Wards Cove Packing Co. v. Atonio
490 U.S. 642 (1989)

Facts:
Wards Cove was a salmon cannery. Jobs at the cannery were of two types:

(1) ‘Cannery Jobs’ – which were unskilled positions.

  • These were filled primarily by nonwhites.

(2) ‘Noncannery Jobs’ – which were skilled positions.

  • These were filled primarily with whites.
  • Virtually all of the noncannery jobs paid more than cannery positions, and the two groups of employees lived in separate dormitories and ate in separate mess halls.

A class of nonwhite cannery workers later brought a Title VII action for disparate impact.

  • Respondents alleged that a variety of petitioners’ hiring/promotion practices-e.g., nepotism, a rehire preference, a lack of objective hiring criteria, separate hiring channels, a practice of not promoting from within-were responsible for the racial stratification of the work force and had denied them and other nonwhites employment as noncannery workers on the basis of race.

History:
The Court of Appeals held that the plaintiffs made out a prima facie case of disparate impact.

  • The court relied on statistics showing a high percentage of nonwhite workers in the cannery jobs and a low percentage of such workers in the noncannery positions.

Issue:
In disparate impact cases, is the proper comparison between the racial composition of persons in a particular job within a company, and the racial composition of those holding the at-issue jobs within the company?

Holding:
No. The proper comparison is between the racial composition of the qualified persons in the labor market, and the racial composition of those the holding at-issue jobs.

  • Case reversed and remanded.

Reasoning:
If the absence of minorities holding such skilled positions is due to a dearth of qualified nonwhite applicants (for reasons that are not employer’s fault),the employer’s selection methods or employment practices cannot be said to have had a “disparate impact” on nonwhites.

  • “The Court of Appeals’ theory would leave the employer little choice but to engage in a subjective quota system of employment selection.”

The Supreme Court also outlined the framework for disparate impact cases:

(1) In order to establish a prima facie case, a plaintiff must demonstrate that it is the application of a specific or particular employment practice that has created the disparate impact under attack.

  • Thus, it would not suffice to simply showing that, at the bottom line, there is racial imbalance.

(2) The burden then shifts to the employer to produce evidence of  a business justification for his employment practice.

  • The dispositive issue here is whether the challenged practice serves, in significant way, legitimate employment goals of employer.

(3) The plaintiff could still prevail if it can show the availability of alternative practices to achieve the same business ends, with less racial impact.

  • By so demonstrating, a plaintiff would prove that the employer’s tests were merely a ‘pretext’ for discrimination.
  • Factors such as the cost or other burdens of proposed alternative selection devices are relevant in determining whether the alternative practices would be equally as effective as the challenged practice in serving the employer’s legitimate business goals.

Dissent:

  • The majority’s opinion begins with recognition of the settled rule that that “a facially neutral employment practice may be deemed violative of Title VII without evidence of the employer’s subjective intent to discriminate that is required in a ‘disparate-treatment’ case.”
  • It then departs from the body of law engendered by this disparate-impact theory, reformulating the order of proof and the weight of the parties’ burdens. Why the Court undertakes these unwise changes in elementary and eminently fair rules is a mystery to me.

Important Note: Soon after the decision, Congress amended Title VII with the Civil Rights Act of 1991 to address the holding in this case:

  • Employees must still attempt to show which employment practice has caused the disparate impact, but if the practices are impossible to disaggregate, courts must analyze the decision-making process as one practice.
  • In addition, Congress increased the burden on the employer in demonstrating that a challenged practice is job-related.
    • Now, the employer must show that “the challenged practice is job-related for the position and consistent with business necessity.”