Understanding Disparate Impact

Employees in California and all other states likely already know that state and federal laws such as Title VII of the Civil Rights Act of 1964 and the Civil Rights Act of 1991 prohibit employers from discriminating against their employees and prospective employees based on race, religion, age, color, sexual orientation, disability and/or national origin. Employees and prospective employees can sue the employer if they believe they have been the target of such discrimination.

What employees and prospective employees may not realize, however, is that they also can bring suit against employers based on the legal theory of disparate impact. The Society for Human Resource Management points out that disparate impact, often called unintentional discrimination, occurs when a company’s policies, practices, rules, or organizational systems, even though not intentionally discriminatory, nevertheless have a disproportionate and/or adverse impact on one of these protected groups.

Disparate impact history

As FindLaw explains, the U.S. judicial system itself established the legal theory of disparate impact through case law. The U.S. Supreme Court first recognized this discriminatory practice in a case having to do with one company’s policy of requiring job applicants to produce a high school diploma in order to obtain employment. The Court struck down the policy, holding that although it seemed reasonable and non-discriminatory on its face, its enforcement resulted in excluding a higher proportion of African-American job applicants than Caucasian job applicants.

The Supreme Court subsequently held that once a present or past employee or prospective employee proves that (s)he belongs to a protected class and was the target of disparate impact, the burden of proof shifts to the employer to prove why the company policy, practice, etc. are not in fact discriminatory, but instead is not only “consistent with business necessity,” but also “job-related for the position in question.”

Disparate impact-proof

Given that disparate impact has no overarching definition, test, or threshold, employees and prospective employees must prove their claims on a case-by-case basis. Such claims usually require lengthy and expensive lawsuits since the disparate impact is difficult to prove and generally requires the presence of considerable testimony by expert witnesses well versed in the art and science of statistical analysis.