Tuesday, June 30, 2009

Ricci v. DeStefano: Supreme Court rules on discriminatory Hobson’s choice

Perhaps no decision has been more eagerly anticipated this year by employment lawyers than the Supreme Court’s opinion in Ricci v. DeStefano. If you are unfamiliar with the case, it concerns a municipality refusing to certify the results of a civil service exam after it concluded that it was racially biased. Specifically, the black test-takers pass rate was half that of white test-takers. The white applicants who scored highest on the exam sued for race discrimination. Both the trial and appellate court ruled for the city, finding that the white applicants did not have a Title VII claim because the city was trying to comply with its Title VII obligations to its black applicants. This case asks a fundamental question – do our anti-discrimination laws guarantee preferential treatment for the historically underrepresented, or do they balance equal treatment for all?

In Ricci v. DeStefano [PDF], the Supreme Court held the following:

  1. The city’s action in disregarding the test results to the detriment of the white firefighters that received the highest scores violated Title VII.

  2. Avoiding disparate-impact liability does not excuse what otherwise would be prohibited disparate-treatment discrimination, unless the employer has a strong-basis-in-evidence that the employer will be liable under Title VII by accepting the challenged results.

  3. To have a strong basis in evidence that the city would have been liable under Title VII had it certified the test results, the city would have had to prove that the exams at issue were not job related and consistent with business necessity, or that it had refused to adopt an equally valid, less discriminatory alternative.

The following quote from the Ricci decision sums up the Court’s view of the Hobson’s choice presented to employers between a policy or practice that has a disparate impact one versus an intentional decision to the discriminatory detriment of another:

Our holding today clarifies how Title VII applies to resolve competing expectations under the disparate-treatment and disparate-impact provisions. If, after it certifies the test results, the City faces a disparate-impact suit, then in light of our holding today it should be clear that the City would avoid disparate-impact liability based on the strong basis in evidence that, had it not certified the results, it would have been subject to disparate-treatment liability.

I was going to write something deep about the damned-if-you-do-damned-if-you-don’t decisions that employers face, but I can’t do it any better than Walter Olson (the proprietor of the awesome Overlawyered blog and Point of Law forum) did on Forbes.com:

It's a question HR managers and company lawyers are used to facing every day. Would you rather field the legal claims that result from targeted layoffs, or the ones that result from sacking people regardless of performance? Would you rather face a defamation lawsuit for mentioning the reasons for a problem employee's departure, or a failure-to-warn lawsuit for not mentioning them? Will your policy on religious proselytizing in the workplace get you sued by the believers, or by the atheists? But the courts have no general theory of sued-if-you-do, sued-if-you-don't scenarios, and often they seem unwilling to give the matter much thought at all. Monday, for a change, these issues took center stage…. Monday's crucial ruling is on the question: how serious does the prospect of litigation over an employment practice have to be before an employer is allowed to lean over in the opposite (discriminatory) direction to avoid liability?

The Ricci decision does not cure this problem, it merely flips it on it’s head. The employer in Ricci chose to protect the black employees and got sued by the white employees. After Ricci, an employer will have to choose the white employees and defend a lawsuit by the black employees. It’s little solace that this lawsuit will be defensible (at least according to the Court), because employers will still have to expend the legal fees to have the likely disparate impact lawsuit dismissed.

Stayed tuned – I’ll have further thoughts on what this important decision means for employers in an upcoming post. For other commentary on Ricci, I recommend checking out the following from my blogging brethren:

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.