The Burger Court expanded the reach of Title VII of the Civil Rights Act of 1964—which prohibits employment discrimination on the basis of race, color, religion, sex, or national origin—by holding that the law applies to not only policies that on their face hurt certain groups, but also to policies neutral on their face that adversely impact certain groups. For example, an employer policy that says the employer will only hire white workers is discriminatory on its face. It is an example of disparate treatment, explicitly treating people differently based on race. On the other hand, an employer policy that says the employer will only hire workers who obtain a certain score on a test may disparately impact a certain group of people. This is an example of disparate impact discrimination.

Title VII clearly prohibits employers from intentionally discriminating against workers based on race. This is called disparate treatment discrimination. The key question facing the Supreme Court in Griggs v. Duke Power Co. (1971) was whether a facially neutral employer policy that applied across the board to all employees could be prohibited because it adversely impacted African American employees.

Duke Power Co., which previously had only hired African Americans for its lowest labor division, changed its employment policies after the passage of Title VII. Thereafter, Duke Power required employees to have a high school diploma or pass two intelligence tests before they could transfer to other divisions outside of labor in the company. Thirteen African American employees sued, claiming that Duke Power violated Title VII because its testing requirements created an adverse impact on them and the tests were not related to job performance.

In Griggs, the U.S. Supreme Court ruled 8–0 (Justice William Brennan did not participate in the case) that Duke Power violated Title VII by implementing test requirements that were not related to job performance.

Chief Justice Warren Burger wrote for the Court: “The Act [Title VII] proscribes not only overt discrimination but also practices that are fair in form, but discriminatory in operation. The touchstone is business necessity. If an employment practice which operates to exclude Negroes cannot be shown to be related to job performance, the practice is prohibited.”

The Court noted that many white employees without a high school diploma had performed quite well in the job. The Court further noted that “neither the high school diploma completion requirement nor the general intelligence test is shown to bear a demonstrable relationship to successful performance of the jobs for which it was used.” Employers bear the burden of proving that such requirements “have a manifest relationship to the employment in question.”

The Griggs decision is significant because it stood for the proposition that Title VII prohibited disparate impact discrimination, that policies neutral on their face could still be unlawful if they negatively impacted certain groups of people.