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What is Disparate Impact?

At its core, disparate impact is a form of unintended discrimination that arises when an employer adopts a seemingly neutral policy or practice that has an adverse effect on members of a protected class. 

Disparate impact is defined as an unintentional yet adverse effect upon members of a protected class resulting from policies and procedures that appear neutral but are not equally applied to all groups.

Understanding Disparate Concept

At its core, disparate impact is a form of unintended discrimination that arises when an employer adopts a seemingly neutral policy or practice that has an adverse effect on members of a protected class. 

Disparate impact is defined as an unintentional yet adverse effect upon members of a protected class resulting from policies and procedures that appear neutral but are not equally applied to all groups.

This means that even if there was no intent to discriminate or disadvantage any particular group, the policy or practice may still have an unequal impact based on race, gender, religion, or another protected characteristic. 

For example, if a company has a height requirement for its sales force and this requirement disproportionately affects female candidates more than male ones then disparate impact may be present.

Another example is of employers requiring candidates to have a college degree in order to apply for certain positions. 

On its face, this appears to be a neutral requirement; however, this could have the effect of screening out potential applicants who come from disadvantaged economic backgrounds or communities where access to higher education is limited or nonexistent.

To avoid disparate impact claims, employers must ensure that their hiring process does not unfairly exclude people from certain demographics due to race, gender, age, disability status, or any other factor. 

Employers should also take proactive steps to create an inclusive environment by including members of protected classes in the recruitment process and using diversity-friendly language in job postings.

The Legal Framework Around Disparate Framework

Under Title VII of the Civil Rights Act of 1964 and other laws prohibiting discrimination in employment decisions based on protected characteristics such as race, color, national origin, sex, religion, age and disability; employers are prohibited from engaging in intentional discrimination against any person based upon any protected status. 

This includes disparate impact discrimination which can be identified through statistical analysis.  In order for an employer to show that it did not engage in disparate impact discrimination it must demonstrate that its policy or practice is job related and consistent with business necessity.   

The burden then shifts to the employee alleging discrimination to prove that there was an equally effective alternative practice with less discriminatory effects available.   

The courts have adopted different standards for evaluating whether a neutral policy has caused a disparate impact depending on the type of claim raised by the plaintiff.   

For example, when evaluating claims brought under Title VII courts often use the “four-fifths” rule where an employer’s selection rate must exceed four fifths (or 80%) of the rate for persons in the protected class for all jobs in order for there to be no violation.    

Alternatively when claims are brought under Section 1981 Courts often require plaintiffs to show their selection rate was two-thirds lower than similarly situated individuals outside their protected class in order demonstrate disparate impact liability exists.   

Ultimately, employers should be mindful of how their policies may affect employees differently based upon their protected status and take necessary steps to ensure they do not unintentionally discriminate against anyone while also making sure they comply with applicable laws at all times.

Disparate Impact vs. Disparate Treatment  

In contrast to disparate impact discrimination, disparate treatment occurs when an employer treats an employee differently because of their membership in a protected class. This type of discrimination is intentional; for instance, if an employer refuses to hire someone because they belong to a specific minority. 

It is important to note that employers can be held liable for both types of discrimination; however, it may be easier for plaintiffs in disparate treatment cases to prove their case since there is usually direct evidence that the employer intended to discriminate against them because of their membership in a protected class.

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