Disparate Impact

Disparate impact is a legal theory under Title VII of the Civil Rights Act that prohibits employment practices that are neutral on their face but discriminatory in operation. Unlike disparate treatment (intentional discrimination), disparate impact does not require proof of discriminatory intent. An employer can defend against a disparate impact claim by showing the practice is job-related and consistent with business necessity. If the employer meets this burden, the plaintiff can still prevail by showing a less discriminatory alternative exists. AI hiring tools frequently produce disparate impact because they learn patterns from historically biased data.