(FORTUNE Magazine) – A theory being eagerly broached by certain optimistic conservatives is that Watson v. Fort Worth Bank & Trust, decided by the Supreme Court this summer, is not all bad. Some say it may even be good news in disguise. Our own view is that Watson is unalloyed bad news entirely lacking in dialectical backspin. And entirely consistent with the Supremes' evident determination to guarantee that racial quotas in employment will never go away. An early manifestation of this impulse in the court was a 1971 case that introduced us to ''disparate impact.'' The case, Griggs v. Duke Power Co., involved aptitude testing of prospective employees. Citing the underrepresentation of blacks among those who passed the test, the Supreme Court made a fateful ruling: When tests had a disparate impact on a minority group, they could be presumed violative of the 1964 Civil Rights Act, even when the employer had no discriminatory intent. To be sure, Griggs left employers with a right to rebut the presumption that disparate impact equaled discrimination. But this kind of back talk never looked like a promising option. Mr. Personnel Director not only had to prove statistically that the test accurately predicted job performance but, equally daunting, had to show that accurate predictions were impossible in its absence. In any case, the critical judgments about test fairness would be made by activists at the Equal Employment Opportunity Commission. So employers got the message. Many opted for some guaranteed level of minority hiring, i.e., for quotas; many others opted not to test but to rely entirely on ''subjective'' judgments about job candidates. To a colorblind employer hoping simply to get the best people, subjectivity looked safe. No judge was presuming subjective judgments to be discriminatory if they had a disparate impact on some groups. This is what has now changed with Watson. A quarter-century after the Civil Rights Act, the Brethren and Sister Sandra (she wrote the opinion) have discovered that ''disparate impact analysis is in principle no less applicable to subjective employment criteria than to objective or standardized tests.'' You are possibly wondering what it is about Watson that looks like disguised good news to Reaganite lawyers. The alleged cheer is in the hilarious second half of Sandra O'Connor's decision. This is the part where she explains how a disparate impact standard should work in practice. Noting that many folks now view the standard as synonymous with quotas, she acknowledges that this might indeed be true. Marvelous circumlocution: ''The inevitable focus on statistics in disparate impact cases could put undue pressure on employers to adopt inappropriate prophylactic measures.'' But then she states earnestly that quotas must not be permitted. ''Allowing the evolution of disparate impact analysis to lead to this result would be contrary to Congress's clearly expressed intent, and it should not be the effect of our decision today.'' Heaven forfend. Fastening on the logic above, some neocons have wishfully wondered if maybe the Court is inviting a direct challenge to quotas. A far more parsimonious explanation is that the Court is still making fudge. It is still writing rules that cement quotas in place while sanctimoniously denying that they are proper. It has had a lot of practice in fudge-making. And it has not overrated Washington's appetite for the stuff.