Labor & Employment

Divided 2nd Circuit rejects statistical bias claim against company that refused to hire convicted felons

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A federal appeals court has affirmed dismissal of a suit claiming that a company’s refusal to hire convicted felons has a discriminatory impact on Black applicants because they are arrested and incarcerated at higher rates than their proportion of the population.

The New York-based 2nd U.S. Court of Appeals ruled Monday in a 2-1 decision, report Law360 and Reuters Legal. The two judges in the majority were appointees of President Donald Trump; the dissenter was appointed by President Bill Clinton.

The two plaintiffs had filed a would-be class action against NTT Data alleging the policy had a disparate impact on Black applicants in violation of Title VII of the Civil Rights Act. Plaintiff George Mandala had received a job offer as a software development consultant, while plaintiff Charles Barnett had received a job offer as a website developer. Both are Black men. NTT withdrew the offers after learning of their prior convictions.

The appeals court said there is no evidence that the national incarceration statistics are representative of the job applicant pool at NTT Data.

“In fact, because the complaint indicates that the positions that plaintiffs applied for require certain educational and technical credentials, there is good reason to think that these national statistics are not representative of the qualified applicant pool,” the appeals court said in an opinion by Judge Richard Sullivan.

It is an error to presume that population-level statistics will accurately describe subgroups of the population, Sullivan said. “A simple example of this pitfall would be to apply national height averages to certain subgroups of the population, say NBA players or horse-racing jockeys,” he wrote.

The dissenting judge, Denny Chin, said the judge who dismissed the suit had wrongly held the plaintiffs to a higher pleading standard than required by the federal rules.

“Mandala and Barnett had the ‘minimal burden’ of alleging facts ‘suggesting’ an ‘inference’ of a disparate impact based on race,” Chin said. The issue isn’t whether the plaintiffs are likely to prevail but whether their allegations plausibly give rise to an inference of unlawful discrimination, he said.

Relying on national statistics is sufficient to meet that burden at the pleadings stage, Chin asserted. Information on NTT’s pool of qualified job applicants would not be readily available without discovery, he said.

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