What is Disparate Impact Discrimination?

Disparate Impact

Unless you are heavily invested in civil rights litigation or politically active, disparate impact may be a foreign concept. Many claims that are based on disparate impact are often brought against people and by people who may not have had exposure to the term before. However, civil rights advocates understand the impact of this type of discrimination, regardless of intent, on a group of people.

Therefore, it is important to understand what disparate impact is and the elements that make up a claim, how claims are brought when they occur under various areas of law, and the possible defenses to claims of civil rights violations. Understanding the concept will ensure that you can spot disparate impact discrimination when it occurs and work to stop it before it begins.

Defining Disparate Impact

Disparate impact refers to the result of a facially neutral rule, process, or requirement that harms a specific protected group of people based on a protected characteristic. It is a category of discriminatory practices, which are practices that single out protected classes, intentionally or unintentionally, based on the shared protected characteristic of the group.

It differs from intentional discrimination because the law, process, or proposed regulation does not immediately exclude or cause harm to a specific group, nor is it created with discriminatory intent. Instead, the discriminatory effects are felt in the application of the law—process, or regulation. The disparate impact theory has been significantly limited by the United States Supreme Court, but it is not eliminated or disallowed because the Justices understand the impact that a law that would seem fair on its face could have differing effects in practice.

Protected Class Defined

To better understand how a disparate impact claim may apply in practice, it is also important to acknowledge and understand the various forms of protected characteristics under United States Law.

The Supreme Court held that the federal government has confirmed through laws that people may not be discriminated against based on race, color, religion, sex or gender identity, national origin, ability, sexual orientation, or various other traits. These will be briefly discussed below. Not every characteristic will apply to every law, but acknowledging these classes will help you avoid discriminatory practices.

Race

The most commonly litigated of the protected characteristics because it is also the most commonly discriminated against. Race refers to the characteristics that are tied to a person’s race, such as skin color, hair texture, or other physical features. It can also discriminate based on racial and cultural mannerisms or background.

Color

Color discrimination is similar to race discrimination in that it relies on skin color for discriminatory effect, yet it is based only on color and does not take race, such as a person’s background or mannerisms into account. It may also misalign people based only on color.

National Origin

National origin is again similar to race, yet it differs because it is based on a person’s home country and can happen within a racial demographic. It can be directed both at immigrants and people who have been in the United States for some time.

Religion

Religious discrimination is the disparate treatment of one group of people based on the religion they follow. It goes beyond disagreements on religion and instead focuses on the practice of religion as a way to exclude or divide a group.

Ability

Another commonly litigated basis for discrimination is disability discrimination. This is the practice of excluding people based on a disability or refusing to provide accommodations.

Sex or Gender Identity

One of the newer categories to be added to the protected classes is sex and gender identity. Discrimination based on gender is the practice of intentionally or not excluding one or more genders. This can include cisgender and transgender men, women, and nonbinary folks as the target of discrimination.

Sexual Orientation

Another more recently added characteristic is sexual orientation, which is the identification of the gender or gender that you are attracted to. Common groups within this protected class are gay, lesbian, bisexual, pansexual, and asexual people.

Disparate Impact Claims under the Civil Rights Act and Other Laws

To bring a disparate impact claim under one of these laws, a person must prove that they are a member of a protected class, that a neutral law was put in place that applies to them in some way, that the law has had a disproportionately adverse effect on them as a result of being a member of the protected class, and that they suffered harm as a result.

Courts have allowed people to bring suits against a bad actor when the adverse impact may only be demonstrated by statistical disparity, but they must be able to point to specific regulations issued or rules in the defendant’s policy to create this disparate impact. Additionally, the burden of proof in many cases has shifted to the plaintiffs to prove disparate impact in many cases.

Specific rules will apply depending on which area of law a person is bringing a dispute, which will discussed briefly below. The most common areas that the Supreme Court, Congress, and other courts have worked through a disparate impact analysis are housing law, employment law, and higher education.

Fair Housing Act

The Fair Housing Act is a landmark piece of legislation that bars discrimination based on race, skin color, nationality, sex, or religion when renting, buying, or selling a home. It is Title VIII of the Civil Rights Act, and it includes a disparate impact private right of action without a reference to discriminatory intent. This most frequently includes policies causing discrimination in tenant selection or financing options.

An example of disparate impact in housing would be a realtor’s policy to not list homes from a certain suburb of a city. While this does not seem discriminatory on its face because it would affect everyone in that suburb, the suburb could have a majority of citizens of one race or color, and it could harm that group, especially if the realty office is one of the only ones in the area.

One of the largest enforcement mechanisms for housing discrimination is the Department of Housing and Urban Development, also known as HUD. There have been some disagreements between how HUD and the Courts have ruled on disparate impact within housing practices, HUD issued a rule establishing uniform guidelines for enforcing housing discrimination, which has created consistency at least within the subsidized housing world.

During the Trump administration, a final rule was created that impacted the ability of people facing disparate impacts to take action against local, state, and federal officials. However, President Biden and the Biden Administration directed HUD to continue allowing a disparate impact analysis for claims of discrimination in housing.

Employment Law

Another area that may face a lot of disparate impact is employment practice. Employees are protected from discrimination both in the hiring process and in job-related policies. Title VII of the Civil Rights Act protects against disparate impact while being hired for and performing a job. This law prohibits employers from creating policies that harm a protected class in the employee selection procedures and job performance review and practice.

An example of disparate impact in the hiring process would be a company subjecting individuals to a strenuous physical test before they were hired, regardless of the position they were interviewing for. While this may seem nondiscriminatory, it would likely harm anyone with a disability. If it was only applicable to jobs that did highly physical labor every day, it could be allowed under an exception. A discussion of a similar requirement may be found in Griggs v. Duke Power Company, a Supreme Court decision that looked at the disparate impact of an intelligence test during hiring.

Business Necessity Defense

The business necessity exception to a disparate impact place allows a business to discriminate against a protected class if they can prove a demonstrable relationship between the policies causing a disparate impact and the requirements of the employment. This exception or defense could be argued in the example above. However, the business will also need to prove that it cannot accomplish its means through a policy with a less discriminatory effect than the current one. If it can be done with less disparate impact, a Court may still find adverse impact and discrimination.

Educational Institutions

Another common that seems disparate impact analysis in litigation is education. The Department of Education has used its power to ban discrimination from any of the institutions that receive federal funds based on the person being a member of a protected class. They have based this on Title VI of the Civil Rights Act, which bars any adverse impact from such institutions. Additionally, Title IX of the Education Amendments codified this reading of the law and added a disparate impact analysis to the law, meaning that any schools receiving federal funds will be barred from creating and enforcing laws with an adverse impact in practice.

Final Thoughts

Disparate impact can have major discriminatory effects on people within a protected class. This is why the Supreme Court has sought to ensure that the disparate impact theory is well-defined and allows the right people to bring a case under its analysis. Disparate impact analysis is a vital part of any rule or procedure drafting, and it ensures that policies causing disparate impact and discrimination are not put into law.

To learn more about disparate impact, discrimination, and mediation, contact ADR Times for educational resources and more!

Emily Holland
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