Watson v. Fort Worth Bank & Trust
487 U.S. 977 (1988)
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Rule of Law:
Disparate impact analysis under Title VII of the Civil Rights Act of 1964 may be applied to subjective or discretionary employment practices, such as a promotion system that relies on the judgment of supervisors.
Facts:
- Clara Watson, a black woman, was hired by Fort Worth Bank and Trust (the Bank) in August 1973.
- Over a period of approximately one year, between February 1980 and February 1981, Watson applied for four different supervisory promotions.
- For each of the four vacancies, Watson was rejected in favor of a white candidate (three male, one female).
- The Bank had not developed formal or precise criteria for evaluating candidates for these promotions.
- Instead, the Bank relied on the subjective judgment of supervisors who were acquainted with the candidates and the nature of the jobs.
- All of the supervisors involved in denying Watson the four promotions were white.
Procedural Posture:
- Clara Watson filed a discrimination charge with the EEOC and subsequently sued Fort Worth Bank and Trust in the U.S. District Court for the Northern District of Texas.
- The District Court analyzed her claim under the 'disparate treatment' model, which requires proof of discriminatory intent.
- The District Court found that while Watson made a prima facie case, the Bank offered legitimate, nondiscriminatory reasons for its decisions, which Watson failed to prove were pretextual, and dismissed the action.
- Watson appealed to the U.S. Court of Appeals for the Fifth Circuit, arguing the court should have used 'disparate impact' analysis.
- The Fifth Circuit, as appellant's court, affirmed the trial court's decision, holding that disparate impact analysis does not apply to subjective promotion systems.
- The U.S. Supreme Court granted certiorari to resolve a circuit split on the issue.
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Issue:
Does Title VII's disparate impact analysis, which prohibits facially neutral employment practices that have a statistically significant adverse effect on a protected group, apply to subjective or discretionary employment decisions, such as a promotion system that relies on the personal judgment of supervisors?
Opinions:
Majority - Justice O'Connor
Yes. Disparate impact analysis under Title VII can be applied to subjective or discretionary employment practices. Limiting disparate impact analysis to objective or standardized criteria would allow employers to insulate themselves from liability by using subjective systems that have the same discriminatory effects, thereby nullifying the protections established in Griggs v. Duke Power Co. Even if not motivated by discriminatory animus, subjective practices may be functionally equivalent to intentional discrimination if they rely on subconscious stereotypes and prejudices. However, the evidentiary standards are adjusted for this context: the plaintiff bears the ultimate burden of persuasion and must identify the specific employment practice causing the statistical disparity and show that the employer's business justification is a pretext for discrimination.
Concurring - Justice Blackmun
Yes. While disparate impact analysis applies to subjective practices, the plurality mischaracterizes the evidentiary burdens established by precedent. Contrary to the plurality's view, once a plaintiff establishes a prima facie case of disparate impact, the burden of proof (persuasion), not merely the burden of production, shifts to the defendant to prove that the challenged practice is a 'business necessity.' The plurality's framework improperly conflates the standards for disparate impact with those for disparate treatment, weakening the force of Title VII by making it too easy for employers to justify practices that have discriminatory effects.
Concurring - Justice Stevens
Yes. The question of whether disparate impact analysis applies to subjective employment practices must be answered in the affirmative. However, it is unwise for the Court to announce a 'fresh' and detailed interpretation of the evidentiary standards for this new context before the lower courts have made factual findings regarding the plaintiff's prima facie case and the defendant's justification. A full discussion of the evidentiary burdens should be postponed until the Court is presented with a more developed factual record.
Analysis:
This decision significantly broadened the scope of Title VII by extending disparate impact theory beyond objective criteria like standardized tests to subjective practices like interviews and supervisory discretion. It allows plaintiffs to challenge systemic, subtle forms of discrimination without proving discriminatory intent, targeting practices like 'old boys' networks.' However, the plurality's evidentiary framework, which keeps the ultimate burden of persuasion on the plaintiff, created ambiguity and foreshadowed future litigation over how rigorously the 'business necessity' defense would be scrutinized. The decision thus opened a critical new avenue for challenging discrimination while simultaneously shaping the litigation framework in a way that could make it difficult for plaintiffs to prevail.
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