Pick up any newspaper or read the latest headlines on your favorite newsfeed, and you will most certainly find a story about a pending discrimination lawsuit. The claims are probably in the well-publicized categories that you might expect – race, sex and age. The cases are often examples of direct discrimination with concrete evidence of bias, and the allegations are relatively straight-forward if for no other reason than they are clearly defined under Title VII.
But, there is a lesser-known form of discrimination which is both trickier to recognize and mitigate. Within the workplace, an employer cannot willfully discriminate or purposely treat employees differently, but what about situations which are not discriminatory by appearance but seem to result in discrimination nonetheless? These circumstances may perpetuate indirect discrimination and proving it can even be premised on inferred evidence or motives. When an employer’s actions constitute indirect discrimination, do you know the signs?
What is Indirect Discrimination?
Indirect discrimination means that a person in a protected class is, typically unintentionally, somehow disadvantaged or unfairly impacted by employment policies in a way that the broader group of employees is not.
Protected classes include categories such as race, sex and age as well as less obvious ones such as religion, national origin, or disability. These groups are protected from employment discrimination by law.
In Desert Palace, Inc. v. Costa, the Supreme Court ruled that circumstantial evidence is sufficient to prove that an employment action is motivated by discrimination, and in a powerful statement, the Court noted:
Circumstantial evidence is not only sufficient, but may also be more certain, satisfying and persuasive than direct evidence.
In spite of sound legal backing by the courts, organizations are still left with the thorny issue of trying to determine if indirect discrimination actually exists.
Disparate Treatment vs. Disparate Impact
While disparate impact and treatment are concepts rooted in discrimination laws, they represent different forms of workplace inequality. Both address unfair practices that can arise in employment, but they differ in intent and execution. To understand these differences in detail, check out our comprehensive comparison of disparate impact and disparate treatment.
Disparate (adverse) impact is a form of indirect discrimination where, as explained above, employers enact certain policies while managing their business which seem innocuous enough, but may have an adverse impact on protected classes or subsets of employees.
Disparate treatment occurs when employers more purposely disadvantage protected classes. This is typically considered a form of direct discrimination. In this situation, two employees for example, must have essentially similar situations or qualifications but be treated differently by the employer, and the employee alleging disparate treatment must be part of a protected class.
Examples of Indirect Discrimination at Work
Career Development
Indirect discrimination in career development can occur when seemingly neutral policies disproportionately affect certain groups. For example, a company might require employees to have ten years of experience in a specific role to qualify for a promotion. This could indirectly discriminate against younger employees or those who have taken career breaks, such as for parental leave, thus limiting their career advancement opportunities.
Dress Codes
Dress codes can also serve as a basis for indirect discrimination if they unfairly impact particular groups. For instance, a workplace dress code that mandates specific hairstyles or bans headwear can disproportionately affect employees from certain racial backgrounds or religions. Such policies, while not explicitly discriminatory, can hinder the expression of cultural or religious identities.
Employee Selection/Requirements
In employee selection, indirect discrimination might manifest through requirements that do not accommodate diverse applicant backgrounds.
In Griggs v. Duke Power Company, Duke Power required a benchmark IQ aptitude test score and high school diploma for applicants for some of the highest paying jobs in their steam station. The adverse discriminatory impact came about because African-American applicants were disqualified at a much higher rate than their white peers, and the U.S. Supreme Court determined that the purpose of the test was in fact to weed out African-Americans from the hiring process for those jobs. The hiring procedure did not fulfill a genuine business need and had an adverse impact on a protected class; therefore, it was deemed indirect discrimination.
Impacts of Indirect Discrimination
Indirect discrimination can have a variety of negative effects not only on the individuals directly affected but also on broader organizational culture and performance. Here are some potential impacts:
- Decline in Engagement and Productivity: When employees feel they are being unfairly treated due to indirect discrimination, it can lead to decreased employee engagement. This reduction in morale often results in lower overall productivity, as employees may not perform to their fullest potential.
