In the last flurry of action, the Connecticut House last night approved Senate Bill 361, which bans the use of credit reports in hiring and promotions, in certain situations by certain employers.  The bill had previously been approved by the state Senate.

I recapped the bill in detail a few days ago.  There are a number of exceptions to the ban, so it is important for employers to review the bill and determine what portions of the bill will apply to you. As always, seek appropriate legal counsel if you need further clarification.

The measure will apply to all employers (those with one or more employees).

The bill now goes on to the Governor, who is expected to sign the measure. When signed, the bill will become effective October 1, 2011.

So, while everyone has been paying attention to the Ricci v. DeStefano case, which dealt with a group of white firefighters who claim that they should’ve been promoted, another case involving New Haven firefighters has been making its way through the state court system.

(As an aside, are there any firefighters in New Haven who haven’t brought an employment discrimination claim against the city?)

Today, the Connecticut Supreme Court reversed a jury verdict which found that, by promoting other firefighters through a practice called ‘‘underfilling,’’ the City of New Haven (and others) had discriminated against several African-American firefighters on the basis of race in violation of their right to equal protection under the fourteenth amendment to the United States constitution.

The case, Broadnax v. City of New Haven (download here), won’t be officially released until next week, but it dates back to some decisions made in the 1990s.  

Frankly, because the case is decided on equal protection grounds, it will be of little impact to private employers in the state. For government entities, though the case, delves into the practice of "underfilling" and says that, at least in this situation, it was handled properly.

What is "underfilling"? Don’t bother looking it up in Google. But the Connecticut Supreme Court provides its definition:

Underfilling, as the term is used in the present case, occurs when the fire department promotes an individual to a particular position, and the city’s budget has not allocated funds to pay the salary of that position, whereby funds for a vacant higher ranking position are used to pay for the newly appointed lower ranking position. For example, if ten individuals are promoted to lieutenant, and only five vacancies exist in the budget for the position of lieutenant, but several vacancies exist in a higher ranking position, such as captain or battalion chief, the first five newly appointed lieutenants are promoted and paid with budgeted lieutenant funds, but the next five newly appointed underfilled lieutenants are paid with funds reserved
for the vacant captain or battalion chief positions. Thus, when an individual employed at a lower ranking position is paid from funds reserved for a higher ranking position, that individual is considered to have been underfilled.’

Got that?

In any event, the Court here says New Haven’s practices were not discriminatory and that the evidence presented by the firefighters fell far short of establishing their case. 

For New Haven, the case will surely bring a sigh of relief that it can close yet another case involving firefighters in the city. But don’t expect that we’ve heard the last of a group of firefighters. Yet another group of firefighters have been requesting judicial relief as well lately.

It was never really a question of if, but when.

And yesterday, the United States District Court in Connecticut made final what had long been anticipated in the Ricci v. DeStefano case — the promotions of various firefighters to the positions of Lieutenant and Captain.  You can download the order here.

In doing so, the Court also ordered the City to certify the results of the promotional exam. Specifically:

The New Haven Civil Service Board shall certify the results of the 2003 promotional examinations for the positions of Lieutenant and Captain in the New Haven Fire Department, and shall certify the promotional lists for each position derived from these examination results.

The New Haven Independent has a full report on the order as well as feedback from each of the parties to the lawsuit.  The New Haven Register’s report is here. 

Earlier this month, a group of black firefighters moved to intervene in the lawsuit. The court has yet to rule on that motion, but the court’s entry of judgment certainly indicates that the judge did not view that motion as warranting any delay in the proceedings.

As noted before, the parties will still brief two additional issues for the court’s review: (a) the scope and nature of damages to which Plaintiffs are entitled under Title VII, and (b) whether any counts remain for liability adjudication.  The briefing of these issues will be completed in early January 2010. 

A further read-through of the Ricci v. DeStefano case today has reinforced my view that there are going to be some real lessons learned for employers out of this case.  The case had the potential of being a very narrow decision which would have minimized the impact to employers. However, because the court addresses head-on various Title VII issues, it’s likely to creep into much larger issues and it’s not out of the question to see it impact affirmative action plans or diversity programs.

Because of that, I’ve decided to spend a good deal of time discussing this case and the impact on employers in Connecticut and beyond in a webinar scheduled for July 8th at noon EDT.  You can register for it for free here.  Space will be limited so be sure to sign up today. 

