I. Introduction
The Fox and the Stork is a beloved children’s fable written many years ago by Aesop. It tells the story of two acquaintances, Fox and Stork, who played pranks on each other at dinner. As the story goes, Fox first invited Stork to his home and served soup in a shallow dish. This made it impossible for Stork to eat, given his long, slender bill. So, Stork devised a plan to retaliate and invited Fox to his own home where he served fish in tall, narrow jars which Fox’s short snout could not reach. The story’s moral is that it is important to always treat others fairly and, perhaps more subtly, how “fairness” can be a relative term.
So, why is this story relevant to a legal discussion? It was famously cited in the U.S. Supreme Court’s decision in Griggs v. Duke Power Co. to illustrate the principle of disparate impact claims.[1] Disparate impact claims challenge facially neutral employment practices which have the effect of discriminating against protected groups under Title VII of the Civil Rights Act of 1964 or other anti-discrimination laws. Disparate impact claims do not require plaintiffs to demonstrate that the party who administered the challenged practice or policy intended to discriminate.[2]
Although disparate impact claims garner less attention than individual disparate treatment claims, a recent decision from the U.S. Court of Appeals for the Seventh Circuit demonstrates that disparate impact claims remain a significant concern for employers and the lawyers who defend against them. In Simpson v. Dart, the Seventh Circuit reiterated that disparate impact claims must be analyzed differently from disparate treatment claims, thereby underscoring the importance for employers to understand their obligations to reduce legal risk.[3]
I. General Overview of Disparate Impact and Disparate Treatment Claims Under Title VII
Title VII authorizes plaintiffs to bring claims for disparate impact as well as disparate treatment.[4] As most may know, Title VII includes the following protected classes: race, color, national origin, religion, sex, gender identity, and sexual orientation.[5] Ordinarily, to establish discrimination, a plaintiff must demonstrate that an employer had the intent to discriminate against the complaining individual. However, disparate impact claims are different and generally require plaintiffs to demonstrate that a certain policy or practice had the effect of discrimination, regardless of whether it was designed to discriminate.[6]
To guide this discussion, it is helpful to review the actual text of Title VII to illustrate how disparate impact claims function in relation to disparate treatment claims. The relevant section provides as follows:
An unlawful employment practice based on disparate impact is established under [Title VII] only if-
(i) a complaining party demonstrates that a respondent uses a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin and the respondent fails to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity; or
(ii) the complaining party makes the [required] demonstration . . . with respect to an alternative employment practice and the respondent refuses to adopt such alternative employment practice.[7]
By contrast, disparate treatment claims are authorized as follows:
It shall be an unlawful employment practice for an employer-
(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin; or
(2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex, or national origin.[8] (emphasis added).
The language between these two sections is somewhat similar but differs primarily based on the bolded “because of” language which courts generally interpret as requiring a showing of intent.[9]
Disparate impact claims are also notable because they allow defendants to argue that a challenged policy is nonetheless lawful if it is consistent with “business necessity.”[10] The U.S. Supreme Court has explained that employment practices such as pre-employment tests will generally satisfy the business necessity standard if the tests “bear a demonstrable relationship to successful performance of the jobs for which it was used.”[11] So, for example, a pre-employment test which measures an applicant’s typing speed would likely bear a demonstrable relationship to a position for an administrative office assistant. Even if an applicant could demonstrate that such a test had a disparate impact on a protected class, the employer would have an argument that the test was required by legitimate need for fast typists.
