Last week, the Department of Justice issued an opinion concluding that the EEOC’s longstanding guidelines on disparate impact liability under Title VII of the Civil Rights Act are unconstitutional. It is a significant statement of executive branch policy, but it is not, on its own, a change in the law. Employers need to understand both what has shifted and what has not.

What has happened

The DOJ’s Office of Legal Counsel published a formal opinion finding that the EEOC’s disparate impact guidelines “pressured employers to engage in racial discrimination” by exposing them to liability for unequal hiring and promotion outcomes among different demographic groups, regardless of whether the employer intended to discriminate. 

The opinion seeks to implement Executive Order 14281, which rejected disparate impact liability on the basis that it “creates a near insurmountable presumption [that] unlawful discrimination exists where there are any differences in outcomes” among racial, sex-based, or similar groups. Acting Attorney General Todd Blanche characterized the opinion as allowing “businesses to hire based on performance, restoring equal opportunities in the American workplace.” EEOC Chair Andrea Lucas endorsed the analysis, saying it would “provide clarity regarding the Constitutional limits of disparate impact in employment discrimination matters.” 

The practical thrust of the OLC opinion is twofold. First, it states that employers can use hiring tools such as aptitude tests, knowledge-based tests, criminal background checks, and SAT scores without fear of Title VII liability simply because those tools produce different outcomes for different groups, provided the practice is “reasonable, useful, or helps serve a valid business purpose.” That is a notably lower threshold than the traditional “job-related and consistent with business necessity” standard. Second, it raises the bar for plaintiffs bringing disparate impact claims, requiring them both to show that a specific practice directly caused unequal outcomes and to identify an equally effective alternative that would produce fewer disparities. 

What this means for employers

The immediate effect is a significant reduction in federal enforcement risk. The EEOC and DOJ are unlikely to pursue new investigations or litigation grounded in disparate impact theory for the foreseeable future. Employers who have felt constrained in adopting selection tools, standardized testing, credential requirements, criminal history screening, may now face considerably less federal scrutiny when deploying them. 

For HR teams working in hiring, performance management, and workforce analytics, this creates breathing room. Organizations that have built compliance infrastructure around adverse impact analysis, such as four-fifths rule calculations, validation studies, alternative practice reviews, may be tempted to scale those efforts back. In particular, employers that previously avoided certain selection methods because of disparate impact risk may now feel more confident implementing them.

But “less federal scrutiny” is not the same as “no legal risk,” and employers who treat this opinion as a green light to abandon defensible hiring practices may find themselves exposed in ways they did not anticipate. 

Why this may or may not matter — limitations and caveats

There are several important reasons to approach the DOJ’s announcement with caution.

An OLC opinion does not bind the courts. The opinion is an internal executive branch legal conclusion. It carries no force in federal litigation. As one former Civil Rights Division lawyer noted, “[c]ourts, including the Supreme Court, have long recognized the lawfulness of disparate impact and the important role it plays in ensuring equal opportunity.” The Supreme Court first recognized disparate impact liability under Title VII in Griggs v. Duke Power Co. in 1971, and Congress codified the framework in the Civil Rights Act of 1991 by adding Section 703(k) to Title VII. The OLC opinion does not overrule the Supreme Court’s prior precedent nor have any effect on Section 703(k).

Private litigation remains fully available. Even with the EEOC stepping back from disparate impact enforcement, private plaintiffs retain the right to bring disparate impact claims in court under Title VII's existing statutory framework. Plaintiffs’ employment lawyers are well aware of this, and the reduced federal enforcement posture does not diminish the viability of private class actions.

State law obligations continue. Several states maintain their own disparate impact frameworks that operate independently of federal enforcement priorities. California’s Fair Employment and Housing Act, New York’s Human Rights Law, and similar statutes in other jurisdictions continue to recognize and enforce disparate impact liability. Employers operating across multiple states cannot simply look to the federal position and assume uniform protection.

The judicial landscape may yet diverge. While some legal scholars have argued that recent Supreme Court decisions, including Muldrow v. City of St. Louis (2024) and the overturning of Chevron deference in Loper Bright, create doctrinal openings to revisit Griggs, the Court has not done so. Until it does, Griggs and Section 703(k) remain good law. 

A future administration could reverse course. Executive orders and OLC opinions are creatures of the sitting administration. A change in political leadership could restore prior enforcement priorities, leaving employers who dismantled their compliance programs scrambling to rebuild.

The takeaway

The DOJ’s opinion is a clear signal of where federal enforcement is headed, and it is not headed toward disparate impact claims. But the law itself has not changed. Title VII’s disparate impact provisions remain on the books, courts remain free to apply them, private plaintiffs remain free to invoke them, and state regulators remain free to enforce their own analogues.

The prudent course for employers is to take note of the shifting federal posture while maintaining defensible, well-documented hiring and employment practices. Now is not the time to dismantle your adverse impact monitoring or abandon validation efforts. It is, however, a good time to review your existing processes, ensure they are genuinely job-related, and confirm that your documentation would withstand investigative scrutiny, whether that scrutiny comes from a federal agency, a private plaintiff, or a state regulator.