Ricci puts employers between a rock and a hard place

Sonia Sotomayor is undoubtedly not the only person responding to questions about the Supreme Court’s Ricci v DeStefano decision – the 5-4 opinion is surely a “hot topic” for employment attorneys and inside-counsel all across the nation. In Ricci, the Court ruled that a city’s decision not to certify firefighters’ exams, in order to avoid potential race bias claims, was discriminatory. The exams rendered no blacks and at most two Hispanics eligible for promotions. The Court’s decision may have generated many more questions than it answered.

While some US Senators sought to use the case as a litmus test for the qualifications of the Supreme Court nominee, more than a few employers and their legal counsel were likely lamenting the lack of clarity – nothing resembling a litmus test – in the High Court’s opinion as to how to meet the new standard announced for the lawful rejection of a selection procedure that has been determined to have a discriminatory impact on protected members of a workforce.

“[U]nder Title VII, before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action,” wrote Justice Kennedy, joined by four other Justices. Applying this standard, the Court concluded that the city “was not entitled to disregard the tests based solely on the racial disparity in the result.”

But what exactly is “a strong basis in evidence” and how is that standard applied in the real world of employers diligently trying to meet antidiscrimination obligations? As Justice Ginsberg points out in her dissenting opinion, the “barely described” standard “makes voluntary compliance a hazardous adventure.” Given that three of her High Court colleagues agreed with her observation, how difficult will it be for employers to navigate this tricky landscape? How many varied interpretations of this new standard will we see in the coming months and years and will the Supreme Court be required to revisit the issue?

And then there is the tension that Ricci creates between Title VII’s disparate treatment and disparate impact provisions. How will employers seeking to avoid selection procedures that create a disparate impact manage not to invite at the same time a disparate treatment claim? As Justice Ginsburg laments, under the High Court’s ruling, an employer that changes an employment practice in order to comply with Title VII’s disparate impact provision is acting “because of race,” which is generally forbidden under Title VII’s disparate treatment prohibition. The Justice finds this position at odds with congressional intent and the EEOC’s interpretive guidance: “Congress did not intend to expose those who comply with the Act to charges that they are violating the very statute they are seeking to implement.”

Employers are caught between a rock and a hard place with a new standard and a new view of Title VII that likely applies to selection procedures for many other types of employment decisions. For example, consider an employer that out of good-faith efforts to comply with Title VII, performs a disparate impact analysis prior to implementing a reduction in force in order to avoid unintentional bias and associated liability. If the statistics show a disparate impact on a minority group, what should the employer do?

Under Ricci, a statistical disparity alone would likely be insufficient to justify a change in selection criteria. How much and what type of evidence of unreliability must the employer collect before rejecting the questionable procedure and implementing a new one without incurring liability for disparate treatment of non-minority members not initially identified for layoff, but selected under a new procedure?

These and many other questions will likely arise in the aftermath of Ricci. But I predict a surge in reverse discrimination cases that will soon begin to generate some answers.