A new Justice Department memo finding the EEOC’s guidance on unintentional workplace bias illegal can complicate employers’ decisions on whether to continue testing for this type of discrimination in hiring and applicant screenings.
The DOJ’s Office of Legal Counsel, in a recent opinion, declared disparate impact liability under Title VII of the 1964 Civil Rights Act unconstitutional, reasoning it overemphasizes protected traits like race at the outset of employment decisions.
The memo builds on Trump administration efforts to eliminate the use of disparate impact, which include a 2025 executive order that led the DOJ and the Equal Employment Opportunity Commission to drop the theory in civil rights enforcement.
But the June 9 opinion isn’t a free pass to cease statistical monitoring of criminal background checks, aptitude tests, and other employment selection tools that may cause unintentional discrimination, labor economists and attorneys said. The opinion also isn’t legally binding and can’t shield employers from private litigation or state-level disparate impact enforcement actions, they said.
“You can’t manage what you don’t measure,” said Dubravka Tosic, director at Berkeley Research Group, who conducts statistical analysis and damage calculations in employment discrimination cases. “To assess and manage your risk, you need to continue collecting the data to detect any disparities. If a company does face litigation, the way to fight it is with documentation and data.”
Under disparate impact theory, an employer can be liable for discrimination if a policy that appears neutral lacks a legitimate business justification and disproportionately impacts a protected class, regardless of intent.
The administration and other critics see disparate impact liability and efforts to boost workplace diversity as related issues. As with their stance on diversity programs, they argue that the doctrine pressures companies to prioritize race and other protected traits and unfairly penalizes them for unintentional bias.
“By changing the defaults of federal enforcement, this decision guts the primary legal weapon used to enforce identity politics and diversity quotas in the American workplace,” the Center for Equal Opportunity, a conservative group, said in a statement lauding the DOJ’s opinion. “It clears the way for a true meritocracy where individuals are judged by the content of their character and their ability to do the job.”
‘Colorblind’ Constitution
Legal scholars and attorneys view the DOJ’s opinion declaring that disparate impact guidance violates the Equal Protection Clause as a foundation for a future challenge to push the US Supreme Court to revisit the 1971 Griggs v. Duke Power decision, which established the doctrine before Congress later codified it in Title VII.
DOJ’s opinion narrows the target specifically to how disparate impact intersects with race, leveraging the conservative majority’s skepticism of race-conscious policies and citing recent rulings that the Constitution is “colorblind.”
“It seems that they are focusing on trying to make a point for companies not to focus too much on race,” said Tosic, by saying that “Title VII allows for equal treatment, not equal outcomes.”
Some employers’ attitudes may already be changing on whether to audit their employment practices for unintentional discrimination due to the Trump administration’s shift. Ending audits can also save money in company budgets.
Labor economists said they noticed, in recent years, fewer new clients seeking these macro-level audits, which could reveal significant disparities across demographic groups in compensation, promotion, and other practices like background checks.
Companies may now feel empowered to use more types of employment tests and background screenings, as the DOJ asserted that merely citing a valid business reason for using them is enough to eliminate liability fears, said Tosic.
However, there’s still overall concern among employers about guarding against costly discrimination suits.
Senior managers aren’t saying “the laws are so favorable, they can do whatever they want,” said Dwight Steward, an economist and principal of EmployStats, which provides statistical consulting and damage allegations in employment litigation.
Evolving Landscape
As part of the EEOC’s enforcement priorities, Chair Andrea Lucas encouraged White men to sue companies for DEI initiatives deemed discriminatory. She’d also pledged to target companies that show a preference for foreign workers over US citizens.
The administration’s stance that statistical disparities alone are insufficient and there must be a showing of discriminatory intent creates a higher bar for the EEOC to bring discrimination suits on behalf of workers. It also undermines a liability theory that plaintiffs, regardless of race and other background, commonly use in bias cases.
Tosic sees the EEOC’s proposal to revoke reporting requirements for workforce race and sex data as ironic, as this information can help both parties in litigation analyze workforce trends by race and gender and could be useful for pursuing or defending bias claims, she said.
Employers may also still need to collect this data under some state laws and the EEOC’s 1978 Uniform Guidelines on Employee Selection Procedures under Title VII, which provide guidance on maintaining lawful employment selection practices.
The DOJ also deemed the UGESP’s disparate impact-based guidance for employers illegal, creating an opening for the EEOC to vacate or make substantial revisions.
Sama Agrawal, a labor economist at EmployStats, has seen greater interest among employers in intersectional analyses of race, gender, and age over the past two years.
They’re “going a step further in getting more information” regarding workplace practices that may affect White men specifically, she said.
This dovetails with an uptick in workplace discrimination cases involving White men.
But Stefanie Camfield, associate general counsel for Engage PEO, hasn’t seen a major shift. For her and other compliance consultants, the need for employment decisions to be documented and supported by legitimate business reasons is key, even when the White House and federal agencies appear to have reduced regulatory burdens.
“I’ve been advising our clients that many of the actions taken now or in the near future are unlikely to be litigated before President Trump’s current tenure ends,” Camfield said. “Changing behavior too much, one way or the other, could create other risks down the line,” particularly if the next administration reverts to prior enforcement priorities.