The city's recent concession means that approximately 4,700 former New York City teachers who were demoted or fired since 1995 because they couldn't pass the state licensing exam can go to court to collect a portion of the funds. So far, more than half of that group has received $835 million in judgments, and the city has stated that it will set aside nearly $1.8 billion in the coming years to cover all potential claims.
"It was time to bring this long-running case to a close," a spokesman for the New York City Law Department said.
From the 1990s to 2014, the state required the Liberal Arts and Sciences Test for teacher certification. In 1996, a group of teachers filed a lawsuit against New York City and state agencies, claiming that the use of the test was discriminatory and violated employment laws.
In court, the teachers demonstrated that white test takers passed at statistically higher rates than Black and Latino test takers. At times, more than 90% of white test takers passed, compared to less than 62% of Black test takers and 55% of Latinos.
A pivotal 2012 court ruling determined that the test violated Title VII of the Civil Rights Act, in part because it was unrelated to what teachers do in the classroom and was not a predictor of higher-performing teachers.
Sylvia Alvarez is one of the former New York City teachers who has benefited from the case, thanks to a $1.1 million judgment on which she is now receiving payments.
Ms. Alvarez attempted to pass the exam ten times before losing her teaching job in Brooklyn in 2003. She got a job at a private preschool for less than half her previous salary of $45,000, which meant she couldn't afford to live in Queens, and her two daughters had to return to Puerto Rico to live with their grandparents.
She recalls falling to her knees and sobbing when she learned about the class-action lawsuit, relieved to learn that the test itself was a contributing factor to the problem.
"It gave me my life back," the 56-year-old said. "It gave me the feeling that I wasn't failing."
The Liberal Arts and Sciences Test had 80 multiple-choice questions and one essay on math, science, humanities, history, communication skills, and other subjects. At a 2002 trial, an expert hired by the teachers testified that part of the difference in passing rates could have been due to cultural knowledge underpinning the questions.
The case went through the federal court system in a roundabout way, including a trial that ended in 2003 in favor of the city and state and multiple trips to appellate courts.
The city has claimed that it followed the New York State Education Department's licensing requirements and that it had no control over the test, which has since been replaced by other mandatory licensing exams. After an appellate court ruled in 2006 that the state Education Department did not qualify as the teachers' employer and dismissed it as a defendant, the state Education Department avoided liability.
A lawyer appointed by the court is now determining the worth of each plaintiff's claim. The procedure necessitates recording how each person's earnings compare to what they could have made if the test had not interfered with their career.
The city argued unsuccessfully that the payment system is flawed because it assumes each plaintiff worked in New York schools for the entire two decades the case has been pending. According to the city, half of all teachers who start with the district leave within the first ten years.
According to the spokesman, payouts range from a few hundred dollars to nearly $2 million.
Ms. Alvarez described the funds as money she would have earned if her career had continued on its current path.
She spent a decade teaching in New York City schools because she kept failing the exam. Teachers could continue to work in untenured, temporary, or lower-paying positions while attempting to meet state requirements under current rules. "It destroyed me mentally," she said of the repeated test attempts.
The settlement enabled her to purchase her first home in Puerto Rico and spend more time with her daughters.
The plaintiffs' career paths differ, according to Joshua Sohn, who joined the case as a junior lawyer in 2000 and is now a partner at law firm Stroock & Stroock & Lavan LLP.
In New York, some became career substitute teachers. Others were able to find teaching positions in other states. Many people left the profession. "It's a generation of teachers whose lives have been disrupted and whose careers have been derailed," he explained.
Theodore Regis, 57, was fired from his teaching job in New York in 2003 after failing the exam five times. He received a $1.2 million judgment from the court.
"It was worthwhile for us to fight discrimination," Mr. Regis, who is now a teacher in North Carolina, said. "Teaching is more than a profession. "This is my life."