What Is Disparate Impact Discrimination?

Federal and state anti-discrimination laws prohibit employment discrimination on the basis of race, color, religion, national origin, sex, and other protected characteristics.

Some types of discrimination are more easily recognizable than others. For example, if an employee is fired and there’s a smoking-gun comment about their race, gender, or disability, it’s easy to see that potentially illegal discrimination was at play. Other forms of discrimination aren’t as commonly understood, particularly in instances where there’s no discriminatory intent. Even though it may be subtler to recognize, unintentional or adverse impact discrimination is also prohibited under the law.

Disparate impact occurs when a policy or practice has a disproportionate adverse effect on members of a protected class, even though the policy or practice seems neutral and non-discriminatory in intent. Read on to learn more about disparate impact, and how it differs from disparate treatment. Get help from an experienced discrimination attorney today.

Understanding Disparate Impact Discrimination

Disparate impact discrimination occurs when a policy, practice, or rule that appears neutral disproportionately affects a particular group of people based on characteristics like race, gender, age, or other protected categories.

“I think we can all recognize that there are systems set up in the world we live in that do not benefit everyone and that disadvantage certain groups,” says Anna P. Prakash, a civil rights and class action attorney with law firm Nichols Kaster in Minneapolis.

“I believe that historic and systemic racism and sexism are just built into certain systems, and that, depending on the circumstances, may result in policies or practices that could constitute illegal disparate impact discrimination against people of color, women, or people in other protected groups.”

Prakash adds, “In other words, a neutral policy or practice that can have a disproportionate and adverse effect on a protected group of people.”

Disparate Impact vs Disparate Treatment

In discrimination law, there’s an important distinction between “disparate treatment,” which is intentional, and “disparate impact,” which is unintentional.

For example, imagine a retail store or restaurant where there are positions that don’t require driving. Maybe the opening is for a waiter or cashier. What if that employer had a hiring policy of rejecting job applicants with a certain number of reports on their driving record?

At first, it might seem like there’s nothing objectionable about that employment policy since it’s not intentionally or explicitly discriminatory against people in particular groups, such as African Americans or female applicants.

However, says Prakash, “Where people of color are being stopped at higher rates in traffic stops, you might think to yourself: Well, since this job has nothing to do with driving, that hiring policy could have a disparate impact on people of color as a result.”

How To Prove Disparate Impact

The U.S. Equal Employment Opportunity Commission (EEOC) lays out the three-part disparate impact analysis that courts use to determine if employment discrimination has occurred. This analysis arises from the Supreme Court’s landmark disparate impact discrimination case, Griggs v. Duke Power Co. (1971):

1. Plaintiff’s burden of proof. To prove a disparate impact case, the burden of proof is on the employee to present evidence that an employer’s neutral policy, rule, or practice disproportionately impacts members of a protected class.
2. Employer’s justification. Once the employee meets their burden of proof, the employer may defend itself by challenging the employee’s evidence of a discriminatory effect or by proving that the policy or rule is consistent with a business necessity or is otherwise job-related.
3. Less discriminatory alternative. The employee can rebut the employer’s defense by providing that the employer refuses to adopt an alternative practice with less discriminatory effect.

Before the U.S. Supreme Court decided Smith v. City of Jackson (2005), the law wasn’t clear whether an employee could sue for age discrimination based on disparate impact. The Court ruled that in order to claim disparate impact discrimination, the employee must identify a specific employment practice that led to the disparate impact. At that point, the employer can avoid liability if it shows that its practice was based on a reasonable factor other than age, even if the factor strongly correlated with age, such as seniority.

Examples of Disparate Impact in Various Contexts

While the theory of disparate impact discrimination is not new, much of the case law remains in the context of employment law. Other contexts can include housing — for example, if a landlord were to implement a policy excluding tenants with certain criminal records, disproportionately impacting certain minorities.

“I think litigating it in areas of law beyond employment is possible,” says Prakash. “I think there are some laws where it is recognized and others where it is not. For example, one law protecting consumers might recognize a disparate impact theory of liability, while another might say you must show something overtly intentional in order for the plaintiff to have a claim. It depends on the law, and it depends on the context in which the person is being discriminated against.”

Find an Employment Law Attorney

If you believe you’ve been discriminated against as a member of a protected class, a knowledgeable attorney with experience in disparate impact lawsuits can help you consider your options.

“A lawyer is going to be the person that is most able to give someone who is being discriminated against advice on whether something is both unfair and illegal, or simply unfair,” Prakash says.

“Unfortunately, there are a lot of ways in which people can be treated terribly in the marketplace as a consumer or on the job as an employee that would not necessarily be illegal. But still, think about what people face in purchasing goods and services, getting credit, going to school, dealing with court fines and fees, dealing with healthcare, dealing with employment. I think that there can be opportunities to make those circumstances fairer for everyone.”