Ricci vs. DeStefano – Redefining Disparate Impact

Ricci vs. DeStefano – Redefining Disparate Impact

Disparate or adverse impact in employment selection decisions refers to the different treatment of employees or applicants based on their race, color, religion, gender, national origin or handicap.

This recent decision of the US Supreme Court takes a new view of the prohibition of disparate impact legislated under Title VII of the US Civil Rights Act of 1964  and the EEOC’s  four-fifths or 80% rule  that provides a measure of disparate impact. The decision deserves attention because the sensitivity of the subject matter addressed in the case will make some serious waves in both the USA and other jurisdictions. Although most jurisdictions outside the US have not codified disparate impact to the extent of the US legislation, the four-fifths rule has become a standard measure of disparate or adverse impact that is often cited in human rights decisions in most common law jurisdictions.

The basic facts of the case are as follows:

  • The New Haven Fire Department in Connecticut developed and then administered written and oral examinations to 118 applicants for promotion to either Lieutenant or Captain. Details of the content of the exams are limited but they appear to have been mostly of a cognitive nature. The pass rate for black and Hispanic candidates was approximately half that of the white candidates. The top scorers for both positions did not include any blacks and only two Hispanics. As a result no black candidates and at most two Hispanics were eligible for promotion.
  • The City officials fearing they would be sued by the black or Hispanic test takers threw out the test results and promoted no one, citing a desire to avoid violating Title VII of the Civil Rights Act.
  • Ricci and sixteen other white test takers, plus one Hispanic test taker (all of whom had passed the examinations) sued the City and Mayor John DeStefano claiming that by discarding the test results, the City and the named officials had discriminated against the plaintiffs based on race in violation of Title VII of the Civil Rights Act.

Two lower courts threw out the claim advanced by the plaintiffs, including a three judge panel of the Second Circuit Court of Appeal that included Judge Sonia Sotomayor (currently a somewhat controversial nominee to the US Supreme Court).

The Supreme Court, by a five to four vote that broke along conservative and liberal lines, reversed the lower court decisions, effectively requiring the City to be bound by the exam results. Although it was clear that the examination results had a “disparate impact” on both the blacks and the Hispanics there was nothing before the court to show the tests themselves were flawed for not being job related and consistent with business necessity or that there was an equally valid but less-discriminatory alternative available to the City. The Court found that the City, looking at the racial makeup of the exam results, could not decide to throw out the results simply because it feared a discrimination lawsuit from the groups who did not pass the exams. The Court said that the City has to have “a strong basis in evidence” to believe the exams were discriminatory under Title VII of the Civil Rights Act. As the evidence did not support a decision that the tests were inherently flawed the City’s action in discarding the examination results was a violation of Title VII of the Civil Rights against the plaintiffs.

So what does this mean for the world of testing/assessment?

  • Well there is the obvious conclusion that statistics generated from the use of a test or other selection procedure are not by themselves enough to show disparate impact, even though they may violate the EEOC 80% rule. If you’ve used a test or other hiring process that is job related, you can’t ignore the results to the prejudice of any group who took the test. But that conclusion is not really new because at least in theory there has always been an exception to the 80% rule where the employer can show the selection process in question is job related and any resulting disparate impact cannot be reduced by some other equivalent process.
  • More importantly the case makes it clear the stated exception to the EEOC 80% rule is in fact a real exception, as long as the test is not inherently flawed. So if you use properly validated tests like the Prevue Assessments that have been shown in detailed studies not to adversely impact protected minorities, you do have a defensible position, regardless of the statistics that may be generated from the use of the test.
  • Probably the most significant impact of the case is that it will likely be repeatedly cited as confirmation that under Title VII of the Civil Rights Act and the EEOC 80% rule, one cannot discriminate against the majority in pursuit of protecting minorities. The case will generate a lot of discussion in both the HR and legal worlds. It should eventually produce a better, more workable definition of disparate impact.

Written by Ken Danderfer

1 A very Short History of Title VII of the Civil Rights Act
2 EEO: Disparate Impact from hr-guide.com
3 Averse Impact Analysis/ Fourth-Fiths Rule