How should the “relevant labor market” be defined |My essay solution

Posted: February 26th, 2023

Opinion by Circuit Judge Hardiman:

This appeal arises under Title VII of the Civil Rights Act of 1964, as amended in 1991. At issue is the legal-ity of a residency requirement for firefighter candidates imposed by North Hudson Regional Fire and Rescue (North Hudson), a fire department comprising five New Jersey municipalities. The United States District Court for the District of New Jersey held the residency requirement invalid because it has a disparate impact on African-American applicants. North Hudson . . . appeal[s] the District Court’s judgment.

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* * * As is common practice in New Jersey, the [civil service] eligibility lists created for North Hudson include only candidates who lived in one of its five member municipalities when they took the written exam (Residents-Only List). Accordingly, North Hudson never sees the names or scores of ineligible nonresident applicants. * * * After a candidate is selected from the Residents-Only List, North Hudson battalion or deputy chiefs verify the candidate’s residency at the time of hiring. Once the candidate has been hired, however, he may live anywhere; some North Hudson firefighters and officers live in neighboring counties or as far as sixty miles away. As of 2000, the population of North Hudson’s member municipalities was 69.6% Hispanic, 22.9% white non-Hispanic, and 3.4% African American. In 2008, the Equal Employment Opportunity Commission (EEOC) reported that North Hudson employed 323 full-time employees, in-cluding 302 firefighters. North Hudson’s firefighter ranks included 240 white non-Hispanics, fifty-eight Hispanics, and two African Americans.

* * * In adjudicating the parties’ motions for sum-mary judgment, [District] Judge Debevoise conducted an extremely thorough analysis of the facts and expert reports. Because disparate-impact claims depend heav-ily on statistical proof of discriminatory effects, we review the experts’ findings and the District Court’s conclusions at length.

The NAACP Plaintiffs presented the expert report of Dr. Richard Wright to establish their prima facie case of disparate-impact discrimination. In his 2008 report, Wright identified disparities between the percentage of qualified African Americans in the relevant labor market, which he defined in several alternative ways, and the percentage of African Americans employed by North Hudson.

The District Court first considered Wright’s definition of the relevant labor market. The U.S. Census Bureau reported that in 2003 the average daily commute was twenty-four minutes nationally and twenty-nine minutes for North Hudson residents. By performing a geographic information system analy-sis, Wright concluded that most people living within a ten-mile radius of North Hudson’s center would have no more than a twenty-nine-minute commute. Wright also opined that North Hudson could reasonably be ex-pected to draw its employees from across New Jersey because state-regulated workers tend to search for jobs statewide. Wright concluded that “the appropriate labor market from which North Hudson may be expected to draw its protective service personnel is either the whole state or the neighboring three-county area.”

* * *The District Court next considered whether Wright’s comparisons demonstrated the kind of sub-stantial statistical proof and causal relationship neces-sary to establish a prima facie disparate-impact claim. To do so, Wright compared the proportion of African Americans employed by North Hudson with the per-centages of African Americans employed in “full time protective service” positions in the Tri-County Area and in New Jersey. The parties disputed—and con-tinue to dispute—whether looking to the ratio of Af-rican Americans in protective service jobs provides an accurate prediction of their expected presence in firefighting jobs. Although Wright parenthetically noted that protective service jobs consist of “mainly police officers [and] firefighters,” a 2000 list of North Hudson’s “Protective Service Occupations” codes sug-gests that this category may also include a substantial number of nonanalogous positions, including crossing guards, gaming surveillance officers, private detectives and investigators, animal control workers, parking en-forcement workers, and fish and game wardens. Other positions with protective service codes, like lifeguards, transit and railroad police, and bailiffs and correctional officers, may involve some skills similar to those re-quired for firefighting, but they unquestionably diverge in other significant ways.

* * *Wright’s results in this comparison were compelling. In the Tri-County Area, 37.4% of protective service positions are held by African Americans. Based on this percentage, one would expect 121 North Hudson firefighters to be African American. Similarly, 20% of protective service workers statewide are African American, so, based on that percentage, one would expect North Hudson to employ sixty-five African American firefighters. The differences of 13 and 8.76 standard deviations in these comparisons leave “virtually no probability” that the discrepancies are the result of chance. Wright’s calculations indicated that African Americans are “significantly under-represented” in North Hudson. Given the near impossibility that the disparities are caused merely by chance, Wright con-cluded: “[T]his likely results from discriminatory hiring practices.”

* * *In the District Court’s view, Wright’s statistical evidence sufficed to establish a prima facie case of disparate impact, including both substantial statistical disparities and a causal link to North Hudson’s resi-dency requirement. The District Court then searched for contravening evidence from North Hudson’s own expert, but Siskin’s report revealed that “[his] own re-sults predict[ed] that a significant number of qualified African Americans would be eligible and qualified for employment with [North Hudson] if the labor mar-ket were expanded to the Tri-[C]ounty [A]rea.” * * * The District Court next considered North Hudson’s business-necessity defense and rejected it because liv-ing in North Hudson was not a “mandatory minimum requirement” for familiarity with local geography, swift response times, or a bilingual firefighter force and because less discriminatory alternative means of achieving these goals were apparent. * * * Nor did the residency requirement ensure that North Hudson firefighters would live in the North Hudson munici-palities after they were hired.

