Disparate Treatment

What Is Disparate Treatment?

Disparate treatment refers to when an employer treats a specific job applicant or employee differently than others on the basis of their demographics. For example, they may treat their female colleagues differently than male colleagues, or behave differently around individuals of a different race. To ensure employers don’t act with discriminatory intent against an applicant or employee, disparate treatment is illegal in the workplace.

Such actions may include:

• Refusal to hire
• Refusal of promotion
• Reason for termination
• Establishment of nonpermissible company policies that are unrelated to Bona Fide Occupational Qualification (BFOQ)
• Other adverse job actions

If an employer acts with disparate treatment, even if discrimination was not the sole motivating factor, they may be held liable in a court of law.

Disparate Treatment Examples

Disparate treatment can occur in any type of workforce and can range from moderate to severe. Some of the most common types of disparate treatment claims include failure to hire, poor employment conditions, and termination.

For example, a settlement was reached between the game development company Activision Blizzard after several women had been subjected to sexual harassment or pregnancy discrimination. When the women spoke up about the discrimination they faced, they lost their jobs.
In 2022, the US District Court for the Central District of California approved and entered a consent decree between Activision Blizzard, Inc. and the US Equal Employment Opportunity Commission (EEOC), which included $18 million in monetary and injunctive relief.

Another recent example occurred in 2022 when a Texas company was ordered to pay ten employees a staggering $70 million for employee discrimination. The case, Yarbrough, et al. vs. Glow Networks, Inc., was filed by numerous Black employees who alleged they faced continuous racial discrimination at work, including being passed over for promotions, unequal pay, and a hostile work environment.

The jury awarded each plaintiff $3 million in emotional distress damages and $4 million in punitive damages after finding the company subjected employees to unlawful discrimination and retaliation within the workplace.

What Is Disparate Impact?

Disparate impact refers to when practices, policies, or rules that seem to be neutral result in a disproportionate impact on a protected group. For example, testing job applicants and using those results from the tests may unintentionally eliminate applicants from underrepresented groups, and would be considered disparate impact.

The key difference between disparate impact and disparate treatment is that disparate treatment is intentional discrimination, while disparate impact is unintentional. Employers who only test certain applicants from underrepresented groups for a particular skill would be an example of disparate treatment. If all applicants are tested, but the test may not favor underrepresented groups, the situation has a disparate impact.

Disparate Impact Examples

The first disparate impact case in the US occurred in 1965. After Title VII of the Civil Rights Act went into effect in 1964, companies were required to stop openly discriminating against African American employees. Prior to Title VII becoming law, the Duke Power Company in North Carolina only allowed African American employees to work in lower-paying labor positions.

After Title VII became law, the company dropped the segregation but created a requirement that “applicants for hire or transfer to any but the labor department had to have a high school diploma or receive a satisfactory score on two IQ tests.” More than a dozen African American employees sued the company, citing discrimination to which the Supreme Court agreed.

Since then, the government has continued to enforce laws to prevent employers from creating rules or policies that negatively impact a protected class. These include:

• Tests
• Physical requirements, such as lifting, standing, stamina, or strength
• Interview impressions
• Job performance
• Degree requirements

For example, a construction company cannot require applicants to complete a strength test before hiring as these tests unintentionally favor men over women.

What Is Differential Treatment?

Differential treatment refers to an employer treating groups of employees differently than others due to characteristics they are unable to change. For example, if an employer only hires applicants from a certain race or withholds promotions from older employees, differential treatment is occurring and results in unlawful discrimination.

Disparate Treatment vs. Disparate Impact: What's the Difference?

The main difference between disparate impact (also called disparate effect) and disparate treatment is whether or not an employer intentionally discriminates against a group of people. While disparate treatment is intentional, disparate impact is unintentional discrimination through specific procedures or policies.

If an organization’s policies, practices, or procedures effectively and negatively impact members of a protected class based on race, color, religion, etc., it is considered disparate impact. However, if the policies, practices, and procedures were set in place to intentionally discriminate against members of a protected group, it is disparate treatment.

For example, disparate impact would occur if all applicants for a certain position were required to take pre-hire assessment tests that eliminate women from further consideration based on the results. Disparate treatment would occur if the employer only required women to take the test.

Another example of disparate treatment would be running an annual background check on only Mexican-American employees. Disparate impact would be running an annual background check on all employees, but the results show that most employees with a new criminal conviction are Mexican-American employees.

What Does Discrimination Mean?

According to the US Equal Employment Opportunity Commission, to discriminate against someone is to “treat that person differently, or less favorably, for some reason.” This could be due to someone’s race, skin color, sex (including pregnancy, gender identity, and sexual orientation), disability, age, national origin, or genetic information.

Overt Discrimination

Overt discrimination is when a financial lender openly discriminates on a prohibited basis. For example, it's considered discriminatory if a lender limits credit loans to $500 for people under 25 but offers $1,500 for those over 25.

Discrimination Example

In 1989, the Supreme Court recognized that discrimination based on sex stereotypes, meaning assumptions or expectations about how a person of a certain gender should dress or behave, is considered sex discrimination. The ruling came after Ann Hopkins was denied a promotion by Price Waterhouse due to other partners at her firm feeling she was not feminine enough. She was told that she needed to “walk more femininely, talk more femininely, and dress more femininely” before she would be considered for a partnership.

Furthermore, the court ruled that “in the context of sex stereotyping, an employer who acts on the basis of a belief that a woman cannot be aggressive, or that she must not be, has acted on the basis of gender.” They explained further that sex discrimination “strikes at the entire spectrum of disparate treatment of men and women resulting from sex stereotypes.”

How Is Disparate Treatment Discrimination Legally Proven?

Both disparate treatment and disparate impact are considered illegal discrimination unless an employer can prove the policies, procedures, and practices are necessary and related directly to the job position. All applicants and employees have the legal right to claim discrimination against an employer.

To prove disparate treatment, the following must apply:

• An applicant/employee must be a member of a protected class.
• At the time of the act, the employer had to know the applicant/employee is a member of the protected class.
• The employer took negative action against the applicant/employee (unfair performance review, refused a bonus, etc.).
• Others who were not a member of a protected class were treated more favorably than the applicant/employee.

To prove disparate impact, the following must apply:

• A specific employment practice caused an applicant/employee to be treated worse than those outside the protected class.
• The employer does not have a legitimate business purpose for the specific employment practice.
• The employer can achieve the same business goal without discriminating against a particular protected class.

What Is a Protected Class?

A protected class is a group of individuals living in the US who are legally protected by Title VII of the Civil Rights Act of 1964 from employment discrimination based on:

• Race
• Color
• National origin
• Religion
• Sex, gender, or sexual orientation

Other federal laws for protected classes are:

• The Equal Pay Act of 1963 prohibits discrimination in compensation based on sex.
• The Age Discrimination in Employment Act of 1967 prohibits discrimination of applicants/employees who are >40 years old.
• The Uniformed Services Employment and Reemployment Rights Act prohibits the discrimination of past and present applicants/members of the uniformed services.
• The Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) prohibits discrimination against veterans.
• The Pregnancy Discrimination Act (PDA) prohibits discrimination based on pregnancy or pregnancy-related temporary disability.
• The Americans with Disabilities Act (ADA) prohibits discrimination against individuals who have a physical or mental disability.
• Title II of the Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits genetic information (i.e., personal or family medical history) from being used to discriminate in employment.

Note: Some state and local laws also protect applicants/employees from employment discrimination based on other personal traits.