In Griggs v. Duke Power Co., 401 U.S. 424 (1971), the Supreme Court ruled unanimously that Title VII of the Civil Rights Act of 1964 bars employment practices that disproportionately screen out a protected group unless the employer can show the practice is tied to actual job performance, even when the employer had no intent to discriminate.1Justia. Griggs v. Duke Power Co., 401 U.S. 424 (1971) That holding created what is now called the disparate impact doctrine, and it remains the backbone of modern employment discrimination law.
What Happened at the Dan River Plant
Before Title VII took effect, Duke Power Company openly segregated its workforce at the Dan River Steam Station in Draper, North Carolina. The plant had five departments. Black employees were confined to the Labor department, where the top-paying jobs paid less than the lowest-paying jobs in any of the four all-white departments.1Justia. Griggs v. Duke Power Co., 401 U.S. 424 (1971)
When Title VII became enforceable in 1965, Duke Power dropped its explicit racial rules. In their place, the company required a high school diploma or passing scores on two standardized tests, the Wonderlic Personnel Test and the Bennett Mechanical Comprehension Test, for any job outside the Labor department.1Justia. Griggs v. Duke Power Co., 401 U.S. 424 (1971) The requirements applied even to longtime employees who had been doing the work competently for years.
The pass rates diverged sharply along racial lines. An EEOC analysis cited by the Court showed 58% of white test-takers passing the test battery, compared with 6% of Black test-takers.1Justia. Griggs v. Duke Power Co., 401 U.S. 424 (1971) North Carolina’s segregated schools had produced a similar gap in high school completion rates. Black employees at the plant sued, arguing that the new, race-neutral criteria locked in the same hierarchy the company had maintained through explicit segregation.
The lower courts sided with Duke Power. Their reasoning was straightforward: without proof that the company adopted the diploma and test requirements to discriminate, Title VII wasn’t violated.
What the Supreme Court Decided
The Supreme Court reversed, 8–0, in an opinion by Chief Justice Burger. Justice Brennan did not participate.1Justia. Griggs v. Duke Power Co., 401 U.S. 424 (1971) The Court held that Title VII targets the consequences of employment practices, not just the motivation behind them. Good faith on the employer’s part does not save a requirement that disproportionately excludes a protected group and bears no demonstrable relationship to job performance.
Both requirements at the Dan River plant failed that test. The diploma rule and the test battery screened out Black applicants at dramatically higher rates, and Duke Power offered no evidence that either predicted how someone would actually perform the work. White employees hired before the criteria were introduced continued to do the jobs satisfactorily, which cut the ground out from under any claim that a diploma or a Wonderlic score was truly necessary.2Library of Congress. 401 U.S. 424 – Griggs v. Duke Power Co.
Congress, the Court reasoned, meant Title VII to eliminate artificial barriers to employment that operate to favor one group over another. Tests and credentials remain lawful. They just cannot be given controlling weight unless they genuinely measure a person’s ability to do the job.1Justia. Griggs v. Duke Power Co., 401 U.S. 424 (1971)
The Business Necessity Defense
Griggs created a burden-shifting framework that still governs disparate impact litigation. The employee first has to show that a specific practice causes a disproportionate impact on a protected group. The burden then shifts to the employer to demonstrate that the practice is job related and required by a legitimate business need.2Library of Congress. 401 U.S. 424 – Griggs v. Duke Power Co.
Duke Power had nothing to show. No studies, no performance data, nothing tying a diploma or a test score to the ability to perform any actual job at the plant. Employees already doing the work without those credentials were doing it well, and that gap between requirement and reality sank the defense.
Even when an employer clears the business necessity bar, the case isn’t necessarily over. The employee can still win by pointing to a less discriminatory alternative that would serve the same business purpose. That extra step keeps employers from defending the most exclusionary version of a practice when a workable substitute exists.
