1. Chapter 4 Unintentional Discrimination: Disparate Impact Spring 2009
Employment Regulation in the Workplace: Basic Compliance for Managers by Robinson, Franklin, and Wayland
Chapter 4
Unintentional Discrimination: Disparate Impact
Spring 2009

2. Answers to Wonderlich Question Answer Question Answer 1 3 15 0.31 e
Yes F ,5 $

3. Answers to Wonderlich Question Answer Question Answer 29 3 41 1 , $
$8.40 % ,7
$320
,3,4

4. Griggs v. Duke Power Company
Griggs v. Duke Power Company 401 U.S. 424 (1971)
Five operating departments:
(1) Labor
(2) Coal Handling
(3) Operations
(4) Maintenance, and
(5) Laboratory and Testing

5. Griggs v. Duke Power Company
Facially Neutral Selection Criteria:
High school diploma or a GED.
Two aptitude tests.
Wonderlich Personnel Test.
Bennett Mechanical Comprehension Tests.

6. Griggs v. Duke Power Company
High school diploma or a GED.
1960 North Carolina census, 34% of white males had completed high school, compared to only 12% of black males
Two aptitude tests.
White candidates, 58% would pass.
Black candidates, 6% would pass.

7. Griggs v. Duke Power Company
Even though the same standards were administered to all applicants, the standards excluded a disproportionate number of blacks from favorable consideration.
The Major Problem: The requirements were not necessary to perform two of the job categories: the coal handling and maintenance jobs.

8. Griggs v. Duke Power Company
Employees who had not completed high school or had not taken the test (employees who had been hired before the new standards were implemented in 1965) had performed satisfactorily in the jobs which now required GED and passing test scores.

9. Disparate Impact Disparate Impact (unintentional discrimination)
A facially neutral selection criterion has the effect of disqualifying a disproportionate number of protected class members.
This is usually demonstrated by a manifest statistical imbalance.

10. Disparate Impact Prima Facie Case:
(1) Identify a specific employment practice.
(2) Offer reliable statistical evidence the the practice causes the exclusion of sufficiently substantial number of applicants because of their membership in a protected group.
(Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 657, (1989))

11. Employment Practices with Potential Disparate Impact
Height Requirements
Weight Requirements
Education Requirements
Physical Agility Requirements
Cognitive Ability Tests
Language Requirements
Arrest Records
Conviction Record
Marital Status
Credit Reports

12. Methods for Establishing Statistical Imbalances
Two or three standard deviations.
Standard deviations are a measurement of the probability that a result is a random deviation from the predicted result.
A 95% confidence interval.
Four-Fifths Rule.

13. A 95% Confidence Interval
A confidence interval gives an estimated range of values which is likely to include an unknown population parameter, the estimated range being calculated from a given set of sample data.

14. Four-Fifths Rule
The EEOC & OFCCP have adopted a rule of thumb under which they will generally consider a selection rate for any race, sex, or ethnic group which is less than four-fifths (4/5ths) or eighty percent (80%) of the selection rate for the group with the highest selection rate as a substantially different rate of selection.
(Source: 44 Fed. Reg. 11,996).

15. Four-Fifths Rule Selection rate Selection rate
of the protected < of the group
class with the highest
rate

16. Four-Fifths Rule
For example, if the hiring rate for Whites [other than Hispanic] is 60%, for American Indians 45%, for Hispanics 48%, and for Blacks 51%, and each of these groups constitutes more than 2% of the labor force in the relevant labor area, a comparison should be made of the selection rate for each group with that of the highest group (whites).
These comparisons show the following impact ratios:
American Indians 45/60 or .75
Hispanics 48/60 or .80
Blacks 51/60 or .85
Source: 44 Fed. Reg. 11,996 (Mar. 2, 1979).

17. Four-Fifths Rule
Should adverse impact determinations be made for all groups regardless of their size?
Answer: No. Section 15A(2) calls for annual adverse impact determinations to be made for each group which constitutes either 2% or more of the total labor force in the relevant labor area, or 2% of more of the applicable workforce.
For hiring, such determination should also be made for groups which constitute more than 2% of the applicants; and for promotions, determinations should also be made for those groups which constitute at least 2% of the user's workforce.
Note that there are record keeping obligations for all groups, even those which are less than 2%.
Source: 44 Fed. Reg. 11,996 (Mar. 2, 1979).

18. Four-Fifths Rule 102 181 .06 < .8 (.58) < .8 .06 < .48
Griggs v. Duke Power Co. Of the 181 White applicants, taking the Wonderlich test, 105 pass. Of the 102 Black applicants , 6 passed.
.06 < .8 (.58)
.06 < .48
< .8
or .06/.58 = .103 which is less than .8

19. Test of Significance and Four-Fifths Rule
Q: Is it usually necessary to calculate the statistical significance of differences in selection rates when investigating the existence of adverse impact?
A: No. Adverse impact is normally indicated when one selection rate is less than 80% of the other. The federal enforcement agencies normally will use only the 80% (4/5ths) rule of thumb, except where large numbers of selections are made.
Source: Equal Employment Opportunity Commission, Uniform Employee Selection Guidelines Interpretation and Clarification (Questions and Answers).

