DOJ reinterprets Title VII disparate impact—Practical implications for employers

On June 9, 2026, the U.S. Department of Justice’s (DOJ) Office of Legal Counsel (OLC) issued an opinion concluding that the Equal Employment Opportunity Commission’s (EEOC) long-standing approach to disparate impact liability under Title VII of the Civil Rights Act of 1964 is unconstitutional. Although the opinion isn’t a court ruling, it is binding on all federal agencies and will immediately reshape EEOC enforcement priorities and guidance.

Theories of discrimination

For over 50 years, Title VII litigation has proceeded on two distinct theories: disparate treatment (requiring proof of intentional discrimination) and disparate impact (reaching facially neutral practices that produce disproportionate effects on a protected group without proof of discriminatory intent). The OLC opinion substantially narrows the second theory at the federal level, holding that disparate impact is no longer a free-standing basis for liability but functions only as a limited evidentiary tool supporting an inference of intentional discrimination.

The opinion grounds its analysis in Supreme Court precedent and appears to reflect the direction of more recent Supreme Court decisions subjecting race-conscious governmental action to increasingly exacting constitutional scrutiny and rejected statistical racial balancing as a justification for such action.

Two regulatory frameworks declared unconstitutional

The OLC opinion identifies two existing federal regulatory frameworks as unconstitutional: