• U.S. Supreme Court Holds That Disparate Impact Claim Can Arise Each Time Employer Hires Based On Written Test Scores
  • June 7, 2010
  • Law Firm: Best Best Krieger LLP - Riverside Office
  • The United States Supreme Court this week held that a new claim for disparate impact discrimination potentially arises each time an employer hires candidates based on scores achieved on the employer’s application exam. Employers should therefore ensure that any written exams or other criteria used to select employees do not disparately impact any protected category of employees.

    In Lewis v. City of Chicago, the City of Chicago required firefighter applicants to take a written exam in 1995. In 1996, the City used the results of the examination to select candidates by randomly selecting “well qualified” individuals, identified as those who scored an 89 or above out of a possible 100. Individuals scoring between 65 and 88 were identified as “qualified,” however, it was unlikely that they would be selected as candidates. Those who scored below 65 were determined to be “not qualified.”

    In 1997, African-American applicants identified as “qualified” pursuant to their exam results (“Plaintiffs”) filed suit against the City claiming they were disparately impacted by the use of the 1995 exam results in selecting candidates in violation of the Civil Rights Act of 1964.

    The issue addressed by the Supreme Court was whether the Plaintiffs had timely filed their required pre-lawsuit charge with the Equal Employment Opportunity Commission (EEOC). An EEOC charge must be filed within 300 days of the alleged discriminatory act. If an EEOC charge is not timely filed, a lawsuit based on the alleged discrimination is barred.  

    The City claimed that the “discriminatory act” was the 1995 categorizing of applicants based on their test scores. The City argued that the act of identifying individuals as “well-qualified,” “qualified” or “not qualified” based on their exam scores and the selection of candidates based on the scores constituted a single discriminatory act. An EEOC charge therefore had to be filed within 300 days of that initial determination and selection.

    The Plaintiffs argued that each time the City used the 1995 exam scores to make a subsequent hiring decision, there was a new “discriminatory act.” Therefore, an EEOC charge would be timely if it was filed within 300 days after each hiring decision.

    The Supreme Court, in its ruling on Monday, agreed with the Plaintiffs. The Court held that while the City’s initial act of categorizing applicants based on their test scores may have given rise to its own disparate impact claim, new violations, and thus new disparate impact claims, occurred each time the City selected candidates based on those categories.

    An employee can establish a disparate impact claim by showing that an employer uses a particular employment practice that results in a disparate impact. Accordingly, an employer can be liable for a disparate impact claim each time a hiring exam is given and applicants are categorized based on the results of the exam, and each time that a hiring decision is made based on such exam. An employer could therefore be liable for disparate claims based on hiring decisions made even more than a year after the exam was given. The Court’s decision highlights the need for employers to review the exams they are currently administering as well as all past exams from which hiring lists are still in use to ensure that the exams are legally appropriate and not subject to discriminatory impact claims.