima facie case of disparate impact discrimination against New Haven due to the “significant” racial adverse impact of the test results, the Court reasoned that New Haven would have ultimately prevailed against the theoretical lawsuit because the exam was job-related and consistent with business necessity. Noting 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 Court was not convinced that New Haven’s decision to discard the test was warranted under the circumstances.

Ricci may leave employers feeling stuck between a rock and a hard place—this marks the first time that the Supreme Court has held that an employer’s good faith effort to avoid disparate impact liability under Title VII could ultimately render the employer liable for disparate treatment discrimination. Notably, this order to provide a fair opportunity for all individuals, regardless of their race.” decision only applies to decisions to invalidate test results after the test has been administered. The Court explicitly noted that “Title VII does not prohibit an employer from considering, before administering a test or practice, how to design that test or practice in order to provide a fair opportunity for all individuals, regardless of their race.”