The Trump Administration wants disparate-impact discrimination claims to go away. To understand this, it is helpful to understand where this theory of liability comes from. In 1971, in Griggs v. Duke Power Co., the Supreme Court held that Title VII prohibits “not only overt discrimination but also practices that are fair in form but discriminatory in practice.” https://supreme.justia.com/cases/federal/us/401/424/ Center. Under this disparate-impact theory, employers can be held liable for discrimination under Title VII “when a seeming neutral policy or action causes a disproportionate and unjustified negative harm to a group, regardless of intent.” https://www.congress.gov/crs-product/IF13057. Disparate-impact liability was later codified into the Civil Rights Act of 1991 which states that an employer may be held liable if a facially neutral practice or policy causes a disparate-impact on a protected group and is not a business necessity or if a less discriminatory policy or practice would serve the employer’s interest just as well but the employer refuses to adopt it. https://www.eeoc.gov/history/civil-rights-act-1991. For example, a requirement that employees be able to lift 100 pounds may have a disproportionate impact on women and is not legal unless it is justified by business necessity.
The EEOC has “incorporated disparate-impact liability into its Title VII rules, guidance documents, and technical assistance documents,” https://www.justice.gov/olc/media/1444871/dl, including its Uniform Guidelines on Employee Selection Procedures (the Guidelines). https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XIV/part-1607.
Earlier this year, EEOC Chair Andrea Lucas asked the Department of Justice (DOJ) to determine whether the EEOC’s interpretation of Title VII was constitutional. On June 9, 2026, the DOJ’s Office of Legal Counsel issued a memorandum opinion (the Memorandum) holding that the EEOC’s interpretation of Title VII was unconstitutional because “[r]ather than treating disparate-impact as an evidentiary mechanism to smoke out intentional discrimination—imposing liability only when disproportionate adverse effects give rise to a strong inference of intentional discrimination—EEOC’s historic interpretations contemplate liability based on disproportionately adverse effects alone, without regard to an employer’s likely intent.” https://www.justice.gov/olc/media/1444871/dl
The Memorandum noted that as a result “disparate-impact liability tends to incent – and even coerce – employers to make race-based decisions to avoid liability or the threat of liability” and that “by pressuring employers to take race-based actions in the name of proactively addressing potential statistical disparities, disparate-impact liability allows the government to engage in race discrimination indirectly.” Id. The Memorandum specifically found that the Guidelines (which require employers to prove that a selection process which adversely impacts a protected group is a business necessity by undertaking a validation study) was unconstitutional because it incorrectly imposed requirements beyond the business-necessity defense. Id.
The Memorandum stated that to be constitutional three limiting principles must be applied to disparate-impact analysis:
- “First, the business-necessity defense must provide defendants significant leeway to state and explain the valid interest served by their policies.” Id. The Memorandum states that under this approach businesses can administer tests related to job-performance and that such tests “need only be a reasonable way of accomplishing a valid interest.” Id.
- Second, plaintiffs must bear the burden of proof and “plead the specific employment practice challenged and plausibly allege factual content showing that the practice causes the disparate-impact.” Id.
- Third, “a plaintiff must identify an alternative employment practice and prove both that it would have less disparate-impact and be equally effective.” Id.
So, what is the impact on employers? Employers’ obligations under Title VII have not changed. The Memorandum is only advisory and does not change Title VII, existing case law or the Guidelines. However, along with the Trump Administration’s 2025 Executive Order stating that “it is the policy of the United States to eliminate the use of disparate-impact liability in all contexts,” https://www.whitehouse.gov/presidential-actions/2025/04/restoring-equality-of-opportunity-and-meritocracy/, and the EEOC’s statement in the NEP that it will cease investigating disparate-impact claims (discussed above), the Memorandum reflects a fundamental change in the government’s attitude toward disparate-impact liability.