20. Standard Deviation Rule
σx =
(ρ) (1- ρ) n
Where:
p = proportion of one group
N = the number selected
pn = expected value (representation)
μx ± 2σx = the confidence interval

21. Standard Deviation Rule
Total Other
Applicants
Total PG
Applicants
Sx =
Total
Applicants
Selected X X
Total
Applicants
Total
Applicants

22. Standard Deviation Rule
Of the 181 White applicants, taking the Wonderlich test, 105 pass. Of the 102 Black applicants , 6 passed.
Sx =
102
181 X
111 X
283
283

23. Standard Deviation Rule
Of the 181 White applicants, taking the Wonderlich test, 105 pass. Of the 102 Black applicants , 6 passed.
Sx =
102
181
Total applicants who
passed X
111 X
283
283 =
.36 X X 111
% of test takers who were black =
25.57 =

24. Standard Deviation Rule
If the black applicants (102) were selected at the same proportion that they were represented in the test-taking (a total of 283 applicants), we would expect 40 Blacks to have been hired.
Blacks were 36% of those taking the test
(102/283) from which 111 total applicants passed.
Hence: 111 X .36 = 40 [expected representation]

25. Standard Deviation Rule
At + 3 Sx we would expect the selection of blacks to fall within a range of 25 to (5.057 X 3).
Selecting only 6 falls more than six Sx (6.72) from the expected representation. 6 25 40 55
-6sx
-3sx
+3sx

26. Applicants with High School Diplomas - Race
Blacks Whites Total
Applied Passed Applied Passed Applied Passed
Male
Female
Total
(.348)
(.621)
.348 < .8(.621)
.348 < .497
or .348/.621 = .56 which is less than .8
Yes, Disparate Impact

27. Applicants with High School Diplomas - Sex
Blacks Whites Total
Applied Passed Applied Passed Applied Passed
Male
Female
Total
(.461)
(.594)
.594 < .8(.461) [Females have the highest rate]
.594 < .369
or .594/.461 = 1.29 which is greater than than .8
No Disparate Impact

28. Applicants Passing Dexterity Test
Blacks Whites Total
Applied Passed Applied Passed Applied Passed
Male
Female
Total
(.96)
(.92)
. 96 < .8 (. 92 )
[note blacks had the highest passing rate]
.96 < .768
or .96/.92 = 1.04 which is greater than .8
No Disparate Impact

29. Hired-After 2nd Test Blacks Whites Total
Applied Passed Applied Passed Applied Passed
Male
Female
Total
(1.0)
(.692)
Note: 100% of Blacks were passing both tests were hired
This is compared to 69.2% of whites passing both.

30. Bottom Line Statistics
Blacks Whites Total
Applied Hired Applied Hired Applied Hired
Male
Female
Total
(.335) (.396)
.335 < .8(.396)
.335 < .316
or .335/.396 = .846 which is greater than .8

31. Practice Problem Blacks Whites Total
Applied Passed Applied Passed Applied Passed
Male
Female
Total
Analyze using both the Four-Fifths Rule and Three Standard
Deviation Rule for Race and Gender

32. Disparate Impact
Employer’s Rebuttal: The criterion creating the imbalance is a business necessity (job-related).

33. Challenging Statistics
Relevant labor market:
For statistical evidence to be probative, the statistical pool or sample used must logically be related to the employment decision at issue and the statistical method applied to the pool or sample must be meaningful and suitable under the facts and circumstances of the case.
(Hazelwood School Dist. v. U.S., 433 U.S. 299, 308, (1977))

34. Challenging Statistics
Sample Size: the sample size may be too small and thus the selection or rejection of a single individual would substantially affect proportional outcomes.
(29 C.F.R. § D)

35. Challenging Statistics
Sample Size
The general convention suggests that correlational studies require at least 30 subjects.
In statistical analysis, the larger the sample size, the greater the degree of precision. The smaller the size, the greater the probability of random error.

36. Challenging Statistics
Countervailing Statistics:
Stock Analysis* (a measure of representativeness):
Employers may choose to show that their internal workforce has more protected class members than one would expect in the relevant external labor market or:
Proportion of Protected Class in Proportion of Protected
Employer’s Internal Workforce Class in the Relevant Labor Market
* The basis for utilization analysis in chapter 6
>

37. Challenging Statistics
Stock Analysis
An employer has the following relevant labor market for laborers: 116,000 individuals of whom 13,950 are African-Americans, 10,000 are Hispanic, 2500 are of Asian ancestry and the remainder are nonHispanic white (89,580).
Proportional estimates relevant labor market: 77.2% white, 12% Black, 8.6% Hispanic, and 2.2% Asian.

38. Challenging Statistics
Employees holding positions classed as laborers in the employer’s workforce are as follows:
5400 total current employees in the classification.
950 are Black.
390 are Hispanic
65 are Asian
3995 are White

39. Challenging Statistics
Employer’s workforce:
5400 current employees.
.176 or 17.6% are Black.
.072 or 7.2% are Hispanic
.012 or 1.2% are Asian
.74 or 74.0% are White

40. Challenging Statistics
Comparison of relevant labor market to employer’s workforce:
Black < .12 or .176/.12 = 1.467
Hispanic .072 < .086 or .072/.086 = .837
Asian < .022 or .012/.022 = .545
White < or .74/.772 = .959