In this session, I anticipate we’ll discuss::

— The basics of Title VII and how it applies to employers
— The differences between "disparate impact" and "disparate treatment" claims
— How employers should deal with the use of tests in the workplace and what it is permissible to do when the test results seem "off"

— What the lessons are to be learned from Ricci, and steps employers can take to avoid reverse discrimination claims in the future

— What is "reverse" discrimination and whether employers need to be concerned about such claims

— What the impact this decision will have on affirmative action plans and diversity programs

As time permits, we will also wrap up the other Supreme Court employment law decisions in the 2008-09 term and the takeaway for employers in each of those cases, including an important age discrimination case.

Looking forward to having you all join us. 

In closing out its 2008-09 term today  the U.S. Supreme Court ruled 5-4, along ideological lines that the city of New Haven violated Title VII in refusing to promote a group of white firefighters and refusing to apply the results of a test that it claimed would have had a disparate impact on minorities.

The decision in Ricci v. DeStefano (download here) is bound to be heavily reviewed, scrutinized and analyzed.  Indeed, because Judge Sotomayor (who was involved in the original decision at the Second Circuit) has now been nominated for the Supreme Court, the decision has been highly anticipated.

But despite the hyperbole about this case beforehand, the case has pitted two competing issues against each other – the city’s alleged fear that the test, if applied, would have had a disparate impact on minorities (opening itself up to a lawsuit) and the firefighter’s right to be promoted based on doing well on the test.  The Court said that the city’s fear was not sufficient to not use the test and that not using the test was a violation of Title VII.  

Indeed, in its decision, the Supreme Court goes one big step further; it provides the city with a defense to a possible disparate impact lawsuit:

Our holding today clarifies how Title VII applies to resolve competing expectations under the disparate-treatment and disparate-impact provisions. 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.

I’ve previously discussed the case extensively in a variety of posts which can be found here and here.

Justice Ginsburg provides the dissent here and predicts that the case will be difficult to apply in practice and further suggests that employers may have a difficult time fiting within its parameters:

As a result of today’s decision, an employer who discards a dubious selection process can anticipate costly disparate-treatment litigation in which its chances for success—evenfor surviving a summary-judgment motion—are highly problematic. Concern about exposure to disparate-impact liability, however well grounded, is insufficient to insulatean employer from attack. Instead, the employer must make a “strong” showing that (1) its selection method was“not job related and consistent with business necessity,” or (2) that it refused to adopt “an equally valid, less-discriminatory alternative.”

I’ll refrain from any big snap judgments until I review the decision at length (93 pages and all) but suffice to say that this decision will be the new starting point for employers who worry about disparate impact claims.  It’s application to private employers will no doubt be scrutinized as well, but I’m going to review the whole decision before drawing too many conclusions.

What’s interesting is that the court decided the case on Title VII grounds instead of the "Equal Protection Clause" questions that it also faced. What this means is that private employers need to pay much closer attention to this case than had it been decided on the other grounds. After all, Title VII applies just as much to private employers as it does to the government.  

My firm will be presenting a free webinar on this case and its impact on employers on July 8th at noon. Details will be forthcoming in a post later today. 

In the meantime, if you’re looking for other instant analysis, check out the SCOTUSBlog for their posts.

Here’s a warning: If you don’t get involved with labor unions or collective bargaining agreements, you might as well skip over this next post because things don’t get much more technical (or mundane, depending on your perspective) than the following case discussion. 

In a divided 3-2 decision, the Connecticut Supreme Court held that the collective bargaining agreement between the named defendant, the town of Greenwich, and the Silver Shield Association, the union representing the town’s police officers, did not cover the promotion to the position of police captain, which is a position outside the bargaining unit. (Note: the decision will be officially released on February 24, 2009.)  Justice Katz writes the dissenting opinion.

The case, Honulik v. Town of Greenwich, will have some significance for those who practice labor law in the state because it will help define what areas should be the subject of mandatory bargaining and what areas shouldn’t.  In this case, the court was asked to examine, among other items, the scope of the "past practices" clause in the collective bargaining agreement. That clause stated:

All benefits and obligations which are not described in this [a]greement or in either the manual or plan and which are now enjoyed by or required of the employees are specifically included in this [a]greement by reference just as though each such benefit or obligation was specifically set forth.

