Restricted Policy approach

Restricted Policy: Another test for adverse impact, involving demonstration that an employer’s hiring practices exclude a protected group, whether intentionally or not.

The restricted policy approach means demonstrating that the employer’s policy intentionally excluded members of a protected group. Here the problem is usually obvious – such as policies against hiring bar tenders under six feet tall. Evidence of restricted policies such as these is enough to prove adverse impact and to expose an employer to litigation.

Population comparisons: This approach compares: (1) the percentage of Hispanic (or black or other minority / protected group)a and white workers in the organization with (2) the percentage of the corresponding groups in the labor market, where labor market is usually defined as the US Census data for that Standard Metropolitan Statistical Area.

For some jobs, such as laborer or secretary, it makes sense to compare the percentage of minority employees with the percentage of minorities in the surrounding community since these employees will come from the community. However, for other jobs, such as engineer, the surrounding community may not be the relevant labor market, since recruiting may be nationwide or even global. Determining whether an employers has enough black engineers might thus involve determining the number of black engineers available nationwide rather than just in the surrounding community. Defining the relevant labor market is therefore crucial.

Mc Donnell Douglas Test: Lawyers in disparate impact cases use approaches unintentionally screening out disproportionate numbers of women or minorities (an adverse impact, in other words)>lawyers use the McDonnell Douglas test for showing (intentional) disparate treatment, rather than (unintentional) disparate impact.

This test grew out of a case at the former McDonnell Douglas Corporation. The applicant was qualified but the employer rejected the person and continued seeking applicants. Does this show that the hiring company intentionally discriminated against the female or minority candidate? The US Supreme Court set four rules for applying the McDonnell Douglas test:

1) that the person belongs to a protected class;
2) that he or she applied and was qualified for a job for which the employer was seeking applicants
3) that, despite this qualification, he or she was rejected and
4) That, after his or her rejection, the position remained open and the employer continued seeking applications from persons with the complainant’s qualifications.

If the plaintiff meets all these conditions, then a prima facie case of disparate treatment is established. At that point, the employer must articulate a legitimate non discriminatory reason for its action, and produce evidence but not prove that it acted on the basis of such a reason. If it meets this relatively easy standard, the plaintiff then has the burden of proving that the employer’s articulated reason is merely a pretext for engaging in unlawful discrimination.

Example: Assume you turn down a member of a protected group for a job with your firm. You do this based on a test score (although it could have been interview questions, application blank responses, or something else). Further assume that this person feels he or she was discriminated against due to being in a protected class, and decides to sue your company.

Basically, all he or she must do is show that your human resources procedure (such as the selection test) had an adverse impact on members of his or her minority group. There are three main approaches that he or she can apply here: disparate rejection rates, restricted policy, or population comparisons. Once the person proves adverse impact to the court’s satisfaction, the burden of proof shifts to the employer to defend against the discrimination charges

Note that there is nothing in the law that says that because one of your procedures has an adverse impact group, you cannot use the procedure. In fact, it could (and does) happen that some tests screen out disproportionately higher numbers of, say, blacks than whites. What the law does say is that once your applicant has made his or her case (showing adverse impact) the burden of proof shifts to you. Now you (or your company must defend use of the procedure.

There are then basically two defenses employers use to justify an employment practice that has an adverse impact on members of a minority group: the bone fide occupational qualification (BFOQ) defense and the business necessity defense.