Disparate Treatment in an Age of Diversity, Equity & Inclusion

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HR professionals need to have good knowledge of discriminatory employment practices and how to avoid them. This includes intentional discrimination – disparate treatment – and unintentional subtle forms of discrimination – disparate impact. In this article, we will focus on disparate treatment and how you can make sure that you and your organization are doing your best to prevent this type of discrimination from happening.

Contents
What is disparate treatment?
Disparate treatment vs. disparate impact
Consequences of disparate treatment
How to avoid disparate treatment at your organization?

What is disparate treatment?

Disparate Treatment is intentionally discriminating against a protected class of employees. According to Title VII of the Civil Rights Act of 1964, a protected class is described as “applicants, employees and former employees who are protected from employment discrimination based on race, color, religion, sex (including pregnancy, sexual orientation, or gender identity), national origin, age (40 or older), disability and genetic information (including family medical history).”

In the aftermath of George Floyd’s public murder in May 2020 and subsequent Black Lives Matter protests, many organizations in the US were confronted with the reality of discrimination and systemic racism, and their impact on society. Then, a global outpouring of support for racial justice and an outcry against systemic discrimination followed in many other cultures worldwide.

CEOs from many Fortune 500 organizations made public statements of their abhorrence of what had happened to Mr. Floyd and their commitment to confronting and addressing discriminatory practices within their own organizations. Consequently, there was almost an immediate increase in demand for Diversity, Equity & Inclusion professionals at varying levels within organizations in every industry. It highlights the importance of cultivating a diverse, equitable, and inclusive environment to combat disparate treatment.

Suffice it to say that discrimination within organizations is an issue we can all relate to through experience or observation. Whether you live in the US or not, disparate treatment and disparate impact potentially exist in your organizations. HR professionals should use whatever leverage they may have to overcome it.

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Disparate treatment vs. disparate impact

Contrary to disparate treatment, which is an intentional behavior, disparate impact occurs when a policy, procedure, or practice, though neutral in its description, has a disproportionate impact on protected classes within an organization. It is also referred to as adverse impact.

Both these forms of discrimination in the workplace are illegal in the US and other countries.

Here is a rundown of the differences between disparate treatment and disparate impact:

Disparate Treatment vs Disparate Impact

To clarify, the table below summarizes the differences by providing examples for both types of discrimination:

Types of Discrimination Disparate Treatment Disparate Impact
Age Laying off employees over the age of 40 in favor of retaining younger employees. Ninety percent of the sales agents subjected to the hiring freeze initiative were 40 years of age or older.
Sex Refusal to accommodate pregnancy-related lifting restriction for one employee. At the same time, accommodating the restrictions of other non-pregnant employees who were injured on the job and who were similar in their ability or inability to work. Conducting strength testing as a requirement for workers to be hired for various jobs, causing an unlawful discriminatory impact on female workers seeking jobs.
Race Employees subject to a hostile work environment and different treatment based on their race/nationality. A broad criminal background check that negatively impacts a particular racial group, even though it is not a business necessity.
The examples are based on actual disparate treatment and disparate impact court cases discussed further below.

Consequences of disparate treatment

Disparate treatment is costly to organizations, as it can lead to long, expensive lawsuits. Not only it costs organizations millions of dollars, but it is also bad publicity, potentially harming the reputation of the company in question.

Another unintended consequence of disparate treatment is its impact on all the employees and the culture of the organization. Employees become demotivated and cynical towards leadership when they experience disparate treatment. The same goes for when they observe their peers subjected to such behavior.

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Suppose discriminatory practices are prevalent enough so that it is perceived to part of the organization’s culture. In that case, employees will begin in subtle and not so subtle ways to reject that culture. There will be increased anxiety about and even physical illness due to working in such an environment. In effect, anxiety and illness may lead to absenteeism, increased tardiness, and poor attention to detail.

If you fail to address and curb disparate treatment, there will also be increased employee grievances, investigations, and high turnover. These will all lead to decreased productivity, which negatively impacts a company’s bottom line. 

Disparate treatment cases

Disparate impact and disparate treatment court cases are quite common in the US. In the last ten years, the number of total charges per year filed with EEOC varied between 72,000 and nearly 100,000 cases.

The following cases are disparate treatment examples in the categories of Age, Sex and Race Discrimination.

Age Discrimination

“JPL systemically laid off employees over the age of 40 in favor of retaining younger employees. The complaint also alleges that older employees were passed over for rehire in favor of less qualified, younger employees. Such conduct violates the Age Discrimination in Employment Act (ADEA),” according to the EEOC.”

Ramifications: Jet Propulsion Laboratory had to pay $10 million to settle the EEOC age discrimination lawsuit.

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Sex Discrimination

“PruittHealth-Raleigh LLC, (PruittHealth) operates a skilled nursing and rehabilitation facility in Raleigh, N.C. Allegedly, PruittHealth subjected Dominque Codrington, a certified nursing assistant, to disparate treatment by refusing to accommodate her pregnancy-related lifting restriction, while accommodating the restrictions of other non-pregnant employees who were injured on the job and who were similar in their ability or inability to work. The EEOC alleged that PruittHealth refused to accommodate Codrington and required her to involuntarily resign in lieu of termination.

Ramifications: “PruittHealth-Raleigh, LLC paid $25,000 and provide other relief to settle a pregnancy discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC). The EEOC charged that PruittHealth violated Title VII when it denied a reasonable accommodation to a pregnant employee.”

