Why Disparate Impact Still Matters

As the EEOC signals a reduced focus on disparate impact cases, some employers may wonder if it's time to deprioritize their own adverse impact analysis. But that could be a costly mistake.

Even if the agency steps back from enforcement in this area, the courts and private plaintiffs have not. Disparate impact remains a legally recognized form of employment discrimination, and failing to evaluate your processes could expose your organization to risk.

Here’s what employers need to understand, and why it’s smart to keep your testing and documentation practices firmly in place.

Disparate Impact 101: What It Is and Why It Matters

Disparate impact occurs when a seemingly neutral policy or practice disproportionately affects members of a legally protected group, even if there’s no discriminatory intent. Common examples include:

• Minimum education or experience requirements

• Layoff or reduction-in-force procedures

• Use of artificial intelligence in resume screening

Even if these practices apply equally to all candidates, they can still be legally challenged if they result in adverse outcomes for certain groups.

EEOC May Step Back - But the Law Hasn’t Changed

While recent reports suggest the EEOC may de-prioritize enforcement of disparate impact claims, this doesn’t mean employers are in the clear.

Disparate impact remains actionable under Title VII of the Civil Rights Act. And in many cases, courts are still siding with plaintiffs, especially when there’s statistical evidence of harm and no clear business necessity for the practice in question.

What’s more, some state and local jurisdictions have their own rules that mirror or expand upon federal protections. Ignoring disparate impact could create compliance gaps you didn’t see coming.

Stay Proactive: What Employers Should Do

Now is not the time to let go of your compliance safeguards. Instead:

• Continue to monitor selection procedures for potential adverse impact, especially in hiring, promotion, and layoffs

• Use validated assessments where possible, and document the business necessity of selection tools

• Review how AI tools are deployed in recruiting and screening - and confirm they’re not introducing bias

• Audit outcomes regularly and look for patterns by race, gender, age, and other protected categories

• Train HR and hiring managers on what disparate impact is and how to spot it

Courts Are Watching - and So Should You

If a claim arises, your best defense is documentation. Show that you've identified risks, taken corrective action when needed, and grounded your decisions in legitimate business needs.