What is ‘disparate impact’ – and why do you need to know?

Many Title VII cases rely on the theory that an employer intentionally discriminated against an employee or applicant. But there’s another viable theory that employees and applicants can raise, and it’s called disparate impact discrimination.

Under this theory, even facially nondiscriminatory policies and practices can violate the law because they have a disproportionate negative impact on a protected class, such as women.

That means even a seemingly neutral, nondiscriminatory practice or policy can lead to employer liability under Title VII.

In a recent ruling, a federal appeals court rejected a disparate impact claim in a case involving work as a firefighter.

She seeks firefighter position

The plaintiff in the case was Catherine Erdman, who applied for a job as a firefighter for the city of Madison, Wisconsin.

The city eliminated Erdman from its 2014 recruiting class after she was unable to achieve a passing score on the department’s physical abilities test. At the time, Erdman had about seven years of experience as a firefighter for another city, which named her its firefighter of the year in 2014.

A total of 499 applicants in Erdman’s class, including 28 women, took Madison’s physical abilities test. It consisted of seven elements: an equipment shuffle, a ladder event, a hose drag, a sledgehammer event, search, rescue, and pike pole.

Only four of the women successfully completed the test, and they were all hired.

Applicant alleges disparate impact

Erdman sued under Title VII, saying that the test had an unlawful disparate impact on women. In other words, she alleged that the test screened out women for no good reason.

She said Madison could have used another test to satisfy its needs. The test she suggested was licensed by the International Association of Fire Fighters and was used by many other departments.

A lower court agreed that the test had a disparate impact on women. But it also determined that the test Madison used was job-related and served legitimate city needs. It said Erdman did not show that her proposed alternative would serve the city’s needs as well as its incumbent test did.

Appeals court rules against applicant

The Seventh Circuit federal appeals court (Illinois, Indiana, Wisconsin) upheld the lower court’s ruling against Erdman.

Erdman established a preliminary case of disparate impact, the appeals court agreed.

It noted that she conceded that the test used by the city was job-related and consistent with business necessity. But she insisted that her suggested test would have less disparate impact and served the city’s legitimate needs.

The city responded that Erdman’s suggested test was not locally valid for its fire department.

The question, the appeals court explained, was whether Erdman’s suggested alternative was “substantially equally valid.”

Not enough evidence

It agreed with the lower court that Erdman did not come forth with enough evidence to show that the test she proposed would serve the Madison Fire Department’s legitimate needs, as it was her burden to do. As the district court found, she just pointed to the test she preferred and assumed it was good enough to meet the department’s needs.

She did not show that people who barely passed her suggested test would be about as qualified as those who barely passed the test Madison chose to use. Without this evidence, she could not win her disparate impact claim, the appeals court ruled.

The decision of the lower court was affirmed.

Key takeaway

Remember: Employers can defeat disparate impact claims by showing that the challenged employment practice or policy is both job-related for the position and consistent with business necessity. If the plaintiff shows there is another way to satisfy its legitimate interests without using the challenged practice or policy, then the defense is defeated.

Erdman v. City of Madison, No. 22-2433 (7th Cir. 1/22/24).