Labor & Employment Law Daily Wrap Up, DISCRIMINATION—RACE—D.C. Cir.: Agency’s RIF met Title VII business necessity test, (Sep 8, 2026)

By Tulay Turan, J.D.

The terminations were tied to the legitimate goal of reducing costs while maintaining core public services.

In a Title VII race-based disparate impact class action arising from a reduction in force at the District of Columbia Child and Family Services Agency, the D.C. Circuit affirmed summary judgment for the agency. In its first articulation of the Title VII business necessity standard, the court held that an employer need only show a challenged employment practice reasonably fits a legitimate business interest. The agency did so here, showing the two practices it took reasonably fit with the need to implement budget cuts while maintaining public services. The court also found the former employees failed to identify an adequate alternative practice that would have similarly served the agency’s interests with less disparate impact (Davis v. District of Columbia, No. 24-7038 (D.C. Cir. Sept. 4, 2026)).

Following the recession of 2007 to 2009, the District of Columbia faced a substantial revenue shortfall. The D.C. Council passed a Fiscal Year 2011 budget that reduced the District of Columbia Child and Family Services Agency’s annual funding by $12.1 million. The agency implemented a reduction in force that terminated 115 employees.

Employment practices. The RIF involved two employment practices. First, the agency eliminated the Social Work Associate (SWA) and Social Service Assistant (SSA) positions. The agency replaced the 70 terminated SWAs and SSAs with 38 Family Support Workers (FSW), a new position created to implement the RIF. Because some of the FSW’s duties mirrored those of SWAs, the agency required FSWs to hold a bachelor’s degree in social work or a related social services field. When initially hiring FSWs, the agency gave priority to the terminated SWAs and SSAs as well as other employees let go in the RIF. The agency ultimately rehired 18 former employees, including six former SWAs and 10 former SSAs for the FSW position.

Second, the agency made individual decisions to terminate 45 additional employees across different offices and divisions. It eliminated positions it found unnecessary, consolidated other positions, and fired additional employees.

Lower court proceedings. Former agency employees brought a class action lawsuit against the District, alleging race and age discrimination under Title VII and D.C. law. After several years of discovery, the district court granted summary judgment for the District on all claims. The district court rejected the employees’ race-based disparate impact claims because they did not challenge a specific employment practice, which is a threshold requirement for a Title VII claim.

The employees appealed, and the D.C. Circuit mostly affirmed the district court’s decision. With respect to the disparate impact claims, the panel held that the employees had challenged the two employment practices that made up the RIF and that these practices were sufficiently specific to support a Title VII claim.

Remand decision. On remand, the district court applied Title VII’s burden-shifting framework for disparate impact claims. The district court held the employees had made out a prima facie case of racial disparate impact from the two challenged practices. Specifically, the court found that Black agency employees were overrepresented in the RIF.

The court then shifted the burden to the District to show that the challenged practices were “job related for the position[s] in question and consistent with business necessity.” The court held the District carried its burden. While acknowledging that the D.C. Circuit had not articulated a test for business necessity, the district court concluded that an employer could demonstrate business necessity by showing an employment practice was “reasonably consistent with a legitimate business need.”

The court held that both of the District’s employment practices were consistent with business necessity. The elimination of the SWA and SSA positions was consistent with the agency’s undisputed need to cut costs and its determination that it would be effective to employ a new teaming model in which a smaller number of FSWs could provide social workers with both substantive and administrative support. The termination of 45 other employees across different offices and divisions also was consistent with the agency’s mandate to cut costs while minimizing the impact of the terminations.

No alternative. The district court also held that the employees failed to carry their burden to set forth an adequate “alternative employment practice” that served the District’s interests just as well but with less disparate impact. Because the District carried its Title VII burden and the employees could not carry theirs, the court granted summary judgment for the District. The employees appealed.

Business necessity test. Affirming the district court’s grant of summary judgment in the District’s favor, the appeals court ruled the two challenged employment practices reasonably fit with the District’s legitimate interests in making required budget cuts while maintaining public services.

Before discussing those employment practices, the court addressed the employees’ conception of the business necessity test. The court found their arguments could not be squared with the text of Title VII or the Supreme Court decisions that Congress codified. The employees argued the business necessity test requires that an employment practice be essential to the employer’s business. This interpretation, the court said, finds no support in the text of Title VII, which requires that a practice simply be “consistent with,” not required by, business necessity.

