Employment Regulation in the
Workplace: Basic Compliance
for Managers
by
Robinson, Franklin, and Wayland
Chapter 4
Unintentional Discrimination:
Disparate Impact
Spring 2009
Answers to Wonderlich
Question
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Answer
3
3
2
Yes
4
2
4
1
5
40
3
$.90
4
3
Question
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Answer
0.31
e
4
4
3
F
1
3,5
31
2
1
1500
2
1
Answers to Wonderlich
Question
29
30
31
32
33
34
35
36
37
38
39
40
Answer
Question
3
41
1
42
1,5
43
$31.85
44
1
45
3
46
20
47
.1
48
6
49
2
50
4
2,3,4
Answer
1
1
6
2
15
$8.40
1
25%
3,7
$320
Griggs v. Duke Power Company


Griggs v. Duke Power Company 401
U.S. 424 (1971)
Five operating departments:





(1)
(2)
(3)
(4)
(5)
Labor
Coal Handling
Operations
Maintenance, and
Laboratory and Testing
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.
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.
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.
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.
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.
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))
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
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.
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.
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 fourfifths (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).
Four-Fifths Rule
Selection rate
of the protected
class
<
Selection rate
.8
of the group
with the highest
rate
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).
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).
Four-Fifths Rule
Griggs v. Duke Power Co. Of the 181 White applicants,
taking the Wonderlich test, 105 pass. Of the 102 Black
applicants , 6 passed.
6
105
< .8
102
181
.06 < .8 (.58) or .06/.58 = .103
which is less than .8
.06 < .48
Test of Significance and FourFifths 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).
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
Standard Deviation Rule
Standard Deviation Rule
Sx =
Total PG
Applicants
Total
Applicants
X
Total Other
Applicants
Total
Applicants
Total
X Applicants
Selected
Standard Deviation Rule
Of the 181 White applicants, taking the Wonderlich test, 105
pass. Of the 102 Black applicants , 6 passed.
Sx =
102
X
283
181
283
X 111
Standard Deviation Rule
Of the 181 White applicants, taking the Wonderlich test, 105
pass. Of the 102 Black applicants , 6 passed.
Sx =
=
102
X
283
181
283
X 111
Total applicants who
passed
.36 X .64 X 111
% of test takers who were black
=
=
25.57
5.057
Standard Deviation Rule
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]
Standard Deviation Rule
At + 3 Sx we would expect the selection of
blacks to fall within a range of 25 to 55.
40 + (5.057 X 3).
Selecting only 6 falls more than six Sx
(6.72) from the expected representation.
6
25
-6sx
-3sx
40
55
+3sx
Applicants with High School
Diplomas - Race
Blacks
Whites
Total
Applied Passed Applied Passed Applied Passed
Male
110
37
146
81
256
118
Female 48
18
36
32
84
50
158
55
(.348)
182
113
(.621)
340
168
Total
.348 < .8(.621)
.348 < .497
or .348/.621 = .56 which is less than .8
Yes, Disparate Impact
Applicants with High School
Diplomas - Sex
Blacks
Whites
Total
Applied Passed Applied Passed Applied Passed
Male
110
37
146
81
256
118
(.461)
Female 48
18
36
32
84
50
Total
55
182
113
340
168
158
(.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
Applicants Passing Dexterity
Test
Blacks
Whites
Total
Applied Passed Applied Passed Applied Passed
Male
37
37
81
76
118
113
Female 18
16
32
28
50
44
Total
53
113
55
(.96)
(.92)
104
168
. 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
157
Hired-After 2nd Test
Blacks
Whites
Total
Applied Passed Applied Passed Applied Passed
Male
37
37
76
44
113
81
Female 16
16
28
28
44
44
Total
53
104
72
(.692)
157
125
53
(1.0)
Note: 100% of Blacks were passing both tests were hired
This is compared to 69.2% of whites passing both.
Bottom Line Statistics
Blacks
Applied Hired
Male
Whites
Total
Applied Hired Applied Hired
110
37
146
44
256
81
Female 48
16
36
28
84
44
Total
53
182
72
340
125
158
(.335)
(.396)
.335 < .8(.396)
.335 < .316
or .335/.396 = .846 which is greater than .8
Practice Problem
Blacks
Whites
Total
Applied Passed Applied Passed Applied Passed
Male
110
47
146
71
256
118
Female 48
18
36
32
84
50
Total
65
182
340
168
158
103
Analyze using both the Four-Fifths Rule and Three Standard
Deviation Rule for Race and Gender
Disparate Impact

Employer’s Rebuttal: The
criterion creating the imbalance is
a business necessity (jobrelated).
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))
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. § 1607.3D)
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.
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
> Class in the Relevant
Employer’s Internal Workforce
Labor Market


* The basis for utilization analysis in chapter 6
Challenging Statistics

Stock Analysis


An employer has the following relevant
labor market for laborers: 116,000
individuals of whom 13,950 are AfricanAmericans, 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.
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

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
Challenging Statistics

Comparison of relevant labor market to
employer’s workforce:
Black
.176 < .12 or .176/.12 = 1.467
Hispanic .072 < .086 or .072/.086 = .837
Asian
.012 < .022 or .012/.022 = .545
White
.74 < .772 or .74/.772 = .959