Disparate Effect

What is Disparate Effect?

Disparate effect, also known as disparate impact, refers to a situation where an employer’s policy or practice appears neutral on its surface but results in a disproportionately negative outcome for members of a protected class, such as those defined by race, gender, age, or disability. Unlike disparate treatment, intent to discriminate is not required for a disparate effect claim.

Why Disparate Effect Matters

Under Title VII of the Civil Rights Act, affected individuals can challenge such practices by demonstrating a statistically significant adverse impact. The employer may then defend the practice by showing it is job-related and consistent with business necessity. If the employer succeeds, the plaintiff can still prevail by identifying a less discriminatory alternative that would serve the same purpose. HR teams should regularly audit hiring criteria, testing procedures, and promotion standards to identify and address potential disparate effects.