Disparate Impact Discrimination: What California Business Owners Must Know
Introduction
California law prohibits not only intentional discrimination, but also workplace policies or practices that seem neutral but disproportionately harm a protected group. This concept, known as “disparate impact,” is central to the Fair Employment and Housing Act (FEHA) and puts a spotlight on how business practices affect all employees—even without intent to discriminate (Cal. Gov’t Code § 12940(a)).
What Is Disparate Impact?
Disparate impact discrimination occurs when a company’s policy, selection procedure, or other employment practice—though unbiased on its face—results in a negative, disproportionate effect on members of a protected group such as racial minorities, women, older workers, or those with disabilities (Guz v. Bechtel National, Inc., 24 Cal.4th 317, 354 n.20 (Cal. 2000)).
What Plaintiffs Must Prove
To establish a prima facie case of disparate impact under FEHA, an employee or applicant must prove:
The employer or organization is covered by FEHA (Cal. Gov’t Code § 12940(a); Cal. Gov’t Code § 12926(d)).
They are an employee, applicant, or otherwise in a covered relationship with the employer.
The employer maintained an employment practice or selection policy that caused a disproportionate adverse effect on a protected group (Jumaane v. City of Los Angeles, 241 Cal.App.4th 1390, 1405 (Cal. Ct. App. 2015)).
The plaintiff is a member of (or associated with) the adversely affected group.
The plaintiff was harmed.
The employment practice or selection policy was a substantial factor in causing that harm.
To be valid, these claims must be proven with reliable statistics showing substantial disparities caused by the challenged policy (Jumaane, 241 Cal.App.4th at 1405).
How These Cases Work
After the plaintiff establishes disparate impact, the employer must justify the practice as job-related and consistent with business necessity (Cal. Code Regs., tit. 2, § 11010(b); City and County of San Francisco v. Fair Employment and Housing Com., 191 Cal.App.3d 976, 985 (Cal. Ct. App. 1987)).
Even if the employer offers a legitimate business justification, the employee can still win if a less discriminatory alternative exists and the employer refuses to adopt it (42 U.S.C. § 2000e-2(k)(1)(A)).
Examples of Disparate Impact
Job requirements that need a high school diploma where not truly necessary, but that systematically screen out minority applicants.
Height or weight requirements that are not essential for the role and that disproportionately exclude women.
Neutral policies, such as rigid attendance rules, that may disproportionately impact employees with certain disabilities or caretaking responsibilities.
Compliance Tips for Employers
Regularly review all employment practices and policies (hiring, promotion, discipline, layoffs) for possible hidden biases.
Rely on valid, job-related criteria backed by business necessity—document the reasons and necessity for every requirement.
Analyze workforce data to detect and address any adverse impact on protected groups.
Be flexible: Consider and, where feasible, implement alternative practices with less discriminatory impact.
Consult legal counsel (e.g., myself) for statistical analysis and risk assessment of potentially problematic policies.
Bottom Line
Disparate impact discrimination can trigger serious legal and financial consequences—even without proof of intent. California employers must carefully audit policies to ensure that facially neutral rules and processes do not result in unjustified barriers for protected groups. Preventive action, ongoing review, and business necessity documentation are the best defenses.
Citations:
Cal. Gov’t Code § 12940(a); Cal. Gov’t Code § 12926(d); Jumaane v. City of Los Angeles, 241 Cal.App.4th 1390, 1405 (Cal. Ct. App. 2015); Guz v. Bechtel National, Inc., 24 Cal.4th 317, 354 n.20 (Cal. 2000); City and County of San Francisco v. Fair Employment and Housing Com., 191 Cal.App.3d 976, 985 (Cal. Ct. App. 1987); Cal. Code Regs., tit. 2, § 11010(b); 42 U.S.C. § 2000e-2(k)(1)(A); CACI No. 2502.