Because disparate impact claims challenge policies and practices, they can often involve a large number of individuals. So, disparate impact claims are sometimes brought as class actions under Rule 23 of the Federal Rules of Civil Procedure. As a brief reminder, plaintiffs seeking to bring a class action must meet each of the threshold requirements of Rule 23(a) to have a class certified. Rule 23(a) contains four threshold requirements as follows:
One or more members of a class may sue or be sued as representative parties on behalf of all members only if:
(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the interests of the class.[12]
As a general matter, if a proposed class meets all four criteria, it must be certified even if it is clear that the claim will fail on the merits.[13]
From a practical perspective, it makes general sense for disparate impact claims to be brought as class action lawsuits. This is because disparate impact claims challenge policies and practices which generally have the effect of harming a group of people, and class action lawsuits allow groups of people to join together and sue for a common purpose subject to the requirements of Rule 23. Although disparate treatment claims can also be brought as class action lawsuits, as a practical matter, it is more difficult to succeed in doing so. This is because disparate treatment claims are more narrowly focused on an employer’s specific reasons for taking an adverse employment action against an individual, and those reasons may vary from person to person.[14] For this reason, it can be more difficult for disparate treatment claims to satisfy the requirement that there be “questions of law or fact common to the class.”
III. Simpson v. Dart and Disparate Impact Claims
In Simpson v. Dart, the Seventh Circuit explained how disparate impact claims differ from disparate treatment claims and why the distinction matters in the class action context. The decision further serves as an important reminder that successfully defending against a disparate treatment claim does not automatically guarantee dismissal of a related disparate impact claim.
The relevant facts of the Simpson case are as follows: Between the years 2014 and 2017, Joseph Simpson submitted four separate applications to work for the Cook County Department of Corrections (DOC) as a Correctional Officer.[15] During the years he applied, the DOC used a five-step hiring process to consider applicants, and an applicant could be eliminated at any step.[16] The first four steps included: (1) an initial written exam; (2) a written situational exam; (3) a physical fitness test; and (4) a discretionary “final review,” which includes a background check, drug testing, and multiple interviews.[17] Successful applicants who were certified as “eligible for hire” then proceeded to the final step, which involved a discretionary “file review” before the final hiring decision was made.[18] Notably, the first three steps of the application process involved objective, pre-employment examinations; this fact will become highly relevant later. Ultimately, Simpson was never hired by the DOC.[19] As a result, he brought claims for disparate treatment and disparate impact against the DOC under Title VII.[20]
Simpson’s disparate treatment claim alleged that the DOC’s multistep process was designed to discriminate against Black applicants.[21] In the alternative, he alleged that the pre-employment screening process disparately impacted Black applicants because Black applicants were hired at significantly lower rates than white applicants.[22] As evidence, Simpson produced statistical evidence which purportedly showed that at each of the five steps of the hiring process, Black applicants were rejected more often than White applicants.[23]
Simpson opted to bring his claims (disparate treatment and disparate impact) as a class action on behalf of other Black individuals who had been rejected.[24] He first moved to certify just one class of all unsuccessful Black applicants dating back to March of 2015.[25] However, he later added five subclasses for candidates rejected at each of the five challenged steps of the hiring process.[26] The district court permitted him to add these subclasses before it ruled on whether to certify the class.[27]
Ultimately, the district court denied class certification.[28] The district court’s decision focused mainly on Rule 23(a)(2)’s commonality requirement which requires that there be “questions of law or fact common to the class.”[29] It concluded that there were not such commons questions of law or fact as to the class members.[30] Notably, the district court’s opinion did not differentiate or separate its analysis of Simpson’s disparate impact claims from its consideration of his disparate treatment claims on this commonality point.[31] Instead, it rejected certification “in its entirety.”[32]
As to his disparate impact claim, Simpson appealed the denial of class certification for individuals who were rejected at Steps 1, 2, and 3 of the pre-employment screening process.[33] He did not appeal the denial of certification for his disparate treatment claims, nor did he appeal denial of certification for individuals who were rejected at Steps 4 and 5 (the Merit Board’s final review and the Sheriff’s Office’s final review).[34] As for Steps 1, 2, and 3, those steps were the objective examination portions.
On appeal, the Seventh Circuit reversed the district court’s denial of class certification as to individuals who were rejected at the first three stages.[35] The Seventh Circuit observed that the exams constituted a uniform practice which was common to each class member and therefore constituted a valid basis for bringing a disparate impact claim.[36] In other words, to satisfy the class certification stage, it was sufficient for Simpson to have alleged that the Black applicants had all been adversely affected by the same examination at Steps 1-3, and so there were common questions of law or fact which merited class certification.[37] According to the court, the district court had improperly weighed evidence which went to the merits of Simpson’s claims at the class certification stage.[38] Thus, certification should have been granted.