Ultimately, the court concludes that other provisions of the agreement belie the notion that
the past practices clause governs the nonmandatory bargaining subject of promotion to police captain.  The court notes that:

We also observe that our conclusion leaves intact the current status of labor law in our state. To conclude that past practices clauses protect nonmandatory subjects of bargaining, in the absence of express language to the contrary, would set forth a rule of law that might have the perverse effect of encouraging municipalities and other employers to behave erratically with respect to permissive subjects of bargaining so as not to create a past practice precedent. That we will not do.

For employers (and even some labor/employment law attorneys), it’s hard to get excited about this case. It’s lengthy and fact-specific and doesn’t lend itself to some overarching analysis.  But this case does reinforce the notion that employers should get sound legal advice when negotiating the terms of an agreement with a union.  Nothing beats good quality drafting of collective bargaining agreements to avoid any future disputes later on.

As an aside, I can’t help but chuckle at the following footnote (footnote 17, if you’re curious), buried in Justice Katz’s dissent :

In light of the urgency to resolve this expedited public interest appeal as expeditiously as possible, I do not address the remaining arguments of the parties.

In case you are curious, the court held oral arguments on the case on April 15, 2008, nearly 10 months ago.

Ed: Updated to reflect newer posts and correct style

There are many employment lawyers who subscribe to the belief that "No Good Deed Goes Unpunished".  A case out of Connecticut and the Second Circuit this month certainly won’t change that perception.  Indeed, although the case may have political undertones, it sets up a classic factual case of an employer who apparently tries to do the right thing and STILL gets sued for their actions.  Ultimately, the Second Circuit has affirmed that the employer did not violate the law but the issue still remains far from settled. 

Here’s the basic facts and background of Ricci v. DeStefano:

In March 2004, New Haven, Connecticut Fire Department held two promotional exams for the positions of Lieutenant and Captain.  However, the New Haven Civil Service Board (“CSB”) refused to certify the results of those exams because statistically, the test results showed that the test may have had a disparate impact on African-Americans. 

A group of seventeen white candidates and one Hispanic candidates who took the promotional exams sued.  These candidates fared fared very well on the test but did not receive a promotion because without the CSB’s certification of the test results, the promotional process could not proceed.

The Plaintiffs asserted that the refusal to certify the examination results violated their rights under Title VII and the Equal Protection Clause. In 2006, the District Court of Connecticut granted New Haven’s motion for summary judgment (decision here) — effectively dismissing  the case. 

CSB officials said, in their papers, that the reason they refused to certify the results is their desire to comply with the letter and the spirit of Title VII. The District Court noted that "Plaintiffs deride this ‘feigned desire to ‘comply’ with Title VII,’ arguing that defendants in fact violated that statute, and their actions were a mere pretext for promoting the interests of African-American firefighters and political supporters of the mayor. "

What is noteworthy, as the lower court pointed out, is that the case presents "the opposite
scenario of the usual challenge to an employment or promotional examination, as plaintiffs attack not the use of allegedly racially discriminatory exam results, but defendants’ reason for
their refusal to use the results.  

Ultimately, the District Court said that Plaintiffs’ contention that "diversity" is a code word for reverse discrimination did not have merit.  The employer here was trying to do right by not using a test that had a disparate impact and the Court was unwilling to suggest that the employer’s decision was incorrect.  The factual circumstances, as I’ve said before, are much more complex than that and I encourage readers to review the entire decision.

Of course, the Plaintiffs appealed. The Second Circuit la500 pearl st, second circuitst week affirmed the decision in a brief per curiam decision (available here).  The Court noted that the CSB "found itself in the unfortunate position of having no good alternatives."  

And while the court said it was "unsympathetic to the plaintiffs’ expression of frustration", the Court said that CSB was "simply trying to fulfill its obligations under Title VII when confronted with test results that had a disproportionate racial impact".   As such, its actions were protected. 

End of story, right?

Well, not quite.  Later in the week, the Second Circuit considered, but ultimately rejected a rehearing "in banc" (meaning a decision in front of all of the Second Circuit judges, not just a three judge panel).  The Wait a Second Blog explains the procedural mess in further detail in a post here.  What is unusual is that the decisions either concurring or dissenting in the decision to rehear the case in banc are lengthy and reveal a deeply divided Second Circuit. 