Race Discrimination

“Koch subjected individual plaintiff/intervenors and classes of Hispanic employees and female employees to a hostile work environment and disparate treatment based on their race/national origin (Hispanic), sex (female), and further retaliated against those who engaged in protected activity. Allegedly, supervisors touched and/or made sexually suggestive comments to female Hispanic employees, hit Hispanic employees and charged many of them money for normal everyday work activities. Further, a class of Hispanic employees was subject to retaliation in the form of discharge and other adverse actions after complaining.”

Ramifications: “Koch Foods, one of the largest poultry suppliers in the world, paid $3,750,000 and furnish other relief to settle a class employment discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC). The EEOC charged the company with sexual harassment, national origin and race discrimination as well as retaliation against a class of Hispanic workers.”

Disparate impact cases

The following cases provide examples of disparate impact and the legal ramifications in the areas of Age, Sex and Race discrimination:

Age Discrimination

“Under the Age Discrimination in Employment Act (ADEA), the EEOC charged that in the year 2000 Allstate adopted a hiring moratorium for a period of one year, or while severance benefits were being received, that applied to all its employee-sales agents who were part of its ‘‘Preparing  For The Future Reorganization Program’. The program was part of Allstate’s reorganization from employee agents to what the company considered independent contractors. The EEOC alleged that the policy had a disproportionate impact on Allstate’s employees over the age of 40 because more than 90 percent of the agents subjected to the hiring moratorium were 40 years of age or older.”

Ramifications:Allstate Insurance Company, one of the nation’s largest insurers, for $4,500,000 to approximately 90 older former employees, in addition to significant remedial relief.”

Sex Discrimination

“CSXT Transportation conducted isokinetic strength testing as a requirement for workers to be hired for various jobs. The EEOC said that the strength test used by CSXT, known as the “IPCS Biodex” test, caused an unlawful discriminatory impact on female workers seeking jobs as conductors, material handler/clerks, and a number of other job categories. The EEOC also charged that CSXT used two other employment tests, a three-minute step test seeking to measure aerobic capacity and a discontinued arm endurance test, as a requirement for selection into certain jobs, and that those tests also caused an unlawful discriminatory effect on female workers.” 

Ramifications: “CSXT had to pay them $3.2 Million to settle the disparate impact sex discrimination case.” 

Race Discrimination

“Dollar General, the largest small-box discount retailer in the United States, violated federal law by denying employment to African Americans at a significantly higher rate than white applicants for failing the company’s broad criminal background check. Employment screens that have a disparate impact on the basis of race violate Title VII of the Civil Rights Act of 1964, unless an employer can show the screen is job-related and is a business necessity.” 

Ramifications: Dollar General had to pay $6 million and furnish other relief to settle a class race discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC).

How to avoid disparate treatment at your organization?

Disparate treatment is an intentional behavior that, in theory, should be easy to avoid. However, as we see from the court cases and examples above, it is not always that straightforward.

There are few practices HR professionals, with the support of organizational leadership, can implement to avoid disparate treatment claims and treat their employees equitably:

Have clear policies in place that ensure fair treatment

These policies should concern all stages of employee lifecycle – hiring, promotions, separations, and managing performance. Review and update your policies periodically and as needed.

Consult your legal team to make sure that your policies follow the local legislation

Also, consult your legal team to ensure practices align with policies and laws. This is especially important in those situations that are not clear-cut or when decisions can be disputed.

Educate your managers

Managers are directly relating to most of the employee population daily. For this reason, it is critical they understand what disparate treatment (and disparate impact) means and the potential consequences to the organizations if discriminatory claims against the organization are made. Education should begin at new employee orientation, continue through formal compliance trainings, and be reinforced through performance conversations with their supervisors.

Develop and nurture a culture of Diversity, Equity and Inclusion (DEI)

This type of culture fosters inclusive environment at work. This will minimize an employee or groups of employees from feeling like outsiders, disenfranchised, and from making discriminatory claims. According to the Society for Human Resource Management (SHRM), there are four main phases to developing a DEI initiative:

  1. Data collection and analysis to determine the need for change.
  2. Strategy design to match business objectives.
  3. Implementation of the initiative.
  4. Evaluation and continuing audit of the plan.

SHRM breaks down the four phases into the following nine steps:

These steps help you structure your process of building or rebuilding a DEI culture at your organization.

A final word

On the whole, the year 2020 represented, what seemed to be, a seismic shift towards ensuring and enforcing more diverse, equitable, and inclusive (DEI) work environments.

However, change doesn’t happen overnight.

Therefore, the DEI work that was accelerated in 2020 needs to continue at a steady pace in 2021 and the years ahead. Part of the work that needs doing is ensuring HR and organizational leadership understand what disparate treatment is (intentional discrimination); how it differs from disparate impact (unintentional discrimination); the costly consequences of discriminatory claims to the organization; and the steps organizations can take to avoid disparate treatment.

Discriminatory practices in the workplace were deemed illegal several decades ago. Yet, there are still many claims filed with the EEOC. Every year, millions of dollars are being paid to employees who suffered because of these claims.

For real change to take place, the culture of organizations must change. Leaders are responsible for creating a diverse, equitable, and inclusive culture. Unless leaders have bought into the need for this culture change and are committed to organizational transformation, a truly diverse, equitable, and inclusive work environment will continue to evade us.

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