What Happened?
On June 9, 2026, the Department of Justice’s Office of Legal Counsel (“OLC”) issued a memorandum opinion concluding that the EEOC’s longstanding interpretation of disparate-impact liability under Title VII of the Civil Rights Act of 1964 is unconstitutional. The opinion was authored by Assistant Attorney General T. Elliot Gaiser and Deputy Assistant Attorney General Joshua J. Craddock in response to a request from EEOC Chair Andrea R. Lucas.
OLC finds that EEOC’s Uniform Guidelines on Employee Selection Procedures (“Guidelines”)—in effect since 1978—and related guidance “embrace an unconstitutional reading of Title VII” because they contemplate liability based on disproportionately adverse effects alone, without regard to whether an employer likely engaged in intentional discrimination. According to OLC, this approach “functions as a qualified racial-proportionality mandate and spurs employers to engage in race-based decisionmaking to avoid liability.”
The Constitutional Problem
The opinion’s constitutional reasoning draws on Students for Fair Admissions, Inc. v. President & Fellows of Harvard College, 143 S. Ct. 2141 (2023), Louisiana v. Callais, 146 S. Ct. 1131 (2026), and Ricci v. DeStefano, 557 U.S. 557 (2009). OLC argues that the Equal Protection Clause guarantees equal treatment, not equal outcomes, and that the touchstone of any equal-protection claim is whether the challenged action can “ultimately be traced to a racially discriminatory purpose.” Disparate-impact liability as historically applied diverges from this principle by imposing liability based solely on statistical disparities, which pressures employers into race-conscious decision-making that itself violates both Title VII and the Constitution.
Three Limiting Principles
Rather than purporting to strike down Title VII’s disparate-impact provisions entirely, OLC identifies three limiting principles that (according to OLC) must reign in disparate-impact liability going forward.
First, a lowered business-necessity defense. The defense is “not a high bar”—an employer need only show that the challenged practice rationally serves a valid business purpose. Common selection procedures—background checks, aptitude tests, knowledge-based tests, SAT scores, high-school graduation requirements, and blind auditions—are “presumptively job-related” per OLC. Only truly irrational practices with “no plausible job-relatedness” can create liability.
Second, a robust causality requirement. Plaintiffs must demonstrate—at the pleading stage and beyond—that the specific employment practice at issue actually caused the disparate impact, rather than relying on raw statistical disparities or pointing to external factors. Without this requirement, OLC reasons, employers would face litigation over “racial disparities they did not create,” making racial quotas the “only practicable option.”
Third, a demanding alternative-practice requirement. Plaintiffs must identify a specific alternative employment practice and prove both that it would produce less disparate impact and that it would be “equally effective” in achieving the employer’s legitimate goals, including with respect to cost and administrative burden. Only the refusal to adopt such a clearly superior alternative can give rise to a “strong inference” that the challenged policy is unlawful.
Two EEOC Regulations Declared Unlawful
Finally, OLC identifies two specific components of EEOC’s regulatory framework as impermissible. Namely, the EEOC’s Guidelines on validation-study requirements because they are “incomprehensible” to typical employers and inconsistent with Constitutional standards and the EEOC’s Affirmative Action Guidelines (29 C.F.R. § 1608.1 et seq.). OLC concludes these regulations “run further into unconstitutional territory” by authorizing—and expressly encouraging—racial preferences in response to actual or anticipated disparate impacts.
Bottom Line
It is important to understand this OLC opinion is just that, an opinion. It does not carry the force of a court decision, but it represents the executive branch’s official legal position and will guide EEOC enforcement going forward. Here is what employers need to know:
- Disparate-impact claims are harder to bring, but still viable. Title VII’s disparate-impact provisions remain statutory law as codified by the Civil Rights Act of 1991. Courts are not bound by OLC opinions, and some circuits may continue to apply the traditional, more demanding framework. Although the EEOC is unlikely to pursue enforcement actions under its old approach while this opinion stands, private litigations may certainly do so.
- Standard selection tools get a presumption of validity. Background checks, aptitude tests, educational requirements, and similar criteria are now presumptively lawful in the executive branch’s view, shifting the practical burden heavily onto plaintiffs.
- Voluntary affirmative action programs face heightened risk. Programs premised on anticipated disparate impact—rather than documented, specific past discrimination—are now viewed by the executive branch as legally and constitutionally suspect. Employers maintaining race-conscious diversity initiatives should reevaluate them in light of the changed environment.
Employers should continue to work closely with counsel to assess how this opinion affects their hiring practices, selection procedures, and any remaining diversity-related programs. As always, our team is available to provide this critically important advice and counsel.