Adverse Impact and Reverse Discrimination

Ricci v. DeStefano (2009)

In Ricci v. DeStefano, the Supreme Court held that employers may violate Title VII when they engage in race-conscious decision making to address adverse impact--unless they can demonstrate a "strong basis in evidence" that, had they not taken the action, they would have been liable under a disparate impact theory. In this case, the Supreme Court held that the employer did not meet that threshold standard.

Ricci dealt with the fire department of the city of New Haven, Connecticut (the "City"), which used a written test to help decide which firefighters would be eligible for certain promotions. The City had hired a consultant to develop a test to qualify candidates for promotion to lieutenant and captain. The test had been "content-validated" under the EEOC's Uniform Guidelines on Employee Selection Procedures (Code of Federal Regulations, 29 CFR Part 1607 and 41 CFR Part 60-3), but the results showed that the test had a statistically significant adverse impact on African-American firefighters because they scored significantly lower than white firefighters.

The City rejected the test results and began the promotion process anew. The test results were not certified, and those with the highest test results lost their opportunity to be immediately promoted. As a result, 17 white firefighters and one Hispanic firefighter brought suit against the City alleging intentional discrimination (disparate treatment) based on their race. The Supreme Court agree with the white and Hispanic firefighters.

The Court's decision notes that if an employer announces a test as a selection device and administers the test to individuals who have relied upon the announcement of the selection device, then the employer cannot rely upon the statistical disparity alone to justify ignoring the test results--even if the test would cause adverse impact. If a validation study was conducted and the test is content-valid, job-related, and supported by business necessity, the employer must use the results, unless the employer can demonstrate that there are equally effective devices available having less adverse impact.

In it's opinion, the Court wrote:

Applying a "strong-basis-in-evidence" standard, the court concluded that the City did not have a lawful justification.

The Ricci decision makes clear that compnsating for apparent disparate impact discrimination by changing employment decisions to favor minorities may expose employers to disparate treatment liability to nonminorities. Cases challenging employer tests are usually filed as disparate impact claims. Ricci potentially makes it harder for employers to defend taking action to correct a disparate impact and increases the likelihood of both disparate impact and disparate treatment claims arising out of selection procedures.

While the Ricci case has several "takeaways," one of the most significant is that employers should reexamine their employment testing procedures. It is unwise for an employer to announce and use any test that has not been properly validated. While employers should still assess adverse impact, with respect to unvalidated tests, they should do so very cautiously, under the supervision of an employment attorney, and any changes contemplated as a result of the adverse impact should be addressed in conjunction with legal counsel.