Application of Disparate Impact Claims Expands under Seventh Circuit Decision

In the recent case of Adams v. City of Indianapolis (7th Cir. 2014), the Seventh Circuit Court of Appeals clarified that disparate impact cases under Title VII can include claims based on any employment policy—not just one that is neutral on its face.

In Adams, the employment policy in question was the City’s promotion examination process. The process included a written test, an assessment of the candidate’s “personnel profile,” and an oral exercise made up of an interview, an assessment of the candidate’s responses to hypothetical scenarios, and an exercise requiring drafting of reports and correspondence. Generally, the City promoted the candidates with the highest overall scores. A group of 36 black police officers and firefighters sued the City claiming that this process was intentionally biased against them based on race.

The Seventh Circuit ultimately dismissed the employees’ claim because they failed to offer any evidence showing a racially discriminatory impact on black employees in the promotion process. This case is significant because by holding that disparate impact claims do not require a facially neutral practice to proceed, it has the potential of expanding the number of disparate impact claims against employers. Although the Seventh Circuit is outside our Mountain States region, other circuits could be influenced by it.

As a practical matter, we recommend that employers review their employment policies and practices for possible disparate impact on protected classes. Employers should examine not only the policy or practice, but also the ultimate effect it has on protected classes based on how it is applied.