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Archived: Beware Disparate Impact Discrimination

Posted on April 23, 2014

Editor’s Note – Amy B. Royal, Esq. specializes exclusively in management-side labor and employment law at Royal LLP, a woman-owned labor and employment law firm in Northampton.

DiscriminationSuppose a company with a high rate of workplace injuries implements a strength test to screen out job applicants after research reveals that this type of test would reduce such injuries.  Could such a test be considered discriminatory?

The answer is “it depends” on whether the test has a disparate impact on a group protected under anti-discrimination laws.  If the test creates a disparate impact, it may not be permissible.

What is disparate impact discrimination?

Disparate impact discrimination occurs when a seemingly neutral and non-discriminatory practice, such as the strength test referenced above, has a disproportionate impact on a protected class of employees.  If women, disabled individuals, or some other protected classes are not able to pass the strength test in large numbers, the test could give rise to a disparate impact claim.

Intent or motive in disparate impact discrimination is irrelevant.  The effects or impact of the policy or practice, not the intent, is what controls. Disparate impact discrimination can thus sneak up on organizations in ways it could not have imagined.

How does disparate impact discrimination arise?

Disparate impact discrimination commonly arises in employment testing, employee assessments, job prerequisites, and other seemingly innocuous employment practices.  That means all tests, assessments, or employment policies or practices must be carefully examined to be sure they do not unintentionally affect a particular protected group.

The following are examples of employment tests that could be implicated and, thus, should be considered for their potential disparate impact:

  • physical abilities or strength tests;
  • performance tests;
  • promotion or advancement tests;
  • personality tests;
  • cognitive tests;
  • drug tests; or
  • English proficiency tests.

Employment screenings or background checking, such as medical inquiries and examinations or criminal history or credit checks could also give rise to disparate impact discrimination claims.  So can requiring certain degrees or certificates, or particular training or other experience.

The good news with respect to disparate impact claims is that the employee bears the ultimate burden of establishing her case.  The employee must establish through specific evidence that a particular employment test or practice has a disparate impact on a protected group.

If the employee can make this showing, the company must then establish that the test or practice was specific, narrowly tailored, and related to the job and consistent with business necessity.  The kicker in these cases is that if a less discriminatory alternative test or practice is available, generally, the company should have used that.

Why does disparate impact matter?

Think dollar signs.  Unfortunately, because of the nature of these cases (i.e., an entire group of people are claiming to have been impacted), they arise with a significant punch:  they take shape as a class action.  Class action lawsuits are extremely costly to defend and carry with them high damage awards should a verdict go against you.

Examine your employment practices to ensure that your policies and practices, as well as any tests and selection procedures you are using, are meaningful and necessary.  Be certain that you can justify why they are necessary for your business.  Also, be certain that you can articulate the ways in which the tests or practices are specifically job-related.

Here are examples of the types of policies and practices that you should examine:

  • Drug testing
  • Dress codes
  • Policies on advancement, promotions, or seniority
  • Attendance
  • Hiring
  • Prescreening and testing
  • Advancement
  • Disciplinary
  • Fitness for duty
  • Drug testing
  • Supervisory

As a preventative measure, companies may turn to the Uniform Guidelines on Employee Selection Procedures as a guide to validate their tests and selection procedures.  These Uniform Guidelines, which were established by the federal government in 1978, provide technical assistance and standards for employers to follow when using testing or selection procedures.

The bottom line in reducing your exposure to disparate impact discrimination is this:  make sure that any test or employment practice is job-related, commensurate with the requirements of the job, and consistent with business necessity.  Make sure that any test or assessment you use measures skills in the most effective ways and that they are otherwise reasonable for the particular job.  It is always a best practice to work closely with your labor and employment counsel before implementing any new test, practice, or policy.  It is also advisable to review with counsel all tests, practices, and policies on an annual basis.