Assessing the Practical Repercussions of Ricci

The Supreme Court's decision in Ricci v. DeStefano may have effectively invalidated the federal Testing Guidelines. The Testing Guidelines, developed almost 40 years ago, require that employers who use any selection procedure for employment or promotion, including written tests, that screens out significantly more members of one group than another, must "validate" those procedures. They must show by scientifically accepted statistical methods that the tests actually measure a person's ability to perform the job successfully, that is, that the test is "job related."

Most of the focus on the June 29 decision in Ricci was on the Court's new standard for determining whether an employer can throw out the results of a test -- it can do so only when it has a "strong basis in evidence" that the test is not job related and justified by business necessity. But at the end of the decision, the Court directed the lower courts about how this case, and presumably similar ones, should be handled in the future:

If, after it certifies the test results, the City faces a disparate-impact suit, then in light of our holding today it should be clear that the City would avoid disparate-impact liability based on the strong basis in evidence that, had it not certified the results, it would have been subject to disparate-treatment liability.

That statement, as well as the Court's discussion of why it found the test was job-related, raises serious questions whether the Testing Guidelines, also known as the Uniform Guidelines on Employee Selection Procedures, can survive.

Griggs v. Duke Power, the 1971 Supreme Court decision that established the disparate impact analysis of discrimination cases, based its conclusion that Duke Power had violated Title VII on the proviso in a section of the original Act specifically applicable to the use of tests:

[it] shall [not] be an unlawful employment practice for an employer to give and to act upon the results of any professionally developed ability test provided that such test, its administration or action upon the results is not designed, intended or used to discriminate because of race, color, religion, sex or national origin. [Emphasis added.]

Chief Justice Burger, writing for a unanimous Court, held that the federal Testing Guidelines were entitled to "great deference." Under Title VII and the Testing Guidelines, employers can use tests only where "they are demonstrably a reasonable measure of job performance." But, the Ricci decision only mentioned this provision of Title VII in passing and did little more than note the existence of the Testing Guidelines. These statements and omissions in Ricci, combined with the Court's direction for further proceedings, could seriously undermine the continued viability of the Testing Guidelines.

The Ricci decision recognized that Congress amended Title VII in 1991 to enunciate the disparate impact standard explicitly. Courts have held that "thirty-five years of using these [Testing] Guidelines makes them the primary yardstick by which we measure" an employer's validation of a test. But the Court in Ricci asserted, without any reference to the kind of rigorous statistical studies required by those Guidelines, that "There is no genuine dispute that the examinations were job-related and consistent with business necessity." The basis for this assertion was:

-statements to the New Haven Civil Service Board by the test developer and city officials about the "detailed steps" they took to develop and administer the tests;

-the "painstaking" analysis of the lieutenant and captain positions utilized in developing the tests;

-use of source material approved by the New Haven Fire Department for preparing the questions on the tests.

This approach to demonstrating that the test in Ricci was job-related (there was no dispute that it had a substantial statistical disparate impact on African Americans) flatly contradicts the requirements of the Testing Guidelines. Section 3 of the Guidelines states:

The use of any selection procedure which has an adverse impact on the hiring, promotion, or other employment . . . opportunities of members of any race, sex, or ethnic group will be considered to be discriminatory and inconsistent with these guidelines, unless the procedure has been validated in accordance with these guidelines. . . .

The Guidelines require that validation studies meet "generally accepted professional standards for evaluating standardized tests . . . such as those . . . in the Standards for Educational and Psychological Tests" and must use "professionally acceptable statistical procedures." Based on the Court's recitation of the facts, there was no evidence that any analysis of the statistical relationship between scores on the tests and successful job performance had ever been conducted.

Indeed, a professional in the field of industrial and organizational psychology, Dr. Dan A. Biddle, has described the tests used by New Haven as "fatally flawed;" the tests had design omissions, design flaws, and the results were used inappropriately. He concluded:

The process of properly validating a test assures that the most qualified applicants will rise to the top of the list. This can only occur when the test properly represents the key success factors needed for the job (for instance, in this situation, "Command Presence"); measures these factors in a balanced and accurately-weighted fashion (which was only arbitrary in this case); and when its results accurately reflect the skill levels actually needed for the position (a validated cutoff score rather than an arbitrary one like 70%). Tests that don't possess these characteristics can only provide hit-and-miss accuracy when it comes to sifting applicant qualification levels.

What implications does Ricci have for employers' use of tests in the future, in light of the Court's bald assertion that the New Haven tests were job related and consistent with business necessity but the apparent failure of New Haven to comply with the Testing Guidelines for test validation? It seems clear most employers can avoid the expense of the kind of validation study required by the Testing Guidelines by engaging in the steps which the Supreme Court found demonstrated beyond dispute that a test is job related and consistent with business necessity. That is, an employer can have a careful job analysis performed and develop test questions based on that analysis and any written job description and performance standards available.

In most cases, while costly, that approach will be considerably less expensive than a validation study that is "consistent with generally accepted professional standards for evaluating standardized tests and other selection procedures." An employer will be insulated from suit by minorities screened out by the test, even if the test has a substantial disparate impact. (A representative of the minority firefighters association in New Haven has been quoted as saying that the "black firefighters would sue if the old promotion test was certified.")

The Court directed that this path to proof of job relatedness by definition provides a "strong basis in evidence" that failure to use the results of such a test will expose it to disparate treatment liability. In other words, the employer can use the results of a test that has a substantial disparate impact and has not been statistically proven to be job related. Few employers would go to the expense of a validation study as required by the Testing Guidelines, the results of which would often lead only to litigation by one disappointed group or the other. Little would be left of the Testing Guidelines.