As part of the Equal Employment Opportunity Commission’s (EEOC) new National Enforcement Plan (NEP), the commission stated its intent to “eliminate the use of disparate impact liability theories in investigations,” and vowed “not [to] commence, develop, or continue to pursue litigation advancing disparate impact claims.”
The NEP, voted into effect on June 4, 2026, replaces the EEOC’s Biden-era Strategic Enforcement Plan and is intended to comply with the Trump Administration’s Executive Order 14281, issued in April 2026, directing the federal government to eliminate the pursuit of disparate impact liability.
On June 9, 2026, following the EEOC’s adoption of the NEP, the Justice Department’s Office of Legal Counsel (OLC) issued a formal opinion to the commission, characterizing the agency’s disparate impact enforcement guidance as “unlawful and unconstitutional” and recommending three limiting principles that, taken together, would significantly narrow the scope of employer liability in future disparate impact cases.
This blog provides an overview of disparate impact claims in the employment context generally, and suggests to litigants changes to expect moving forward.
What are Disparate Impact Claims?
Broadly speaking, disparate impact claims refer to legal challenges to neutral policies that nonetheless adversely affect members of a specific protected class.
Martin C. Kuhn, Marquette 2004, Marquette 2004, is the founder of
Kuhn Law, in Milwaukee, where he focuses on labor and employment matters.
Antidiscrimination laws frequently target two primary forms of discrimination: disparate treatment and disparate impact. Under Title VII, disparate treatment cases involve intentional harm directed at an employee or potential employee because of their membership in one or more protected classes.
Plaintiffs seeking to establish disparate treatment in employment must follow the McDonnell-Douglas burden-shifting paradigm.[1] Under
McDonnell-Douglas, plaintiffs establish discrimination under direct or indirect methods of proof. Once this burden is met, the burden “shifts” to the employer to identify legitimate, nondiscriminatory reasons for the adverse actions at issue. The burden then “shifts back” to the plaintiff to show the defendant’s stated reasons are pretextual.
Disparate impact discrimination, on the other hand, occurs when an employer’s seemingly neutral policy or practice disproportionately and adversely impacts members of a specific protected class. Intent, in disparate impact cases, has historically been irrelevant. Instead, disparate impact cases focus nearly entirely on outcomes without regard to whether a defendant intended to discriminate.
In disparate impact cases, the question is whether an employer’s practices disparately impacted a specific protected class of individuals at a significantly higher rate. If so, employers in such cases are required to justify the practices at issue to avoid liability.
The Supreme Court first endorsed the disparate impact theory in 1971 in Griggs v. Duke Power Company.[2] Griggs was set in North Carolina and filed with the courts in 1966. The plaintiffs in the case were 13 African American laborers at the Duke Power Company who had been frozen into a racially separate, lower-paid tier of employment.
Griggs took place at a time when many African Americans were still experiencing the effects of the Jim Crow laws that had denied them access to quality education for decades. Griggs examined whether the employer’s practices of hiring and assigning jobs to employees based on whether individuals had a high school diploma or depending on how individuals scored on intelligence tests violated Title VII. The employer’s practices, the plaintiffs argued, disparately impacted African American applicants and employees of Duke Power Company, who were less likely to have the requisite diploma and who underperformed on the employer’s tests relative to non-African Americans.
Ultimately, a unanimous Supreme Court agreed. It concluded that the employer’s practices operated to disqualify African American applicants at a substantially higher rate than Caucasian applicants. Moreover, the Court held that the employer’s requirements were not shown to bear a demonstrable relationship to the successful performance of the jobs for which the standards were used and requirements operated.
Whether the employer intended to discriminate against African American applicants was not relevant to liability, the Court found, because “courts were required to look to the consequences of the employment practices, not simply the motivation.”[3]
In short, Griggs held that under a disparate impact theory, Title VII allows for a finding of wrongdoing based on discriminatory outcomes, even in the absence of proof of discriminatory intent.
The disparate impact approach applied in Griggs was subsequently codified by Congress in the Civil Rights Act of 1991, and became one means of enforcing antidiscrimination law in a variety of contexts, including employment, housing, education, and with respect to federally funded programs.
Current Methods for Proving Disparate Impact in Employment
The OLC’s June 9, 2026, formal opinion recommends significant changes to EEOC’s enforcement guidelines pertaining to disparate impact cases. As such, before discussing the OLC’s recommended changes, it is worth pausing briefly to review the current methods of proof for disparate impact cases.
