Supreme Court: Disparate Impact Plaintiffs Can Sue Based on the Application of the Discriminatory Practice
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The Supreme Court today issued a judicial smackdown to the Seventh Circuit Court of Appeals, unanimously reversing its decision in Lewis v. City of Chicago (as we suggested it should when we reviewed the details of this case back in October!). Briefly put, the plaintiffs are a group of approximately 6,000 black firefighter applicants who filed charges of race discrimination with the EEOC more than 300 days after the initial announcement of their application test results, but within 300 days of the hiring of the new firefighter class from which they allege they were denied consideration. The Seventh Circuit held that the “discrimination was complete when the tests were scored...and the applicants learned the results.”
Justice Scalia, writing for the entire Court, stated that because there is no dispute that the claim was filed within 300 days of the hiring of the new class, the issue in this case is not “whether a claim predicated on the [on the hiring of the new firefighter class] is timely, but whether the practice thus defined can be the basis for a disparate-impact claim at all.” (Emphasis in original.) In other words, while the parties agreed that the adoption of a practice had a disparate impact, the real question was whether a cause of action can arise from the application of that same practice. The Court held that it could. Citing its recent opinion in another firefighter test case—Ricci v. DeStefano, the court noted that “a plaintiff establishes a prima facie disparate-impact claim by showing that the employer ‘uses a particular employment practice that causes a disparate impact’ on one of the prohibited bases.”
Per the Court, the City believes that this decision “will result in a host of practical problems for employers and employees alike,” in that it may subject employers to an increased number of disparate-impact lawsuits based on long-stranding practices. That may, in fact, be true. Following this decision, any employer engaging in a practice whose application may result in a disparate impact on some protected classification of employees should take the time to reevaluate that practice. While there may be a legitimate business defense for the practice (as remains to be seen in the Lewis case on remand), it’s going to be easier for employees to get their foot in the door and state a claim.
The First Monday in October: Supreme Court Roundup
The first Monday in October traditionally marks the beginning of the United States Supreme Court's yearly term - and it provides an excellent opportunity to look at the cases the Court will be hearing this year. In an earlier post, the World of Work brought you detailed discussion of the Court's only Title VII case this term: Lewis v. City of Chicago. Here's a sampling of other labor and employment-related cases to watch for throughout the term:
This morning, in Mohawk Industries, Inc. v. Carpenter, the Court will consider whether an employer's attorney's investigation of an internal complaint is protected by the attorney-client privilege. The internal complaint alleged that the company was conspiring to hire individuals who were not authorized to work in the United States. The case involves a former employee's claim for witness tampering; a separate lawsuit involving the alleged conspiracy is proceeding on a separate track.
On October 7, the Court will hear a case involving the Railway Labor Act. The issue in Union Pacific Railroad Co. v. Brotherhood of Locomotive Engineers is whether the Seventh Circuit Court of Appeals had the power to overturn, on due process grounds, an arbitration award in the railroad's favor.
On October 14, in Perdue v. Kenny A., the Court will consider whether attorney fee awards under 42 USC 1988 can be enhanced when the lawyer does a particularly good job. Section 1988 is a common basis for fees in employment-related lawsuits.
On December 9, the Court will hear Stolt-Nielsen SA v. AnimalFeeds International. This case asks the Court to decide whether an employee bringing a claim under an arbitration agreement may sue, not only on his own behalf, but on behalf of a class of similarly situated employees. In this case, the arbitration agreement did not specifically allow class claims, but the arbitrators allowed those claims anyway.
Finally, on a date to be announced, the Court will hear Granite Rock Co. v. International Brotherhood of Teamsters. This case again involves questions about arbitration. Here, the issue is whether an arbitrator (not a court) may decide whether a valid collective bargaining agreement exists.
Supreme Court to Decide Title VII Statute of Limitations Question
The U.S. Supreme Court agreed yesterday to hear a challenge to a Seventh Circuit Court of Appeals decision in a case with similar factual overtones to the Ricci case decided earlier this year. Like Ricci, this case involves a firefighter qualification test that had a disparate impact on black applicants; unlike Ricci, at issue here is the statute of limitations on a Title VII claim.
In this case, Lewis v. City of Chicago, the plaintiffs are a group of approximately 6,000 black firefighter applicants who filed charges of race discrimination with the EEOC more than 300 days after the initial announcement of their test results, but within 300 days of the hiring of the new firefighter class from which they allege they were denied consideration. The trial court held that the hiring of each new firefighter was a new violation of Title VII, so the EEOC charges were timely filed. On appeal, the Seventh Circuit reversed, holding that the “discrimination was complete when the tests were scored...and the applicants learned the results.” At issue for the Supreme Court is whether the limitations period for a Title VII claim begins to run when an employer announces the results of a test that could violate Title VII’s disparate impact provision, or if the right to sue begins only once the employer has acted on that policy.
At face value, it seems that the trial court probably got this one right and the Supreme Court should reverse the Seventh Circuit. How can an employee know what the actual disparate impact will be until the employer’s hiring decisions are actually made? If, for example, the employer’s business needs ultimately dictate that it need hire nobody, there has been no harm done regardless of the results of the test. An actual harm needs to occur before the right to sue accrues. Notwithstanding that analysis, and given the current makeup of the court, however, it is unclear which way the Court will go on this one. The Stoel Rives World of Employment will let you know when a decision is reached and how that decision may impact your workplace.
