Minimizing the Risk of a Discrimination Lawsuit

August 11, 2018

Minimizing the Risk of a Discrimination Lawsuit

As unfortunate as it is, discrimination in the workplace remains an issue throughout the United States. This issue not only impacts employees, but it also affects prospective employees participating in the job application process. Many employers have policies and procedures aimed at eliminating such behavior, but the issue remains nonetheless.  And because discrimination is often rooted in personal feelings and biases, employers will always remain vulnerable and potentially liable.

The legislatures of California and the United States have passed laws aimed at eliminating discrimination in the workplace. And while the laws are generally complementary, vigilance is required to ensure small business owners remain up to date on all laws applicable to employment discrimination. This article will provide a high-level overview of such laws and will provide some practical guidance on what employers can do to minimize the risk of a discrimination lawsuit.

Federal Law

Federal law is a labyrinth of definitions, exceptions, and qualifications. Here are the highlights.

  • Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex, or national origin.

  • The Equal Pay Act of 1963 prohibits sex-based wage discrimination.

  • The Age Discrimination Employment Act of 1967 protects individuals over 40 years of age.

  • Title I and V of the Americans with Disabilities Act of 1990 prohibits employment discrimination against individuals with qualified disabilities for all non-federal employees. Sections 501 and 505 of the Rehabilitation Act of 1973 prohibit such discrimination in the federal government.

  • Title II of the Genetic Information Nondiscrimination Act of 2008 prohibits employment discrimination based on genetic information.

California Law

Through a variety of legislative actions, California has made it unlawful for an employer to discriminate against someone based on race, color, ancestry, national origin, age over 40, disability, sex, gender, sexual orientation, gender identity, gender expression, medical condition, genetic information, marital status and military or veteran status.


Discrimination comes in two general varieties. Disparate treatment and disparate impact. Disparate treatment occurs when an employer adversely treats an employee or group of employees due to one of the protections outlined above. The intent of the employer is important in establishing a claim for disparate treatment. That is, the employer must have intended to discriminate before a disparate treatment claim will succeed.

Disparate impact, on the other hand, does not require an intent to discriminate by the employer. Any action that adversely and disproportionately impacts any of the groups identified above may be considered disparate impact.  One illustration of disparate impact arises in the hiring process. If an employer employs a practice that applies to all applicants, but disproportionately and negatively impacts a protected group without a legitimate business reason, there may be a claim for disparate impact. As such, employers must look at the potential consequences of action even if the action is taken for the most benevolent reason.

Minimizing Risk

Know the Law

As obvious as it sounds, employers must know the law. Some of the law that differs between California and federal is relatively new to California employers. Both federal and California law also differ in some regard as to which employers the law is applicable, for example, employer size.  Federal and California law also require certain postings in the workplace regarding discrimination.  These steps are relatively easy and are the frontline in creating an environment that minimizes the risk of discrimination.


Establishing a culture of anti-discrimination begins with a firm stance by the employer against any such activity or behavior. This position should be reflected in company policies and procedures, including employee handbooks. All levels of employees should be trained on equal opportunity. Supervisor training should focus on the law, recognizing discrimination, and the employer’s policy for addressing. Remaining employees should be trained on anti-discrimination policies and related procedures.


Whether making notes regarding a non-hire, or discussing a possible discrimination issue with an employee, employers should always document the issue and conversation, along with any steps taken to investigate or mitigate the issue. Consistent documentation demonstrates an employer takes allegations seriously and is committed to ensuring an equal opportunity workplace.

Discipline and Terminate with Caution

Allegations of discrimination are common when adverse action is taken against an employee. Discipline must be consistent from employee to employee for a particular offense. Gather all evidence that may be necessary for understanding the issue for which discipline is desired. As indicated above, documentation in this context is very important. Terminations must be managed similarly. Honesty is the best approached when executing a termination. If appropriate, use a witness who could corroborate the termination event should a dispute arise.

Accept the Risk

Employers have many tools available for minimizing the risk of a discrimination claim.  Sometimes though, discrimination arises outside of the employer’s control. Like other business risks that can’t be fully mitigated, the key is education and preparation. Create a culture intolerant of discrimination and act swiftly should allegations arise. Employers should not wait until a problem occurs to figure out how to resolve it.