Disparate Effect
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Tiffany ClarkAbout the Author
Tiffany is an experienced workforce development expert with extensive experience in the public sector, course development, and online learning.
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Last Modified
Apr 17, 2024
Disparate Effect
A disparate effect occurs when an employment practice or policy has an adverse impact, with the result often being discriminatory or exclusionary. The terms disparate impact, adverse impact, and disparate effect were first used in a Supreme Court case (for example, Griggs v. Duke Power Co, 1971) following the passage of Title VII of the Civil Rights Act of 1964, which makes it illegal for employers to use ambiguously neutral selection procedures or tests that disproportionately excludes applicants based on race, religion, color, sex (including gender identity and pregnancy), gender, sexual orientation, or national origin.
The Americans with Disabilities Act of 1990 (ADA) and the Age Discrimination in Employment Act of 1967 (ADEA) also prohibit the use of discriminatory selection procedures and employment tests that can result in a disparate effect.
If a legal review of disparate treatment or effect claims shows that an employer made decisions about hiring, termination, advancement, or compensation based on discriminatory practices, the company may face fines and penalties or be found otherwise illegally liable.
Example:
In 2015, Target Corporation was sued by the Equal Employment Opportunity Commission (EEOC) because it was determined that their pre-employment assessments had a disparate effect based on sex, race, and disability. The company was forced to pay $2.8 million to resolve the discrimination finding.
Related Terms
Adverse Impact
is a term that is sometimes used interchangeably with “disparate impact.” Adverse impact refers to the discriminatory effect on protected groups when biased hiring selection or promotion processes are used. With adverse impact, qualified members of minority groups are often underrepresented in a company’s workforce.
Disparate Treatment
is intentionally unfair treatment of employees or candidates who belong to legally protected minority groups. If a person feels that they have been discriminated against because of their race, sexuality, or gender, they can claim disparate treatment.
Affinity Bias
is a term that refers to the unconscious bias that exists when a person is naturally inclined to favor someone who shares things in common with them. In some cases, affinity bias can lead to favoritism.
Disparate Impact
refers to policies, practices, or procedures that appear neutral but may negatively impact a legally protected group. In some cases, disparate impact is unintentional but nonetheless harmful.