Adverse, or disparate, impact focuses on discriminatory consequences, rather than discriminatory intent. Discrimination in employment can result from neutral employment practices that are applied to all employees or applicants, but that in fact disproportionately exclude some protected groups. Adverse impact occurs when there is a significantly disadvantaged rate of selection for minorities or females as a result of any employment activity – hiring, promotion, transfer, or termination.
In a landmark case, the U.S. Supreme Court issued a unanimous ruling in Griggs v. Duke Power Co., 401 U. S. 424 (1971) that established a “disparate impact” framework for employers to follow. The Supreme Court held that Title VII of the Civil Rights Act of 1964 prohibits not only overt discrimination, but also practices that seem fair but, in reality, discriminate. The criterion is business necessity. If an employment practice excludes African Americans, for example, and isn't related to job performance, the practice is prohibited.
The Griggs v. Duke Power Co. case examined the company’s employment tests. Statistical evidence showed that a lot more African Americans than whites failed the test and lost out on employment. Since the employer couldn't prove the tests related to business necessity, the Supreme Court held that the testing was unlawful. The practice was discriminatory, even though everyone agreed that the employer didn’t mean to discriminate by using the tests.
