Adverse Impact Analysis of Employment Actions
Being aware of potential disparate impact discrimination in hires, promotions, terminations, etc.
Any employment action, including hires, terminations, promotions, transfers, and special assignments, can be open for a claim of disparate impact discrimination. Under Title VII of the Civil Rights Act of 1964, disparate impact occurs when a facial neutral employment practice unfairly impacts a specific group (race, gender, etc.).
Adverse impact is a statistical concept that is generally used to mean there is a "substantially different passing rate" between two groups on a practice, procedure, or test (please see www.uniformguidelines.com for a more detailed discussion). Since the late 1970s, the U.S. courts have defined, re-defined, limited, and expanded the use of adverse impact analyses for evaluating various personnel transactions such as layoffs, hires, promotions, transfer, and (more recently) compensation.
Single Event Selection Rate Comparison is designed to compare the passing rates of each gender and ethnic group on a single practice, procedure, or test. It may also be used to compare group passing rates on an overall selection or promotion process, although an event-by-event analysis should be the primary comparison in most circumstances [the 1991 Civil Rights Act requires that a "particular employment practice" needs to be identified as the source of adverse impact for a plaintiff to establish a disparate impact case, unless the results are not capable for separation for analysis-see Section 2000e-2(k)(1)(A)(i)]. This type of analysis can be regarded as the "most typical" type of adverse impact analysis, and is specifically explained in the Uniform Guidelines as a "rates comparison" (see Section 4D) that compares the passing rates between two groups (e.g., men and women) on a practice, procedure, or test. This Program can also be used to analyze the outcome of layoffs, demotions, or other similar personnel transactions where there are only two possible outcomes (e.g., promoted / not promoted; hired / not hired, etc.).
Single Event Availability Comparison is designed for comparing one group's representation (i.e., the percentage of incumbents in a given position who belong to the gender or ethnic group) to that group's availability in the relevant labor market (using availability data from inside or outside the organization). This type of comparison is useful for determining whether a group is underutilized in a particular position, or group of positions.
This analysis should be differentiated from the "Selection Rate" comparison because (under most circumstances) a statistically significant underutilization does not automatically constitute a finding of adverse impact. The reason for this is straight-forward: a selection rate comparison directly evaluates how two groups fared on a particular employment practice, so if one group significantly outperforms the other, direct evidence is gathered regarding the impact of a particular employment practice on the group of interest. Then the attention can shift toward evaluating that particular employment practice for job relatedness (i.e., validity).
By contrast, the Availability Comparison does not (necessarily) consider the impact of one employment practice. Because the comparison is an overall evaluation that considers one group's makeup in a given position compared to their availability outside of position, it does not consider all of the practices, procedures, or tests that may have been used to select or promote individuals for that position. Further, it does not take into consideration other factors such as "job interest" or qualification levels of the at-issue group. For example, if outside availability data shows that men are statistically significantly underutilized for a group of clerical jobs, the underutilization could possibly be explained by either lack of interest on the part of men to pursue these positions, or the fact that men performed poorly on the multitude of qualification screens required for entry into the position (or likely some combination of these two factors and others). For these reasons, the Availability Comparison should be considered as a "threshold" or "initial inquiry test."
Multiple Events Selection Rate Analysis is designed for comparing the passing rates of each gender and ethnic group on several combined "events" or administrations of various practices, procedures, or tests. It may also be used to complete an overall adverse impact analysis on several jobs or groups of jobs with similar skill sets. It may also be used to compare group passing rates on an overall selection or promotion process for multiple years, although an event-by-event analysis should be the primary comparison in most circumstances [the 1991 Civil Rights Act requires that a "particular employment practice" needs to be identified as the source of adverse impact for a plaintiff to establish a disparate impact case, unless the results are not capable for separation for analysis-see Section 2000e-2(k)(1)(A)(i)].
Multiple Events Availability Comparison is designed for making availability comparisons for several different jobs (or groups of jobs) or for the same job across multiple years. This type of analysis has been applied in several EEO litigation settings such as:
- Vuyanich v. Republic National Bank (N.D. Texas 1980). 505 F. Supp. 224
- EEOC v. United Virginia Bank (615 F.2d 147 (4th Cir. 1980)
- Cooper v. University of Texas at Dallas (482 F. Supp. 187, N.D. Tex. 1979)
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Adverse Impact & Test Validation Book by Dan Biddle, Ph.D.
For more information about our EEO consulting services, please contact Biddle Consulting Group, Inc. at (800) 999-0438 or email@example.com