Oct 06, 2009

Supreme Court Term Begins: Disparate Impact on the Docket (Again)

The Supreme Court began its 2009-2010 term yesterday. As a number of news reports have pointed out, there are a lot of business cases on the docket this time around, including a challenge to the accounting review board created by Sarbanes-Oxley. There are also a few cases with labor or employment implications on the docket, including a couple of arbitration cases (Union Pacific Railroad Co. and Stolt-Nielsen S.A.) and an ERISA dispute (Conkright).  

And just last week, the Court agreed to hear Lewis v. City of Chicago, a disparate impact case involving racial disparities in the results of a written test given to firefighter applicants. (Sound familiar?) This time around, Black applicants are suing the city of Chicago for using the results of a written test -- which they allege had a disparate impact based on race -- to decide whom to hire.

The issue in Lewis is when the plaintiff-applicants should have filed their charges of discrimination with the EEOC (which is a prerequisite to filing a lawsuit; plaintiffs who don't file a charge with the EEOC or a similar state agency may not sue under Title VII). The Seventh Circuit Court of Appeals found that the applicants filed their charges too late and entered judgment for the city. 

Plaintiffs have 300 days after their claim "accrues" to file a charge of discrimination with the EEOC. In Lewis, the plaintiffs learned their test results (which divided applicants into the categories of "well qualified," "qualified," or "not qualified") and were told that they were unlikely to be hired unless they fell into the "well qualified" category. At about the same time, the city announced that it was likely to hire only a third of those who fell into the well qualified category in the next three years. 

The plaintiffs filed their charge more than 300 days after they received their test scores and learned how the city planned to use them, but within 300 days after the city actually started hiring based on those scores. The Seventh Circuit found that the plaintiffs' claims accrued when they learned their test scores, because that event determined whether or not they would be hired. Other Circuits have reached a different conclusion, finding that plaintiffs don't have to file charges within 300 days after a policy is announced, but only within 300 days after that policy is relied upon to make an employment decision. Presumably, the Supreme Court agreed to hear the case in order to clear up the issue.