On June 9, 2026, the U.S. Department of Justice (“U.S. DOJ”) issued a memorandum of opinion (the “Opinion”) finding that the disparate impact provisions in Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991, are unconstitutional as currently interpreted and applied, particularly by the EEOC in its interpretative rules and guidance documents.
Disparate impact liability is a legal theory that is codified in Title VII of the Civil Rights Act of 1964 that allows a plaintiff to sue without fulfilling the burden of demonstrating intentional bias by pointing to practices that disproportionately affect protected groups. Under this doctrine, an employer can be held liable for neutral policies or practices that have a disproportionate impact on a particular group of individuals based on a protected characteristic.
As you may recall, on April 23, 2025, President Trump signed an Executive Order aimed at eliminating the use of disparate-impact liability and ordering federal enforcement agencies to stop the enforcement of antidiscrimination laws based on disparate impact theories. The Executive Order directed the Attorney General and the Chair of the Equal Employment Opportunity Commission to assess all pending investigations, civil suits, or positions taken in ongoing matters under every Federal civil rights law that rely on a theory of disparate-impact liability, and to take appropriate action with respect to those matters consistent with the policy of the Executive Order.
The U.S. DOJ’s recent Opinion is a reflection of the guidance provided in the Executive Order. In its Opinion, the U.S. DOJ found that EEOC’s Title VII 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 decision making. The Opinion states, “Properly understood, disparate-impact liability proscribes only those practices that reflect a significant likelihood of intentional discrimination.”
The Opinion sets forth what must be demonstrated by plaintiffs in order to bring a disparate impact claim:
(1) The specific hiring practice directly caused the unequal outcomes being challenged must be shown; and
(2) Plaintiffs must identify another approach that would be equally effective for employers but would result in fewer unequal outcomes.
This Opinion is not binding and currently employers may continue to face claims based on a disparate impact theory regardless of changes in U.S. DOJ’s enforcement priorities. However, employers should be aware of this shift, as it may serve as an indication of future efforts to revise or rescind the EEOC’s guidance documents. We will continue to monitor updates in this area and will keep you apprised of any developments. Should you have any questions, please contact Ali Law Group.
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