This morning, the United States Supreme Court ruled that Title VII disparate impact claims accrue each time the employer uses the facially neutral employment practice which has a disparate impact on a protected class. Lewis v. City of Chicago. No. 08-974 (5/24/10). Accordingly, the class action could proceed with its disparate impact discrimination claims even though the earliest Charge of Discrimination filed by a class member was filed with the EEOC more than 300 days after the challenged policy was adopted and announced and even more than 300 days after it had first been applied because the employer had used the disputed employment practice on other occasions within 300 days of when the Charge had been filed. Writing for a unanimous Court, Justice Scalia noted that to have held otherwise would mean that an employer could indefinitely utilize a discriminatory policy if it were lucky enough not to be challenged within the first 300 days.
According to the Court's opinion, the City of Chicago administered a civil service test in 1995 to select firefighters. In January 1996, it announced that applicants who scored below 65 failed and would not be considered further and that even though applicants with scores between 66 and 88 passed and, thus were qualified, they would not be considered for vacancies until all of the "well qualified" applicants who scored 89 or better were hired or given further consideration. No applicant filed a Charge of Discrimination to challenge the City's stated policy. In May 1996, the City hired its first class of firefighters from the 1995 list based on the policy announced in January 1996 and, again, no applicant filed a Charge of Discrimination to challenge the City's action within 300 days. The City then continued to process candidates off the 1995 list for six years until it ran out of "well qualified" applicants and began processing "qualified" candidates. In March 1997, the first Charge of Discrimination was filed by a qualified applicant who was passed over by the City's January 1996 process, the EEOC completed its investigation in July 1998 and a class action lawsuit was filed later that year. The trial court denied summary judgment to the City on the issue of timeliness while the plaintiff were pursuing a continuing violation theory to avoid the 300-day limitations period issue. There was then an eight-day bench trial which found in favor of the plaintiffs. The City apparently stipulated that the adoption of the 89-point cut off had a severe disparate impact on African-Americans. (There was no evidence presented that the City's use of the policy had a disparate impact each or any time it was utilized.) The Seventh Circuit Court of Appeals had reversed the trial court judgment on the grounds that the City's hiring decisions were merely the affect of a past decision which the plaintiffs had failed to challenge within the 300-day limitations period. The Supreme Court reversed.
Employment decisions may be challenged as intentional discrimination (i.e., disparate treatment) or unintentional discrimination (i.e., disparate impact). The second theory began in the Supreme Court's 1971 decision in Griggs v. Duke Power Co., 401 U. S. 424, 431 (1971). Congress later amended Title VII at 42 U.S.C. § 2003-2(k):
"(1)(A) An unlawful employment practice based on disparate impact is established under this subchapter only if—
"(i) a complaining party demonstrates that a respondent uses a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin and the respondent fails to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity . . . ."
Thus, 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.
Title VII requires that a Charge of Discrimination be filed with the EEOC within 300 days "after the alleged unlawful employment practice occurred." §2000e–5(e)(1).
In disparate treatment cases, that "practice" is when the employment action is deliberately taken with discriminatory intent. After the passage of 300 days, employees cannot later sue for the current affects of past discriminatory decisions under the disparate treatment theory. However, in disparate impact cases, no discriminatory intent is required. Thus, in disparate impact the question is generally not whether the lawsuit is timely, but whether a valid disparate impact claim can be alleged at all. In other words, if the plaintiff can show that any employment action taken in the prior 300 days has a disparate impact, then the claim can proceed regardless of when the employment practice was first adopted or utilized. In this case, the City's practice of excluding candidates with a score between 66 and 88 from further consideration constituted an employment practice and, apparently, it was stipulated that it had an adverse impact on the plaintiffs on account of their race.
While the Court had sympathy with the plight of the City (and all other employers) that its decision to adopt the policy became lawful when it was not timely challenged, the Court concluded that "it does not follow that no new violation occurred—and no new claims could arise—when the City implemented that decision down the road. If petitioners could prove that the City" use[d]" the "practice" that "causes a disparate impact," they could prevail.
Granted, "[e]mployers may face new disparate-impact suits for practices they have used regularly for years. Evidence essential to their business-necessity defenses might be unavailable (or in the case of witnesses' memories, unreliable) by the time the later suits are brought. And affected employees and prospective employees may not even know they have claims if they are unaware the employer is still applying the disputed practice." However, the alternative was even less satisfactory:
[I]f an employer adopts an unlawful practice and no timely charge is brought, it can continue using the practice indefinitely, with impunity, despite ongoing disparate impact. Equitable tolling or estoppel may allow some affected employees or applicants to sue, but many others will be left out in the cold. Moreover, the City's reading may induce plaintiffs aware of the danger of delay to file charges upon the announcement of a hiring practice, before they have any basis for believing it will produce a disparate impact.
The case was remanded to the Seventh Circuit to determine whether a new trial was necessary and whether the relief ordered by the trial court should be modified (as stipulated by the parties) to exclude consideration of the first round of hiring decisions which were made more than 300 days before the filing of the first Charge.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.
