DISPARATE IMPACT
A theory of liability that prohibits an employer from using a facially neutral employment practice that has an unjustified adverse impact on members of a protected class. A facially neutral employ-
ment practice is one that does not appear to be
discriminatory on its face; rather it is one that is
discriminatory in its application or effect.
Under Title VII of the CIVIL RIGHTS ACT OF
1964, plaintiffs may sue employers who discrimi-
nate on the basis of race, color, gender, religion,
or national origin. Employers who intentionally
discriminate are obvious candidates for a lawsuit,
but the courts also allow plaintiffs to prove liabil-
ity if the employer has treated classes of people
differently using apparently neutral employment
policies. The disparate impact theory of liability
will succeed if the plaintiff can prove that these
employment policies had the effect of excluding
persons who are members of Title VII’s protected
classes. Once disparate impact is established, the
employer must justify the continued use of the
procedure or procedures causing the adverse
impact as a “business necessity.”
Proof of discriminatory motive is not
required, because in these types of cases Con-
gress is concerned with the consequences of
employment practices, not simply the motiva-
tion. If the employer proves that the require-
ment being challenged is job related, the
plaintiff must then show that other selection
devices without a similar discriminatory effect
would also serve the employer’s legitimate inter-
est in efficient workmanship.
The Supreme Court, in Griggs v. Duke Power
Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158
(1971), articulated the disparate impact theory
and constructed a model of proof that the plain-
tiff and defendant must use in presenting their
cases. In Griggs, the employer required a high
school diploma and a passing score on two pro-
fessionally developed tests. Although the lower
courts found no liability because the plaintiff
failed to prove that the employer had a discrim-
inatory motive for the requirements, the
Supreme Court reversed the decision. The Court
stated that Title VII “proscribes not only overt
discrimination but also practices that are fair in
form, but discriminatory in operation.” In a
famous quote, the Court said that the “absence
of discriminatory intent does not redeem
employment procedures or testing mechanisms
that operate as ‘built in headwinds’ for minority
groups and are unrelated to measuring job
capacity.”
In the three-step model defined by the
Griggs Court, the plaintiff must first prove that a
specific employment practice adversely affects
employment opportunities of Title VII pro-
tected classes. If the plaintiff can establish a dis-
parate impact, the employer must demonstrate
that the challenged practice is justified by “busi-
ness necessity” or that the practice is “manifestly
related” to job duties. The courts, between 1971
and 1989, used these two phrases interchange-
ably. If the employer does not meet the burdens
of production and persuasion in proving busi-
ness necessity, the plaintiff prevails. If the
employer does meet these burdens, the third
step requires the plaintiff to demonstrate that
alternative practices exist that would meet the
business needs of the employer yet would not
have a discriminatory effect.
The plaintiff has the burden of persuading
the fact finder that the employment practice
used by the employer adversely affects the
employment opportunities of a Title VII protected
class. If the plaintiff fails to meet this burden, the court will dismiss the action under Rule
41(b) of the Federal Rules of Civil Procedure.
Demonstrating that the employer’s workforce
does not reflect the racial, ethnic, or gender
percentage of the population of the area does
not prove disparate impact. Such an imbalance
may be the product of legitimate factors, such as
geography, cultural differences, or the lack of
unchallenged qualifications for the job. Therefore,
it is incumbent upon the plaintiff to show
that the imbalance is because of the challenged
practice. The most compelling evidence of disparate
impact is proof that an employment
practice selects members of a protected class in a
proportion smaller than their percentage in the
pool of actual applicants, or, in promotion and
benefit cases, in a proportion smaller than in the
actual pool of eligible employees.
If the plaintiff proves that the employer’s
practice had a disproportionate impact on a
protected class, the burden shifts to the defendant
to justify its use of the challenged practice.
Griggs labeled this burden as business necessity,
but suggested that exclusionary practices would
be justified if they were manifestly related to job
duties.
Business necessity is the only known defense
against the accusation that a personnel practice
denies protected classes equal opportunity for
hire, promotion, training, earnings and any
other term or condition of employment. Three
conditions must exist before business necessity
can be asserted: (1) The standard used as the
basis for the employment practice must be apparently
neutral; (2) the standard must be uniformly
applied by the employer; and (3) the
standard must have a disparate impact on a protected
class.
The term business necessity is a fluid concept
rather than a bright-line rule (a firm legal standard
that courts are required to honor without
regard to the particular circumstances of the
case being heard). In some cases, courts conclude
that business necessity is established by
showing a reasonable relationship between the
practice in question and the employer’s business
needs.However, the majority of courts hold that
an employment practice having a discriminatory
impact can be justified on business necessity
grounds only if it is “essential” to the safety
and efficiency of the employer’s operations.
These courts contend that the mere fact that the
employment practice serves legitimate management
functions will not justify discrimination.
The Supreme Court, in Wards Cove Packing v.
Atonio, 490 U.S. 642, 109 S.Ct. 2115, 104 L.Ed.2d
733 (1989), revisited the concept of business
necessity and realigned the burdens of proof and
persuasion. The Wards Cove Packing Company
employed low-paid cannery workers in its
salmon canning facility in Alaska and higherpaid
non-cannery workers at the company offices
in Washington and Oregon. Non-white workers
filled a high percentage of the cannery worker
positions; primarily white workers held the noncannery
worker jobs. The court of appeals found
this statistical disparity sufficient to establish a
PRIMA FACIE case of disparate impact.
The Supreme Court reversed and remanded
because the statistical proof the plaintiffs offered
was not adequate. As to the defendant’s BURDEN
OF PROOF, the Court stated that the employer
“carries the burden of producing evidence of a
business justification for his employment practice.
The BURDEN OF PERSUASION, however,
remains with the disparate-impact plaintiff.”
This meant that although the employer had to
show a legitimate business reason for using a test
or certain job requirements, the plaintiff had to
prove that he or she was denied a desired
employment opportunity based on race, color,
religion, gender, or national origin. This pushed
the burden closer to that of disparate treatment,
where the plaintiff has to show intentional discrimination
by the employer. This is often difficult
to prove. In addition, the Court held that
just because the plaintiff could offer nondiscriminatory
alternatives did not prove that the
employer had improper motivations for the use
of the employment practice.
The Wards Cove decision was severely criticized
by CIVIL RIGHTS leaders, who believed the
Supreme Court had made disparate impact
cases almost impossible to win. Congress
responded by passing the CIVIL RIGHTS ACT of
1991, which overturned Wards Cove. In effect,
Congress reversed the Court’s holding that the
burden of proof must remain with the employee
at all times. Therefore, once the plaintiff has carried
the burden of proving that the challenged
employment practice causes a disparate impact,
the employer must not only articulate a business
justification for the practice but must also prove
the validity of the asserted justification.
The Supreme Court has put limits on the
disparate impact theory. For example, the Court
has made it clear that it is not unlawful for an
employer to apply different standards of compensation or different terms or conditions of
employment to employees, if the employer acts
according to a legitimate seniority system. This
is true even if the seniority system has a discriminatory
effect, as long as the system was not
intended to be discriminatory. In addition, it has
ruled that disparate impact theory cannot be
applied in AGE DISCRIMINATION cases under the
Age Discrimination in Employment Act of 1967.
FURTHER READINGS
Fick, Barbara. 1997. The American Bar Association Guide to
Workplace Law: Everything You Need to Know About Your
Rights As an Employee or Employer. New York: Times
Books.
CROSS-REFERENCES
Employment Law.
