Reconsidering Disparate Impact Under Title VII: Business Necessity as Risk Management

Rather than admit defeat on disparate impact, as some scholars have suggested, I am reluctant to abandon the existing framework without first attempting to advance a proper understanding of the doctrine. Even if the practical efficacy of the doctrine remains dubious, “law’s symbolic or expressive functions are sometimes more important than its immediate practical consequences,” according to Professor Richard Primus, “and the story we tell about disparate impact doctrine still plays a significant role in shaping how we think about the nature and purposes of antidiscrimination law.” Indeed, disparate impact conveys a powerful social meaning: discrimination is less about subjective intentions and more about the objective status of historically disadvantaged populations. This “more robust” conception of disparate impact is precisely what needs to be sustained in the face of a less amenable antidiscrimination canon. Perhaps now more than ever, disparate impact’s contemplation of systemic effects is needed to ensure equality of opportunity in today’s society—a society that often overlooks enduring yet less perceptible discrimination in its desire to become post-racial.

But here this Note departs from the prevailing disparate impact literature. This Note is less about the idea of disparate impact writ large—which has been overwritten for a relatively narrow issue of law—and more about an analytic construct that offers a novel contribution to antidiscrimination scholarship. This Note looks to reconceptualize disparate impact’s doctrinal framework by extrapolating from the Third Circuit’s notion of “risk management” as an interpretation of business necessity. I define risk management as a conceptual model or procedure in which institutions must determine whether the benefits of hiring an ex-offender are reasonably proportional to the costs. This method is broader than traditional cost-benefit analysis and contemplates an evaluation of competing interests by the factfinder. Risk management provides a workable heuristic for measuring exclusionary hiring practices against ex-offenders and, quite possibly, a solution to the indeterminacy of disparate impact’s malleable doctrine.

Risk management differs from the current articulation of business necessity in two crucial ways. First, risk management offers a systematic, process-based method for adjudicating cases under Title VII. The concept lays out neutral criteria for empirically testing whether a challenged employment practice is sufficiently related to business necessity or is a mere pretext for discrimination. Second, risk management reconciles the tension underlying business necessity, striking a compromise between the “balancing” of “competing social and entrepreneurial interests” and “forc[ing] us, and the courts, to recognize the stakes of the decision.” The concept attempts a reconciliation of these interests—all while the process itself remains apathetic to the political undertones surrounding disparate impact. The truth is that imposing disparate impact liability represents a Calabresian tragic choice of sorts—between the economic risks associated with hiring an ex-offender and the moral value our society places on fair opportunity in the labor market. Risk management does not care about society’s response to this tragic choice; rather, it cares about how we arrive at that response. Indeed, getting the procedure right may at least mean minimizing the conflict inherent in tragic choices. Ultimately, risk management moves us away from a problematic doctrine and towards a more robust procedure that seeks an optimal level of liability through a clear, bright-line standard. A more robust procedural framework will, in turn, properly complement the substantive, remedial objectives of Title VII.