Disparate Effect
Decoding Disparate Effects in Employment Practices: Origins, Standards, and Consequences
Unraveling the Term: What Is a Disparate Effect?
Definition:
- A disparate effect arises when an employment policy or practice yields adverse and often discriminatory outcomes, impacting hiring, advancement, termination, or compensation.
Historical Roots: Origin of Disparate Effect in Legislation
Civil Rights Act of 1964:
- Title VII of the Civil Rights Act prohibits employers from using seemingly neutral tests or procedures that disproportionately exclude individuals based on race, color, religion, sex, or national origin.
Landmark Case – Griggs v. Duke Power Co. (1971):
- Examining discriminatory practices, the Supreme Court held that under Title VII, tests disparately affecting ethnic minorities must be “reasonably related” to the job, marking such practices as a disparate effect.
Measuring Disparities: Standards for Assessing Disparate Effect
The 4/5ths Rule by EEOC:
- The U.S. Equal Employment Opportunity Commission (EEOC) employs the 4/5ths Rule, defining a disparate effect when the selection rate for any group falls below 80 percent of the rate for the highest group.
Ramifications of Unintended Impact: Consequences of a Disparate Effect
Diversity and Inclusion Impact:
- Disparate effects, though unintentional, hinder organizational diversity by excluding qualified candidates, impacting the overall vibrancy of the workforce.
Financial Repercussions:
- Legal findings of adverse impacts can lead to substantial fines. In a notable case, Target Corporation paid 2.8 million dollars in fines due to the EEOC’s discovery of disparate effects in their pre-employment assessments based on race, sex, and disability.
Liability and Penalties:
- Employers facing a disparate effect may be held liable, potentially resulting in fines or other penalties, emphasizing the importance of aligning policies with anti-discrimination laws.