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Joanna L. Grossman

Lewis v. City of Chicago: The Supreme Court Protects the Rights of Disparate-Impact Discrimination Plaintiffs


Tuesday, June 8, 2010

In a recent ruling, Lewis v. City of Chicago, the Supreme Court unanimously concluded that a group of African-American would-be firefighters had filed a timely charge of race discrimination against the City of Chicago.

The plaintiffs alleged that the cutoff score on a written examination that was used to define the pool of qualified applicants for firefighting positions had a disparate impact on racial minorities — a fact conceded by the City. But the City had successfully argued below that the charge of discrimination was filed too long after the City announced it would exclude applicants on the basis of the test, and thus did not comply with Title VII's short statute of limitations.

The Supreme Court reversed, however, ruling that an employment practice with a disparate impact can be challenged not only when the practice is adopted, but also when it is later applied to fill open slots.

The Facts of the Case: The City of Chicago's Method for Selecting New Firefighters, and Crawford Smith's Legal Challenge

In July 1995, the City of Chicago gave a written examination to 26,000 people who had applied for jobs in the Chicago Fire Department. In January 1996, the City announced the results of the test and issued a press release stating that it would begin using a lottery to fill openings from among those applicants who scored an 89 or above (out of 100) on the exam. It rated those with scores in that range as "well qualified." Applicants who scored below a 65 were notified by letter that they had not passed the exam, and were ineligible for a firefighter position.

The Lewis lawsuit concerns some of the applicants whose scores fell in between these two extremes — those who scored between 65 and 88 and were rated "qualified," but not "well qualified," by the City. These applicants were individually notified that they had passed the exam and were eligible for a firefighter position, but they were also told that they were not likely to be called for "further processing," given the projected hiring needs and the number of applicants who had scored in the higher "well qualified" category. Their names were, however, placed on an "Eligible List" for potential future hiring.

In May 1996, the City ran a lottery to select a class of applicants from among the "well-qualified" scorers to advance to the next stage. It did so again in October 1996 and again nine more times during a six-year period. In the final lottery, the City included some applicants who were merely "qualified" because it had used up the entire "well-qualified" pool.

In March 1997, Crawford Smith, an African-American man who had scored in the "qualified" range on the written test, filed a discrimination charge with the EEOC, alleging that the City's reliance on this test produced an illegal disparate impact on black applicants. (Under Title VII, the main federal anti-discrimination law, plaintiffs must first file an administrative charge with the EEOC before proceeding to a lawsuit.)

Five other qualified applicants filed similar charges, and the EEOC issued all six a "right-to-sue" letter, which paved the way for a lawsuit. In September 1998, the six filed a lawsuit against the City of Chicago alleging disparate-impact discrimination on the basis of race, and the federal district court certified a class action consisting of more than 6,000 African-Americans who had scored between 65 and 88 on the written firefighter examination (earning the "qualified," but not the "well-qualified" designation) and were never hired into the position.

A Question of Timeliness: What Constitutes an "Unlawful Employment Practice"?

After the class was certified in the Lewis case, the City filed for summary judgment on the grounds that the plaintiffs had waited too long to file their EEOC charges. Title VII imposes a statute of limitations that is short by comparison to virtually any other — the limitations period is either 180 or 300 days, depending on whether the discrimination occurs in a state with an agency that shares work with the EEOC. For these Illinois firefighters, the limitations period was 300 days.

But what triggers the limitations period? Title VII provides that the 180/300 day period runs from the date of the "unlawful employment practice" being challenged. However, the definition of an "unlawful employment practice" under Title VII has been the subject of several important Supreme Court decisions in the last decade, as well as Congressional legislation.

As a general matter, the limitations period begins once the discrimination occurs. In two cases, however, the Supreme Court has considered when different types of discrimination occur. In 2002, in National R.R. Passenger Corp. v. Morgan, the Supreme Court held that "discrete acts" of discrimination must be challenged within 180/300 days of their occurrence. In so doing, it rejected the so-called "continuing violations" doctrine, under which some lower federal courts had permitted plaintiffs to challenge a series of related acts of discrimination as long as at least one had occurred within the filing period.

The Court carved out an exception in Morgan for hostile-environment sexual harassment, which, by its very nature, occurs over time, through the aggregation of multiple incidents of misconduct that together create the hostile environment. For such claims, a plaintiff can challenge harassment as long as at least one of the acts that together created the hostile environment occurred within the 180/300 day charge-filing period.

