A Turning Point in Title VII

A major shift in federal employment law is underway. In this episode, we unpack the DOJ Office of Legal Counsel’s June 9, 2026 opinion declaring key aspects of disparate-impact liability under Title VII unconstitutional. We explore how this change narrows employer risk, raises the bar for plaintiffs, and challenges long-standing EEOC guidance—while leaving state laws and disparate-treatment claims firmly in place. Tune in for a clear breakdown of what changed, what didn’t, and what employers should do next.

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DOJ Reinterprets Title VII Disparate Impact — Practical Implications for Employers

About the authors

John Pueschel

Kiley McCarthy-Connolly Scholtz

Richard Raleigh

Transcript

Welcome to Womble Perspectives, where we explore a wide range of topics, from the latest legal updates to industry trends to the business of law. Our team of lawyers, professionals and occasional outside guests will take you through the most pressing issues facing businesses today and provide practical and actionable advice to help you navigate the ever changing legal landscape.

With a focus on innovation, collaboration and client service. We are committed to delivering exceptional value to our clients and to the communities we serve. And now our latest episode.

Host A: 

Welcome back to the show. Today we’re breaking down a major development that could reshape employment law in the U.S.: a June 9, 2026 opinion from the Department of Justice’s Office of Legal Counsel.

Host B: 

The OLC concluded that the EEOC’s long-standing approach to disparate-impact liability under Title VII is actually unconstitutional. Now, just to clarify upfront, this isn’t a court ruling, but it is binding on federal agencies. So even without a court decision, this will immediately influence how the EEOC approaches enforcement.

Host A: 

For more than 50 years, Title VII cases have relied on two frameworks: disparate treatment and disparate impact. And disparate treatment is about intentional discrimination. You have to prove someone meant to discriminate.

And disparate impact is different. It looks at policies that seem neutral on their face but disproportionately affect protected groups, even if there’s no intent.

Host B:

What the OLC is saying now is that disparate impact can’t stand on its own anymore. It’s no longer a separate basis for liability. Instead, it’s been reduced to more of an evidentiary tool, something that might support an inference of intentional discrimination.

Host A:
So what’s the legal reasoning behind this? Well, the opinion leans heavily on Supreme Court precedent. It also reflects a broader trend we’ve seen where race-conscious policies are being subject to stricter constitutional scrutiny. And notably, the opinion challenges the idea that statistical imbalances alone can justify certain employment practices.

Host B: 

And that leads us to two major regulatory frameworks the OLC specifically calls out as unconstitutional. First up, the Uniform Guidelines on Employee Selection Procedures.

These guidelines have long required employers to conduct validation studies for things like 

hiring tests. They’ve made testing programs expensive and legally risky. The OLC says those validation requirements don’t have a valid statutory basis under its narrower reading of Title VII.

Host A: 

The second framework is the EEOC’s Affirmative Action Guidelines. These provided a kind of safe harbor for employers implementing race-conscious programs based on workforce imbalances.

But if disparate impact isn’t an independent theory anymore, that safe harbor essentially collapses. And here’s an important thing to keep in mind: these regulations are still technically in place.

Host B: 

Exactly. The opinion doesn’t automatically repeal them. We could see formal rulemaking or court challenges down the line, but for now, there’s uncertainty. So, what does this mean in practice for employers?

Host A: 

Well first, the “business necessity” standard has been significantly lowered. Instead of rigorous validation, employers now just need to show a rational, non-arbitrary relationship between a policy and the job.

Second, common screening tools are getting stronger protection. Things like aptitude tests, degree requirements, and even criminal-history exclusions are now presumed to be job-related.

Host B: 

Which means they’re less likely to be successfully challenged.

Host A: 

And third, the burden on plaintiffs is higher. They now have to identify the exact policy causing the disparity and propose an equally effective alternative.

And even if it’s debatable whether the alternative is better, the employer wins.

Host B: 

This feels like a significant shift in litigation dynamics, but not everything changes. Disparate-treatment claims, for example, are completely unaffected.

So intentional discrimination is still very much in play, and state and local laws remain fully intact. That includes fair-chance hiring laws, regulations around automated decision-making, and broader disparate-impact standards in states like California and New York.

Host B: 

So employers are now operating in a bit of a split landscape—different rules at the federal and state levels. Which brings us to a few practical next steps. To start, employers should look at inventorying key policies. That includes hiring and promotion screens, criminal-history rules, DEI program design, and reduction-in-force criteria.

Host A: 

And don’t make major changes in a vacuum. Coordination with legal counsel is essential, especially with the likelihood of court challenges and evolving state laws.

Host B:

At the federal level, exposure to disparate-impact claims is clearly narrowing, but risk hasn’t disappeared, it’s just shifting. State laws and disparate-treatment claims still carry real weight.

Host A: 

So the safest path forward is to focus on job-related, consistently applied practices and make sure everything is backed by clear, streamlined documentation.

Thank you for listening to Womble Perspectives. If you want to learn more about the topics discussed in this episode, please visit The Show Notes, where you can find links to related resources mentioned today. The Show Notes also have more information about our attorneys who provided today's insights, including ways to reach out to them.

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