Adverse Impact refers to the unintentional discrimination that occurs when a particular employment practice or policy disproportionately and negatively affects a protected group of individuals based on characteristics such as race, gender, age, or other legally protected attributes. It is a violation of anti-discrimination laws and can lead to legal consequences for organizations.

Example
If a company's hiring process consistently results in significantly fewer women being selected for management positions compared to men, even if the criteria seem neutral, it may be considered as having an adverse impact and could be legally challenged for gender discrimination.