Supreme Court rules on pre-employment tests and disparate impact

by Arthur B. Smith Jr. and Michael H. Cramer, Esqs.

The U.S. Supreme Court in late May unanimously sided with a group of black firefighter applicants who alleged that the city of Chicago’s employment selection process had a disparate impact on them. The court said the timing of Title VII lawsuits—in this case concerning a pre-employment test—doesn’t depend on when the alleged discriminatory act first occurred, but on when the employer acted on the results of that discriminatory act, even if that’s years later.

The applicants challenged the city’s decision to exclude applicants who did not achieve a certain score on an examination—but not the city’s decision to adopt that employment practice.

The case is Lewis v. City of Chicago (Supreme Court of the United States, No. 08–974, May 24, 2010).

Pre-employment tests

In July 1995, Chicago administered a written examination to more than 26,000 applicants seeking to serve in the Chicago Fire Department. The city then drew randomly from the applicants who scored 89 or above—so-called “well-qualified” applicants—to proceed to the next phase.

Interview Bootcamp D

Those who scored below 65 were notified that they had failed the test and would no longer be considered for a firefighter position.

Applicants who scored between 65 and 88—referred to as “qualified” applicants—were told they had passed the examination but probably wouldn’t be called for further processing. Over the next six years, the city exhausted the list of well-qualified applicants and started drawing from the qualified applicant list.

Six black applicants who had scored in the qualified range and hadn’t been hired sued after filing EEOC complaints. They alleged that the city’s practice of selecting for advancement only applicants who scored 89 or higher had a disparate impact on blacks.

Title VII prohibits practices that, while not intended to discriminate, have a disproportionately adverse effect on members of a particular classification. That’s known as disparate impact.

The case eventually reached the U.S. Supreme Court, where Chicago argued the men had missed their 300-day deadline to file EEOC complaints and that the date that counted was the original date the city announced how it would use the test results.

What’s the real question?

The “real question” in this case, the Supreme Court ruled, was whether the practice challenged by the applicants—excluding those who scored under 89 until the well-qualified applicant list was exhausted—could be the basis for a disparate impact claim.

The court ruled that the city’s practice of selecting only those who had scored 89 or above on the 1995 examination to advance qualifies as an “employment practice” under Title VII. Although the city had adopted the eligibility list earlier, “it made use of the practice of excluding those who scored 88 or below each time it filled a new class of firefighters.”

The court next rejected the city’s argument that the unlawful employment practice in this case occurred in 1996 when it “used the examination results to create the hiring eligibility list, limited hiring to the ‘well-qualified’ classification, and notified petitioners.”

The court reasoned that even if the city was right that a timely charge had not been filed challenging its decision to adopt the cutoff score, “it does not follow that no new violation occurred—and no new claims could arise—when the ity implemented that decision down the road.”

According to the court, if the applicants could prove that the city used the practice that causes a disparate impact, they could prevail.

Impact on employers

Years after initially deciding to exclude job applicants who scored below a certain threshold on a test, the city of Chicago kept excluding such applicants. The Supreme Court’s Lewis decision clarifies that, in the disparate impact context, each subsequent use of an impermissible policy constitutes a new violation—even if the statute of limitations on the initial decision ran out long ago.

The fact that a policy was implemented well outside the limitations period does not protect an employer that continues to use and reuse that policy.

Although the court did not mention the Lilly Ledbetter Fair Pay Act, it appears that all nine members of the court got Congress’ message when that law was enacted.

In a disparate impact case, no longer are Title VII time limitation periods to be strictly construed by ascertaining when the original discriminatory employment action occurred. Instead, time limitation periods are to be applied in reference to much later implementations of the original action, even those occurring well outside the time limitation period measured from the original discriminatory act.

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Authors: Arthur B. Smith Jr. and Michael H. Cramer are shareholders in Ogletree Deakins’ Chicago office. They represent employers on a wide variety of labor and employment-related legal matters.