City and County of San Francisco v. Fair Employment & Housing Com.

Facts

California’s Fair Employment and Housing Act (Gov. Code, § 12900 et seq.) makes it an unlawful employment practice for an employer to discriminate in compensation, terms, conditions, or privileges of employment — including promotion — on the basis of race (see Gov. Code, §§ 12921, 12940). The Department of Fair Employment and Housing acts as prosecutor on an “accusation,” which the court described as “the administrative equivalent of a civil complaint” that “states in ordinary and concise language the acts or omissions charged and the statutes alleged to have been violated”; the Fair Employment and Housing Commission “acts as the adjudicatory agency” (City and County of San Francisco, supra, 191 Cal.App.3d at p. 981, fn. 4).

In 1978 the City’s civil service commission prepared a new written examination for the position of H-20 lieutenant, “the first promotive rank above entry-level H-2 firefighter” (id. at p. 980). On October 14, 1978, 577 firefighters sat for the examination; of these, 33 (5.7 percent) were Black and 476 (82.5 percent) were White (id. at pp. 980–981). The test “consisted of 149 multiple choice questions, 34 fill-in questions, 2 case problems and 1 written communications problem” and was “essentially a job knowledge test” covering firefighting strategy, arson detection, equipment maintenance, rescue, and report writing (id. at p. 981). Critically, “[t]he test score was the exclusive means of determining which applicants would be promoted to lieutenant” (ibid.).

A ranked eligibility list of the 250 highest scorers was prepared; of those, 226 were White and 6 were Black (id. at p. 981). As the court summarized, “the pass rate for White firefighters (47.8 percent) was nearly two and one-half times that for Black firefighters (18.18 percent)” (ibid.). The court focused on eligibility for promotion — the top 250 — rather than ultimate promotions, observing that “eligibility for promotion is based on successful passage of the examination” (id. at p. 981, fn. 3).

The administrative law judge who heard 11 days of testimony recommended dismissal, concluding the examination “was job related and content valid to a degree far in excess of that established as adequate under the case law governing the subject” (id. at pp. 981–982). The FEHC declined to adopt that proposed decision and decided the case itself on the administrative record (Gov. Code, § 11517), concluding the City had discriminated against Black firefighters because the exam had an adverse impact and “was not proven to be job-related” — specifically, “that ability to supervise was the primary component of the job and was not tested, that higher scores were not shown to be correlated with job performance, and that there was no evidence the City had evaluated alternative procedures with less discriminatory impact” (id. at p. 982).

Procedural history

The accusation issued from the Director of the Department on December 29, 1980 (id. at p. 980). After the FEHC rejected the ALJ’s proposed decision and found discrimination, it “enjoined the City from making appointments from the H-20 eligibility list and ordered the immediate promotion with backpay of four Black firefighters,” required promotion of six more Black firefighters within a year, and ordered “the appointment of one Black for every five non-Blacks” until a job-related procedure was administered (ibid.).

The City sought a writ of administrative mandamus (Code Civ. Proc., § 1094.5; Gov. Code, § 11523), joined by San Francisco Fire Fighters, Local 798, and individual firefighters who had passed the exam (id. at pp. 980–981 & fn. 1). The superior court “agreed the examination had an adverse impact on Black candidates for promotion, but disagreed with FEHC’s determination that the City failed to prove the examination’s validity” (id. at p. 980). Finding an “absence of credible evidence to support [FEHC’s] finding that the examination was not job related,” the trial court issued the writ on July 5, 1983, vacating the FEHC decision (id. at p. 982). Both the City and the FEHC/Department appealed; amici included the NAACP, MALDEF, and the Asian Law Caucus on the agency’s side (id. at p. 981, fn. 2). The Court of Appeal, Division Five, reversed in part and affirmed in part in an opinion by Haning, J., with Low, P.J., and King, J., concurring (id. at pp. 993–994).

Issue

The court identified three questions. First, a threshold jurisdictional question: whether the Department’s accusation was timely under Government Code section 12960’s one-year limit, given that the eligibility list had been adopted more than a year before filing (id. at pp. 982–983). Second — “[t]he critical issue in this case” — whether the City “proved the examination was job-related” after a prima facie showing of adverse impact (id. at p. 989). Third, whether the FEHC’s original remedial order remained appropriate in light of intervening, parallel federal litigation (id. at p. 991).

