Disparate Impact Liability Targeted Anew in DEI Legal Battle

The conservative legal movement is bringing fresh scrutiny to a doctrine used to assess liability for unintentional workplace bias, with critics arguing it’s an overreach as the partisan clash over diversity, equity, and inclusion initiatives intensifies.

The disparate impact theory of liability allows litigants to challenge neutrally applied workplace practices that can be discriminatory if statistics show they disproportionately affect people based on their race, sex, or other protected characteristics. These include educational requirements, criminal history policies, and physical fitness and job tests.

Conservatives have long argued that the doctrine unfairly punishes employers for unintentional practices and overemphasizes protected traits at the outset of decision-making. Those talking points are now dovetailing with the Trump administration’s anti-discrimination enforcement priorities, legal scholars said, building on the US Supreme Court’s 2023 ruling outlawing race-conscious college admissions practices.

Under the disparate impact theory, codified in Title VII of the 1964 Civil Rights Act and approved by the Supreme Court’s 1971Griggs v. Duke Power Co. decision, a plaintiff can sue without the higher burden of demonstrating intentional bias.

“Everything is going to have a disparate impact on some protected class, so the first problem with disparate impact liability is that it encompasses everything,” said Joshua Thompson, director of equality and opportunity litigation at the conservative Pacific Legal Foundation.

Employers then “proactively think race first, and make decisions based on race or whatever the protected class they’re trying to avoid” triggering potential liability, he said. “You can’t remedy unintentional discrimination by mandating intentional discrimination.”

Access to Justice

Civil rights advocates and other supporters of the doctrine see it differently, however.

The doctrine pushes employers to remove unnecessary barriers to employment that lack a legitimate business need, said Olatunde C.A. Johnson, a professor at Columbia Law School specializing in anti-discrimination law.

Most workplace discrimination litigation arises from a disparate impact claim because workers “don’t usually have concrete evidence to show intentional bias,” Johnson said. Paring it back “obviously would weaken workers’ efforts to bring cases.”

While claimants need not prove malicious intent, employment law scholars said the standards for proving a pattern of bias—the three-step burden-shifting framework and the need for extensive statistical analysis—are significant hurdles to sustaining a disparate impact claim.

A worker must show that the policy or underlying conduct disproportionately impacted employees of certain protected groups without a legitimate business rationale. If met, the defendant must then demonstrate that it serves legitimate, nondiscriminatory business interests. The plaintiff could win by showing that another practice would’ve caused a less discriminatory effect.

Enforcement Discretion

Any attempts to override the doctrine need congressional approval, which could prove an obstacle to proponents of that effort.

But the Trump administration may still choose to limit the use of this doctrine, as his conservative allies have recommended, including supporters of the Project 2025 manifesto which advocates for eliminating it altogether.

Without it, the US Justice Department would likely only pursue cases when there’s clear evidence of intentional bias, said Jonathan Berry, a DOJ alumnus and managing partner at Boyden Gray PLLC.

“It has been widely speculated that the Department of Justice will revisit the current interpretations of the laws that support certain disparate impact claims,” conservative activist Edward Blum, whose legal group convinced the Supreme Court to outlaw race-conscious college admissions practices, told Bloomberg Law via email.

“This may have a significant impact in various areas of public policies,” he said.

A DOJ spokesperson didn’t respond to a request for comment.

A key argument from critics is that Title VII’s disparate impact provision undermines the US Constitution’s guarantee of equal protection, which they say was meant to address intentional bias.

Then-Justice Antonin Scalia’s concurrence in the high court’s 2009 Ricci v. DeStefano decision held this view, warning of the looming “evil day” when the justices must confront whether the doctrine violates the equal protection clause. Justices Clarence Thomas and Samuel Alito joined it.

Ricci concerned the City of New Haven, Conn.'s decision to discard firefighter promotional test results to avoid a disparate impact on Black and Latino candidates. The high court’s conservative majority concluded that this constituted unlawful bias against the White candidates who passed the tests.

Cases Pending

Conservatives have since invoked the concurrence in subsequent litigation where the doctrine was at issue, including in non-workplace bias cases.

One of the most recent judicial jabs came from a Trump-appointed federal judge’s Jan. 17 refusal to approve the Biden DOJ’s $750,000 consent decree to resolve racial bias claims against the Cobb County Fire Department in Atlanta, Ga.

The deal itself is discriminatory because it promises payout, priority hiring, and retroactive seniority only to eligible Black claimants who were allegedly screened out of the application process, Judge William Ray of the Northern District of Georgia said.

Ricci requires a “strong basis in evidence” that the employer believes it would be held liable for declining to “participate in the race-conscious discriminatory action” to remedy a perceived disparate impact, he said.  If the Trump DOJ continues the case, Ray said he may appoint a third party to defend the county’s stance that it acted lawfully.

Ricci’s applicability is also at issue in a similar pending Biden-era consent decree to resolve claims that the City of Durham, N.C.'s written test for entry-level firefighters discriminates against Black applicants.

Judge Thomas Schroeder of the Middle District of North Carolina on Jan. 15 allowed Blum’s legal group to argue as an amicus curiae that the decree is unconstitutional and undercuts Ricci and Title VII.

The City of South Bend, Ind., also made this argument in a Jan. 6 court filing denying the DOJ’s claims that its written and physical tests for entry-level police officers disproportionately impacted Black and female applicants.

“It’s a signal of potentially broader judicial reception,” Berry said of the legal developments. “More litigants and more judges are beginning to revisit aspects of the law that may be out of joint with equal protection.”