The Origins of Disparate Impact and How it Works
The landmark statutes passed at the height of the Civil Rights Movement made it unlawful to “discriminate” against people—or for people to be “subjected to discrimination”—based on certain protected characteristics.[1] Those statutes, however, did not expressly define whether “discrimination” meant only the explicit differential treatment of people based on a trait like race or sex or also the use of facially neutral procedures that in practice unfairly disadvantaged people based on such traits.[2]
Federal agencies tasked with applying the new statutes interpreted them to cover such discriminatory effects.[3] For example, Title VI of the Civil Rights Act of 1964 empowered agencies to write implementing rules to ensure nondiscrimination in the use of federal funds. That year, the predecessor agency to the Department of Education and the Department of Health and Human Services issued a rule prohibiting recipients of federal funds from “utiliz[ing] criteria or methods of administration which have the effect of subjecting individuals to discrimination.”[4]
The Equal Employment Opportunity Commission (EEOC), meanwhile, issued guidance in 1966 and 1970 interpreting Title VII of the Act, which prohibits employment discrimination. Title VII contains an exemption for the use of “any professionally developed ability test” that “is not designed, intended or used to discriminate.”[5] Southern companies that previously discriminated openly against Black workers began adopting such tests after Title VII’s enactment. The EEOC saw the potential for these tests to produce discriminatory effects—for example, by using written tests requiring significant reading comprehension for jobs that involved little or no reading. The agency therefore took the position that ability tests had to measure qualities relevant for the specific job in question in order to pass muster under Title VII.[6]
The Supreme Court validated this view of discrimination in the seminal 1971 case Griggs v. Duke Power Company.[7] The Court held that Title VII prohibits “not only overt discrimination but also practices that are fair in form, but discriminatory in operation.”[8] In doing so, it recognized a legal framework for what came to be called disparate impact liability.
In Griggs, Black workers at a North Carolina power plant challenged the company’s policy of requiring employees to have a high school diploma and pass two written aptitude tests for positions above the lowest job tier. While these requirements appeared neutral, they were not related to skills needed for jobs at the power plant, and they disproportionately excluded Black applicants who, due to historical educational discrimination in the state, graduated from high school and achieved passing test scores at much lower rates than White applicants.[9] (Notably, the company first adopted its high school diploma requirement in 1955, the year after the Supreme Court’s landmark desegregation case Brown v. Board of Education,[10] and instituted the aptitude tests the day Title VII took effect.[11])
Chief Justice Warren Burger—a conservative jurist appointed by President Richard Nixon—wrote the unanimous decision. He explained that in Title VII, Congress required “the removal of artificial, arbitrary, and unnecessary barriers to employment when the barriers operate invidiously to discriminate on the basis of racial or other impermissible classification.”[12] His opinion emphatically rejected the idea that the purity of intent insulated employment practices from Title VII’s mandate: “Congress directed the thrust of the Act to the consequences of employment practices, not simply the motivation.”[13] Burger wrote that barriers that have a discriminatory effect can be maintained if warranted by “business necessity,” meaning in the employment context that they are “related to job performance.”[14] In this case, the evidence showed there was no relationship between either high school graduation or the aptitude tests and job performance. Those requirements therefore violated Title VII.[15]
In subsequent cases the Supreme Court developed a three-part process for evaluating disparate impact claims. First, a plaintiff must make “a prima facie case of discrimination,” relying on statistical evidence to show that the challenged employment tests or requirements “select applicants” of a particular race, religion, sex, or national origin in a “pattern significantly different from that of the pool of applicants.”[16] This causal showing must compare the demographics of the people selected to the demographics of the people who were qualified and available for the job—not to the demographics of the broader population.[17] Moreover, the disparity must be “statistically significant,” typically meaning that there is less than a 5% probability that the disparity occurred by chance.[18] Second, the burden then shifts to the employer to prove business necessity by demonstrating that the requirements have a “manifest relationship to the employment in question”—that is, that they are job-related.[19] An employer that has good business reasons for the challenged practices generally can continue to use them. Finally, the plaintiff will still prevail if the evidence shows “that other tests or selection devices, without a similarly undesirable racial [or other prohibited] effect, would also serve the employer’s legitimate interest.”[20]
Congress amended Title VII in 1991 to codify disparate impact liability and write the Supreme Court’s standards into the statute’s text.[21] Several other statutes also impose liability for neutral practices with unjustified discriminatory effects. These include the Fair Housing Act, the Equal Credit Opportunity Act, the Age Discrimination in Employment Act, the Safe Streets Act, Title VI, Title IX, the Voting Rights Act, the Americans with Disabilities Act, and Section 504 of the Rehabilitation Act of 1973. The precise standards and rules about which party has the burden vary by statute and jurisdiction, but with some notable exceptions[22] they typically involve the same sort of framework as Title VII:
Although the coverage of these statutes is incomplete, leaving gaps in important sectors of our economy and society,[23] they protect Americans in a host of contexts from private-sector and government decisionmaking systems that appear neutral on their face but discriminate in practice.
