by Steven E. Abraham
President Donald Trump issued in April an executive order titled “Restoring Equality of Opportunity and Meritocracy.”
This order directs federal agencies to deprioritize enforcement of anti-discrimination statutes and regulations that include disparate-impact liability.
The order criticizes disparate-impact liability as creating a “near insurmountable presumption of unlawful discrimination” based solely on statistical disparities, even absent any discriminatory intent. It argues that such liability pressures employers to consider race and engage in racial balancing to avoid legal repercussions, which the order deems inconsistent with constitutional principles.
Disparate treatment and disparate impact are theories that can be used by a person suing for employment discrimination under federal or state law.
Disparate treatment is the more common and more easily understood of the two. Disparate treatment occurs when an individual is intentionally treated differently based on a protected characteristic such as race, gender, religion, etc. For example, if an employer refuses to hire qualified female applicants solely because of their gender, that would constitute disparate treatment. In order to prevail in a disparate treatment case, the individual must prove that the employer intended to discriminate because of her membership in a protected class.
On the other hand, disparate impact refers to policies or practices that are neutral on their face but disproportionately affect members of a protected group in a negative way, regardless of intent. Under this theory, a claimant does not need to show discriminatory intent. Rather, the plaintiff must demonstrate that a particular employment practice causes a statistically disparate (adverse) impact on a protected group.
For example, if an employer required all employees to be at least six feet tall and weigh 150 pounds, that policy could not be challenged under disparate treatment because it applies to everyone (i.e. everyone is being treated the same) but it would have a disparate impact against women, because a much greater percentage of men meet the height and weight requirements than women.
It should be noted, however, that employers can defend themselves when they use employment policies that have a disparate impact against a particular group if they can demonstrate that those policies can be justified by “a business necessity.” For example, if an employer had a rule that required employees to be able to lift 50 pounds, that rule would have a disparate impact against women, but it probably could be justified for any job that required employees to lift a great deal of weight (e.g., construction).
Many other policies could lead to disparate impact, even though some might be unaware. As examples:
1. Criminal Background Checks
Blanket exclusions of applicants with criminal records may have a disparate impact against certain minorities because historically, those groups have greater rates of criminal records than Caucasians. Therefore, excluding applicants with criminal records could be problematic.
It is recommended that employers examine the nature of the offense, the time elapsed and the job’s relevance to avoid unlawful disparate impact. It is especially important to note that excluding applicants who have been arrested is always problematic because the fact that someone has been arrested does not mean that the person is guilty of anything.
2. Educational Requirements
Requiring a high school or college degree for jobs that do not genuinely require a degree may disproportionately exclude minority groups, because Caucasians have a higher rate of educational advancement than certain minority groups. Unless the employer can show that a degree requirement is job-related and consistent with business necessity, this policy may be challenged.
3. English-Only Rules or Language Proficiency Tests
Requiring fluent English for jobs that do not require frequent communication in English may disproportionately affect applicants of certain national origins. Virtually all people born in the US are fluent in English, while many people born in other countries are not. Therefore, these rules must be carefully tailored and justified as essential to job performance.
4. Height and Weight Requirements
As stated above, these standards can disproportionately exclude women and certain racial or ethnic groups. Unless clearly tied to essential job duties (e.g., firefighting or law enforcement), they are vulnerable to legal challenge.
5. Physical Fitness Tests
Again, these tests may statistically disadvantage older applicants, women or people with disabilities. Thus, they must be directly related to job duties.
6. Credit History Checks
Often minorities have poor credit histories as compared to Caucasians. Thus, refusing to hire people with poor credit ratings may disproportionately exclude racial minorities. Therefore, it would be wise to use credit checks in the hiring process only for positions involving financial responsibility or access to sensitive information.
As a check against potential disparate impact liability, employers should consider the taking the following steps:
• List all employment policies and practices (e.g., hiring, promotion, discipline, termination, testing, layoffs).
• Identify any policies that disproportionately affect certain protected groups (e.g., racial minorities, women)
• Review job requirements (e.g., degrees, licenses, physical ability) for actual relevance to job duties.
• Ensure that any policy having a potential disparate impact against a particular group is necessary to successful job performance.
Despite the executive order mentioned above that directs federal agencies to stop relying on disparate impact as a theory of liability, that order is not binding on the courts, and disparate impact remains as a potential concern for employers. Therefore, it would be wise for businesses to examine their employment policies for potential disparate impact and even more importantly, ensure that all policies remain necessary for successful job performance.
Steven E. Abraham is a professor in the College of Business and Entrepreneurship at SUNY Oswego. He practiced labor and employment in New York City prior to teaching.
