What is a Disparate Impact?

Disparate impact refers to employment tests or practices that adversely affect a protected class of individuals. Under civil rights legislation in the United States, qualifications and terms of employment that have a disparate impact can result in a violation of equal protection rules. This can subject a company to potential litigation, fines and penalties.

Within the United States, many laws exist to protect minorities and individuals who have a long history of discrimination. For example, Title VII of the Civil Rights Act of 1964 makes it illegal for employers to discriminate in hiring, firing, or terms of employment on the basis of race, religion, gender, national origin or color. Americans over 40 years of age find similar protection in the Age Discrimination in Employment Act (ADEA) and disabled Americans are protected by the Americans with Disabilities Act (ADA).

Because these civil rights laws prohibit discrimination in any aspect of employment from hiring to firing to promotions and everything in between, tests or qualifications that unfairly impact one protected class of people are not permitted. The only exception to this rule is if there is a bona fide occupational need for the test that cannot be met in some way that does not create disparate impact. The Equal Opportunity Employment Commission and judges or juries will decide whether a bona fide reason exists on a case-by-case basis, but generally, the company must be able to prove that the test was necessary to ensure the success of the employee at his job and that there was no other way to test that skill that did not adversely impact or favor one class or group of people over another.

There are a number of different ways a test or employment condition could have a disparate impact. For example, if there is a test in which Caucasians perform significantly better than African Americans in every situation, the test might demonstrate a cultural bias. As such, the test could be seen as having a disparate impact and could thus be a violation of EEOC regulations.

A test that requires individuals to lift heavy materials could be seen as having a disparate impact on gender. Thus, such a test would be permitted only if the job involved lifting heavy objects on a regular basis. If the job was a desk job, there would be no bona fide occupational purpose for administering it, and since it had a disparate impact on females, it would be illegal. In order for the plaintiff to prevail, she would have to demonstrate that the test had a substantially adverse impact on those in the protected gender class.