Last week, the Iowa Supreme Court affirmed the district court’s judgment in favor of the state in Pippen v. State of Iowa et al, No. 12-0913, a class-action employment-discrimination case brought under Title VII and the Iowa Civil Rights Act. The class of over 5,000 was represented by twenty-three African-American plaintiffs who claimed the state’s merit system of employment discriminated against African-Americans in hiring, promotion, and pay. The plaintiffs proceeded on a disparate-impact theory rather than a theory of intentional discrimination and introduced expert testimony about implicit bias. The case has been closely watched as a forerunner on the viability of disparate impact employment claims, particularly those brought under state law, and several amicus briefs were filed by national organizations.
To make a prima facie case of disparate impact under federal law, the plaintiffs needed to show that a particular employment practice had a statistically adverse impact on the protected class. Alternatively, they could have proved that the decision-making process was incapable of separation into discrete employment practices for statistical analysis and that the whole process had an adverse impact.
At trial, the plaintiffs’ expert testified the state’s merit system could be broken down, but rather than trying to do so, the plaintiffs rested on their argument that the process shouldn’t be “sliced and diced” because that would reduce the sample size, thereby lessening the aggregate statistical impact. The defense expert, on the other hand, actually did separate and analyze certain practices, undermining the plaintiffs’ incapable-of-separation argument. The plaintiffs also pointed to deficiencies in the state’s documentation of the hiring process and claimed the hiring files were therefore “inadequate to allow separation for analysis.” However, the plaintiffs did not attempt to review the data in these files; they simply relied on their incompleteness. They further claimed the presence of subjective decision-making elements rendered the entire process inseparable.
The district court, after a lengthy trial, found the plaintiffs had not met their prima facie burden and had also failed to prove causation. Accordingly, it granted judgment in favor of the state.
On appeal, all justices of the Iowa Supreme Court concurred in affirming the district court’s result. Justice Appel wrote for the majority, while Justices Mansfield and Zager joined Justice Waterman’s concurring opinion. The Court agreed the plaintiffs had not proved the state’s process was incapable of separation for analysis. It did not reach the causation issue.
The majority opinion provided a roadmap on the “incapable of separation for analysis” issue, explaining that may be the case when: (1) the substantive features of the decision-making process make it incapable of being separated, such as when the process is wholly subjective; (2) discrete employment practices are so intertwined that statistical analysis of them is no longer meaningful when they are separated; or (3) the employer does not keep sufficient records from which to discern separate practices. The Court also held that decision-making processes do not necessarily have to be broken down by job or by department if the process as a whole cannot be separated. For example, when all hiring decisions are made at the absolute discretion of department managers, the process is not capable of separation even though there are multiple departments at issue. The majority found none of these circumstances applicable to the record.
The concurrence agreed the plaintiffs had not met their burden to prove the employment process was incapable of separation. It also focused on the challenges associated with bringing such a broad class action, as the plaintiffs chose to do, rather than narrowing their focus. It even suggested there was evidence of adverse impact on African-Americans in certain departments and from certain practices, as pointed out by the NAACP in its amicus brief and as indicated in the testimony of the defense expert, but emphasized that those were not the theories advanced by the plaintiffs and the record was not developed with regard to them.
Though the Court ultimately rejected the plaintiffs’ arguments, its problem was not with the viability of disparate-impact claims or the implicit bias theory in general, but rather with the methods of proof chosen by the plaintiffs in this particular case. As the majority stated: “Disparate impact claims may be complex and complicated, but they are not disfavored.”
The majority suggested the analysis could have been different under the Iowa Civil Rights Act than under Title VII if the plaintiffs had argued that a different standard applied under state law—for example, that there was no requirement to identify separate employment practices in a disparate-impact case. However, because plaintiffs relied on the federal interpretations of Title VII, that is what the Court applied.
The majority opinion notably cast doubt on the persuasive value of federal precedent interpreting Title VII in cases brought under the ICRA. The Court ultimately concluded that courts should be skeptical of the reasoning in any federal case construing Title VII narrowly because such a construction is at odds with the ICRA’s statutory mandate that it should be construed broadly. The majority further opined that this is so even when the statutory language of the state law mirrors federal law. The concurrence criticized the majority for “gratuitously undermin[ing] our court’s long-standing practice of relying on federal decisions to interpret equivalent provisions of the Iowa Civil Rights Act,” explaining that such an approach undermines “the stability and predictability of our law.”