Watson v. Fort Worth Bank & Trust
487 U.S. 977 (1988)

Annotate this Case

U.S. Supreme Court

Watson v. Fort Worth Bank & Trust, 487 U.S. 977 (1988)

Watson v. Fort Worth Bank & Trust

No. 86-6139

Argued January 20, 1988

Decided June 29, 1988

487 U.S. 977

Syllabus

Petitioner employee, who is black, was rejected in favor of white applicants for four promotions to supervisory positions in respondent bank, which had not developed precise and formal selection criteria for the positions, but instead relied on the subjective judgment of white supervisors who were acquainted with the candidates and with the nature of the jobs. After exhausting her administrative remedies, petitioner filed suit in Federal District Court, alleging, inter alia, that respondent's promotion policies had unlawfully discriminated against blacks generally and her personally in violation of Title VII of the Civil Rights Act of 1964. As to petitioner's individual claim, the court held that she had not met her burden of proof under the discriminatory treatment evidentiary standard and, for this and other reasons, dismissed the action. The Court of Appeals affirmed in relevant part, rejecting petitioner's contention that the District Court erred in failing to apply "disparate impact" analysis to her promotion claims. The court held that, under its precedent, a Title VII challenge to a discretionary or subjective promotion system can only be analyzed under the disparate treatment model.

Held: The judgment is vacated, and the case is remanded.

798 F.2d 791, vacated and remanded.

JUSTICE O'CONNOR delivered the opinion of the Court with respect to Parts I, II-A, II-B, and III, concluding that disparate impact analysis may be applied to a subjective or discretionary promotion system. Pp. 487 U. S. 985-991, 487 U. S. 999-1000.

(a) Each of this Court's decisions applying disparate impact analysis -- under which facially neutral employment practices, adopted without a deliberately discriminatory motive, may in operation be functionally equivalent to illegal intentional discrimination -- involved standardized tests or criteria, such as written aptitude tests or high school diploma requirements, see, e.g., Griggs v. Duke Power Co.,401 U. S. 424, and the Court has consistently used disparate treatment theory, in which proof of intent to discriminate is required, to review hiring or promotion decisions that were based on the exercise of personal judgment or the application of subjective criteria, see, e.g., McDonnell Douglas Corp. v. Green,411 U. S. 792. Until today, the Court has never addressed the

Page 487 U. S. 978

question whether disparate impact analysis may be applied to subjective employment criteria. Pp. 487 U. S. 985-989.

(b) The reasons supporting the use of disparate impact analysis apply to subjective employment practices. That analysis might effectively be abolished if it were confined to objective, standardized selection practices, since an employer could insulate itself from liability under Griggs and its progeny simply by combining such practices with a subjective component, such as a brief interview, in a system that refrained from making the objective tests absolutely determinative, and could thereby remain free to give those tests almost as much weight as it chose without risking a disparate impact challenge. Moreover, disparate impact analysis is, in principle, no less applicable to subjective employment criteria than to objective or standardized tests, since, in either case, a facially neutral practice, adopted without discriminatory intent, may have effects that are indistinguishable from intentionally discriminatory practices. Simply because no inference of discriminatory intent can be drawn from the customary and reasonable practice in some businesses of leaving promotion decisions to the unchecked discretion of the lower level supervisors most familiar with the jobs and candidates, it does not follow that these supervisors always act without discriminatory intent. Even if it is assumed that discrimination by individual supervisors can be adequately policed through disparate treatment analysis, that analysis would not solve the problem created by subconscious stereotypes and prejudices that lead to conduct prohibited by Title VII. Pp. 487 U. S. 989-991.

(c) Since neither the District Court nor the Court of Appeals has evaluated the statistical evidence to determine whether petitioner made out a prima facie case of discrimination under disparate impact theory, the case must be remanded. Pp. 487 U. S. 999-1000.

JUSTICE O'CONNOR, joined by THE CHIEF JUSTICE, JUSTICE WHITE, and JUSTICE SCALIA, concluded in Parts II-C and II-D that:

1. The extension of disparate impact analysis to subjective employment practices could increase the risk that, in order to avoid liability, employers will adopt surreptitious numerical goals and quotas in the belief that, since disparate impact analysis inevitably focuses on statistical evidence, which cannot practically be rebutted by the kind of counterevidence typically used to defend objective criteria, the threat of ruinous litigation requires steps to ensure that no plaintiff can establish a prima facie case under disparate impact theory. That result would be contrary to Congress' clearly expressed intent in 42 U.S.C. § 2000(e)-2(j) that no employer shall be required to grant preferential treatment to any protected individual or group because of a numerical imbalance in its workforce. Pp. 487 U. S. 991-993.

2. However, the application of disparate impact theory to subjective employment criteria should not have any chilling effect on legitimate

Page 487 U. S. 979

business practices, since the high standards of proof applicable in such cases operate to constrain the theory within its proper bounds and provide adequate safeguards against the danger that quotas or preferential treatment will be adopted by employers. Pp. 487 U. S. 993-999.

