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Supreme Court: Title VII deadline clock resets with each new biased decision

05/25/2010

In a unanimous opinion, the U.S. Supreme Court on May 24 ruled that the lawsuit clock resets each time an employer uses apparently biased job-qualification tests to make hiring decisions. The court said the timing of Title VII lawsuits doesn’t depend on when the test was administered, but on when the employer uses the test results, even if that’s years later.

The opinion could open the litigation floodgates, according to business groups that argued against the case brought by 6,000 black applicants who sought jobs as firefighters for the city of Chicago.

The case is Lewis v. Chicago.

A matter of timing

The central question in the case, which stretches back 15 years, was about timing. In July 1995, the Chicago Fire Department administered an employment test that it now acknowledges was biased against black applicants. It divided the candidates into three groups: “well qualified” (those who scored 89 and above), “qualified” (65 to 88) and “unqualified” (below 65).

Of the well-qualified group, 76% were white and 11% were black. The city began hiring applicants from the well-qualified group.

But in 1997, a group of black applicants who had scored between 65 and 88 filed an EEOC complaint alleging that the test had a disparate impact on minorities. When the EEOC gave the go-ahead, the group sued.

The city immediately argued that the plaintiffs had missed the deadline for filing a Title VII lawsuit. The law says applicants must sue within 300 days of an alleged discriminatory act. The black applicants’ suit came more than 400 days after they learned their test results.

The applicants won the first round of litigation, and the court ordered the fire department to hire 132 randomly selected members of the qualified group. It awarded back pay to be divided among all the other members of the class.

Then the city appealed to the 7th Circuit Court of Appeals, which reversed the lower court’s ruling. Eventually, the case made its way to the Supreme Court.

They filed on time

The High Court’s decision could not be more straightforward: The discriminatory event wasn’t when the test was administered. It was when the city used the test results to make hiring decisions.

By that measure, the court ruled, the applicants had filed their suit in time. Now their lawsuit goes back to be heard in a lower court.

Justice Antonin Scalia, who wrote the Lewis opinion, noted that if Chicago’s argument had prevailed, there would be no end to ongoing discrimination. “Under the city’s reasoning,” Scalia wrote, “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.”

Like two other landmark cases

Lewis v. Chicago bears some resemblance to last year’s landmark Supreme Court decision in Ricci v. DeStefano.

Both cases involved firefighters who challenged the results of an employment test that was alleged to be biased. But Ricci was about whether efforts to protect one group (minority firefighters) from discrimination could result in discrimination against another group (white firefighters).

In reality, Lewis is more like another landmark case, 2007’s Ledbetter v. Goodyear Tire & Rubber. In a 5-4 decision, the Supreme Court in Ledbetter held that an employee couldn’t sue for current wage discrimination based on past discriminatory actions.

Congress passed the Lilly Ledbetter Fair Pay Act of 2009 to overturn the High Court’s decision. The law amended Title VII to make clear that each new allegedly unfair paycheck shall be considered a fresh incident of discrimination.

According to Arthur Smith, Jr., an employment law attorney with the Ogletree Deakins law firm, Ledbetter was on the Supreme Court’s mind when it ruled in Lewis.

“Although the court did not mention the Lilly Ledbetter Fair Pay Act, it appears that all nine members of the court got Congress’ message when that law was enacted,” Smith said. “In a disparate impact case, no longer are Title VII time limitation periods to be strictly construed by ascertaining when the original discriminatory employment action occurred.”

Effect on employers

Business groups immediately decried the Lewis decision. “We are very disappointed with the court’s decision,” said Karen Harned, executive director of the National Federation of Independent Business’ Small Business Legal Center. “Allowing employees to wait years before they file a disparate impact claim is unfair to small business owners.”

Scalia’s opinion recognized that Lewis could cause “a host of practical problems for employers.” However, he wrote, it “is not our task to assess the consequences of each approach and adopt the one that produces the least mischief …. Our charge is to give effect to the law Congress enacted.”