Disparate impact is a legal concept that recognizes the consequences that certain actions, policies, or practices have on certain groups. It occurs when rules that may appear neutral on the surface actually have an unintended discriminatory effect that disproportionately affects members of a protected class. This understanding of the law helps businesses recognize when their policies or actions may be discriminatory and learn how to protect themselves against potential claims of unfair practices.
The concept of disparate impact was established by the landmark Supreme Court case, Griggs v. Duke Power Co. (1971). In this case, the Court found that certain company policies had a discriminatory effect on African-American employees. The ruling set a legal precedent for challenging any such policies that appear neutral on the surface but create an unequal impact.
The principle of disparate impact has since been used to challenge practices that appear neutral but result in discriminatory outcomes. For example, a no-beard policy required by an employer might seem neutral but could disproportionately impact workers of certain religious backgrounds. Or, a credit-check-policy could negatively affect potential minority employees who might otherwise not have the same access to credit.
Businesses should be aware of potential disparate impact claims and take proactive steps to identify any potential risks. This includes conducting regular audits and reviews of policies or practices to assess whether they are applied in a discriminatory manner. Businesses should also address any identified issues swiftly, as the effects of any such discriminatory practices can lead to costly and time-consuming litigation.
It’s important for businesses to understand how discrimination can manifest even in subtle or seemingly innocent forms. Disparate impact offers a way to ensure that all individuals are treated fairly and equally regardless of their race, color, national origin, religion, gender, age, or disability.