To understand how employers defend themselves against employment discrimination claims, we should first briefly review some basic legal terminology.
Discrimination law distinguishes between disparate treatment and disparate impact. Disparate treatment means intentional discrimination. It requires no more than a finding that women (or protected minority group members) were intentionally treated differently because of their gender or minority status). Disparate treatment exists where an employer treats an individual differently because that individual is a member of a particular race, religion, gender, or ethnic group. Having a rule that says “we do not hire bus drivers over 60 years of age”, exemplifies this
Disparate impact means that an employer engages in an employment practice or policy that has a greater adverse impact (effect) on the members of a protected group under Title VII than on other employee, regardless of intent. A rule that says employees must have college degrees to do this particular job exemplifies this (because more white males than some minorities earn college degrees).
Adverse Impact: The overall impact of employer practices that result in significantly higher percentages of members of minorities and other protected group being rejected for employment placement, or promotion.
Disparate impact claims do not require proof of discriminatory intent. Instead, the plaintiff must show that the apparently neutral employment practice such as requiring a college degree creates an adverse impact – a significant disparity – between the proportion of (say) minorities who are in the available labor pool and the proportion you hire. So, the key here is to show the employment practice caused an adverse impact. If it has, then the employer will probably have to defend itself (for instance, by arguing that there is a business necessity for the practice).
Showing adverse impact therefore plays a central role in discriminatory practice allegations. Under Title VII and CRA 1991, a person who believes he or she unintentionally discriminated against as a result of an employer’s practices need only establish a prima facie case of discrimination. This means showing that the employer’s selection procedures (like requiring a college for the job) did have an adverse impact on a protected minority group. Adverse impact refers to the total employment process that results in a significantly higher percentage of a protected group in the candidate population being rejected for employment, placement or promotion. Employers may not institute an employment practice that causes a disparate impact class of people unless they can how that the practice is job related and necessary.
What does this mean? If a protected group applicant feels he or she was a victim of discrimination, the person need only show that the employer’s selection process resulted in an adverse impact on his or her group. (For example, if 80% of the white applicants passed he test, but only 20% of the black applicants passed, a black applicant has a prima facie case proving adverse impact). Then, the employee has proved his or her point, the burden of proof shifts to the employer; It becomes the employer’s task to prove that its test, application blank, interview the like is a valid predictor of performance on the job (and that it was applied fairly and equitably to both minorities an non-minorities).
Disparate Rejection rates: A test for adverse impact in which it can be demonstrated that there is a discrepancy between rejection of members of a protected group and of others.
4/5 ths rule: Federal agency rule that minority selection rate less than 80% (4/5ths) that of group with highest rate evidences adverse impact.
How can someone show adverse Impact? It is actually not too difficult for an applicant to show that one of an employer’s procedures (such as a selection test) has an adverse impact on a protected group. There are four basic approaches:
Disparate Rejection rates: This means comparing the rejections rates for a minority group and another group usually the remaining non-minority applicants.
Federal agencies use a “4/5ths rule” to determine disparate rejection rates: A selection rate for any racial, ethnic, or sex group which is less than four fifths or 80% of the rate for the group with the highest rate will generally be regarded as evidence of adverse impact, while a greater than four fifths rate will generally not be regarded as evidence of adverse impact. For example suppose 80% of male applicants are hired, but only 50% of female applicants. Since 50% is less than four fifths of 80% adverse impact exists as far as these federal agencies are concerned.