In addition, the court rejected the employees’ argument that the Civil Rights Act of 1991 eliminated consideration of employers’ legitimate business interests in the business necessity test. Although Congress intended to overrule Wards Cove, it also directed courts to apply the business necessity standard from Supreme Court decisions that predated Wards Cove. Those earlier decisions likewise recognized that business necessity includes an employer’s legitimate business goals. Therefore, even if Wards Cove articulated a similar understanding of business necessity, the 1991 Act requires courts to follow the pre-Wards Cove cases that embrace the concept, the court said.

Thus, the court found that to rebut a prima facie case of disparate impact, an employer must demonstrate that a challenged employment practice is consistent with business necessity. That test is met by showing that a practice reasonably fits with the employer’s legitimate interests.

Elimination of positions. Applying this test, the appeals court found the elimination of the SWA and SSA positions satisfied the business necessity test because it reasonably fit with the agency’s legitimate interests. The District slashed the agency’s funding, thereby requiring substantial cost cuts to achieve a balanced budget. To continue providing important public services, the agency did not fire any of its frontline social workers but decided to cut other employees providing substantive and administrative support. In making these cuts, the agency considered the changing nature of its work, including that total caseloads had declined over the previous seven years while the average case had become more complex. The court agreed with the district court that the agency’s new teaming model was a “practical choice” that responded to both the need for budget cuts and the changing nature of the agency’s work.

The court rejected the employees’ various arguments that the agency’s employment practice was not consistent with business necessity. The employees contended the district court improperly treated the agency different from private employers. The appeals court disagreed, finding the district court correctly appreciated that the business necessity test has “different contours in the context of a government RIF versus a private RIF.”

Likewise, the employees’ criticisms of the FSW position were not persuasive. The employees pointed to negative employee feedback received after the RIF. The question, however, was whether the agency’s action was consistent with its legitimate interests at the time of the action, the court noted. In response to the budget cuts, the agency reasonably determined that the new teaming model would be effective. “Post hoc factual assertions do not undermine a decision that was otherwise reasonable and consistent with business necessity at the time it was made,” the court wrote.

Termination of other employees. The court next found that the second challenged employment practice, the agency’s termination of 45 other employees across multiple offices and divisions, also was consistent with business necessity. The action was a reasonable response to a more than $12 million budget cut while preserving essential services for children and families. After consulting senior managers, the agency eliminated the positions. The targeted layoffs were based on operational needs, including a shift to a less resource-intensive team model, the elimination of superfluous positions, and the removal of nonessential administrative and temporary roles. As a result, the terminations were closely tied to the agency’s legitimate goal of reducing costs while maintaining core public services.

Objective metrics not required. The court rejected the employees’ contention that the terminations were “acts of unbridled discretion that could not be compatible with an interest in providing public services.” Contrary to the employees’ assertions, the agency was not required to use objective performance metrics to justify every employment practice, the court said. The agency based its decisions primarily on the relative importance of individual employees to the agency’s work. According to the court, the District had shown that agency managers were capable of deciding which employees were amendable to termination on a case-by-case basis.

Inconsistent explanations. Likewise, the employees’ argument that the agency’s explanation for firing these 45 employees was inconsistent failed. The agency relied on seniority while also stating there were no uniform criteria used for the terminations. The court found no inconsistency in this approach. The agency explained it relied on seniority to fire 12 employees who were in non-critical administrative or temporary roles. At the same time, it clarified that the remaining 33 employees were let go for other reasons. The agency suitably explained that it relied on seniority to fire some employees and did not rely on any uniform criteria to fire all 45, the court found.

No adequate alternative practice. Finally, because the District satisfied the business necessity test for the two challenged employment practices, the court shifted the burden to the employees to present an adequate alternative practice. The court found the employees failed to carry their burden. The employees argued the agency should have given fired employees a preference when hiring for the new FSW role. The court found there was no genuine dispute that the agency did give fired employees preference when hiring FSWs. The agency interviewed former employees before external candidates and ultimately hired 18 former employees into the FSW role.

Although the employees recognized this fact, they argued the agency should have adopted an even stronger hiring preference that would have resulted in the hiring of more former employees. The court found this argument failed because the proposed alternative practice was not sufficiently specific. If the employees were suggesting the agency should have rehired SSAs who lacked any bachelor’s degree, this proposal would not have similarly served the District’s legitimate interests because those SSAs were not equally qualified for the FSW role.

Thus, the court affirmed the district court’s grant of summary judgment in the District’s favor.

The case is No. 24-7038.

Judge: Rao, N.

Attorneys: Aderson Francois (Georgetown University Law Center) for Ronda L. Davis, Zacchaeus T. Ajakaiyiye, and Sephanie R. Alston. Holly Michelle Johnson, Office of the Attorney General for the District of Columbia, for District of Columbia.

Cases: Discrimination RaceDiscrimination Discharge DistrictofColumbiaNews