- Legal Consequences and Brand Damage: Organizations that fail to address or prevent indirect discrimination may face legal challenges. These legal battles can be costly and damage the company’s reputation, making it harder to attract top talent and retain existing employees.
- Barriers to Diversity and Inclusivity: Indirect discrimination can significantly hinder efforts to create a diverse and inclusive workplace. When policies or practices disproportionately affect certain groups, it can lead to a less diverse workforce, undermining the organization’s goals for inclusivity.
- Impact on Employee Mental Health: The stress and anxiety caused by experiencing or witnessing indirect discrimination can have serious effects on an individual’s mental health. Employees who feel discriminated against may experience increased levels of stress, anxiety and depression.
- Erosion of Equity and Trust: Perceptions of unfairness due to indirect discrimination can erode trust between employees and management. When employees believe that opportunities are not distributed based on merit or that policies are biased, trust within the organization can deteriorate, affecting team cohesion and cooperation.
Addressing these impacts is crucial for maintaining a positive workplace culture. It’s important for organizations to regularly review policies and practices to ensure they do not inadvertently perpetuate indirect discrimination.
Identifying and Dealing with Indirect Discrimination in the Workplace
Indirect discrimination can be subtle and often goes unnoticed until it has already caused significant harm. ER/HR professionals must be vigilant in identifying and addressing these issues promptly to maintain a safe, fair and inclusive workplace. Here are some strategies to help recognize and prevent indirect discrimination:
- Identify Patterns: Regularly review investigation processes and outcomes to spot biases and hot spots. For example, if certain policies result in predominantly adverse outcomes for a specific demographic, this could indicate the presence of indirect discrimination.
- Review Policies for Fairness: Conduct thorough audits of all workplace policies and practices to ensure they do not disadvantage any employee groups. This includes everything from recruitment processes to performance evaluation systems and promotion criteria.
- Open Channels for Concerns: Create channels for employees to express concerns about workplace practices. Encouraging open dialogue can help bring issues of indirect discrimination to light before they escalate. Consider implementing an anonymous reporting tool, like Speakfully, to allow employees to report their concerns as they happen.
- Evaluate the Bigger Picture: Always take into account the broader societal and cultural contexts when evaluating workplace dynamics. What may seem neutral in one context might be discriminatory in another, especially when cultural or socioeconomic factors are considered.
- Consult the Experts: When unsure about certain policies or situations, consult with legal experts or DEI professionals. Their expertise can help identify blind spots in company practices and suggest improvements.
- Provide DEI Training: Educate all employees, especially people leaders, on the importance of DEI. Training should cover how to recognize indirect discrimination and the steps to take to avoid it.
- Cultivate Inclusivity: Promote an organizational culture that values inclusivity and actively works against discrimination. This involves leadership demonstrating their commitment to diversity and setting clear expectations for behavior within the organization.
By implementing these measures, organizations can better identify and combat indirect discrimination, creating a more trusted workplace for all employees.
Address and Prevent Indirect Discrimination with HR Acuity
Because indirect discrimination can be substantiated with circumstantial evidence, it has broad implications for a company’s employment and ER/HR policies. To pass muster, today’s procedures must be thoughtfully conceived and implemented. Otherwise, while internal policies may have every intention of treating employees fairly, they may inadvertently disadvantage a subset of employees. The end result may be that your organization will confront a costly and time-consuming lawsuit.
The key to effective employee relations risk management is the process, and HR Acuity provides the framework. A company can best defend itself from employee-related event risk by utilizing a systematic employee relations process which is participatory in nature and managed by well-trained staff.
Should allegations of direct or indirect discrimination occur in your company, HR Acuity provides your organization with structured fact-finding tools, a framework for investigations, consistent documentation, case reports and a wealth of metrics for detailed analysis. Contact us to schedule a demo and see it in action for yourself.