The New Jersey Division on Civil Rights (“DCR”) has proposed new regulations governing “disparate impact” liability in New Jersey. The disparate impact theory of liability allows both the DCR and private litigants to challenge business decisions that have a disparate impact on protected classes under the New Jersey Law Against Discrimination (“NJLAD”) (e.g., race, gender, religion, sexual orientation, etc.), regardless of whether there was discriminatory intent on the part of the business. Disparate impact liability was originally established as part of Title VII of the federal Civil Rights Act.
Although the NJLAD contains no explicit statement establishing disparate impact liability, New Jersey courts have interpreted the NJLAD to establish such liability and the DCR is proceeding here under its grant of statutory authority to promulgate regulations to eradicate discrimination. Historically, New Jersey courts have applied the same requirements for disparate impact claims under the NJLAD as federal courts apply under Title VII, which imposes exacting pleading and evidentiary standards. The reason for imposing a high bar on these claims is simple: A looser pleading and evidentiary standard in such cases could unduly burden the managerial prerogative inherent in free enterprise.
NJCJI determined that the proposed regulations materially deviate from the standards established under existing case law. Among other things, the regulations appear intended to make it easier for the government and private claimants to plead and prove their initial claims of disparate impact, thereby quickly shifting the heavy burden of proof and evidence to businesses, which must then establish a legitimate business need for the challenged decision. Additionally, NJCJI has concluded that the proposed regulations exceed the DCR’s statutory authority, unduly impede the jurisdiction of the judiciary, and run afoul of federal law.
Accordingly, NJCJI prepared and submitted a comment to DCR addressing the above-mentioned issues with the proposed disparate impact regulations. A copy of NJCJI’s comment can be found here. A copy of the DCR’s proposed regulations can be found here.