Overview
- On June 9 the Justice Department’s Office of Legal Counsel issued an opinion finding the EEOC’s longstanding disparate‑impact guidance constitutionally suspect and directing agencies to apply a narrower framework.
- The opinion sets three limiting rules: plaintiffs must show robust causation that a particular practice caused the disparity, employers face an easier business‑necessity defense that treats practices as presumptively job‑related, and plaintiffs must propose an equally effective, less‑discriminatory alternative.
- The OLC view is binding on executive agencies so the EEOC has signaled it will not pursue disparate‑impact claims under prior standards while it considers new guidance or rulemaking.
- The opinion does not change Title VII itself, does not apply to the ADEA, and leaves private and state‑law disparate‑impact claims intact so litigation and state enforcement are expected to test the OLC framework.
- Employers may face less federal exposure for common screens like tests and background checks but will confront a patchwork of state rules and private lawsuits that could preserve broader liability in places such as New York and California.