Lessons Learned from Johnson v. City of Memphis

The 2000 Promotional Process
In 2000, the City of Memphis conducted a promotional process to select patrol officers for promotion to the position of sergeant. Johnson v. City of Memphis (2003 Johnson), 73 F. App’x 123, 126 (6th Cir. 2003). Applicants were informed the test would consist of four components with different weights given to each: (1) a written test (20 percent); (2) a practical exercise test (50 percent); (3) performance evaluations from the previous two years (20 percent); and (4) seniority points (10 percent). Individuals who passed the written test were next required to take the practical test. Johnson v. City of Memphis (2005 Johnson), 355 F. Supp. 2d 911, 913 (W.D. Tenn. 2005). The department would then consider evaluations and seniority points. Initially, the Memphis Police Department had a “cut score” on the written test of 70 points. However, this resulted in a disparate impact against minority candidates, so it adjusted the cut score to 66 in an effort to satisfy the Equal Employment Opportunity Commission’s (EEOC’s) four-fifths rule.

During administration of the practical exercise test, the Memphis Police Department learned that unauthorized study materials had been released to the applicants, thereby compromising the test. 2003 Johnson, 73 F. App’x at 127. In response, the department eliminated the practical exercise test and instead increased the weight of the written test and performance evaluations from 20 percent to 45 percent.

On July 11, 2000, plaintiffs filed a complaint alleging that the Memphis Police Department had intentionally discriminated against them on the basis of race by eliminating and increasing the weight applied to certain portions of the promotional process. The plaintiffs alleged that the defendant had been warned that the modifications it undertook would have an adverse impact on African American candidates, but that it still chose to modify the process. Ultimately, the Memphis Police Department conceded that the 2000 promotional process was invalid.

The 2002/2003 Promotional Process
In 2002 and 2003, the Memphis Police Department took steps to revamp its promotional process to ensure that it was job-specific and tested skills required for the position of sergeant. 2005 Johnson, 355 F. Supp. 2d at 914; 2006 Johnson, 2006 WL 3827481, at *5. It hired a consultant to create a promotional process that would be “nondiscriminatory” and “legally defensible.” 2006 Johnson, 2006 WL 3827481, at *5.

However, after the new test was given, the defendant learned that the test had a significant disparate impact on African American applicants. 2005 Johnson, 355 F. Supp. 2d at 914. The consultant advised the defendant that although the test did have such an adverse impact, the cause of which he could not find, the test was still content-valid, and the consultant recommended that the test results be used to make promotions. 2006 Johnson, 2006 WL 3827481, at *5. The Memphis Police Department chose to rely on the tests and made its promotions accordingly. 2005 Johnson, 355 F. Supp. 2d at 914. On January 10, 2003, 176 of 240 white candidates were promoted to the rank of sergeant, while only 86 of 274 African American candidates were promoted.

Disparate Impact under the 2002/2003 Process
The legal issues addressed by the district court and the U.S. Court of Appeals for the Sixth Circuit are numerous. This article focuses on the claims of disparate impact and disparate treatment. The plaintiffs attacked the 2002/2003 process on the grounds that it had not been validated and was unreliable, although the plaintiffs did not challenge any specific test item.2006 Johnson, 2006 WL 3827481, at *9.

The court followed the three-step analysis set forth in the U.S. Supreme Court decision ofAlbermarle Paper Co. v. Moody, 422 U.S. 405, 432 (1974) to reach the conclusion that the plaintiffs had met their burden to prove disparate impact under the 2002/2003 process. The plaintiffs “must first establish a prima facie case by showing that a promotions process has a measurably discriminatory impact, regardless of motive or intent or appearance of even-handedness.” 2006 Johnson, 2006 WL 3827481, at *9. The plaintiffs met this step by showing that the defendant’s own consultant recognized that the test led to a disparate impact on African American applicants and by bringing in their own experts to analyze the test results.

The burden shifts to the employer to show that “any given requirement [has] . . . a manifest relationship to the employment in question.” Id. Here, the defendant was able to show that its promotional process was both valid and reliable. The court looked to EEOC Guidelines regarding acceptable methods of validating a promotional process, which include content validation, construct validation, and criterion-related validation. Id. at *10. As noted above, the defendant, through its expert, chose content validation. “[C]ontent validity is demonstrated by showing that the test content is a ‘representative sample’ of the important aspects of performance on the target job.” 29 C.F.R. §§ 1607.5. The 2002 process focused on 44 knowledge, skills, abilities, and personal characteristics necessary for the position of sergeant. 2006 Johnson, 2006 WL 3827481, at *10. Because the test took into account skills required for the position sought, the promotional process was deemed valid. In addition, after a cursory review of the expert testimony regarding the calculations used in the 2002/2003 process, the court found that the 2002/2003 test was reliable (i.e., it measured the quantities intended to be measured). Because the 2002 process was both valid and reliable, the defendant satisfied the burden of proving the process was job-related.

The burden then shifts to the plaintiffs to show that other testing modalities were available that would have allowed for merit-based promotions without disparate impact on minority candidates. “Where two or more selection procedures are available which serve the user’s legitimate interest in efficient and trustworthy workmanship, and which are substantially equally valid for a given purpose, the user should use the procedure which has been demonstrated to have a lesser adverse impact.” Id. (quoting EEOC Guidelines on Employee Selection Process). The plaintiffs suggested three such alternative procedures: (1) practical exercise (simulation of on-the-job procedures); (2) assessments of integrity and conscientiousness; and (3) a merit promotion process that had been successfully used in another city. The district court found merit in each option.

