Disparate Impact: What it means, how it works, history

Disparate impact refers to neutral policies that disproportionately affect protected groups, impacting areas like housing and employment. Federal regulations allow evaluating these impacts to identify and prevent discrimination.

By Brad Nakase, Attorney

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Disparate Impact: What Is It?

The term “disparate impact” describes the outcome of applying a standard, prerequisite, assessment, or related screening tool for selecting that, despite its seeming neutrality, hurts members of a constitutionally protected class. It is the term used to describe inadvertent discrimination against members of a protected category in contexts such as housing and employment. The United States Congress integrated the concepts of disparate effect into anti-discrimination laws, encompassing education, civil rights, employment, and housing acts.

Important Points

  • A law or procedure that is visually neutral but has a specific negative effect on members of a constitutionally protected group without any valid reason is said to have a disparate impact.
  • The application of disparate impact evaluation to detect illegal discrimination is permitted under federal regulations and statutes.
  • When voting regulations that affected people based on their race, color, or ethnic background were declared unlawful, the courts first accepted the use of disparate impact assessments.
  • Testing to identify discrimination in voting rights, housing, work, education, credit, and various other sectors has sparked political debate.

Comprehending Disparate Impact

Disparate impact refers to the deliberate, unjustified, harmful effect on members of legally protected categories of people that a facially impartial legislation, regulation, or procedure has on them. Another common word for this concept is adverse impact. Disparate impact evaluation may be used to detect illegal discrimination in accordance with federal regulations and statutes.

When voting rules discriminated against people on the basis of color, race, or ethnic background were declared unlawful by civil rights laws, the courts initially accepted the use of disparate impact analysis. Comparative effect evaluation has created political controversy when it comes to identifying discrimination caused by these criteria or prejudice based on gender, religion, sexual orientation, pregnancy, disability, age, and other traits in employment, housing, education, credit, and other domains.

During the civil rights period, the concept of disparate impact was developed to identify discrimination and defend the rights of minorities against discriminating state activities. Since then, the application of this concept has been extended outside of racial situations by legislative action and court rulings.

Regulations that forbid discrimination on the basis of color, race, or nationality and include a standard for discriminatory consequences or disparate impact are in place at 26 federal agencies. There is still much disagreement in the political, legal, and judicial spheres over the concept’s use and meaning, particularly with regard to its detrimental impact on ethnic and racial groups.

Quick Fact: The concept of disparate impact additionally gets applied to laws and rules that prohibit discrimination on the basis of age, sex, gender identity, sexual orientation, religion, equal pay, pregnancy, handicap, or genetic data.

Disparate Impact Evolution

1. Duke Power Co. v. Griggs

In Duke Power Co. v. Griggs (1971), the Supreme Court used the concept of disparate impact to interpret Title VII of the Civil Rights Act (198\64) to invalidate an action that had a racially disparate impact and wasn’t backed by an enterprise’s necessity.

A Supreme Court ruling in 1976, Davis v. Washington, rejected the idea that Griggs was a legitimate decision and ruled it to be solely centered on the statute, despite the fact that many observers thought it was grounded in both the 1964 legislation and the Equal Protection provision of the United States Constitution.

2. Davis v. Washington

As per the verdict in Davis v. Washington, an action of the state that results in a racially unequal impact can only be deemed unlawful if it is intentionally intended to discriminate against a particular race. As a result, only circumstances in which a statute allowing the use of disparate impact might render a state action unconstitutional without demonstrating discriminatory intent.

Despite the fact that Davis v. Washington rejected the disparate impact concept on the grounds of the US Constitution, the ruling essentially permitted the legal application of a disparate impact as a criterion for figuring out whether an act of government is discriminating.

Following a period of time in which courts restricted the use of disparate impact, the Supreme Court, in the case of Bolden v. City of Mobile, 1980 extended the need for a discriminatory motive to Section 2 in the Voting Rights Act. An overall electoral system was accused of unfairly diluting Black people’s right to vote and violating their rights, but the lawsuit was dismissed by the court.

3. Voting Rights & Fair Housing

Due to this ruling, in 1982, Congress amended the voting rights legislation by adding precise wording that applied the disparate impact concept without requiring intent. Any official action or procedure pertaining to the right to vote that “results in” the denial of privileges according to color or race is considered unconstitutional under the amendment.

