Labor & Employment Law

Between A Rock and A Hard Place -- Ricci v. DeStefano Addresses the Conflict Between Disparate Treatment and Disparate Impact Theories

The U.S. Supreme Court decision in Ricci v. DeStefano is very much in the tradition of the Court's affirmative action jurisprudence of the last 40 years.  In other words, it is confusing and provides little or no practical guidance to real-world employers.

The factual scenario in Ricci placed the employer (the New Haven Fire Department) in an excruciating dilemma.  It had taken great pains to design and administer a promotion test that would be job related and fair to members of all ethnic groups.  But when the results came back, the only candidates eligible for promotion were white.  The minority candidates threatened a lawsuit if the test results were used.  And the white candidates threatened a lawsuit if they were thrown out.

The hapless City chose to be sued by the white firefighters.  In throwing out the test results, the City admittedly acted for  racially discriminatory reasons -- i.e. because "too many" whites had passed the test.  The City argued, however, that avoiding a lawsuit over the unintended  disparate impact of its test should be a legal justification for its intentional disparate treatment in voiding the results for racial reasons.

The Court recognized that employers may be faced with a conflict between potential liability for "disparate treatment" and  "disparate impact."  The Court's resolution was to create a new affirmative defense under which an employer may be immunized from liability for an adverse employment action if it had a "strong-basis-in-evidence" to believe that its action was necessary to avoid liability under another theory of discrimination.

This is a strange rule because it basically directs employers to put themselves on trial and reach a legal conclusion as to how they are most likely to be found liable (even where they believe they have done nothing wrong under any theory) . 

It also goes without saying that this "strong-basis-in-evidence" standard is inevitably in the eye of the beholder. After all, the Supreme Court ruled in favor of the white firefighters on the ground that the evidence of intentional disparate treatment was slam-dunk compared to the very weak claim for disparate impact from the test.  However, the First Circuit panel whose decision was overruled (including soon-to-be Supreme Court Justice Sonia Sotomayor) had looked at the same record and found the opposite to be true.    

Full post as published by California Labor & Employment Defense Blog on June 30, 2009 (boomark / email).