What is a Disparate Impact Employment Discrimination Claim?

On September 22, 2021, the 7th Circuit affirmed an order of summary judgment in a Title VII disparate impact employment discrimination lawsuit filed by the Chicago Teachers Union (“CTU”) against the Board of Education of the City of Chicago (“Board”), in which the CTU alleged that 2011 mass layoffs disparately impacted African-American teachers. Chicago Teachers Union, et al. v. Board of Education of the City of Chicago, No. 20-1167 (7th Cir. Sept. 22, 2021). Title VII makes it unlawful for an employer to fire or otherwise discriminate against any individual with respect to her compensation, terms, conditions, or privileges of employment, or limit, segregate, or classify employees or applicants in any way which would deprive any individual of employment opportunities on account of race.

Title VII also prohibits employment practices that are facially neutral, but discriminate in operation. As amended by the Civil Rights Act of 1991, Title VII prohibits employment practices that have a disproportionately adverse impact on a protected group, even if the impact is unintended.

To establish a disparate impact claim, a plaintiff must demonstrate that an employer uses an employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin. This requires proof that the employment practice caused statistical disparities. The employer in turn must establish that its practice is job-related and consistent with business necessity. The plaintiff must then show that the employer refused to use an available, yet equally valid, less discriminatory practice.

The parties agreed that African-American individuals comprised approximately 30% of Union members, but made up over 40% of laid off Union members. It was also undisputed that the Board’s decision to tie layoffs to declining school enrollment was legitimate, job-related, and consistent with business necessity. Thus, the only issue on appeal was whether the Board refused to use an equally efficient, but less discriminatory method to conduct the layoffs. The CTU contended that laid off Union members could instead have been transferred to other schools. However, it failed to provide any concrete detail as to how a transfer plan would have operated. The existence of open positions at other schools for which laid off employees were qualified was insufficient.