What Is Disparate Impact Discrimination?

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Disparate impact discrimination refers to policies (often employment policies) that have an unintentional and adverse effect on members of a protected class. It is a legal theory derived from Title VII of the Civil Rights Act of 1964 and the Equal Protection Clause of the Fourteenth Amendment. Lawsuits based on disparate impact seek to change procedures that seem neutral in their language and structure but harm particular groups in practice.

Key Takeaways: Disparate Impact Discrimination

  • Disparate impact discrimination occurs when a policy has an unintentional, adverse effect on members of a protected class, even if the policy's language seems neutral.
  • The Supreme Court first used disparate impact discrimination as a legal theory during Griggs v. Duke Power Company (1971).
  • The existence of disparate impact is sometimes established through the four-fifths (or 80 percent) rule.
  • Disparate Impact has been codified in Title VII of the Civil Rights Act since 1991.
  • Unlike disparate impact, disparate treatment refers to a purposeful discriminatory action.

Origins of the Disparate Impact Theory

Disparate impact discrimination arose from Title VII of the 1964 Civil Rights Act and was coined by the Supreme Court in the 1971 case, Griggs v. Duke Power Company.

Title VII of the 1964 Civil Rights Act

Title VII of the Civil Rights Act of 1964 introduced regulations against unlawful employment practices. These regulations prohibit discrimination on the basis of "race, color, religion, sex, or national origin." The provisions extended to employers, employment agencies, labor organizations, and training programs. Title VII covers both the public and the private sector and is enforced by the Equal Employment Opportunity Commission (EEOC).

Under Title VII of the Civil Rights Act of 1964, an employer or group (as described above) cannot:

  1. take negative employment action (failing to hire, choosing to fire, or discriminating) against an individual because of the individual's race, color, religion, sex, or national origin;
  2. limit, segregate or classify employees in a way that negatively impacts their employment opportunities because of their race, color, religion, sex, or national origin.

Griggs v. Duke Power Company

Griggs v. Duke Power Company (1971) was the Supreme Court case that established disparate impact discrimination. The Supreme Court had to decide whether it was legal for the Duke Power Company to use aptitude tests to restrict promotions and transfers within the company. The company claimed that it used the tests to ensure that all of its workers were well-educated. In practice, however, the tests kept the company segregated, preventing black employees from transferring to departments that offered higher pay.

The Supreme Court ruled that these tests violated Title VII of the Civil Rights Act of 1964 because they were unrelated to job performance and had a disparate impact on black workers. Although the language of the company's policy was neutral and not explicitly discriminatory, the policy had an adverse effect on a protected class; thus, the theory of disparate impact discrimination was established.

Disparate Treatment vs. Disparate Impact

In simple terms, disparate treatment refers to the actions of an employer, whereas disparate impact refers to the policies or procedures implemented by an employer.

Disparate treatment occurs when an employer purposefully discriminates against an employee because that employee is a member of a protected class. In order to prove disparate treatment, an employee must show that they have been treated differently from other employees because of that protected class status.

On the other hand, disparate impact occurs when an employer implements a policy that seems neutral but that has adverse effects for members of a particular protected group. In order to prove disparate impact, employees must show that their employer's neutral policy has a disproportionate negative impact on members of their protected class.

The Four-Fifths Rule

The four-fifths rule (sometimes called the 80 percent rule) is a technique for determining whether disparate impact exists in a given scenario. Pioneered by the Equal Employment Opportunity Commission in 1972, and codified in Title VII in 1978, the rule examines the selection rate for hiring, firing, or promotion.

The four-fifths rule states that the protected class may be adversely impacted by the employment decision if the selection rate of the protected class is less than four-fifths (80 percent) of the selection rate of the non-protected group. However, the four-fifths rule is only a rule of thumb and cannot be used as absolute proof of disparate impact discrimination.

Example

An employer receives 100 applications from women and 100 applicants from men. The employer selects 40 women and 80 men from the application pool. In order to determine whether the selection ratio demonstrates a policy that adversely impacts female applicants, follow these steps:

Step 1: Determine the selection rate for each group.

The selection rate for women is 40/100, or 40%. The selection rate for men is 80/100, or 80%.

Step 2: Determine which group has the highest selection rate.

In this example, the male group has a higher selection rate than the female group.

Step 3: Divide the protected class selection rate by the highest selection rate.

To determine whether the protected class' selection rate is at least 80% of the non-protected class' rate, divide the protected class' selection rate by whichever selection rate is higher. In this case, the male group's selection rate is higher, so we'll divide the female group's rate by the male group's rate.

40% divided by 80% is 50%, meaning that the female group's selection rate is 50% of the male group's selection rate. 50% is significantly less than 80%, which suggests that women may be adversely impacted in this hiring process if the company does not have a legal reason for the difference in ratio.

Disparate Impact Discrimination and the Supreme Court

The following Supreme Court cases represent some of the most significant legal developments related to disparate impact discrimination.

Washington v. Davis (1976)

Washington v. Davis limited the legal theory of disparate impact. The Supreme Court ruled that plaintiffs cannot bring disparate impact claims on a constitutional basis under the Fourteenth Amendment Equal Protection Clause.

Ward’s Packing Cove v. Antonio (1989)

Ward’s Pack Cove v. Antonio shifted the burden of proof in a disparate impact lawsuit from the respondents to the plaintiffs. According to the majority opinion, in order to prevail in a Title VII claim, plaintiffs need to demonstrate:

  1. specific business practices and their impact;
  2. that the practice is not necessary to conducting business; and
  3. that the company refused to adopt different, non-discriminatory practices 

Two years later, Title VII of the 1991 Civil Rights Act, which officially added disparate impact to the act, removed the condition of Ward's Packing Cove that required plaintiffs to prove that an employment practice was not necessary to conducting business. However, it failed to provide plaintiffs with a process for legally showing disparate impact discrimination.

Ricci v. DeStefano (2009)

In Ricci v. DeStefano, the Supreme Court ruled that employers taking discriminatory actions in order to avoid a disparate impact lawsuit need a "strong basis" to prove that not taking the action would, in fact, result in such a lawsuit. The case arose from a police department's claim that they promoted black candidates over white candidates, even when white candidates' test scores were higher, because they feared being subject to a disparate impact liability if they promoted more white candidates based on test scores. According to the Supreme Court, the department did not have a strong enough basis to claim that their discriminatory action was necessary.

Sources

  • “Disparate Impact: Unintentional Discrimination.” American Bar Association, 26 July 2018, www.americanbar.org/groups/young_lawyers/publications/the_101_201_practice_series/disparate_impact_unintentional_discrimination/.
  • “Title VII of the Civil Rights Act of 1964.” U.S. Equal Employment Opportunity Commission, www.eeoc.gov/laws/statutes/titlevii.cfm.
  • Guerin, Lisa. “Disparate Treatment Discrimination.” Nolo, 27 June 2013, www.nolo.com/legal-encyclopedia/disparate-treatment-discrimination.html.
  • Griggs v. Duke Power Co., 401 U.S. 424 (1971).
  • Ricci v. DeStefano, 557 U.S. 557 (2009).
  • Tobia, Kevin. “Disparate Statistics.” The Yale Law Journal, vol. 126, no. 8, June 2017, www.yalelawjournal.org/note/disparate-statistics.
  • Washington v. Davis, 426 U.S. 229 (1976).
  • Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989).