Disparate Impact Analysis: Key Steps and Tests

Summary

This practice note discusses the basic steps and tests to determine any potential disparate impact claims resulting from a company's reductions in force (RIFs) or other exit incentive programs. Companies considering reorganization via RIFs or other exit incentive programs should perform certain statistical tests to determine whether the group of individuals selected for inclusion in the RIF or exit incentive program contains a statistically significant over-representation of any protected group(s).