Courts apply an “effects test” in disparate impact cases. Under this framework, plaintiffs must identify a particular practice creating the adverse effects at issue.[4] The discriminatory effect must be substantial. Traditionally, the EEOC has required disparate impact claimants to show that the adverse impact to employees of a protected class is less than 80% of the selection rate for the most selected group.[5]
Once the plaintiff has shown that a policy causes a significant adverse effect, the burden shifts to the defendant to justify the challenged practice.[6] In the employment context, employers can meet their burden using the “business necessity defense,” which involves a showing that the challenged practice is job-related for the position in question and consistent with business necessity.[7] If an employment practice that operates to exclude a protected group cannot be shown to be related to job performance, the practice is prohibited.[8]
If the defendant makes this showing, a plaintiff may still prevail if it identifies a different practice that would serve the employer’s legitimate needs while producing less disparate impact, and the employer refuses to adopt it.[9]
Recent Challenges to Disparate Impact Theory
On April 23, 2025, the Trump Administration issued Executive Order 14281, entitled “Restoring Equality of Opportunity and Meritocracy.” In it, the administration stated its intent “to eliminate the use of disparate impact liability in all contexts to the maximum degree possible,” called on agencies to “deprioritize” disparate impact enforcement, and revoked presidential approval of certain disparate impact regulations.
President Trump’s executive order describes disparate impact doctrine as a dangerous device that would “transform America’s promise of equal opportunity into a divisive pursuit of results preordained by irrelevant immutable characteristics.”
Disparate impact liability “not only undermines our national values, but also runs contrary to equal protection under the law and, therefore, violates our Constitution,” the order contends.
In keeping with the order’s directives, on June 4, 2026, the EEOC voted to adopt its NEP, and made clear the agency will comply with Trump’s order directing the federal government to cease pursuit of disparate impact liability.
In its June 9, 2026, opinion memo to the EEOC, the OLC declared the EEOC’s Title VII guidelines to be “unlawful and unconstitutional” inasmuch as the agency’s guidelines “contemplate liability based on disproportionately adverse effects alone, without regard to an employer’s likely intent.”
The OLC’s opinion goes on to set out three “limiting principles” reinterpreting Title VII’s disparate impact provisions. First, the opinion establishes a significantly lower threshold for the business necessity defense. Second, the OLC’s opinion contends plaintiffs must satisfy a “robust causality requirement” establishing a causal link between the challenged practice(s) and the disparate impact at issue. Third, plaintiffs must, according to the OLC’s opinion, “identify an alternative employment practice and prove both that it would have less disparate impact and be equally effective.”
Taken together, the OLC’s limiting principles would significantly narrow the available pathways for establishing employer liability in disparate impact cases.
In response to the OLC’s memo, EEOC Chair Andrea Lucas thanked the OLC, and said its memo will “provide clarity regarding the constitutional limits of disparate impact in employment discrimination matters.”
What’s Next for Disparate Impact Claims?
While none of the developments discussed here amend or rescind any existing EEOC guidelines or law, plaintiffs should not expect the EEOC will pursue disparate impact claims under the previous standards. It is further likely the EEOC will soon issue revised guidelines formally adopting the OLC’s opinion, including its three “limiting principles” or some version thereof.
The OLC’s opinion and any related changes in EEOC enforcement guidance are certain to be tested in court, where the propriety of the OLC’s opinion will be ultimately determined.
In the meantime, private plaintiffs may continue to pursue disparate impact claims under the existing framework unless or until the courts determine otherwise. Litigants choosing to do so should carefully monitor the status of any challenges to the OLC’s opinion and thoughtfully assess the impact of any such challenges to their existing cases.
Endnotes
[1] See McDonnell-Douglas Corp. v. Green, 411 U.S. 792 (1973). ↩
[2] Griggs v. Duke Power Company, 401 U.S. 424 (1971). ↩
[3] Id. at 434. ↩
[4] 42 U.S.C. § 2000e-2(k). ↩
[5] 29 C.F.R. § 1607. ↩
[6] See, e.g., Bew v. City of Chicago, 252 F. 3d 891, 895 (7th Cir. 2001). ↩
[7] 42 U.S.C. § 2000e-2(k)(1)(A)(i). ↩
[8] Griggs, supra, at 431. ↩
[9] 42 U.S.C. §§ 2000e-2(k)(1)(A)(ii), (C). ↩