Ultimately, the court determined that it did not need to scrutinize each alternative option put forward by the plaintiffs, and it simply found that “[i]t is sufficient to acknowledge that the existence of such alternative measures and methods belies . . . Defendant’s position that they had no choice but to go forward with the 2002 promotion process despite its adverse impact because no alternative methods with less adverse impact were available.” Id.

Disparate Treatment under the 2000 and 2002/2003 Processes
The analysis for disparate treatment is similar to the analysis for disparate impact, and a plaintiff “must show discriminatory motive, either by direct evidence or by influence based on a prima facie showing of discrimination.” The plaintiffs argued that with respect to the 2000 process, the defendant’s intent to discriminate was evidenced by the promotion of white candidates over black candidates based on an invalid process, even though the defendant knew that the process was invalid. With respect to the 2002 process, the plaintiffs submitted that the disparity between white and African American candidates, with no credible explanation, was evidence of discriminatory intent; that the defendant did not report score reliability or other statistical indices; and that the manner in which the promotions occurred demonstrated that the defendant was trying to limit the possibility of court intervention.

In light of the considerable resources expended by the City in designing the 2000 and 2002 processes, the court found the plaintiffs’ arguments to be unavailing. While the district court questioned the judgment of the defendant, it found “nothing to indicate that the judgment of the City was animated by racial animus or intent to discriminate.”

Remedies Available to the Plaintiffs
In determining what remedies were available to the plaintiffs for the disparate impact claims, the court noted that Title VII was guided by two fundamental principles:

The court recognized that in the circumstances of this case, damages were difficult to assess because the court is not able to go back in time and change the plaintiffs’ positions for the past couple of years and that it would be unfair to demote other individuals who have been promoted through no fault of their own. Therefore, the court ultimately reached the following conclusion:

2006 Johnson, 2006 WL 3827481, at *19.

This remedy involved back pay, seniority credits, and promotion. The parties are today still attempting to determine the appropriate damage amount for each plaintiff.

Lessons Learned from the Johnson Decisions
The Johnson decisions offer insight into the steps necessary for a nondiscriminatory promotional system. Employers must develop processes that test potential promotional candidates on the basis of the skills required for the position. Most will need to hire consultants to analyze results and/or statistical data relating to disparate treatment of minority candidates, as well as possible alternative testing methodologies. This will allow employers to support the use of their tests with data and to show a clear link between the test and required job skills. It will also allow employees to fully understand the skills required of them before being considered for promotion. The primary lesson learned from this litigation is that employers must take their obligations seriously and design a process that excludes even the possibility of discrimination against candidates. Other lessons learned include the following.

Make Sure to Analyze Alternative Options
When implementing a promotional system, an employer must be certain to analyze feasible, job-related alternative options and the potential for disparate impact that each option poses, and select the alternative that has the least potential for disparate impact. This might sound simple, but it may be necessary to retain a consultant with experience to understand the methods to measure disparate impact. The importance of this step is highlighted by theJohnson litigation, where the test methods were found valid and reliable, but the district court found the test to have a disparate impact because there were alternative methods that were job-related but had a lesser adverse effect on minorities.

Employers Cannot Always Rely on Their Experts
In the Johnson decision, the defendant relied not only on the experience of its consultant to design and implement a promotional process but also on his judgment that the testing should be used despite having a disparate impact on minority candidates. Employers should not rely solely on the judgment of outside candidates; they should think about the possible legal ramifications of following that advice. Consultants may be able to offer statistical analysis and guidance on testing options, but they are not legal experts. Legal counsel should be contacted if there are any concerns about implementing a promotional process that may have a disparate impact.

Meeting EEOC Guidelines May Not Be Enough
In defending the validity of the 2000 promotional process, the defendant argued that there could not be a finding of disparate impact because the written test results satisfied the EEOC’s “four-fifths rule.” The plaintiffs countered that this rule is not the only measure and that the court should examine other statistical evidence. The court agreed.

The four-fifths rule states that a selection rate of a group of less than four-fifths the selection rate of the majority group may be evidence of adverse impact. 2005 Johnson, 355 F. Supp. 2d at 915–16. Although the defendant changed the cut rate to comply with this rule (lowering the minimum written test score from 70 to 66), the district court still found disparate impact because “small differences in selection rate may nevertheless constitute adverse impact where they are significant in both statistical and practical terms.”

Ultimately, while EEOC Guidelines are often helpful in defining the contours of legal employment activity, employers should not rely on them as definitive legal precedent for their actions.

Damages May Be the Hardest Part
The trial in the Johnson litigation took place in 2005, but the litigation continues in part due to disputes over the appropriate damages to the plaintiffs. The parties disputed the appropriate amount of prejudgment interest to be awarded and whether certain plaintiffs are truly entitled to back pay and overtime pay, and at what pay rate. Recently, the Sixth Circuit expressed its frustration at the amount of time it has taken the district court to enter a final judgment on the issue of damages, noting that six months was an appropriate time frame to issue a final order. Only time will tell whether the district court will be able to meet that deadline, but the delay certainly must be a cause of frustration for the plaintiffs, who have waited over seven years to see the damages owed to them.

Conclusion
For employers who plan to use promotional processes to move candidates up the ranks in the organization, it can be a difficult, expensive, and time-consuming task to tailor the process to ensure that candidates are not discriminated against. However, carefully tailoring such a plan is necessary and important to prevent protracted litigation and ensure that employees are treated fairly and equally under the law. Time and energy devoted to creating a fair and nondiscriminatory system can prevent this type of lengthy and unnecessary litigation.

Keywords: litigation, employment and labor relations law, discrimination, promotion process

_{Katie Kiernan Marble is an associate with McLane, Graf, Raulerson & Middleton, P.A., in Manchester, New Hampshire.}

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