Disparate Impact Liability Targeted Anew in DEI Legal Battle
Do you know that discrimination can happen unintentionally? When it comes to fair lending, regulators identify three primary types of discrimination: overt discrimination, disparate treatment, and disparate impact.
Disparate impact news spread as President Trump directed federal agencies to end government “diversity, equity, and inclusion” initiatives. Hence, fight them in the private sector on the second day of his presidency. The order carries out his pledge to eliminate the incorporation of race and sex into every organisation of the US. Thus, create a merit-based, color blind society. Disparate effect lending has emerged as an important debate on DEI initiatives, which have come under legal attention in recent years. Notably, legal challenges to plenty of DEI practices have gained confidence since the Supreme Court’s 2023 decision against supporting action in college admissions.
Since the decision, conservative organisations have launched a flurry of lawsuits. Furthermore aiming to destroy diversity, equity, and inclusion (DEI) practices in American workplaces. 68 cases challenging DEI have been launched in the year since the Supreme Court’s affirmative action ruling.
DEI: What is it?
DEI involves a huge range of variables, including gender, ethnicity, and others.
- Diversity refers to measures like hiring and promotion practices that try to diversify a workforce.
- Equity refers to following equity in a current workforce, such as employee benefits or mentorship access.
- Inclusion refers to workplace culture, which includes fostering an atmosphere where workers feel like they belong.
Navigating Disparate treatment Vs Disparate impact
Disparate treatment and disparate impact both are linked to discriminatory actions. While disparate treatment is deliberate, disparate impact is frequently referred to as unintentional discrimination.
Disparate Impact
When neutral policies and regulations have a disparate impact on a protected group, this is known as disparate impact. Disparate impact would include testing every candidate and then unintentionally excluding a disproportionate number of minority applications.
Disparate Treatment
Intentional discrimination in the workplace is known as “disparate treatment.” Disparate treatment might be, for instance, testing a specific ability on only a subset of minority applicants.
Disparate Impact Theory
As per the disparate impact news, the user does not have to prove disparate impact. While in order to file a lawsuit under the disparate effect theory. Established in Title VII of the 1964 Civil Rights Act and upheld by the Supreme Court in its 1971 Griggs v. Duke Power Co. ruling.
According to Joshua Thompson, director of opportunity and equality litigation, “everything is going to have a disparate impact on some protected class, so the primary issue with disparate impact lending is that it involves everything.”
According to him, employers may be held liable if they “proactively consider race first”. They make choices based on racism or whatever particular class they’re trying to avoid.” “Intentional discrimination cannot be required to correct unintentional discrimination.”
Disparate Impact: A New Legal Battle
Seeking Justice
Defenders of the theory, including civil rights advocates, have a different perspective. According to Olatunde C.A. Johnson, a professor of anti-discrimination law at Columbia Law School, the theory forces companies to eliminate different ethnicity employment barriers that don’t have a valid economic purpose.
Workers “don’t usually have strong evidence to show intentional bias,” according to Johnson, which is why the majority of employment discrimination lawsuits start with a disparate impact claim. It goes without saying that reducing it would make it harder for employees to file cases.
Employment law experts stated that the requirements for demonstrating a pattern of bias—the three-step burden-shifting framework and the requirement for substantial statistical analysis—are major obstacles to upholding a disparate impact claim, even if claimants do not have to demonstrate malicious intent.
Freedom for Execution
The requirement for congressional approval for any attempt to overrule the opinion may prove to be a hurdle for those who support such an activity.
However, as suggested by his conservative fellows, notably defenders of the Project 2025 announcement. That calls for its complete elimination, the Trump administration may still decide to restrict its use.
Jonathan Berry, a managing partner at Boyden Grey PLLC and a DOJ graduate, stated that without it, the US Justice Department would probably only investigate cases where there is obvious evidence of deliberate bias.
A Case Study from Title VII’S Disparate Impact News
One of the main points raised by opponents is that the equal protection clause of the US Constitution. Which was intended to address intentional bias, is compromised by Title VII’s disparate impact clause.
Acknowledging with this position was then-Justice Antonin Scalia, who cautioned of the impending “evil day” when the justices will have to decide whether the concept violates the right to equal protection in the high court Ricci v. DeStefano ruling. It was joined by Justices Samuel Alito and Clarence Thomas.
In order to prevent a disparate impact on Black and Latino participants, the City of New Haven, Connecticut, decided to reject the results of fireman promotional tests, which concerned Ricci. The conservative majority on the high court determined that this was illegal bias against the White candidates who qualified the examinations.
Pending Cases
As per the disparate impact news, conservatives have cited the concurrence in later decisions involving the concept, such as those involving non-workplace bias.
A Trump-appointed federal judge’s denial on January 17 of the Biden DOJ’s $750,000 agreement order to settle racial bias allegations against the Cobb County Fire Department in Atlanta, Georgia, was one of the most recent legal barbs.
According to recent disparate impact news, DEI involves an extensive range of policies and practices aiming to create work environments based on equality. One of the primary duties of law enforcement organisations is to ensure equitable disparate impact lending practices. Institutions should encourage disparate lending for all applicants. While responsibly achieving their business goals by realising the significance of disparate impact news and taking proactive steps to reduce related risks. Adopting diversity in disparate lending procedures boost the general reliability of the financial system while also promoting trust and goodwill in local communities. However, conservatives who oppose DEI believe that now is the perfect time to remove DEI from American workplaces.
