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"Affirmative Action Disparity Studies Upheld"

By: Stanley S. Taylor

In an important new decision, the Tenth Circuit Court of Appeals overturned the decision of a lower court and approved Denver’s affirmative action program, holding that the city had met its burden of proving prior disparate treatment of minority- and women-owned firms in contracts with the city. The decision, Concrete Works of Colorado, Inc. v. City and County of Denver, 2003 U. S. App. LEXIS 2396 (10th Cir. Feb. 10, 2003) ("CWC IV") concluded that three disparity studies conducted by the city were sufficient to establish a pattern of discrimination against MBEs and WBEs in bidding for and contracting with the city and its prime contractors for construction and other projects.

The action was brought by a majority contractor and attacked the city’s analyses of prior and existing conditions, referred to as "disparity studies," on several grounds. These grounds were summarized in a six part question established by the trial court as the basis for analyzing the adequacy of the city’s justification for its affirmative action program:

1. Did the disparity studies and other evidence clearly show that there was pervasive race, ethnic and gender discrimination throughout all aspects of the construction and professional design industry within the city;

2. Did that discrimination equally affect all the racial and ethnic groups designated for preference by the city and all women;

3. Did the discrimination result from the policies and practices intentionally used by business firms for the purpose of disadvantaging MBE and WBE firms because of race, ethnicity or gender;

4. Would the city’s use of firms that discriminated without requiring them to give work to qualified WBEs and MBEs in the required percentages make the city guilty of discrimination;

5. Would the required use of MBEs and WBEs be likely to change discriminatory policies and practices within the industry;

6. Is the burden that the city’s affirmative action program imposes reasonable and does it fairly place the burden on those who are accountable for proven discrimination? *48.

The trial court applied the six-part litmus test, concluded that the city had failed to meet its burden and held that the affirmative action program was accordingly in violation of the Fourteenth Amendment’s equal protection mandate. The Court of Appeals, in more than 50 pages of the decision, dismantled the trial court’s conclusions point by point, establishing or reaffirming in the process several significant legal principles.

  • The implication of the six questions, that the city had to prove the existence of discrimination, was wrong. What the city did have to establish was that there was "strong evidence from which an inference of past or present discrimination could be drawn." *49. Strong evidence meant evidence approaching a prima facie case, not irrefutable or definitive proof of discrimination.
  • The requirement that discrimination equally affected all racial and ethnic categories identified was rejected, the court finding that the city’s evidence showing some discrimination against each of the racial and ethnic groups the ordinance sought to protect was sufficient.
  • The court rejected the trial court’s position that the city had to prove "intent" with respect to the alleged discriminatory practices. The city’s burden was to introduce evidence that raised an "inference of discriminatory exclusion" in the affected trade or industry and to link that discrimination to expenditures by the city. In respect to the introduction of evidence of prior discrimination, the use of disparity studies to establish a pattern of discrimination in hiring or contracting was affirmed. The disparity studies could use both statistical analyses of data and the introduction of anecdotal evidence, in the nature of testimony by witnesses of discriminatory conduct within the industry. The city was not obligated to identify specific practices intended to disadvantage women or minorities. According to the court, to do so "would eviscerate any reliance the municipality could place on statistical studies and anecdotal evidence." *54. Nor did the city’s studies have to show that discriminatory barriers in the industry in question were different from general societal discrimination. That was not to say that the city’s program could be based solely on evidence of societal discrimination; however, the mere fact that the industry discrimination sprung from widely held discriminatory attitudes was immaterial.
  • The inference that a city could only remedy its own discrimination was also rejected, the court holding that the city had a compelling interest to remedy both public and private discrimination. Further, it was not the city’s job to establish a direct linkage between the award of a public contract and private discrimination. It was sufficient that the city had a compelling interest, that it presented evidence of private discrimination and that the city was a "passive participant" in the discrimination.
  • The requirement in the litmus test that the affirmative action program would likely change discriminatory policies and practices within the industry was held to be manifestly erroneous; the proper standard affirmed by the court was that the remedy should be narrowly tailored to remedy the city’s participation in the discrimination. The program didn’t have to demonstrate that it in fact eliminated the discrimination. To make that a requirement, the court noted, "would be illogical. If firms persisted in their discrimination, they could effectively defeat all affirmative action legislation." *59.
  • The requirement in the trial court’s final question that the disparity studies specifically identify the parties responsible for the discrimination sought to be corrected was overbroad. The requirement confirmed by the court and reflected in the disparity studies found the disparity studies to be sufficient, provided they supported the inference that local prime contractors engaged in racial or gender discrimination. The studies should not have been discounted merely because they failed to identify individuals or firms responsible for discrimination.

In California, Proposition 219 has effectively eliminated the possibility of affirmative action set-aside and goals programs in the operation of public employment, education and contracting. However, Proposition 219 has several carve-outs, one of which is for action "which must be taken to establish or maintain eligibility for any federal program, where ineligibility would result in loss of federal funds to the State." Proposition 219, amending Article I, Section 31 to the California Constitution, at Section 31(e). Accordingly, where eligibility for a federal program involving the expenditure of federal funds in this State would be implicated, affirmative action programs still have applicability. This decision advances understanding of the use and applicability of disparity studies to establish the terms and conditions of local affirmative action programs required to obtain and maintain the flow of federal funds to this State.

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