On June 29, 2009, a closely divided (5-4) United States Supreme Court issued a decision in Ricci v. DeStefano, which concerned the claims of white firefighters that they had suffered discrimination in violation of Title VII when the City of New Haven, Connecticut, threw out test results from a promotional examination that would have qualified white and Hispanic firefighters for promotion, but no African-American firefighters. In so ruling, the Supreme Court reversed both the District Court for the District of Connecticut and the Court of Appeals for the Second Circuit, which had affirmed the District Court ruling. Interestingly, especially in light of the close vote in the Supreme Court, the Second Circuit panel that had affirmed the District Court ruling included Supreme Court nominee Sonia Sotomayor.

The majority opinion, delivered by Justice Anthony Kennedy, noted the potential conflict between Title VII’s prohibition of purposeful disparate treatment based on race and its prohibition of otherwise neutral actions that disparately impact a protected group. The Court concluded that the City had violated the prohibition against purposeful treatment based on race and the City’s reliance on a possible disparate impact claim to justify its actions was not supported by the evidence. To address the potential conflict in Title VII's terms, the Court adopted the “strong basis in evidence” test, previously used in the context of the Equal Protection Clause of the Fourteenth Amendment. Under the test, government actions to remedy racial discrimination that are race-based are valid only where there is a “strong basis in evidence” that the remedial actions are necessary to avoid liability on a claim of disparate impact discrimination.

In applying its newly announced test, the Court explained that the City would be liable for disparate impact discrimination only if: a) the examination was not job related and consistent with business necessity; or b) there was an equally valid, less discriminatory alternative that served the City’s needs which that the City refused to adopt. The Court found no such “strong basis in evidence” to establish the promotional examination was deficient in either of these two respects, and based its reversal on this analysis.

Additionally, the Court noted that the test was consistent with Title VII provisions that prohibit employers from adjusting employment related tests scores on the basis of race and that provide protection for bona fide promotional examinations. The Court stated that if an employer cannot rescore a test on the basis of race, it should not be allowed to take the greater step of discarding the test entirely to achieve a more desirable racial distribution. Further, the Court stated that uncertainty and fear of litigation—which was a risk regardless of the path chosen by the City—could not justify the City’s actions. Rather, the City was obligated to undertake the “difficult inquiry” of whether it would be liable for violating Title VII’s disparate impact provisions by discarding the test results.

This decision likely will have a significant impact on diversity initiatives by employers across the country.