The New Jersey Division on Civil Rights (DCR) has introduced new regulations addressing "disparate impact" liability in the state. The disparate impact theory allows both the DCR and private litigants to challenge business decisions that disproportionately affect protected classes under the New Jersey Law Against Discrimination (NJLAD), regardless of discriminatory intent.
While the NJLAD does not explicitly establish disparate impact liability, New Jersey courts have interpreted it to do so. The DCR is acting under its statutory authority to create regulations aimed at eradicating discrimination. Historically, New Jersey courts have applied the same stringent requirements for disparate impact claims as federal courts do under Title VII of the Civil Rights Act, which demands high standards for pleading and evidence.
The New Jersey Civil Justice Institute (NJCJI) has expressed concerns that the proposed regulations deviate significantly from established case law standards. According to NJCJI, these regulations seem designed to simplify the process for government and private claimants to make initial claims of disparate impact. This shift could place a substantial burden on businesses, which would then need to justify their decisions with legitimate business reasons.
NJCJI also argues that the proposed regulations exceed the DCR’s statutory authority, interfere with judicial jurisdiction, and conflict with federal law.
"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," stated NJCJI.
