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Court Reaffirms Viability of Disparate Impact Theory in Discrimination Cases

Last week, the Supreme Court issued its highly anticipated ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. (Inclusive Communities). For the first time, the Court interpreted the Fair Housing Act (FHA) to permit “disparate impact” claims, in which a plaintiff or group of plaintiffs alleges that a policy or practice, though racially neutral on its face, has the effect of creating disparities between racial groups. While the decision interprets the FHA, the Court relied heavily on analogous provisions in federal employment statutes – namely, Title VII of the Civil Rights Act of 1964 (Title VII) and the Age Discrimination in Employment Act (ADEA) – in reaching its conclusion. In doing so, the Court made clear that disparate impact claims are here to stay for the foreseeable future.

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