On June 9, 2026, the Department of Justice’s Office of Legal Counsel (“OLC”) issued a formal opinion concluding that the Equal Employment Opportunity Commission’s (“EEOC”) longstanding guidelines on disparate-impact liability under Title VII of the Civil Rights Act of 1964 are unconstitutional. The OLC opinion stated that a disparate impact claim under Title VII exposed employers to liability without regard to the employer’s intent and thereby pressured employers to engage in race-based decision-making in violation of the Constitution’s equal-protection guarantee. The opinion reinterprets Title VII’s disparate-impact provisions to require a significantly lower threshold for the business-necessity defense, a robust causality requirement for plaintiffs, and affirmative evidence of an equally effective alternative practice. For employers, the opinion is potentially transformative in workplace selection procedures and hiring practices.
History of Disparate-Impact Liability
Title VII prohibits employers from discriminating against individuals “because of” race, color, religion, sex, or national origin. In Griggs v. Duke Power Co., 401 U.S. 424 (1971), the Supreme Court interpreted Title VII to reach beyond intentional discrimination, holding that facially neutral employment practices that are “fair in form, but discriminatory in operation” may also violate the statute. Under this framework, an employer could be liable for using selection criteria—such as standardized tests or educational requirements—that disproportionately affect members of a protected group, unless the employer demonstrated that the criteria was related to job performance.
In 1991, Congress amended Title VII to codify a three-step burden-shifting framework for disparate-impact claims: (1) the plaintiff must demonstrate that a particular employment practice causes a disparate impact; (2) the burden shifts to the employer to show the practice is consistent with business necessity; and (3) if the employer makes that showing, the plaintiff may still prevail by identifying an equally effective alternative practice with less disparate impact.
The concept of disparate impact liability under Title VII liability has a controversial history due to a perceived tension with the Constitution’s equal-protection guarantee. In Ricci v. DeStefano, 557 U.S. 557 (2009), the Supreme Court confronted a case in which a fire department discarded promotion exam results because of racially disparate outcomes, and held that the department’s race-based remedial action violated Title VII’s disparate-treatment prohibition. Justice Scalia’s concurrence warned that the Court would eventually need to confront whether the disparate-impact provisions of Title VII are themselves consistent with equal protection. In Texas Department of Housing & Community Affairs v. Inclusive Communities Project, Inc., 576 U.S. 519 (2015), the Court acknowledged that “serious constitutional questions” would arise if disparate-impact liability were imposed based solely on statistical disparities, and stressed that such liability must be “limited in key respects.” The OLC opinion takes up these threads directly.
President Trump’s April 2025 Executive Order 14281 (“EO”) set the stage for the OLC opinion. The EO, titled “Restoring Equality of Opportunity and Meritocracy”, wholly rejected disparate-impact liability on the basis it “creates a near insurmountable presumption [that] unlawful discrimination exists where there are any differences in outcomes [among] races, sexes, or other groups.” The OLC opinion is the DOJ’s fulfillment of that mandate, providing the constitutional foundation upon which the Administration’s restructuring of federal enforcement is built.
The Opinion: Three Limiting Principles
Relying on several key Supreme Court decisions, the opinion sets out three limiting principles that, taken together, would significantly narrow the scope of employer liability on a disparate impact theory.
First: The Business-Necessity Defense Is a Low Bar
Under the opinion’s interpretation, an employer need only demonstrate that a challenged practice rationally serves a valid business purpose—that is, that the practice is “reasonable,” “convenient,” or “helpful” in achieving a legitimate end. Workplace requirements and selection procedures—including background checks, aptitude tests, knowledge-based tests, SAT scores, and high-school graduation requirements—are presumptively job-related. Only practices that are truly “artificial, arbitrary, and unnecessary”, with no plausible job-relatedness, can create disparate-impact liability. This standard is substantially more employer-friendly than the EEOC’s existing validation-study framework.
Second: Plaintiffs Must Satisfy a Robust Causality Requirement
The opinion states that a disparate-impact plaintiff must demonstrate, both at the pleading stage and throughout litigation, that the specific employment practice challenged caused the alleged disparate impact. Plaintiffs may not rely on raw statistical disparities across an employer’s workforce or point to external societal factors. Instead, they must isolate the particular practice responsible for the unequal outcomes.
Third: Plaintiffs Must Identify an Equally Effective Alternative
The opinion requires that a plaintiff, in addition to demonstrating causation, must identify an available—and equally effective—alternative employment practice that would produce less disparate impact. “Effectiveness” must include achieving legitimate business goals without spiking the employer’s costs and administrative burdens. According to the OLC, only an employer’s refusal to adopt a genuinely equivalent alternative “without a similarly undesirable racial effect” permits an inference that the challenged practice is a pretext for discrimination.
What Happens Next
The OLC opinion is directed to the EEOC and is intended to guide the Commission’s enforcement of Title VII going forward. But the opinion does not, by itself, amend or rescind any EEOC guidelines or law. Rather, the opinion establishes the DOJ’s position that the current guidance and regulations are unlawful and unconstitutional. Employers should expect the EEOC to undertake rulemaking or issue revised guidance to conform its framework to the opinion’s requirements. In the interim, the opinion signals a significant shift in federal enforcement posture: the DOJ and EEOC are unlikely to pursue disparate-impact claims under the previous standards.
To be clear, the opinion has not been tested in court. Federal courts will ultimately determine whether the OLC’s reading of the statute is correct. Private plaintiffs and state enforcement agencies may continue to pursue disparate-impact claims under existing precedent and employers should not assume that a court will simply take the OLC opinion as gospel. That said, OLC opinions are binding on federal executive agencies, meaning the EEOC and other federal departments are expected to conform their enforcement practices to the opinion’s framework.
Employer Takeaways
The opinion does not apply to the ADEA. Importantly, the opinion expressly states that it does not intend to address or otherwise modify disparate-impact liability under the Age Discrimination in Employment Act of 1967 (“ADEA”). The opinion noted this is because age is not considered a “suspect class.”
The EEOC under the Trump Administration is likely to move in this direction. While the EEOC has not yet revised its regulations or guidance to conform to the OLC opinion’s framework, employers should anticipate that such changes may be forthcoming. In the interim, employers should remain mindful and continue to comply with current regulations, guidance, and precedent governing disparate-impact liability.
Monitor developments and engage counsel. The federal enforcement landscape is likely to evolve and employers should actively monitor these developments and consult experienced employment counsel to evaluate their specific risk profile, ensure continued compliance with current federal, state, and local requirements, and develop strategies that account for the shifting regulatory environment.