Disparate impact is a long-standing theory of liability recognized under laws like Title VII, the Age Discrimination in Employment Act and many state employment laws. First recognized by the United States Supreme Court in 1971 in Griggs v. Duke Power Co., the Supreme Court held that facially neutral employment practices can violate Title VII where they disproportionately exclude protected groups unless the employer can show the practices are job-related and consistent with business necessity. Griggs v. Duke Power Co., 401 U.S. 424, 431–36 (1971). Disparate impact claims are assessed by courts under the burden-shifting framework known as the “effects test,” which requires:

1. Plaintiff must identify a specific practice or policy that is responsible for a discriminatory or adverse effect.
2. The policy or practice must be the cause of the difference, and it must be substantial; a statistical disparity is insufficient; EEOC regulations generally require disparate-impact claims to show that employees of a certain group are selected at a rate that is less than 80 percent of the selection rate for the most selected group.
3. Assuming the above showing is made, the burden shifts to the defendant to confirm that the challenged policy or practice is justified. In employment, it needs to be job-related and consistent with business necessity.
4. Plaintiff can still prevail if he/she proves that a less discriminatory policy would meet the business need.

Not only was disparate impact recognized...

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