III. Practical Considerations for Employers and Defense Counsel
Simpson serves as a reminder that disparate impact claims remain a significant concern for employers for a few reasons. First, claims can arise based on a policy which the employer believes to be legal because it is applied equally to all individuals without respect to protected-class status. Employers may therefore unwittingly be inviting claims by enforcing an invalid policy or practice under the mistaken assumption that equal application will defeat any claim for discrimination. Employers should therefore carefully evaluate their employment practices and, if applicable, any pre-employment examinations they use to ensure that they are not inadvertently applying standards or using tests which may invite legal risk.
Second, disparate impact claims can be expensive and complicated to litigate. Employment discrimination cases are notoriously fact-intensive, and cases which involve just one plaintiff—let alone an entire group—can quickly become expensive due to discovery and expert witness costs. Disparate impact cases are also unique in that expert witnesses are often central to the success of demonstrating that a policy or practice is proper. This is because statistical analysis of data showing that a particular protected group was more negatively affected as compared to another is often central to the success of such claims. Employers are often required to retain their own experts as well which further adds cost and complication.
IV. Conclusion
Simpson highlights that disparate impact claims are thriving and serves as a reminder that job requirements must be job related and must not have the effect of (even unintentionally) harming protected classes of individuals. Employers and their counsel should therefore take note that such claims remain a concern.
Author Biography:
Storm B. Larson is an associate at Boardman & Clark LLP in Madison. His practice primarily lies in the area of labor and employment law. Prior to joining Boardman Clark, Storm was an attorney with a local Madison law firm, where he advised and represented clients in a variety of civil issues including general liability defense and labor and employment law. He graduated from the University of Wisconsin-La Crosse with Highest Honors in 2016 and earned his JD from the University of Wisconsin Law School in 2018. Prior to graduating law school and starting his practice, Storm served as a judicial intern for the Honorable William Conley as well as the Honorable Ann Walsh Bradley. He is admitted to practice in Wisconsin state courts and the United States District Court for the Western District of Wisconsin. In addition to WDC, Storm is a member of the State Bar of Wisconsin, the Dane County Bar Association, the Western District Bar Association, and the American Bar Association.
[1] Griggs v. Duke Power Co., 401 U.S. 424 (1971).
[2] Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 988 (1988).
[3] Simpson v. Dart, 23 F.4th 706 (7th Cir. 2022).
[4] 42 U.S.C. §§ 2000e-2(k)(1)(A)(i)-(ii); 42 U.S.C. §§ 2000e-2(a)(1)-(2).
[5] Id.; Bostock v. Clayton County, Georgia, 140 S. Ct. 1731 (2020).
[6] Watson, 487 U.S. at 988.
[7] 42 U.S.C. §§ 2000e-2(k)(1)(A)(i)-(ii).
[8] 42 U.S.C. §§ 2000e-2(a)(1)-(2).
[9] Ricci v. DeStefano, 557 U.S. 557, 577 (2009).
[10] 42 U.S.C. §§ 2000e-2(k)(1)(A)(i).
[11] Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971).
[12] Fed. R. Civ. P. 23(a)(1)-(4).
[13] See Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 399-400 (2010).
[14] Simpson, 23 F.4th at 712.
[15] Id. at 708.
[16] Id. at 709.
[17] Id.
[18] Id.
[19] Id. at 708.
[20] Id. at 709.
[21] Id.
[22] Id.
[23] Id.
[24] Id. at 709-10.
[25] Id.
[26] Id.
[27] Id. at 710.
[28] Id.
[29] Id.
[30] Id.
[31] Id.
[32] Id.
[33] Id.
[34] Id.
[35] Id.
[36] Id. at 712.
[37] Id.
[38] Id.