Five years later, in Ledbetter v. Goodyear Tire & Rubber Co., the Court again considered the definition of "unlawful employment practice" for purposes of applying Title VII's limitations period. There, the issue was whether pay discrimination claims should be treated like claims alleging a series of discrete acts, where the clock starts ticking immediately, or like hostile- environment claims, where the clock starts ticking with the final act alleged.

In an opinion written by Justice Samuel Alito, the Ledbetter Court ruled that the "discrete" act rule, rather than the harassment rule, applies to pay discrimination claims. This ruling departed from the longstanding position of the EEOC, the agency charged with enforcement of Title VII: The EEOC, instead, followed a paycheck accrual rule that allowed suits to be filed within 180/300 days of each discriminatory paycheck, as well as to be brought within 180/300 days of any discriminatory pay decision that set those checks in motion.

The Court's rejection of Ledbetter's claim turned on two basic conclusions: First, the Court ruled that under Morgan, a discriminatory pay decision is a discrete act that triggers the statute of limitations.

Second, the Court also ruled that a paycheck containing a discriminatory amount of money is not a present violation, but, instead, is merely the effect of a prior act of discrimination. "[C]urrent effects alone cannot breathe life into prior, charged discrimination," the Court wrote, "such effects have no present legal consequences."

However, as I explained in a previous column, Congress overruled Ledbetter by statute. The Lilly Ledbetter Fair Pay Act of 2009 restores the paycheck accrual rule for pay discrimination claims.

When Does a Claim of Disparate-Impact Discrimination Accrue? Related Supreme Court Precedents

Like Morgan and Ledbetter, Lewis v. City of Chicago raises the question of how to define "unlawful employment practice" for purposes of applying Title VII's limitations period. In Lewis, however, the question was how to define the trigger for disparate-impact claims.

As originally enacted in 1964, Title VII made it unlawful for an employer "to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of" a particular characteristic or characteristics like race or sex.

In 1971, in Griggs v. Duke Power Co., the Supreme Court interpreted this language to prohibit not just intentional discrimination, but disparate impact discrimination as well. At issue in that particular case were the requirements that a candidate for certain low-skill jobs must have a high school diploma and must achieve a certain score on an aptitude test — requirements that had disqualified a disproportionate number of black applicants for new positions and internal transfers, despite the requirements' possessing no obvious connection to job performance.

The Supreme Court held in Griggs that employers could not rely on hiring criteria that imposed a demonstrable negative impact on a protected class of workers, and yet were not justified by business necessity. The Court concluded that targeting discriminatory consequences — not just discriminatory motives — was part of Congress' purpose in enacting Title VII.

Although later Supreme Court decisions narrowed the scope of disparate-impact liability, Congress amended Title VII in 1991 to restore the initially broader scope. It added a provision, codified as 2000e-2(k)(1)(A)(i), that expressly prohibits disparate-impact discrimination. Under the current statute, an employer is liable if "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." A prima facie case is thus shown by a plaintiff who can show "use" of an employment practice that produces a disparate impact (proof of which causes the burden to shift to the employer for proof of job-relatedness and business necessity).

The Lewis v. Chicago Case: A Clear Case of Disparate-Impact Discrimination, But Was the Claim Timely?

Returning to the Lewis v. Chicago case that the Supreme Court just resolved, the City of Chicago conceded there that the 89-point cutoff had "a severe disparate impact against African Americans." The question for the Supreme Court, then, was simply whether the City "used" the discriminatory practice only when it first announced the results and created the list of eligible applicants, or whether it "used" that practice each of the eleven times that it drew a new pool of applicants from the list to fill open positions.

This distinction mattered because the initial EEOC charges by Smith and others were filed more than 400 days after the January 1996 announcement by the City that it would begin drawing only from the "well-qualified" list, but within 300 days of the second and later drawings.

The district court found that the City was engaged in a "continuing violation" of Title VII by its "ongoing reliance" on the 1995 test results. It ruled for the plaintiffs and ordered a variety of remedies for the class — including immediate hire for 132 randomly-selected class members and back-pay for the remaining class members.

