Key Takeaways

  • Disparate impact refers to policies or practices that unintentionally discriminate against protected groups even when no discriminatory intent exists.
  • It differs from disparate treatment, which involves intentional discrimination.
  • Common examples include pre-employment tests, background checks, or physical requirements that disproportionately exclude certain groups.
  • Employees can file a disparate impact claim by presenting statistical or factual evidence showing that a neutral policy causes adverse effects.
  • Employers can defend such claims by proving that the policy is job-related and consistent with business necessity.
  • Both public and private employees may bring disparate impact claims under laws like Title VII of the Civil Rights Act, the Age Discrimination in Employment Act (ADEA), or the Americans with Disabilities Act (ADA).
  • Recent litigation trends highlight the role of data-driven employment decisions and artificial intelligence tools in perpetuating unintended bias.

Disparate Impact

Disparate impact is a specific course of action. It is used to prove that discrimination has occurred due to an employment policy or practice.

The act of disparate impact results in unintentional discrimination. Disparate impact concerns the procedures and policies regarding employment, education, housing, and other issues that aren't associated with discrimination. Even though these issues aren't necessarily discriminatory, situations arise that have "adverse effects" directed at a specific class. The discrimination may be based on religion, race, or color, for example. An employee's weight, height, education, interviews, and written tests can also be considered to have a disparate impact.

Legal Definition and Historical Background

The concept of disparate impact emerged from the landmark Supreme Court case Griggs v. Duke Power Co. (1971). In this case, the Court ruled that even seemingly neutral employment requirements—such as high school diplomas or standardized tests—could be unlawful if they disproportionately excluded protected groups and were not directly related to job performance.

Under Title VII of the Civil Rights Act of 1964, employers cannot use practices that appear neutral but have a discriminatory impact on individuals based on race, color, religion, sex, or national origin. Similar principles apply under the Age Discrimination in Employment Act (ADEA) and the Americans with Disabilities Act (ADA), extending protection to older workers and individuals with disabilities.

Courts now assess whether an employer’s actions—such as hiring criteria, promotion standards, or background checks—produce statistically significant disparities between protected and non-protected groups. If so, the employer must justify those policies as necessary for business operations.

What Is the Difference Between Disparate Impact and Disparate Treatment?

Disparate impact results in an employee being subjected to unintentional discrimination. An employee subjected to disparate treatment is being discriminated against intentionally.

For an employee to claim disparate treatment, he or she must show they were treated differently based on their protected traits. These include gender, age, religion, gender, sexual preference, and race.

An example of disparate treatment would be along the lines of a well-qualified black employee with experience, skills, and positive reviews by his supervisor or manager who is repeatedly passed over when a promotion to a higher-level position within the company is available. Instead, the promotion is given to a white employee who has fewer skills and fewer qualifications.

A disparate impact claim is based on the actual procedures and policies of a company that has resulted in unintentional discrimination. A disparate treatment claim is most often based on a complaint lodged by an individual.

Common Examples of Disparate Impact in the Workplace

Disparate impact can occur in various workplace settings, particularly when employment policies, though neutral in wording, affect specific demographic groups disproportionately. Common examples include:

  • Pre-employment testing: Skills or aptitude tests that unintentionally exclude minority applicants.
  • Physical ability requirements: Standards that disadvantage women or individuals with disabilities without a clear job necessity.
  • Educational prerequisites: Requiring degrees unrelated to the job, which may exclude certain racial or socioeconomic groups.
  • Background checks or credit screenings: Criteria that disproportionately affect racial minorities or those from disadvantaged backgrounds.
  • Height and weight restrictions: Standards that may exclude women or certain ethnic groups without a legitimate business reason.

Employers should regularly audit their policies to ensure compliance and minimize the risk of unintentional bias. Using validated testing methods, updating outdated requirements, and consulting with employment counsel are effective risk-reduction strategies.

What Takes Place When Filing a Disparate Impact Claim?

For an employee to make a disparate impact claim, evidence must be presented by the employee that the neutral policy, practice, or rule, of an employer, has resulted in a negative impact on persons of a protected class.

