In a unanimous decision authored by Justice Antonin Scalia, the U.S. Supreme Court issued a blow to the city of Chicago in a case involving the timeliness of a disparate impact claim brought by minority applicants who challenged the City's use of a hiring list generated from an entrance exam for firefighters. The hiring list categorized firefighter applicants on the basis of their test scores, labeling those with test scores of 89 and above as "well qualified" and those with scores between 65 and 88 as "qualified." Scores under 65 were deemed to have failed. The city then used the hiring list to hire firefighters in several rounds of hiring over a six-year period. The plaintiff applicants (those with scores between 65 and 88) filed a charge of disparate impact discrimination after the second round of hiring. The city argued that because the plaintiffs did not file a charge within 300 days of the adoption of the hiring list, that the claim was time-barred.
The District Court had rejected the city's argument, but the U.S. Court of Appeals for the Seventh Circuit held on appeal that the claim was time-barred. In its decision, the Seventh Circuit relied on U.S. Supreme Court cases including Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), finding that the subsequent rounds of hiring were merely the present effects of prior discriminatory acts and therefore not independently actionable. The 7th Circuit was also persuaded that disparate treatment and disparate impact claims should accrue on the same basis.
The Supreme Court rejected the reasoning of the Seventh Circuit, pointing to the plain text of Section 2000e-5(e)(1) of Title VII. This provision, which was a codification of the disparate impact theory first articulated by the U.S. Supreme Court in the landmark decision Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971), provides in pertinent part:
"An unlawful employment practice based on disparate impact is established under this subchapter only if -- a complaining party demonstrates that a respondent uses a particular employment practice that causes a disparate impact . . . "
The Supreme Court found that this section of Title VII sets out both the elements of the disparate impact cause of action as well as the burdens of proof in the action. Because the statute explicitly contemplates that a cause of action can be established whenever an employer "uses" an "employment practice" that "causes a disparate impact," the court held that a new disparate impact claim accrued upon each use of the hiring list in question. The court found that in the disparate impact context, each use of the hiring list constiuted a separate employment practice. Thus the court did not establish a continuing violation theory for disparate impact claims but rather discussed a theory of accrued disparate impact claims that would be triggered each time the employment practice was followed. In so finding, the court recognized that there will be times when a disparate treatment claim, which requires proof on an intentional act of discrimination within the EEOC charge-filing period, will be time-barred but a disparate impact claim will not be time-barred.
Though there was a split in Circuit Court authority on this issue, the majority of Circuit Courts sided with plaintiffs' reading of the statute. The decision nevertheless settles what had been a split and definitively resolves the question of when a disparate impact claim accrues.
The impact of the decision on employers is significant insofar as it requires them to continue to evaluate their policies and procedures to ensure they do not have a disparate impact on protected groups of employees or that they are otherwise legally justified under the law. Employers cannot assume that new or changed policies, if not challenged within 300 days, will not be subject to challenge under a disparate impact theory years in the future. Thus, it will be important for employers to maintain appropriate records to defend policies and practices while they are in use. Also, while the Lewis decision will not effect disparate treatment claims, often those claims are proved by statistical analyses and the underlying facts can also supporate a disparate impact claim.
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