- Adverse Impact
Plaintiff shows through a significant statistical disparity that the challenged practice disproportionately harms people with a shared protected trait (race, religion, sex, etc.) - Legitimate Interest
Defendant must prove that the challenged practice is necessary to serve a valid interest - Less Discriminatory Alternatives
Plaintiff can still prevail by showing that the defendant’s valid interest could be served by a different practice with a less discriminatory effect
[1] See, e.g., 42 U.S.C. § 2000d (Title VI of the Civil Rights Act of 1964); 42 U.S.C. § 2000e-2(a) (Title VII of the Civil Rights Act of 1964); 29 U.S.C. § 623(a) (Age Discrimination and Employment Act, 1967); 42 U.S.C. § 3604 (Fair Housing Act, 1968); 20 U.S.C. § 1681 (Title IX of the Educational Amendments of 1972); 29 U.S.C. § 794 (Section 504 of the Rehabilitation Act of 1973).
[2] The text of several of these statutes strongly suggested they should be read to prohibit unjustified discriminatory effects. For example, Title VII forbade employers to “limit, segregate, or classify” employees “in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee” based on race, color, religion, sex, or national origin. 42 U.S.C. § 2000e-2(a)(2). The Age Discrimination and Employment Act contained the same textual prohibition based on age. 29 U.S.C. § 623(a)(2). The Voting Rights Act originally outlawed the application of procedures to “deny or abridge” the right to vote on account of race or color. Pub. L. No. 94-73 (amended in 1982 to prohibit the application of procedures “in a manner which results in a denial or abridgement,” 52 U.S.C. § 10301). The Fair Housing Act made it unlawful to “make” housing “unavailable” based on race, color, religion, and national origin, and later sex, disability, and familial status. 42 U.S.C. § 3604(a), (f).
[3] See Olatunde C. Johnson, The Agency Roots of Disparate Impact, 49 HARV. C.R.-C.L. L. REV. 125, 127 133-34, 138-39 (2014) (arguing that agency action in the immediate wake of the Civil Rights Act’s passage “allows us to understand disparate impact not as a separate offshoot of antidiscrimination law invented by courts, but as a reasonable agency implementation choice given the potentially broad and conflicting meanings of the antidiscrimination directive of civil rights law”).
[4] 29 Fed. Reg. 16298, 16299 (Dec. 4, 1964), codified at 45 C.F.R. § 80.3(b)(2).
[5] 42 U.S.C. § 2000e-2(h).
[6] Alfred W. Blumrosen, Strangers in Paradise: Griggs v. Duke Power Co. and the Concept of Employment Discrimination, 71 MICH. L. REV. 59, 60-61, 64 (1972); Johnson, supra note 11, at 134, 140-41.
[7] 401 U.S. 424 (1971).
[8] Id. at 431.
[9] Id. at 426, 429-30 & n.6.
[10] 347 U.S. 483 (1954).
[11] Griggs, 401 U.S. at 427.
[12] Id.
[13] Id. at 432 (emphasis in the original); see also id. (“good intent or absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as ‘built-in headwinds’ for minority groups and are unrelated to measuring job capability”).
[14] Id. at 431. The Court also reviewed Title VII’s legislative history and validated the EEOC’s view that Title VII exempts only employment tests that are job-related. Id. at 433-34.
[15] Id. at 431-33.
[16] Albemarle Paper Co. v. Moody, 422 U.S. 405, 425 (1975).
[17] Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 650-51 (1989) (“a comparison . . . between the racial composition of the qualified persons in the labor market and the persons holding at-issue jobs . . . generally forms the proper basis for the initial inquiry in a disparate impact case”), superseded on other grounds by Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071 (1991); Hazelwood Sch. Dist. v. United States, 433 U.S. 299, 308 (1977) (“a proper comparison was between the racial composition of Hazelwood’s teaching staff and the racial composition of the qualified public school teacher population in the relevant labor market”).
[18] Jones v. City of Boston, 752 F.3d 38, 43-44, 46-47 & n.9 (1st Cir. 2014).
[19] Albemarle Paper Co., 422 U.S. at 425 (cleaned up).
[20] Id.
[21] See Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071, § 3(3) (1991) (listing among its purposes “to confirm statutory authority and provide statutory guidance for the adjudication of disparate impact suits under title VII”).
[22] See, e.g., Chiraag Bains, What Just Happened: The Trump Administration’s Dismissal of Voting Rights Lawsuits, Just Security (May 27, 2025) (explaining that results claims under Section 2 of the Voting Rights Act “differ from disparate impact claims in important ways,” including that “VRA plaintiffs must adduce evidence in certain enumerated categories concerning past and present discrimination”), https://www.justsecurity.org/113745/wjh-trump-dismissal-voting-rights-lawsuits.
[23] See Bains, The Legal Doctrine that Will Be Key to Preventing AI Discrimination, supra note 5.