How Disparate Impact Is Measured
Proving disparate impact turns on statistics. The main benchmark federal agencies use is the four-fifths rule, adopted in 1978 through the Uniform Guidelines on Employee Selection Procedures. Under the rule, a selection rate for any racial, sex, or ethnic group that falls below 80% of the rate for the group with the highest selection rate is generally treated as evidence of adverse impact.3eCFR. 29 CFR Part 1607 – Uniform Guidelines on Employee Selection Procedures
Concretely: if 60% of white applicants pass a hiring test, the four-fifths threshold for any other group is 48% (60% × 0.80). A pass rate below 48% flags the test for adverse impact. At the Dan River plant the gap was far wider, with a 58% white pass rate against 6% for Black applicants.
The four-fifths rule is a starting point, not the last word. The Guidelines note that smaller differences can still amount to adverse impact when they are statistically and practically significant, and larger differences may not qualify when sample sizes are too small to be reliable.3eCFR. 29 CFR Part 1607 – Uniform Guidelines on Employee Selection Procedures Courts commonly supplement the four-fifths analysis with standard deviation tests and other statistical methods.
How Congress Locked the Rule In
The Griggs framework held for nearly two decades before the Supreme Court weakened it in Wards Cove Packing Co. v. Atonio (1989). That decision made the employee’s burden heavier and the employer’s justification easier.
Congress pushed back. The Civil Rights Act of 1991 said explicitly among its purposes that it codified the business necessity and job-relatedness concepts from Griggs and restored the legal standards that existed before Wards Cove.4U.S. Equal Employment Opportunity Commission. Civil Rights Act of 1991 (Original Text) The statute wrote the burden-shifting framework directly into Title VII at 42 U.S.C. § 2000e-2(k). A disparate impact claim is established when a plaintiff shows that a particular employment practice causes a disparate impact based on race, color, religion, sex, or national origin, and the employer fails to demonstrate the practice is job related and consistent with business necessity. The Act also preserved the less-discriminatory-alternative route.5Office of the Law Revision Counsel. 42 U.S. Code 2000e-2 – Unlawful Employment Practices
What a Winning Disparate Impact Case Recovers
Winning a disparate impact case does not unlock the same remedies as winning an intentional discrimination case. Federal law expressly limits compensatory and punitive damages to intentional discrimination, and the statute authorizing those damages specifically excludes practices that are unlawful solely because of their disparate impact.6Office of the Law Revision Counsel. 42 USC 1981a
Successful plaintiffs can still recover back pay for lost wages, reinstatement or front pay, injunctions ordering the employer to stop using the discriminatory practice, and attorney’s fees. The emotional-distress damages and punitive awards that push intentional discrimination verdicts into the millions are not available.7U.S. Equal Employment Opportunity Commission. Remedies For Employment Discrimination
Where the Doctrine Reaches Now
The framework has traveled far beyond the Dan River plant. In 2015 the Supreme Court held in Texas Department of Housing and Community Affairs v. Inclusive Communities Project that disparate impact claims are cognizable under the Fair Housing Act, opening zoning, lending, and housing policies to the same kind of effects-based challenge. The Court applied guardrails familiar from Griggs: a statistical disparity alone is not enough, the plaintiff must identify a specific policy causing the disparity, and the policy must function as an artificial and unnecessary barrier before liability can attach.8Justia. Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., 576 U.S. 519 (2015)
The doctrine also reaches modern hiring technology. The EEOC treats software and algorithmic selection tools the same way it treats paper tests: employers using them face disparate impact liability if the tools disproportionately exclude protected groups and the employer cannot show job-relatedness and business necessity. The Uniform Guidelines that established the four-fifths rule apply to algorithmic screening just as they apply to a Wonderlic score.3eCFR. 29 CFR Part 1607 – Uniform Guidelines on Employee Selection Procedures
An AI tool trained on past hiring decisions can absorb the same biases Duke Power’s diploma requirement embedded. If historical hiring skewed a certain way, the algorithm can learn to prefer candidates who resemble past hires. The employer may have no discriminatory intent, and the developers may not even understand which variables drive the tool’s recommendations. Under Griggs, none of that matters. The question is the one Chief Justice Burger framed in 1971: does the practice screen out a protected group at a disproportionate rate, and if so, can the employer prove it measures what actually matters for the job? Employers deploying automated hiring tools carry the same validation obligation Duke Power failed to meet, and they need to audit for adverse impact, document that the criteria are genuinely predictive of job performance, and evaluate whether a less discriminatory alternative exists.