nj-map-400.gifBy Gerald L. Maatman, Jr. and Howard Wexler

A settlement approval decision in New Jersey federal court earlier this week stands as a reminder of the realities, and complexities, of settling class action lawsuits. Judge Katharine S. Hayden of the U.S. District Court for the District of New Jersey put the U.S. Justice Department’s class action claim against the State of New Jersey and the New Jersey Civil Service Commission (“NJCSC”) to rest when she deemed their settlement agreement “fair, adequate, reasonable, and consistent with the law.” U.S. v. New Jersey, No. 10-91, at 55 (D.N.J. Jun. 12, 2012). The settlement marks the end of an almost four year investigatory and litigation process. 
Background Of The Case 

The case began when the Justice Department filed a complaint against New Jersey and the NJCSC alleging a pattern or practice of discrimination against African-American and Hispanic police officers who were candidates for promotion to sergeant throughout the state. Per the NJCSC’s selection procedures, officers are required to pass an exam to be eligible for a promotion. According to the Justice Department, this exam resulted in a “statistical disparate impact on African American and Hispanic candidates” and thus “constitute[d] unlawful discrimination due to race in violation… of Title VII.” Id. at 4.   

Last year, the case went into settlement proceedings. The parties negotiated a consent decree, and the agreement was modified twice before finally reaching Judge Hayden’s courtroom for final approval.  

Basis Of The Court’s Ruling 

The decision sheds light on the compromising effect settlements can have in class action suits.  Most class action settlements have a two pronged approach to relief: systemic relief and individual relief. This approach seeks to give relief to all effected class members in a meaningful and effective way.  

Not everyone is always satisfied, though. In this instance, the Court received a staggering 468 objections in opposition to the consent decree. 

Some objections offered alternative explanations for the different exam passage rates, citing “cultural distinctions or amount of time dedicated to preparing for the examinations.” Id. at 20. Others complained that the back pay relief was inadequate “in terms of…retirement benefits for claimants who took the examination but were never promoted.” Id. at 37. The most controversial part of the settlement, however, concerned “the authorization of priority promotions in 13 jurisdictions.” Id. at 38. Many objectors voiced concerns “that they [would] be put at an unfair disadvantage through no fault of their own” and bypassed by less qualified candidates through the application of retroactive seniority. Id. at 38-39.  

The objections hardly fell on deaf ears. Judge Hayden’s lengthy 55 page opinion carefully considered each of the major objections, though she ultimately found them unpersuasive. In the end, she concluded that the class action settlement should be approved. 

Implications For Employers 

While this case does not change the landscape of class action settlements, its insights on those settlements in the context of Title VII claims are valuable. Recognizing the complexity in “strik[ing] an appropriate balance” between competing interests, Judge Hayden’s opinion reminds litigants of the benefits of settlement over litigation, but also of the unique challenges that face parties in crafting programmatic relief provisions in settling employment discrimination class action litigation. Id. at 41.