The “Disparate” Dilemma in Employment Discrimination Litigation

Transcript

Matt Camardella
Principal, Long Island

Welcome to the latest installment of the We get work® podcast. My name is Matt Camardella, and I am a principal in the Long Island office of Jackson Lewis. Joining me today is my partner and colleague, Monica Khetarpal, who is in the firm’s Chicago office. 

Today, we are going to discuss the disparate impact theory of employment discrimination and recent developments that may affect the way organizations view their risk of such claims. Monica, I have some great news to share. Employers can no longer be sued for disparate impact. Isn't that great?

Monica Khetarpal
Principal, Chicago

Well, that would be great, but not so fast, Matt. It wasn't that employers can no longer be sued. It's just that the EEOC has announced that they've declined to pursue disparate impact claims. It's a little bit different. 

Do you want to take a minute to explain what disparate impact is and why it's important?

Camardella

Happy to. Under federal anti-discrimination laws, plaintiffs can bring claims under either disparate treatment or disparate impact theory. When most people think about employment discrimination, they're really envisioning disparate treatment claims. Someone was discriminated against because of their race, sex, or any other protected characteristic. In other words, disparate treatment is intentional discrimination and requires proof of intent. If sufficiently proven, there really is no defense. We have strict liability in that case. 

On the other hand, disparate impact claims don't require a showing of intent. Rather, a disparate impact claim involves a facially neutral employment practice that has the unintended consequence of impacting one group more than another. Take, for example, a strength test required of all applicants for a warehouse position. That test may very well screen out female applicants more frequently than male applicants. Unless the employer put that test into place so that it could screen out women, then it was the unintended consequence of an otherwise facially neutral process and thus constitutes disparate impact. Even if a plaintiff can make a showing of disparate impact, typically through the use of statistical analysis, an employer can still defend against the claim by showing the employment practice is job-related and consistent with business necessity. In our example, the employer would need to demonstrate that the ability to pass the strength test is necessary to demonstrate the ability to do the job. If the employer can meet such a showing, then the resulting disparate impact is nonetheless lawful. 

Now that we know a little bit more about what disparate impact is, and we know that the EEOC will not generally pursue such claims, why do employers still need to be vigilant?

Khetarpal

Historically, the EEOC has been far from the only entity that has brought these types of lawsuits against not just employers, but also institutions, as well as public interest entities, higher education, and things like that. There are a myriad of reasons why private plaintiff attorneys would do so as well. First of all, a lot of these statutes that they're suing under involve fee shifting. There's an incentive for them to put together and file these lawsuits because there is a potential payout. We're also seeing ideological challenges. Just because the EEOC is not bringing the claims doesn't mean that organizations can't find themselves in court. 

Matt, maybe you can tell us a little bit more about how data and statistics play a role in these claims, because a lot of it really does pivot on that type of information.

Camardella 

As I mentioned before, statistics are often leveraged to make out a prima facie case of disparate impact. If we revisit our earlier example of a pre-employment strength test, we can see how this works. The plaintiff in such a case would typically obtain data from the employer through discovery on everyone who took the test and the results of those tests. The plaintiff’s counsel could then perform a fairly simple test that compares the pass rates of women and the pass rates of men. If they were able to show a sufficiently large difference in those pass rates, we would find statistically significant results that would allow for the establishment of a prima facie case. In our example, if the plaintiff could show a statistically significant difference in pass rates of men and women, then the employer would have to prove the test is job-related and consistent with business necessity, as I mentioned earlier. The process for doing that is known as validation. Validation studies are complicated, follow rigorous standards, and are typically conducted by industrial-organizational, IO, psychologists.

Monica, I'm embarrassed to say I know a few too many IO psychologists. They are wicked smart, and they know what they're doing. Now, I will also say that statistics can be used in support of a traditional disparate treatment claim to show an employer had a pattern and practice of discrimination. In other words, the employer's standard operating procedure was to intentionally discriminate. Once again, using our example, if the employer put that strength test in place, so it would not have to hire women or hire fewer women, that would be an example of a pattern or practice case. However, that's a story for another day.

Monica, we've been hearing a lot about ‘illegal DEI’ from this administration. How does what is happening there to end disparate impact claims affect this push against DEI programs?

Khetarpal

It's all really interesting to piece it all together. First of all, I'm really glad that Jackson Lewis has a team of statisticians to handle the data and the numbers because that is definitely not my forte. I am a traditional lawyer in that respect, bad at math. Even though the EEOC has said it won't ordinarily pursue these disparate impact claims, it's still going to pursue pattern and practice claims. You can see how going after pattern and practice claims also relies on data and employers’ DEI initiatives. That's all going to be interesting to the EEOC because the EEOC, under every presidential administration, has a certain agenda. As we all know, this EEOC is critical of DEI policies and practices. One thing it is expected to do is take up some cases and have some scrutiny over how those DEI policies and practices may turn into a pattern and practice type case. 

Interestingly, the law has changed a little bit on this front. There's a case called Muldrow v. City of St. Louis. Historically, in order to have any type of discrimination case, disparate impact or otherwise, an employee has to show that something bad happened to them, and that there was some sort of adverse action. That bar was pretty high in the past. Somebody had to really show that there was a material impact on their pay, their responsibilities, or something like that. With the Muldrow case, that bar lowered. What we expect to see is the EEOC and, frankly, private plaintiffs, and public interest-leaning entities are going to fund litigation to take advantage of that decision to say, listen, these employers and organizations have these DEI policies, and they benefit people based on a protected category, like race, gender, et cetera. When they benefit one group, it works to the detriment of another. They're going to use statistics to push pattern and practice cases, in the case of the EEOC, and disparate impact cases in the case of private lawsuits in court, in order to say that there is this type of negative impact on certain groups by protected category related to DEI. The Muldrow decision makes it easier for them to do that. That's how we see these concepts of DEI and the EEOC's agenda, as well as private plaintiffs pushing this further and further, and really creating a significant risk for anybody who employs people or organizations in general.

Camardella

While it's true, and as you described, Monica, that the EEOC may not pursue such a claim in many instances, an individual certainly can.

Khetarpal

That wraps up our discussion today of disparate impact claims. Thank you for tuning in today. Matt, thank you very much for joining me to talk about this issue. Stay tuned for more from Jackson Lewis' We get work® podcast.