If an employer adopts a practice that has an adverse effect on a particular race of employees, can those employees sue years later, if the employer uses that practice to make additional employment decisions that negatively affect those employees? According to the Supreme Court, in its recent opinion in Lewis v. City of Chicago (PDF), the answer is “yes.”

The plaintiffs, six African-American firefighter candidates, alleged that the City of Chicago’s practice of selecting only those classified as "well qualified" on a written entrance examination adversely affected them (and the more than 6,000 other African Americans that had taken the exam) more than Caucasians in violation of Title VII of the Civil Rights Act of 1964. The main issue for the court was whether the candidates could assert a claim even though the test had been administered more than 300 days prior to the filing of the complaint. The firefighters asserted they could because the City was still using the test results for further applicant considerations.

As you may know, Title VII prohibits employers from using employment practices that cause a “disparate impact” on the basis of race. It also requires employees (or applicants), before beginning a federal lawsuit, to file a timely charge of discrimination with the EEOC. A timely charge must be filed within 300 days after the claim comes into existence. In Lewis, the City administered its written exam to firefighter applicants in 1995. Depending on an applicant’s score, he or she was ranked as “well qualified,” “qualified,” or “not qualified.” The City maintained the list of those identified as qualified and well qualified, and over the next six years, used the list to select applicants to advance to the next stage of the hiring process in order to fill vacancies.

The claimants, all classified as qualified, filed EEOC charges in 1997, after they were not selected for advancement in the hiring process. Although the claimants initially won at the trial court, the federal appeals court reversed the verdict, holding that the lawsuit was untimely because the earliest EEOC charge was filed more than 300 days after the only discriminatory act — sorting scores into well qualified, qualified, and not qualified. According to the appeals court, the later hiring decisions using that list were an automatic consequence of the test scores, not new discriminatory acts.

The Supreme Court did not agree, ruling instead that a claimant who does not file a timely charge challenging the adoption of a practice may nonetheless assert a disparate impact claim in a timely charge challenging the employer’s later application of that practice. The court distinguished disparate-impact cases from disparate-treatment cases, where intent is required. The court noted that for disparate treatment cases, a claim is only viable if the claimant demonstrates deliberate discrimination within the limitations period. No such demonstration is needed for disparate impact claims.

So what does this mean for employers? Lewis opens the door for employees to file disparate-impact suits for practices their employers have used for years, as long as there is a claim that the practice disparately impacts them within the most recent 300-day period. Employers should be very cautious when using tests or sorting as a basis for future employment actions because those actions may give rise to new and distinct claims and may open up the potential for class actions.