Holding

Reasoning

The complaint was timely under the continuing-violation doctrine. Local 798 argued the FEHC lacked jurisdiction because the “unlawful practice” — adoption of the eligibility list — occurred more than a year before the complaint (id. at pp. 982–983). The court rejected this, importing the federal “continuing violations” doctrine. Quoting Williams v. Owens-Illinois, Inc. (9th Cir. 1982) 665 F.2d 918, it explained that “a systematic policy of discrimination is actionable even if some or all of the events evidencing its inception occurred prior to the limitations period,” and that such violations “are most likely to occur in the matter of placements or promotions” (City and County of San Francisco, supra, 191 Cal.App.3d at p. 984). Because promotions kept issuing from the list, “we conclude it was timely filed” (ibid.).

Substantial-evidence review governs, and the FEHC’s findings are presumptively correct. The court framed the standard of review as turning “on a single factor: . . . whether the administrative decision substantially affects a fundamental vested right” (id. at p. 984). Because “[a]n employer’s right to establish its employment practices and procedures . . . has not been considered a fundamental vested right,” the deferential substantial-evidence test applied, and “FEHC’s findings on questions of fact will be sustained if supported by substantial evidence on the record considered as a whole” (id. at pp. 984–985). On legal questions, however, the courts “are not bound by FEHC’s legal conclusions” (id. at p. 985). The court rejected the named firefighters’ bid for independent review of their asserted right “not [to be] discriminated against,” reasoning that because promotions had been allowed to proceed and the FEHC did not seek demotions, their opportunities were not substantially interfered with (id. at p. 984, fn. 7).

FEHA disparate-impact analysis tracks federal Title VII. The court anchored its analysis in Griggs v. Duke Power Co. (1971) 401 U.S. 424, quoting its core command: “If an employment practice which operates to exclude [Blacks] cannot be shown to be related to job performance, the practice is prohibited” (City and County of San Francisco, supra, 191 Cal.App.3d at p. 985). It then recited the burden-shifting structure from Connecticut v. Teal (1982) 457 U.S. 440: the plaintiff shows a “significantly discriminatory impact,” whereupon the employer must show the requirement has “a manifest relationship to the employment in question” (id. at p. 985). Because “the ‘antidiscriminatory objectives’ and ‘overriding public policy purposes’ of title VII and California’s Fair Employment and Housing Act are identical,” the court relied on federal authority throughout (id. at p. 985). This is a disparate-impact case, not disparate treatment: the court emphasized “[t]here was no claim in the instant case of intentional discrimination” — only that “the written test had a highly discriminatory impact in screening out Black candidates” (id. at p. 986).

The statistics established a prima facie case. Applying the Uniform Guidelines’ four-fifths rule (29 C.F.R. § 1607.4(D)), the court found the Black passage rate “was only 38.8 percent of that for White firefighters — substantially below the 80 percent rate established in the Uniform Guidelines” (id. at pp. 986–987). Recognizing that “statistical disparities alone may constitute prima facie proof of discrimination” (id. at p. 987), the court walked through the Department’s expert proof: a two-sample binomial test showed the Black passage rate “was 3.37 standard deviations below the expected rate,” with a probability of such a disparity by chance of “one in one thousand” (id. at pp. 987–988). Under the rule drawn from Castaneda v. Partida (1977) 430 U.S. 482, a deviation “greater than two or three standard deviations . . . can be regarded as caused by some factor other than chance” (id. at p. 987).

The court rejected the City’s attempts to explain away the disparity. The City argued that “job experience, rather than race, accounted for most of the disparity,” that the Black applicant pool was atypical, and that Black candidates failed to prepare (id. at p. 988). The court found the FEHC reasonably relied on the Department’s rebuttal: a two-sample T-test comparing candidates “with comparable seniority” still showed Black scores “3.52 standard deviations below the expected average,” and regression analysis isolating seniority, temporary-lieutenant service, and simulator training left Black scores “79.1 points below the expected,” again with odds of less than one in a thousand (id. at pp. 988–989). “[E]ven after isolating the effect of job experience, a statistically significant disparity remained” (id. at p. 989). The court also dispatched the preparation argument: although some Black candidates skipped preparation classes, the FEHC found they “adequately prepared . . . according to their own particular study habits” (id. at p. 989, fn. 16), and the suggestion that court-mandated minority hires were “less qualified” had “no support in the record” (id. at pp. 988–989).

