Dive Brief:
- The U.S. Department of Justice issued an opinion Tuesday to the U.S. Equal Employment Opportunity Commission finding that its guidelines about disparate impact liability under Title VII of the Civil Rights Act are unconstitutional.
- The “guidelines are unconstitutional because they contemplate liability based on disparate effects alone, without regard to an employer’s likely intent, and pressure employers to engage in race-based decisionmaking,” per the 25-page opinion issued by DOJ’s Office of Legal Counsel.
- In a DOJ release, EEOC Chair Andrea Lucas said the agency is “grateful for the thoughtful and insightful analysis” by Assistant Attorney General Elliot Gaiser and Deputy Assistant Attorney General Josh Craddock. “We believe this opinion will provide clarity regarding the Constitutional limits of disparate impact in employment discrimination matters,” Lucas said.
Dive Insight:
The push against disparate impact liability has been a focus of the Trump administration.
President Donald Trump issued an executive order in April 2025 directing federal agencies, including EEOC, to stop enforcement of disparate impact liability under civil rights laws.
Disparate-impact liability “not only undermines our national values, but also runs contrary to equal protection under the law and, therefore, violates our Constitution,” Trump said in the order.
EEOC on June 4 rescinded its Biden-era 2024-2028 Strategic Enforcement Plan and voted to replace it with a Trump-friendly national enforcement plan. The NEP specified that the agency will comply with Trump’s order directing the federal government to eliminate the pursuit of disparate impact liability.
“Despite trying to promote equality, EEOC’s disparate impact liability interpretation under Title VII actually fosters the very discrimination its guidelines seek to address,” Blanche said in a statement. “This opinion will now allow businesses to hire based on performance, restoring equal opportunities in the American workplace.”
Businesses can use hiring practices such as aptitude tests, knowledge-based tests, criminal-background checks and SAT scores “without fear of violating Title VII simply because such practices may result in different outcomes for different demographic groups,” DOJ said. To do so, employers need to show “the practice is reasonable, useful, or helps serve a valid business purpose.”
The opinion calls for workers bringing disparate impact claims to meet two requirements: show that a specific hiring practice caused unequal outcomes and provide an alternative approach that would be “equally effective for employers but would result in fewer unequal outcomes.”
Efforts to curb disparate impact claims, however, have been met by pushback.
The Illinois legislature recently approved a bill that bans disparate impact discrimination. And a group of former EEOC and U.S. Department of Labor officials previously urged employers to ignore Trump’s order, saying it was at odds with “decades of legal precedent.”
“Employers should not expect that they will have a free pass on disparate impact liability,” the officials said.
