Posted on September 1, 2004

A Reminder Of The Limits Of Affirmative Action

Frederick H. Schranck, Sneaking Suspicions, Aug. 31

Last Friday the U.S. Seventh Circuit Court of Appeals issued another opinion in the long-running dispute over affirmative action in civil service testing for promotions in the Chicago Fire Department.

The opinion gave both sides something to chew on, and I think deliberately so. The panel upheld the finding of liability won by the white firefighters who brought the lawsuit, but it also found that the relief granted in the District Court proceedings went too far.

This mess began when the CFD tweaked the way that it originally planned to use the results of the 1986 lieutenants’ examination. It had already spent a fair amount of taxpayers’ cash to develop the test as a valid examination of the knowledge, skills, and abilities needed for those seeking that rank.

As with most civil service tests of large numbers of folks seeking relatively few chances for advancement, the normal process called for rank-ordering the test-takers by their overall scores, and promoting in that order. However, 29% of those taking the 1986 test were black or Hispanic, but were only 12% of the 300 top-scoring candidates. Under EEOC guidelines, this is recognized as a disparate impact on minority candidates.

Title VII analysis doesn’t usually stop there, however. When faced with these kinds of results, employers should first make sure their tests are valid, both with respect to how the test matches up with job requirements, and also with respect to how test scores are used. Minority candidates and their advocates could still try to show that a different approach to testing and scoring would produce similarly valid results, but without the adverse impact.

The CFD discovered that rank-ordering made sense, but only within certain limits. For example, anyone within a range of 3.5 points on the 100-point scale was equivalent to all others in the same range, but strict point-by-point ranking wasn’t defensible.

The Department adopted yet another approach to using the test results. They split the test group into two parts (white and minority), and used the two lists until 1991. The Department promoted new minority lieutenants at a rate that matched the candidate pool of 29%, while retaining the strict rank-order promotion process for both lists in making 209 promotions.

Under this scheme, white candidates lost out on some promotions, and other white firefighters saw their eventual promotion dates delayed.

Naturally, this situation created a new set of plaintiffs, who quickly sued the city.

The CFD lost on the liability issue, both in trial below and on appeal:

[T]he premise of the City’s argument is that [the EEOC] regulations supply a compelling governmental interest in making decisions based on race. How can that be? Then Congress or any federal agency could direct employers to adopt racial quotas, and the direction would be self-justifying: the need to comply with the law (or regulation) would be the compelling interest. Such a circular process would drain the equal protection clause of meaning. Decisions such as Adarand Constructors [515 U.S. 200 (1995)] show that compliance with federal laws cannot automatically be a compelling interest; Adarand Constructors held a federal statute unconstitutional precisely because it required public officials to make use of race, and the statute was not itself supported by a compelling governmental interest. Chicago does not contend that 29 C.F.R. §1607.4 carries out any compelling governmental interest, and given the holding of Washington v. Davis, 426 U.S. 229 (1976), that disparate impact in hiring or promotion by a public employer does not violate the equal protection clause, it is hard to see how such an argument could be constructed. If avoiding disparate impact were a compelling governmental interest, then racial quotas in public employment would be the norm, and as a practical matter Washington v. Davis would be undone. Congress did not attempt this; to the contrary, it provided in 42 U.S.C. §2000e-2(j) that an employer’s desire to mitigate or avoid disparate impact does not justify preferential treatment for any group.

The Civil Rights Act of 1991 explicitly forbids the dual list response to disparate impact. 42 U.S.C. §2000e-2(l).… Public employers have other options. One will suffice here. Instead of making rank-order promotions, Chicago could have created bands reflecting the standard error of measurement. For example, the Department could have treated all scores in the range 96-100 as functionally identical and made promotions by lot from that band; when all test-takers with those scores had been promoted, the Department could have pooled scores in the range 91-95 and promoted randomly from that group, and so on. That procedure would have respected the limits of the exam’s accuracy while avoiding any resort to race or ethnicity. Given options of this kind, the City’s two-list procedure cannot be thought compelled. Indeed, it is hard to credit the Department’s assertion that it viewed rank-order promotions as unsupportable when that is how it actually used the exam. After creating racially segregated lists, the Department promoted in rank-order sequence from each list!

As for the relief granted, however, the proofs simply didn’t go as far as the plaintiffs suggested or the trial judge ordered. One short passage related to sequential damages shows why:

Even in a world of grade inflation, where teachers living far from Lake Wobegon think nothing of rating all students as “above average,” it is hard to swallow a conclusion that all candidates held back from promotion to lieutenant in 1986 were sure to become captains.

In addition, the panel found fault with the scale of the compensatory damages awards, the front pay award, and other relief.

The Circuit Court also gave a none-too-subtle suggestion to the parties about its preferences for the next stage:

Perhaps what we have said will lead the litigants to resolve these remaining issues (and the remaining firefighters’ claims) amicably rather than slug it out again in the courtroom. We hope so; this dispute is approaching its third decade.

Both sides should take the hint. Most trial judges in this position certainly will—and a U.S. District Judge can be remarkably creative when he or she wants the parties to settle, especially on remand.