(a) In establishing a prima facie case when subjective selection criteria are at issue, the plaintiff may have difficulty satisfying the initial burden of identifying the specific employment practices that are allegedly responsible for any observed statistical disparity, especially where the employer has combined the subjective criteria with more rigid standardized rules or tests. Moreover, the plaintiff's statistical evidence must be sufficiently substantial to prove that the practice in question has caused the exclusion of job or promotion applicants because of their membership in a protected group, and the defendant is free to attack the probative weight of that evidence, to point out fallacies or deficiencies in the plaintiff's data or statistical techniques, and to adduce countervailing evidence of its own. Pp. 487 U. S. 994-997.

(b) The nature of the "business necessity" or "job-relatedness" defense -- under which the defendant has a burden of producing evidence after the plaintiff has made out a prima facie case -- also constrains the application of the disparate impact theory. Employers are not required, even when defending standardized or objective tests, to introduce formal "validation studies" showing that particular criteria predict actual on-the-job performance. In the context of subjective or discretionary decisions, the employer will often find it easier than in the case of standardized tests to produce evidence of a "manifest relationship to the employment in question." Many jobs, for example those involving managerial responsibilities, require personal qualities that are not amenable to standardized testing, but are nevertheless job-related. In evaluating claims that discretionary practices are insufficiently related to legitimate business purposes, courts are generally less competent than employers to restructure business practices, and therefore should not attempt to do so. Pp. 487 U. S. 997-999.

JUSTICE BLACKMUN, joined by JUSTICE BRENNAN and JUSTICE MARSHALL, agreeing that disparate impact analysis may be applied to claims of discrimination caused by subjective or discretionary selection processes, concluded that:

1. In the disparate-impact context, a plaintiff who successfully establishes a prima facie case shifts the burden of proof, not production, to the defendant to establish that the employment practice in question is a business necessity. See, e.g., Albemarle Paper Co. v. Moody,422 U. S. 405, 422 U. S. 425; Dothard v. Rawlinson,433 U. S. 321, 433 U. S. 329; and Griggs v. Duke Power Co.,401 U. S. 424, 401 U. S. 432. The plurality's assertion to the contrary mimics the allocation of burdens this Court has established in the very different context of individual disparate treatment claims. Unlike a

Page 487 U. S. 980

disparate treatment claim of intentional discrimination, which a prima facie case establishes only by inference, the disparate impact caused by an employment practice is directly established by the numerical disparity shown by the prima facie case, and the employer can avoid liability only if it can prove that the discriminatory effect is justified. To be justified as a business necessity, a practice must directly relate to a prospective employee's ability to perform the job effectively; i.e., it must be necessary to fulfill legitimate business requirements. Pp. 487 U. S. 1000-1006.

2. The plurality's suggestion that the employer will often find it easier to produce evidence of job-relatedness for a subjective factor than for standardized tests may prove misleading, since the employer still has the obligation to persuade the court of job-relatedness through the introduction of relevant evidence. Pp. 487 U. S. 1006-1011.

(a) The fact that the formal validation techniques endorsed by the Equal Employment Opportunity Commission's (EEOC) Uniform Guidelines on Employee Selection Procedures cannot always be used to prove the job-relatedness of subjective selection processes does not free an employer from its burden of proof. The link between such processes and job performance may, depending on the type and size of the business and the nature of the particular job, be established by a variety of methods, including the results of studies, expert testimony, and prior successful experience. Although common sense plays a part in the assessment, a reviewing court may not rely on its own, or an employer's, sense of what is "normal" as a substitute for a neutral assessment of the evidence. Pp. 487 U. S. 1006-1008.

(b) The employer's burden of justifying an employment practice that produces a disparate impact is not lessened simply because the practice relies upon subjective assessments. Establishing a general rule allowing an employer to escape liability simply by articulating vague, inoffensive-sounding subjective criteria would disserve Title VII's goal of eradicating employment discrimination by encouraging employers to abandon attempts to construct neutral selection mechanisms in favor of broad generalities. While subjective criteria will sometimes pose difficult problems for courts charged with assessing job-relatedness, requiring the development of a greater factual record, and, perhaps, the exercise of a greater degree of judgment, that does not dictate that subjective selection processes generally are to be accepted at face value. Pp. 487 U. S. 1008-1011.

JUSTICE STEVENS, agreeing that the racially adverse impact of an employer's practice of simply committing employment decisions to the unchecked discretion of a white supervisory corps is subject to the test of Griggs v. Duke Power Co.,401 U. S. 424, concluded that, since cases

Page 487 U. S. 981

involving such practices will include too many variables to be adequately considered in a general context, further discussion of evidentiary standards should be postponed until after the District Court has made appropriate findings concerning petitioner's prima facie evidence of disparate impact and respondent's explanation for its subjective practice. P. 487 U. S. 1011.

O'CONNOR, J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II-A, II-B, and III, in which REHNQUIST, C.J., and BRENNAN, WHITE, MARSHALL, BLACKMUN, and SCALIA, JJ., joined, and an opinion with respect to Parts II-C and II-D in which REHNQUIST, C.J., and WHITE and SCALIA, JJ., joined. BLACKMUN, J., filed an opinion concurring in part and concurring in the judgment, in which BRENNAN and MARSHALL, JJ., joined, post, p. 487 U. S. 1000. STEVENS, J., filed an opinion concurring in the judgment, post, p. 487 U. S. 1011. KENNEDY, J., took no part in the consideration or decision of the case.

Page 487 U. S. 982

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