* * *Title VII’s disparate-impact provision prohibits em-ployment practices that have the unintentional effect of discriminating based on race. The statute provides:An unlawful employment practice based on disparate impact is established . . . only if . . . a complaining party demonstrates that a respondent uses a particular em-ployment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin and the respondent fails to demonstrate that the chal-lenged practice is job related for the position in ques-tion and consistent with business necessity[.]

* * * Statistical disparities alone can raise an infer-ence of causation, but only when those disparities are substantial and the statistical evidence is reliable. In showing statistical disparity, the relevant comparison is “between the racial composition of [the at-issue jobs] and the racial composition of the qualified . . . popula-tion in the relevant labor market.”

* * *Wright’s comparison of the proportion of African Americans employed in Tri-County Area protective service positions (37.4%) with the proportion of Afri-can Americans employed as firefighters by North Hud-son (0.62%) shows a disparity that raises an inference of causation. * * * Although North Hudson now contests Wright’s definition of the relevant labor market to include the Tri-County Area and even the entire state of New Jersey, it offers no alternative analysis to explain why the market should be defined more narrowly. On the other hand, as the District Court acknowledged, Wright bol-stered his definition of the labor market by pointing to commute times that do not exceed the average for North Hudson residents and the tendencies of those in this type of employment to seek positions statewide.

North Hudson also objects to Wright’s definition of the “qualified” population. North Hudson points out an obvious flaw: neither the entire African American population nor the whole pool of African American state and local government employees can be considered qualified for a firefighter position. * * * But this argu-ment is unavailing to North Hudson on appeal because the District Court agreed with Siskin on this point and instead based its summary judgment on the protective services comparison. Wright’s analysis of full-time pro-tective service employees—though imperfect because it includes several nonanalogous positions—fairly, and as nearly as possible, approximates the pool of qualified Af-rican Americans. The full-time protective service posi-tions are a sufficient proxy even though firefighting is a specialized job. Many of the full-time protective service positions require emergency medical training, physical fitness, calmness under pressure, and strategic decision making in emergencies. Though none of the included positions—other than firefighter, of course—encom-passes the full breadth of special skills required for fire-fighting, the law does not demand a perfect analog.

* *Having found no error in the District Court’s conclusion that the NAACP Plaintiffs proved a prima facie case of disparate impact, we turn to its rejection of North Hudson’s defense that business necessity justifies the residency requirement. . . . [W]e have interpreted the business-necessity defense to apply only when an employer can show that its challenged hiring criteria define minimum qualifications for the position. Even if business necessity is shown, the plaintiff will prevail if there are less discriminatory alternative means of selecting for the crucial qualification.

* * * North Hudson claimed that residency is essential to its fire department operations because it: increases the likelihood that its firefighters will be able to respond to emergencies more quickly because they will be more familiar with the buildings and streets in the served com-munity; . . . increases the number of Spanish-speaking firefighters in a department that serves a 69% Hispanic population; and fosters community pride.

We have no quarrel with the notion that a critical as-pect of firefighting is the ability to respond quickly and that familiarity with the streets and buildings of a locale is important to achieving that goal. But this valid point cannot be reconciled with the fact that North Hudson does not require its firefighters to reside in the North Hudson municipalities after they are hired. In fact, in 2008, only 34% to 36% of North Hudson firefighters were residents. As for employing a certain number of Spanish-speaking firefighters in a region that is 69% Hispanic, this is a plausible justification in the abstract. But North Hudson failed to establish that the residency requirement leads to a greater number of Spanish-speaking firefighters. Rather, this purported justifica-tion is a “conceivable” basis, which is insufficient to invoke the business-necessity defense. Moreover, as the District Court noted, there are nondiscriminatory ways to ensure the hiring of Spanish-speaking firefighters. Rather than seek out Spanish speakers by making the imprecise assumption that North Hudson residents are more likely to speak Spanish, North Hudson could, and actually does, seek out bilingual candidates. Finally, as . . . the business-necessity standard itself make clear, community pride is not a sufficient justification for a discriminatory hiring practice.

In sum, the District Court properly concluded that North Hudson’s purported business-necessity argu-ments fail. They are not tied to minimum firefighter qualifications in North Hudson and, in some cases, less discriminatory alternatives are available.

* * * CASE QUESTIONS

1. What were the legal issues in this case? What did the appeals court decide?

2. How should the “relevant labor market” be defined in a case like this? What was the evidence that the residency requirement had adverse (disparate) im-pact on African Americans?

3. What reasons did the employer offer for having a residency requirement? Why were these insufficient to show business necessity?

4. What are the practical implications of this decision for public employers? Should they impose residency requirements at all? Would they be better off with stricter residency requirements (i.e., residency is re-quired for both applicants and current employees)? With more lenient policies (i.e., residency is pre-ferred, but not required)?

5. Do you agree with the decision in this case? Why or why not?

 

 

SOLUTION

This case involves an appeal by North Hudson Regional Fire and Rescue (North Hudson) of a decision by the United States District Court for the District of New Jersey, which held that the residency requirement for firefighter candidates is invalid because it has a disparate impact on African-American applicants. The case arises under Title VII of the Civil Rights Act of 1964, as amended in 1991. The District Court found that North Hudson’s residency requirement was discriminatory and presented a prima facie case of disparate-impact discrimination, including substantial statistical disparities and a causal link to North Hudson’s residency requirement. The District Court also rejected North Hudson’s business-necessity defense because living in North Hudson was not a “mandatory qualification” for firefighting.

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