The law recognizes two forms of unlawful
discrimination. The most familiar is disparate treatment,
in which an employee’s protected class status is a motivating factor in an
adverse employment action. A less familiar, and sometimes confusing, form of
unlawful discrimination is disparate
impact discrimination. This occurs
when an employer’s apparently neutral policy, practice, or criterion disproportionately
impacts applicants or employees of a particular protected class. For
example, a hiring policy that requires applicants to live within a mile of the
employer’s location has no direct connection to race or ethnicity, but if the
neighborhoods in that mile radius are overwhelmingly white, the facially
neutral policy can make it significantly less likely that non-white applicants
Proof of disparate treatment – the more familiar kind – it
requires a showing of employer intent to discriminate. Proof of disparate
impact does not. Employers can be held liable for the effect of
their policies and practices on protected groups, regardless of their
motivation. In order to avoid liability in a disparate impact case, the
employer must demonstrate that the policy, practice, or standard in question is
job-related and a business necessity.
Most of the time, employers deal with concerns or claims
of disparate treatment. Disparate impact generally only becomes an issue when
groups of employees are affected by an action or policy. It is almost
never raised in situations involving a single employee. Disparate impact
can become a worry when an employer carries out a reduction in force, reduces
salaries or hours for a group of employees, or adopts a new set of hiring
criteria. In any of these situations, an employer can be held liable for
discrimination if a protected group is disproportionately impacted.
Disparate impact cases can be particularly alarming to
employers because they involve claims by a large number of plaintiffs.
They are expensive to defend and the judgments paid by employers who are found
to have engaged in disparate impact discrimination can be large. Like
disparate treatment claims, however, disparate impact claims can be avoided
and, if necessary, defended. Avoidance requires planning and attention to
the potential effect of a planned policy or action. Successful defense
requires careful documentation of the non-discriminatory
business reasons for the action or policy in question and a clear
explanation of the business
necessity that motivated the policy or action.
Any time a personnel action or personnel policy is likely
to impact a significant number of applicants or employees, employers would be
wise to ask these questions:
What is the business reason for this policy or action? Is it sound? Is it documented? Will it be understood by individuals outside the circle of decisions-makers?
Is there an alternative policy or action that could produce the desired result? If so, has it been considered?
If the initial review of the likely results of the action
or policy suggests that women, people of color, or employees over 40 will be
impacted the most, employers should pause and do the following:
Carefully review the circumstances to see if patterns are evident. Is a particular supervisor recommending the selection of more women than men for a RIF? Is a new policy a reaction to circumstances better addressed directly? Are selection standards being uniformly applied?
Dig deeper if an adverse impact analysis produces results indicating that a particular protected group will be disproportionately affected. Make sure that there are no alternative actions or policies available that accomplish the same result without the disproportional impact. Make sure that none of the individuals responsible for creating the policy or selecting those impacted by an action are motivated by considerations of race, gender, age, or other protected class status.
Most HR professionals and in-house counsel are used to
questioning the reasons for and validity of individual personnel actions.
It is second nature to consider and eliminate the possibility of discriminatory
motivation. To avoid the significant risks associated with disparate
impact discrimination, it’s essential that personnel policies and actions that
affect large groups be subject to the same scrutiny.