Department of Justice’s Opinion Letter Could Signal Major Shift in Disparate Impact Discrimination, but States may Continue to Enforce Such Laws

Bayan Biazar, Associate

For more than fifty years, disparate impact liability has been a cornerstone of federal employment discrimination law. Under that framework, employers could face liability for facially neutral policies that disproportionately affected protected groups, even without evidence of intentional discrimination. A recent June 9, 2026 Opinion Letter[1] (“Opinion”) from the Department of Justice’s Office of Legal Counsel (“DOJ” or “OLC”) has concluded that the Equal Employment Opportunity Commission’s (“EEOC”) longstanding interpretation and enforcement of disparate impact liability under Title VII of the Civil Rights Act is unconstitutional and inconsistent with federal law.  

What is Disparate Impact Liability?

            Disparate impact[2] claims do not require proof of intentional discrimination and challenge neutral employment practices that disproportionately affect individuals based on race, sex, or another protected characteristic.[3]

            Throughout history, employers have faced disparate impact scrutiny of practices such as aptitude tests, educational requirements, background checks, hiring algorithms, and other selection criteria that produced statistically significant disparities among protected groups. Even where an employer lacked discriminatory intent, liability could arise unless the employer demonstrated that the challenged practice was job-related and consistent with business necessity.[4]

The DOJ’s Position

            The DOJ’s position takes direct aim at the previous disparate impact framework. According to the DOJ, Title VII prohibits intentional discrimination, not practices that merely produce different outcomes among demographic groups.[5] The Opinion argues that disparate impact liability improperly focuses on results rather than equal treatment and, in doing so, pressures employers to consider race, sex, or other protected characteristics when making employment decisions in order to avoid statistical disparities.

            The DOJ further contends that employers should generally be permitted to rely on facially neutral employment practices that serve legitimate business purposes. In the OLC’s view, employment policies should not be presumed unlawful simply because they result in differing outcomes among groups. Rather, the burden should remain on plaintiffs to identify a specific employment practice responsible for the disparity and to demonstrate that an equally effective alternative practice exists that would reduce the alleged impact.

Current Colorado Law

            Notably, the Opinion does not address how its conclusions may affect state employment discrimination laws. In Colorado and some other states like New Jersey and Illinois,[6] disparate impact remains a recognized theory of liability, and employers may still face claims based on the discriminatory effects of a facially neutral employment practice. Colorado’s statutory framework reflects a deliberate balance between addressing employment practices that produce discriminatory outcomes and those motivated by intentional discrimination.[7] [8]

Employer Considerations

            The DOJ’s Opinion signals that the federal government’s enforcement priorities may be changing but employers must ensure that they are also complying with state laws, many of which will enforce disparate impact discrimination. Employers should continue evaluating employment practices for potential disparate impact concerns, despite the Opinion. The coming years may, however, determine whether this Opinion represents merely a change in enforcement strategy primarily driven by the Trump Administration[9] or the beginning of a more fundamental transformation of federal employment discrimination law.

[1] See Constitutionality of Disparate-Impact Liability Under Title VII, 50 Op. O.L.C. __, at *1 (June 9, 2026), available at https://www.justice.gov/olc/media/1444871/dl for the full Opinion Letter.

[2] The Supreme Court has interpreted Title VII to incorporate disparate impact liability, which is liability based on employment decisions that disproportionately affect members of a protected group. See generally Griggs v. Duke Power Co., 401 U.S. 424 (1971).

[3] A protected characteristic refers to an individual’s race, color, religion, sex, and national origin. 42  U.S.C. § 2000e-2.

[4] Business necessity may be demonstrated if an employer’s requirements are a “reasonable measure[ment] of job performance.” See Texas Dep't of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc., 576 U.S. 519, 541 (2015) (quoting Griggs, 401 U.S. at 436.

[5] 50 Op. O.L.C. __, at *2 (“Rather than treating disparate impact as an evidentiary mechanism to smoke out intentional discrimination… EEOC’s historic interpretations contemplate liability based on disproportionately adverse effects alone, without regard to an employer’s likely intent…. EEOC’s historic approach… functions as a qualified racial-proportionality mandate and spurs employers to engage in race-based decisionmaking to avoid liability.”)

[6] See the Illinois Civil Rights Safeguard Act, 775 ILCS 5/1-101 et seq.; see also the New Jersey Law Against Discrimination, N.J.S. 10:5-1 et seq..

[7] See Colo. Rev. Stat. § 24-34-405.

[8] For a more detailed discussion on Colorado’s disparate impact statutory framework and recent Colorado legislation aimed at disparate impact see https://www.rockymountainemployersblog.com/blog/2026/2/12/reductions-in-force-could-still-carry-disparate-impact-risk-nationally-and-in-colorado.

[9] See Executive Order 14281 “Restoring Equality of Opportunity and Meritocracy.”