The New Jersey Employment Law Firm Blog
Employment discrimination on the basis of factors like race, religion, sex, sexual orientation, gender identity, and disability is unlawful under New Jersey employment law. Broadly speaking, courts have identified two types of unlawful employment discrimination: discriminatory intent and disparate impact. Cases based on discriminatory intent often involve overt bias. In disparate impact cases, an employer may violate the law if their policy or practice has an outsized adverse impact on a protected group, even if it appears outwardly neutral. A group of federal agencies developed a guideline several decades ago, known as the Four-Fifths Rule, for determining when a policy or practice has too much of a disparate impact on a protected group. While this rule significantly predates the current use of artificial intelligence (AI) in employment, it provides a useful guide for assessing when an AI tool might violate employment laws.
Title VII of the Civil Rights Act of 1964 is the main federal statute dealing with employment discrimination. It mentions five protected categories by name: race, sex, religion, color, and national origin. Congress amended the statute in 1978 to add discrimination based on pregnancy and childbirth to the definition of sex discrimination. The U.S. Supreme Court has held that sex discrimination includes discrimination based on sexual orientation and gender identity.
The Four-Fifths Rule is based on uniform guidelines developed by four federal agencies in 1978: the Equal Employment Opportunity Commission (EEOC), the Civil Service Commission, the Department Of Labor, and the Department of Justice. Although it includes the word “rule,” the Four-Fifths Rule is more like a guideline that provides an idea of when an employment practice might run afoul of the law.
Policies and practices that deal with hiring, promotions, or other features of employment may be subject to scrutiny under the Four-Fifths Rule. A policy or practice may violate the law if the selection rate for members of one race, sex, religion, or nationality is less than four-fifths of the rate for the group with the highest selection rate.
Suppose an employer has a policy for screening job applicants that results in a higher percentage of applicants of one race getting hired over another race. The Four-Fifths Rule can help assess whether this may constitute unlawful adverse impact discrimination. The employment policy in question results in the following selection rates:
– White applicants: 200 applied, 150 hired, 75%
– Hispanic applicants: 100 applied, 65 hired, 65%
– Black applicants: 75 applied, 40 hired, 53%
Under the Four-Fifths Rule, any group with a selection rate of less than 60% (⅘ of 75%) would be subject to greater scrutiny by agencies like the EEOC. In this case, the employer’s policy resulted in a selection rate for Black applicants of less than that percentage.
As employers begin to rely on AI tools to screen job applicants and perform other employment-related functions, the Four-Fifths Rule may come into play if they begin to produce disparate impacts based on protected categories like race or sex. AI tools rely on human inputs to perform their functions, and biased inputs will almost certainly produce biased results. Even if an employer does not intend to discriminate, they may violate the law if they use a biased tool.
The knowledgeable and skilled employment lawyers at the Resnick Law Group represent New Jersey and New York employees who have experienced unlawful workplace practices. Please contact us at 973-781-1204, 646-867-7997, or online today to schedule a confidential consultation and learn how we can assist you.