Employment-ish FHA Decision

By John Alan Doran

Amid the headlines of last week’s Supreme Court decisions was one applying disparate impact analysis to claims under the Fair Housing Act “FHA”. Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc., No. 13-1371. (We report on these FHA cases because FHA concepts frequently overlap with employment discrimination law, and because we regularly handle FHA matters given this overlap.) A public interest group sued Texas under the FHA, arguing that Texas’ points system used to allocate federal tax credits to builders of low-income housing had a disparate impact by favoring construction of low-income housing units in predominantly black urban areas, thereby reinforcing segregated housing patterns. The Court unsurprisingly held that the FHA allows for disparate impact analysis. But, the Court added some useful language about the “business necessity” defense. For example, the Court recognizes that decisions challenged under disparate impact theory often involve a “mix of factors, both objective…and, at least to some extent, subjective….” The Court noted that disparate impact claims include a “robust causality requirement” that courts must “examine with care” at both the pleading and summary judgment stage, with an eye toward “prompt resolution” of these cases. These are some unexpected and extremely helpful words that should encourage employers and sway courts in future disparate impact cases.