The 1991 Civil Rights Act and the 1988 FHA (Fair Housing Act)  both included a disparate impact assessment, without mentioning intent, in response to additional court rulings that rejected the application of disparate impact in cases where the intent to discriminate was not obvious. The federal labor amendment was passed by Congress over the veto of the president in both circumstances, despite strong resistance.

Quick Fact: Several judicial decisions have added limitations and criteria that limit the scope of such legislation, despite the fact that courts have largely upheld them.

Disparate Impact: Further History

There have been mixed results when it comes to attempts to use a disparate impact assessment in more settings and to reinforce its application. Variations in the political power structure of the federal legal and executive offices, as well as the makeup of the Supreme Court, have often resulted in modifications to the way anti-discrimination statutes are interpreted and applied in general, as well as in the application of disparate impact requirements that take specific legislative outcomes or effects into account.

Rules & Tests

The most controversial issue has been the application of disparate impact assessments to racial discrimination. Legislation with disproportionate effect standards was enthusiastically backed by civil rights activists and successive democratic governments.

Disparate impact regulations & affirmative action legislation, in particular, were opposed by those who supported the selection of judges with conservative views who would interpret the regulations narrowly, reducing their usefulness.

Disparate impact assessments were backed by conservatives who were worried about protecting the rights of individuals in various circumstances, including those related to pregnancy, disability, and religious freedom. Congress and Courts created rules for accommodations that avoid adverse impacts on pregnant women, individuals with disabilities, and religious minorities in order to combat discrimination against these groups.

Biden vs. Trump

The disproportionate impact standard remains a topic of dispute. Regulations that permitted the application of disparate impact evaluations to detect and outlaw discrimination were attempted to be rolled back by the government of Donald Trump.

Upon the expiration of its full term, the Trump government published a notice stating its intention to publish the final regulation that would undermine the implementation of anti-discrimination laws. However, the Administrative Procedure Act required that the suggested modification be published beforehand and provide a chance for public input. The goal of the modification was to forbid discrimination other than deliberate ones and to do away with Section VI of the Civil Rights Act’s (1964) application of the disparate effect criteria to combat discrimination on the basis of color, race, or national background.

In a directive to the Secretary of HUD (Housing & Urban Development) in January 2021, President Biden upheld the disparate impact requirement. In order to guarantee that equitable housing rules are upheld and that procedures do not have “an unjustifiable discriminatory impact,” he gave HUD instructions to review the anti-discrimination standards that were altered during the Trump administration. By canceling the 2020 regulations put in place by the government of Trump, the agency brought anti-discriminatory procedures back in 2023.

Disparate Impact Example

Federal regulations impacting organizations receiving federal monies under a wide range of programs and activities contain provisions for disparate impact assessment.

For instance, the Department of Education released regulations under Title 6 of the 1964 Civil Rights Act that forbid entities receiving federal funding of any kind from applying “criteria or ways of governance that have an impact on subjecting people to discrimination due to their color, race, or national background.”

Disparate impact evaluation is a feature of regulations made under Title IX of the 1972 Education Amendments, which forbids gender bias in any activity or program at colleges and universities receiving federal funding. Affirmative action with regard to pupil discipline, among other educational issues, has generated varying perspectives over time.

What Is Meant by Disparate Impact?

Under the law, inadvertent discriminatory acts and policies in contexts such as employment and housing are referred to as having a disparate impact. Minorities and individuals of different ethnic backgrounds are among the protected categories adversely impacted by these activities. Congress has enacted legislation against discrimination in the US.

What is the disparate impact rule of eighty percent?

In 1978, the Equal Employment Opportunity Commission, Dept. of Justice, Civil Service Commission, and Dept. of Labor adopted a policy known as the eighty percent rule, also known as the four-fifths guideline. According to the law, managers must recruit members of protected categories at a pace that is 80% higher than that of white males when it comes to hiring practices. Assisting businesses in determining if hiring new employees involves discriminatory practices is the objective.

Does Adverse Impact Differ from Disparate Impact?

Adverse impact and Disparate impact are synonyms for the same concept. Both of these are employed to characterize discriminatory actions that are deemed inadvertent in contexts such as housing and employment.

The Final Word

Laws have been put in place to shield particular groups against unfair treatment in the workplace, housing market, and other domains. The purpose of these regulations is to combat prejudice, both deliberate and inadvertent. We refer to the latter as disparate impact. Even when done unintentionally, the consequences can be disastrous for the people involved.

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