Adverse Impact Defined
If the test was designed to ask questions about job skills, then one might reasonably ask how this could be deemed discriminatory. It is not discriminatory on its face and there is no intent to discriminate. In other words, there is no disparate treatment. All of the firefighters took the same test in the same way.
However, Title VII of the Civil Rights Act of 1964 (Title VII) also prohibits discrimination that has disparate impact. Disparate impact is also referred to as adverse impact. Even though a hiring practice is neutral on its face, if the practice results in decisions that disproportionately effect a protected class, then the practice may be deemed to have disparate impact. This was the charge the City of New Haven was initially concerned about.
The law does provide businesses with a defense to a claim of disparate impact. If there is a job-related "business necessity" then it is acceptable to use the practice in question. However, if the complainant can show that there is another alternative that would adequately screen applicants and would be less discriminatory, then the business necessity defense cannot be asserted. The Uniform Guidelines on Employee Selection Procedures (UGESP) adopted in 1978 provides test validation guidance to employers.
Note that Title VII of the Civil Rights Act, the Americans with Disabilities Act and the Age Discrimination in Employment Act together prohibit discrimination on the basis of race, color, national origin, sex, religion, age (40 or older), or disability.