Objective and/or subjective criteria must be presented to prove a disparate impact claim. This may include the following:

  • Degree requirements
  • Tests
  • Physical requirements, such as lifting, standing, and stamina
  • Job performance
  • Interview impressions

Once the subjective and objective data has been submitted by the employee, the employer may then take steps to defend itself. The tactic may be to challenge the evidence provided by the employee. This may include the validity of the statistics used to demonstrate that disparate impact has occurred.

The employer may also choose a defense that is designed to prove the company policy or the rule in question is, in fact, job-related and a necessity for consistent business.

Should the employer prove the validity of the business necessity, the employee can still win the case by proving an alternative practice and one with a less negative discriminatory effect is available but the employer refuses to put it into practice.

In the event the employer can prove that the claim being challenged is actually job-related, it is then up to the plaintiff to show that there are other options available that do not have a similar discriminatory effect and would support the employer's concern about maintaining an efficient work process.

Proof of an employer having a discriminatory motive is not a requirement to file a disparate impact claim.

Legal Standards and Burden of Proof

A disparate impact claim follows a three-step process:

  1. Plaintiff’s burden: The employee must show that a specific policy or practice caused a statistically significant adverse impact on a protected group.
  2. Employer’s defense: The employer can rebut the claim by proving the challenged policy is job-related and consistent with business necessity.
  3. Alternative practice: Even if a policy is justified, the employee may still prevail by demonstrating that a less discriminatory alternative exists that the employer refused to adopt.

Courts often rely on statistical analyses to determine whether disparities are significant. The EEOC’s Uniform Guidelines on Employee Selection Procedures offer specific thresholds for evaluating the adverse impact ratio (often called the “four-fifths rule”). If the selection rate for a protected group is less than 80% of that for the highest group, it may suggest disparate impact.

Understanding these legal standards helps both employees and employers navigate compliance obligations and potential litigation risks.

Are Disparate Impact Claims Limited to Public Employees?

The answer is no. Disparate impact claims can be filed by employees working for public or private employers. For example, a 2006 case implicated the practices of a private employer involving pre-employment strength tests. These tests were discriminatory and resulted in a disparate impact on women.

Pre-employment criminal background checks by private employers are also increasing in disparate impact claims.

There are a few reasons why a potential employee might be disqualified due to a criminal background check. An employer might want to assess these reasons, which could include, but are not limited to, the circumstances of their prior conviction, whether there has been any rehabilitation, and their character references.

A recommendation from the Equal Employment Opportunity Commission (EEOC) suggests employers perform an assessment for any applicant who is disqualified for employment based on information received in a background check to make sure the person has not been discriminated against based on any of the protected categories.

Recent Cases and Emerging Issues

While disparate impact claims have traditionally focused on hiring and promotion, recent developments have broadened their scope. Courts are now examining:

  • Artificial intelligence and automated hiring tools that may perpetuate historical bias.
  • Remote work policies that inadvertently disadvantage employees with caregiving responsibilities.
  • Background check algorithms that disproportionately screen out minority applicants.
  • Facial recognition and biometric systems in employment screening that replicate systemic bias.

For example, several recent EEOC actions have targeted employers using AI-driven selection tools without verifying their neutrality. In such cases, the technology itself may generate patterns of discrimination even without human intent.

Employers should implement bias audits and periodic impact analyses for all automated decision-making systems. This ensures compliance with federal guidance and demonstrates a proactive commitment to workplace equity.

Frequently Asked Questions

  1. What is disparate impact in simple terms?
    Disparate impact occurs when an employer’s neutral policy unintentionally disadvantages members of a protected class, even without any intent to discriminate.
  2. How is disparate impact different from disparate treatment?
    Disparate treatment involves deliberate discrimination, while disparate impact focuses on the unintended effects of neutral policies or practices.
  3. What laws protect employees from disparate impact discrimination?
    The primary laws include Title VII of the Civil Rights Act, the ADEA, and the ADA, which collectively prohibit employment policies that result in unfair exclusion of protected groups.
  4. How can employers avoid disparate impact claims?
    Employers should validate job requirements, perform statistical impact analyses, and document the business necessity of each policy.
  5. Can technology cause disparate impact?
    Yes. AI-driven recruitment tools, automated screening systems, or biased algorithms can unintentionally perpetuate discrimination if not carefully audited for fairness and compliance.

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