By Jackson Lewis

In a decision that will make it more difficult for employers to defeat disparate impact claims as untimely, a unanimous Supreme Court has ruled that plaintiffs may challenge the application of an employment practice with an alleged disparate impact on protected employees even if they have not timely challenged the adoption of that practice.  Lewis v. Chicago, No. 08-974 (May 24, 2010).  The Court’s decision breathes new life into a class action lawsuit brought by African-American firefighter applicants alleging the City of Chicago’s employment practices had a disparate impact on the basis of race in violation of Title VII of the Civil Rights Act of 1964.

The City’s Test

The City of Chicago administered a written entry test in July 1995 to over 26,000 individuals for firefighter jobs.  When the City announced the test results in January 1996, the applicants were placed into one of three categories: “well-qualified,” “qualified” or “not qualified.”  African-American applicants were underrepresented in the “well-qualified” category. 

At the time of the announcement, the City told applicants in the “qualified” category that, while they were eligible for positions, they would likely not be called for further processing.  The City hired from the “well-qualified” list until it was exhausted, and then filled the remaining slots with the “qualified” candidates.   

Lower Court Proceedings

Beginning in March 1997, six African-Americans who fell into the “qualified” category and were not hired by the City filed charges of discrimination with the Equal Employment Opportunity Commission.  After the EEOC issued the complainants right-to-sue letters, they filed a Title VII disparate impact lawsuit against the City on behalf of a class of more than 6,000 African-American applicants whose scores placed them in the “qualified” category but were not hired as firefighters. 

In order to file a Title VII lawsuit, however, plaintiffs must first file a timely EEOC charge.  In this case, the applicable period was 300 days “after the alleged unlawful employment practice occurred.” 

The City sought to dismiss the plaintiffs’ claims in the district court as time barred, because they did not file an EEOC charge until more than 300 days after the City announced the test results.  The plaintiffs, on the other hand, argued they had 300 days after the employer acts on the results of the test by making a hiring decision to file an EEOC charge. 

The district court ruled in favor of the applicants, finding the City’s “ongoing reliance” on the test results constituted a “continuing violation” of Title VII.  The court also ruled for the plaintiffs on the merits, ordering the City to hire 132 randomly selected class members and awarding backpay to the other class members.

The City appealed the decision to the U.S. Court of Appeals for the Seventh Circuit, which reversed the lower court’s ruling.  The Supreme Court then agreed to review the case.

Supreme Court Revives Firefighters’ Claims

A unanimous Supreme Court reversed the Seventh Circuit.  The unlawful employment practice in this case is the City’s practice of picking only applicants in the “well qualified” category to fill each new class of firefighters, the Court ruled.  Because plaintiffs filed an EEOC charge within 300 days of the application of that practice, they can pursue their lawsuit.

The Court rejected the City’s argument that “present effects of prior actions cannot lead to Title VII liability.”  That argument, according to the Court, only applies in disparate treatment and other claims where plaintiffs must demonstrate discriminatory intent during the limitations period.

The Court also was not persuaded by the City’s and amici’s assertion that allowing each new selection based on the results of a prior test to restart the charge-filing clock would “result in a host of practical problems for employers and employees alike.”  Justice Scalia said on behalf of the Court, “[I]t is not our task to assess the consequences of each approach and adopt the one that produces the least mischief.” 

Explaining some of these consequences, Justice Scalia continued, “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.”  On the other hand, Justice Scalia said, starting the clock from the time the test results are announced could “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.”

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The facts in Lewis may be reminiscent of those at issue in last year’s Ricci v. DeStefano decision.  In Ricci, the Court ruled 5-4 that the City of New Haven improperly discriminated against white applicants when it refused to certify the results of a promotional test on which white and Hispanic firefighters outperformed their black colleagues.  The Lewis decision, however, is about procedure rather than the ultimate merits of the City’s actions.  The procedural rule set forth in Lewis may make it harder for employers to defeat disparate impact claims regardless of who brings those claims.