New Haven was wrong to scrap a promotion exam because no African-Americans and only two Hispanic firefighters were likely to be made lieutenants or captains based on the results, the court said today in a 5-4 decision. The city said that it had acted to avoid a lawsuit from minorities. The ruling could alter employment practices nationwide, potentially limiting the circumstances in which employers can be held liable for decisions when there is no evidence of intentional discrimination against minorities.

"Fear of litigation alone cannot justify an employer’s reliance on race to the detriment of individuals who passed the examinations and qualified for promotions," Justice Anthony Kennedy said in his opinion for the court. He was joined by Chief Justice John Roberts and Justices Samuel Alito, Antonin Scalia and Clarence Thomas.

In dissent, Justice Ruth Bader Ginsburg said the white firefighters "understandably attract this court’s sympathy. But they had no vested right to promotion. Nor have other persons received promotions in preference to them."

Justices Stephen Breyer, David Souter and John Paul Stevens signed onto Ginsburg’s dissent, which she read aloud in court today.

Kennedy’s opinion made only passing reference to the work of Sotomayor and the other two judges on the 2nd U.S. Circuit Court of Appeals who upheld a lower court ruling in favor of New Haven.

But the appellate judges have been criticized for producing a cursory opinion that failed to deal with "indisputably complex and far from well-settled" questions, in the words of another appeals court judge, Sotomayor mentor Jose Cabranes.

"This perfunctory disposition rests uneasily with the weighty issues presented by this appeal," Cabranes said, in a dissent from the full 2nd Circuit’s decision not to hear the case.

Today’s decision has its origins in New Haven’s need to fill vacancies for lieutenants and captains in its fire department. It hired an outside firm to design a test, which was given to 77 candidates for lieutenant and 41 candidates for captain.

Fifty-six firefighters passed the exams, including 41 whites, 22 blacks and 18 Hispanics. But of those, only 17 whites and two Hispanics could expect promotion.

The city eventually decided not to use the exam to determine promotions. It said it acted because it might have been vulnerable to claims that the exam had a "disparate impact" on minorities in violation of the Civil Rights Act of 1964.

The white firefighters said the decision violated the same law’s prohibition on intentional discrimination.

Kennedy said an employer needs a "strong basis in evidence" to believe it will be held liable in a disparate impact lawsuit. New Haven had no such evidence, he said.

The city declined to validate the test after it was given, a step that could have identified flaws or determined that there were no serious problems with it. In addition, city officials could not say what was wrong with the test, other than the racially skewed results.