The City failed to prove the exam job-related. Once adverse impact was shown, “the burden of proof shifted to the City to prove the examination job-related” (id. at p. 989). The touchstone is business necessity: a discriminatory practice “must be shown to be necessary to safe and efficient job performance,” and there must be “available no acceptable alternative policies or practices which would better accomplish the business purpose . . . or accomplish it equally well with a lesser differential racial impact” (id. at pp. 989–990, quoting Robinson v. Lorillard Corp. (4th Cir. 1971) 444 F.2d 791, 798). The fatal gap was that supervision — the “primary function for the position” — went untested: the job description listed only “knowledge of supervisory principles,” not the ability itself, “ability to supervise is not tested, and we doubt that any paper and pencil test can measure this ability” (id. at pp. 990–991). And because many questions came from past exams, a score-to-performance correlation “could have been obtained, if it existed” (id. at p. 991). The court found the case “nearly identical to Firefighters Institute, etc. v. City of St. Louis” (8th Cir. 1977) 549 F.2d 506, where failure to test supervisory ability defeated content validity (City and County of San Francisco, supra, 191 Cal.App.3d at p. 991).

Comity required deferring the remedy to the federal court. Having found a violation, the court nonetheless concluded that “extreme passage of time and intervening events” rendered the FEHC’s original order “no longer appropriate” (id. at p. 991). By 1984 the United States and private plaintiffs had sued the City in federal court over the same and successor exams, and by late 1986 the City abandoned its defense and the selection process moved under federal supervision (id. at pp. 991–992). Parallel proceedings “raise the real possibility of each forum ordering conflicting relief” — risking “the creation of ‘state’ and ‘federal’ lieutenants” (id. at p. 992). Invoking “[t]raditional concepts of comity and judicial restraint” and the federal courts’ “broad equitable power” to fashion “the most complete relief possible,” the court deferred remedy to the federal forum, with the assurance — confirmed by the FEHC’s own supplemental briefing — that the Commission could proceed if the federal court declined (id. at pp. 992–994).

Significance

The decision is a clean California application of Griggs/Teal disparate-impact doctrine to the FEHA, reaffirming that “California courts have often turned to federal title VII authority to interpret analogous provisions of the Fair Employment and Housing Act” (id. at p. 985). Its enduring teaching for selection-device litigation is twofold. First, on the plaintiff’s side, it endorses the four-fifths rule plus standard-deviation analysis as a sufficient prima facie showing, and confirms that the relevant focus is the discriminatory bar to opportunity — pass rates — not the “overall number of minority . . . applicants actually hired or promoted” (id. at p. 988, fn. 12, quoting Teal). Second, on validation, it holds that an examination measuring genuine job knowledge can still be unlawful if it omits the position’s primary function; a written knowledge test that does not measure supervisory ability cannot be content-valid for a supervisory rank (id. at pp. 990–991).

The opinion’s second contribution is remedial and more unusual: it is a leading California example of a state court declining to reinstate an agency’s remedy out of deference to overlapping federal litigation, on comity grounds, while leaving liability intact (id. at pp. 991–994). That liability-remedy split is the holding’s key limit. The court was careful to confine the deferral to the remedial phase “since the United States is a party only in the federal actions” (id. at p. 992), and to preserve the FEHC’s residual authority to act “[i]f the federal court should, for any reason, decline or fail to provide remedial relief” (id. at p. 994).

Key quotes

“An analysis of the examination results reveals the passage rate for Black firefighters was only 38.8 percent of that for White firefighters — substantially below the 80 percent rate established in the Uniform Guidelines.” (City and County of San Francisco, supra, 191 Cal.App.3d at pp. 986–987.)

“[A]bility to supervise is not tested, and we doubt that any paper and pencil test can measure this ability. We find no evidence that the City made any attempt to correlate examination scores with satisfactory job performance.” (Id. at pp. 990–991.)

“[P]arallel proceedings in both federal and state forums scrutinizing the fire department’s promotional practices . . . raise the real possibility of each forum ordering conflicting relief. . . . [W]e should avoid conflicting promotional policies . . . which . . . could lead to the creation of ‘state’ and ‘federal’ lieutenants within the City’s fire department.” (Id. at p. 992.)

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Practice pointer

Open questions

The court expressly reserved the design question, holding that “[n]either we nor FEHC need, nor should we, decide how the City should measure the supervisorial component of the job,” while noting assessment centers, outside oral interviews, and on-the-job demonstrations as available alternatives (id. at p. 991, fn. 17). It also declined to invalidate the exam as a measure of firefighting knowledge, exempting that function from its ruling “(except for questions 148 through 157)” (ibid.). On remedy, the opinion left open what the FEHC may ultimately order: it directed additional hearings and a new order, and preserved the Commission’s power to fashion “interim, temporary selection” methods and to act if the federal court “decline[s] or fail[s] to provide remedial relief” (id. at pp. 993–994) — leaving the final shape of relief contingent on the federal proceedings then underway.