B. The Roots of Disparate Impact
1. The Court's First Recognition of Disparate Impact
The concept of disparate impact comes from employment discrimination law. In 1971, the landmark Supreme Court opinion Griggs v. Duke Power Co. interpreted Title VII of the 1964 Civil Rights Act to include a discriminatory effect standard.
In Griggs, a group of African-American employees in North Carolina brought suit against their employer, Duke Power Company, claiming that their employment practices violated the Civil Rights Act.
Prior to the 1964 Civil Rights Act, Duke had a policy of relegating African-American employees to a single department, Labor, where the highest-paying jobs paid less than the lowest-paying jobs in any of the other white departments. But after the Civil Rights Act passed, Duke changed its race-based employment assignments to a policy of requiring either a high school diploma or passing a standardized general intelligence test to either be employed in, or transferred to, certain jobs, primarily ones with higher wages.
Plaintiffs argued that degree and testing requirements disproportionately affected African-Americans because they were less likely than whites to have diplomas or pass the intelligence test. In 1960 in North Carolina, thirty-four percent of white males completed high school, compared to only twelve percent of African-American males. Further, fifty-eight percent of whites passed Duke's standardized intelligence tests, compared to only six percent of African-Americans.
Plaintiffs also argued that degree and testing requirements did not relate to job performance because the percentage of white employees promoted without high school diplomas was nearly the same as the percentage of non-graduates in the entire white work force. In other words, high school graduates were no more likely than non-graduates to be promoted.
Duke, on the other hand, argued that they lacked intent to discriminate against African-American employees, and that section 703(h) of the Civil Rights Act provided for a right to condition promotions or transfers on passing certain tests.
The Court in Griggs sided with plaintiffs, holding that Congress directed the thrust of the Act to the consequences of employment practices, not simply the motivation. Accordingly, Duke's intention for implementing testing requirements was not a dispositive factor for proving or disproving employment discrimination. Instead, what mattered was the impact caused by the testing requirements.
The Court reasoned that Congress did not intend to prohibit testing or measuring procedures, as long as they are a reasonable measure of job performance and measure the person for the job and not the person in the abstract. Since the diploma and testing requirements were not significantly related to successful job performance and disqualified African-Americans at a substantially higher rate than white applicants, Duke's policy was held to be discriminatory in violation of Title VII of the Civil Rights Act.
2. Codification of Disparate Impact in Employment Discrimination Law
The burden of proof in Title VII disparate impact cases was discussed by the Court in 1989 in Wards Cove Packing Co. v. Atonio and codified in an amendment to the Civil Rights Act in 1991. Under the current statute, an unlawful employment practice based on disparate impact may be established in only one of two ways: (1) the complainant demonstrates that an employment practice causes a disparate impact and the employer fails to show that its practice is job-related and consistent with business necessity; or (2) if the employer refused to adopt an alternative employment practice that complainant demonstrated (in accordance with pre-Wards Cove law) is less discriminatory.