Indeed, the dissent noted that the Second Circuit has done a disservice by not publishing a full opinion on the subject and instead hiding behind a short "per curiam" opinion.  Ultimately, the dissent views the issue as one of "great importance" and believes that full consideration by the Second Circuit — or at least a more detailed decision — is warranted.  Certainly, the next time this issue is before the Second Circuit, we can expect more fireworks depending on the panel makeup.

The Plaintiffs here have petitioned the Supreme Court to grant certiorari in this case. It certainly merits further watching.   I would expect a ruling from the Supreme Court on whether to grant certiorari in fall of 2008. 

For employers, this case demonstrates the problem that companies face all the time. Typically, a decision affecting one employee, will leave another unhappy.  And even when the employer is trying to do the "right" thing by complying with Title VII (even if there is political overtones) they still could face a lawsuit by a group of employees unhappy with the decision.  Strict compliance with the law and getting sound legal advice is the best strategy for avoiding the minefields that continue to exist in this area.

UPDATE: Point of Law was kind enough to pick up on the post and credit should be given to their initial post on the subject late last week (which I was just tipped off to).  There are also other blog posts on the subject here,  here and here as well. 

FURTHER UPDATE 6/17: Wait a Second has an update this afternoon about another dissenting opinion released today by Second Circuit Chief Judge Dennis Jacobs.  From a legal procedural perspective, it’s interesting to see the "catfight" going on at the Court of Appeals. But from employment law perspective, it doesn’t really affect the underlying decision.

It’s a common observation among employment lawyers that employers can be sued for lots of on-the-job actions that don’t lead to termination.  Whether that employee, however, will prevail on the claim is an entirely different question. A case yesterday decided by the United States District Court of Connecticut highlights that distiusdc hartfordnction.

In Charles v. State of Connecticut, Judicial Branch (download here), an African-American probation officer claimed that she was denied a request to transfer because of her race.  She requested a transfer from the Milford, Connecticut office, where she performed  supervisory functions, to the New Haven office where she would  perform intake functions. It was undisputed that although her responsibilities would change after the transfer, there would be no change in her pay or benefits.  The position was ultimately filled with a white woman whose skills better matched the position description.

On a summary judgment motion by the employer, Senior Judge Dominic Squatrito  found that the employee did not establish a claim for race discrimination because, among other things, she did not suffer an "adverse employment action".

What is an adverse employment action? The Court looked to some other cases in the transfer context to find:

“If a transfer is truly lateral and involves no significant changes in an employee’s conditions of employment, the fact that the employee views the transfer either positively or negatively does not of itself render the denial or receipt of the transfer [an] adverse employment action.’” Nevertheless, “[a] lateral transfer that does not result in a reduction in pay or benefits may be an adverse employment action so long as the transfer alters the terms and conditions of the plaintiff’s employment in a materially negative way.”

Here, the employee admitted that her salary and benefits were unaffected, but argued only that her transfer hurt her chances to be promoted in the future.  The Court rejected that argument saying that there was no evidence that the transfer denial would affect her in the future. Indeed, because she already had experience in the "intake" function (a reason the employee claimed she needed the position), the Court saw no reason why this denial would hurt her in the future.  Ultimately, what was telling to the court is that:

her pay was never adversely affected; she was never demoted, disciplined, suspended or terminated; and her job title was never adversely changed. Indeed, [the employee] admits that not being transferred to the New Haven office did not adversely affect her, and that she has not  experienced any sort of adverse employment action as a result of her not obtaining the transfer.

In short, the Court seems to view this dispute as nothing more than a kerfuffle. Or much ado about nothing

So what’s the takeaway for employers in other cases? Two things.

  • First, this should confirm for employers that a very small number of employees may sue for anything — no matter how trivial.  Good documentation and support for decisions (that are obviously non-discriminatory) are cruicial to getting these claims defeated.
  • Second, a good human resources practice that recognizes employees desire to get ahead and that works with those employees to develop a career path, can help employees see more options than they might otherwise have.  HR should not simply be about discipline and discharge, but working with supervisors and employees to allow employees to work to their fullest potential.