On appeal to the Seventh Circuit Court of Appeals, however, the outcome was reversed on grounds that the plaintiffs' suit was untimely. The Seventh Circuit held that the only discriminatory act had occurred when the City sorted the scores into three categories. In the appellate court's view, the later "hiring only of applicants classified ‘well qualified' was the automatic consequence of the test rather than the product of a fresh act of discrimination."

The Supreme Court's Unanimous Ruling in Lewis: How the Court's Logic Differed from the Seventh Circuit's

In an opinion written by Justice Scalia, the Court held that each time the City of Chicago selected another class of applicants from those who had tested in the "well-qualified" range, it "used" a practice that produced a disparate impact.

Although Title VII, even as amended in 1991, does not define "employment practice," the Court concluded that it was "clear that the term encompasses the conduct of which petitioners complain: the exclusion of passing applicants who scored below 89 (until the supply of scores 89 or above was exhausted) when selecting those who would advance. The City ‘use[d]' that practice in each round of selection."

By so defining the employment practice, the Court preserved the ability of the Lewis plaintiffs to sue even if their EEOC charges were filed more than 300 days after the test results were first announced. Each selection round gave rise to a new claim — and triggered another 300-day period.

In arguing for a different outcome, the City had claimed that the only time it used the practice with the disparate impact was when it created the eligibility list in 1996. And once 300 days passed from that date, it was entitled to treat it as lawful even if it could have been the basis for an independent disparate-impact claim. All subsequent exclusions of the merely "qualified" candidates, the City argued, were simply an inevitable result of having decided, on the earlier date, to adopt the cutoff score.

In making this argument, the City relied on two earlier cases that had driven the Court's ruling in Ledbetter. In the first of those cases, United Air Lines v. Evans, the Court had dismissed the discrimination claim of a flight attendant who had been wrongfully terminated and then rehired — without seniority — years later. The Court refused to permit her to challenge the loss of seniority, since it held that that was just an "effect" of the prior, uncharged wrongful termination.

In the second case, Delaware State College v. Ricks, a librarian who had been denied tenure, allegedly on the basis of race, was not permitted to sue within 180 days of his departure, since the notice of the tenure denial had been communicated to him a year earlier. Again, the Court held that the actual termination was merely an effect of the allegedly-illegal denial of tenure, rather than a present violation of Title VII.

While the Seventh Circuit agreed with the City's analysis on this point, the Supreme Court rejected it. Evans and Ricks, it explained, are relevant only to disparate-treatment claims for which discriminatory intent is required. In the Lewis Court's view, the distinction between "present effects of prior actions" and "present violations" makes sense for such claims because, there, the intent to discriminate is a necessary part of the unlawful employment practice. Thus, an automatic consequence of an earlier decision to discriminate does not create a freestanding violation of Title VII because the intent to discriminate is not present in the consequence; indeed, the consequence, being automatic, has no intention behind it all.

But the same rule, the Court concluded, need not apply to disparate-impact claims. For those, the required elements are the "use" of an "employment practice" that produces a "disparate impact." Thus, the Court concluded, each time the City relied on the cutoff score (which had an admitted disparate impact) to advance a new pool of applicants, it committed a new violation of Title VII that could be challenged within 300 days.

Caught Between Two Problematic Interpretations of the Statute, the Court Made the Right Choice

The Court acknowledged that both the City's and the plaintiffs' readings of the statute produced potentially troublesome problems. "Under the City's reading, if 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." The Court did acknowledge that equitable tolling or estoppel may be used to suspend the limitations period for some plaintiffs, but "many others will be left out in the cold." The City's reading, the Court noted, could also induce premature lawsuits based on hiring practices that are announced but never actually implemented.

The Court saw problems with the approach that it did adopt, as well as with the one that it rejected, though: "Employers 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."

But despite this last set of predicted problems, the Court adopted the most plausible reading of Title VII, which was its task. Lewis v. City of Chicago does not eliminate the many obstacles that employees face to challenging discriminatory employment practices, but it does give them a fair shake at attacking an employer's repeated use of a racially-discriminatory test.

Joanna Grossman, a FindLaw columnist, is a professor of law and John DeWitt Gregory Research Scholar at Hofstra University. She is the coeditor of Gender Equality: Dimensions of Women's Equal Citizenship (Cambridge University Press 2009), an interdisciplinary collection that explores the gaps between formal commitments to gender equality and the reality of women's lives. Her columns on family law, trusts and estates, and discrimination, including sex discrimination and sexual harassment, may be found in the archive of her columns on this site.

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