Alaska Employment Law

Introduction

The United States Supreme Court issued an opinion on Monday, May 24, 2010, addressing the standards for timely filing of disparate impact claims.  The case is Lewis v. City of Chicago.  This summary briefly reviews the case and its significance.

The Case

Should the time for filing a Title VII disparate impact charge begin running when the allegedly unlawful policy or practice is announced or when it is implemented?

The City of Chicago administered written tests to firefighter job applicants in 1995.  The test results were announced in January 1996.  However, hiring based on the test results did not commence until later in 1996.  In March 1997, fourteen (14) months after the test results were announced, certain applicants filed charges with the EEOC contending that the tests had a disparate impact on African-American applicants.  The charges were filed more than 300 days after the test results were announced, but within 300 days of when the City actually began to hire based on the test results.  The district court concluded that the charges were timely filed because each hiring denial was a new act of employment discrimination.  The Seventh Circuit reversed.  The court concluded that the grieved employment decision or action was complete when the tests were scored in January 1996 because the claims were disparate impact claims.  All of the firefighter job applicants knew at that time what the test results were.  If they wanted to challenge the test results on a disparate impact theory, they should have filed suit within 300 days of January 1996.

There has been a circuit split on when the limitations period should begin running for disparate impact type claims based on circumstances such as those arising in Lewis.  The Third, Sixth, and Seventh Circuits begin the clock when the test results are finalized and announced.  The Second, Fifth, Ninth, Eleventh, and District of Columbia Circuits begin the limitations period when the test results are implemented.

The Opinion

In a unanimous opinion (something of a rarity these days) authored by Justice Scalia, the Court reversed. The Court held that a plaintiff who failed to file a timely challenge to the adoption of a policy or practice may nevertheless file a timely challenge to the actual application of the policy or practice so long as all other elements of a disparate impact claim were properly alleged. Title VII specifically allows a plaintiff to file a claim against an employer who uses a policy or practice that causes a disparate impact.  The Act does not address or distinguish situations where the employer may or may not have applied or relied upon the same policy in the past.  Consequently, under a “four corners” type reading of the statute, the Court held that Title VII allowed the disparate impact claims to proceed when the policy was actually applied.  The Court noted that a different result would probably have been reached in a disparate treatment claims because plaintiffs must timely allege intentional discrimination within the limitations period.  However, a disparate impact claim is not linked to an intentional act of discrimination, and therefore may be timely filed if the charge is filed within the limitations period after a policy or practice is implemented (actual application).

Significance

The Court’s opinion distinguishes between disparate treatment and disparate impact claims.  For the former, it will ordinarily be difficult if not impossible to allege a timely claim for present effects of past discriminatory practices where the past practices occurred outside the limitations period.  For the latter, this is not important in the Court’s view because discriminatory intent is not at issue.  Stated in the Court’s words, the two types of claims are not “co-extensive” for purposes of a limitations analysis.

Chicago argued that allowing untimely disparate impact claims to proceed might result in claims being filed for policy decisions made years ago.  In the context of disparate impact claims, this is especially critical because the employer’s only real defense is the business necessity defense and evidence necessary to construct such a defense could be lost if dormant claims were resurrected.

However, as Justice Scalia persuasively noted, “[t]ruth to tell . . . both readings of the statute produce puzzling results.  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.”

Ultimately, Justice Scalia reasoned that the result was dictated by Title VII.  “Congress allowed claims to be brought against an employer who uses a practice that causes disparate impact, whatever the employer’s motives and whether or not he has employed the same practice in the past.  If that effect was unintended, it is a problem for Congress, not one that federal courts can fix.”

This is one we got completely wrong.  In our annual Term preview we predicted:

In Lewis, I think that the Court will affirm, but this will be another sharp 5-4 split.  The merits briefing has not been filed, but the existing divides on the Court offer reasonably sure predictive insight.  The firefighters knew what the test results were in January 1996.  If they wanted to challenge the test results on the basis of a disparate impact claim, they should have filed EEOC charges within 300 days.  This would not affect other issues such as a disparate treatment claim or equitable tolling arguments.  But where plaintiffs knew about a particular test result, and their claim is a disparate impact claim, they should be required to file within 300 days from the time the test results are finalized and posted. Otherwise, they get two bites at the same apple.