Alicia J. Samolis, Partner and Chair of the Employment & Labor Practice Group at Partridge Snow & Hahn, was featured in Massachusetts Lawyers Weekly and the New England Biz Law Update discussing the U.S. Department of Justice’s (DOJ’s) opinion that disparate impact liability under Title VII is unconstitutional.
Alicia explains that the opinion is unlikely to immediately change EEOC enforcement, given that “even before this opinion, the EEOC had made it very clear that they were backing away from disparate impact cases.”
Disparate impact claims involve facially neutral rules or policies that unintentionally create an adverse impact on a protected class. For example, if an employer decided to hire only applicants who brought a red umbrella to a job interview and it was later determined that women statistically carried red umbrellas less often than men, the “red umbrella” rule could be illegal, even if the employer’s only intention was based on a preference for red umbrellas.
These claims have been recognized under Title VII by the EEOC and by current Supreme Court precedent. Disparate impact liability is also a theory currently driving disputes related to AI screening and employee assessment tools.
The EEOC and DOJ are looking to limit disparate impact cases to instances where neutral rules or policies do not have a rational, convenient or helpful business purpose, essentially targeting arbitrary rules and policies that may serve as a guise for intentional discrimination. Under the challenged prior administration’s guidelines, which the current EEOC quickly withdrew after the DOJ opinion was released, employers needed to establish a business necessity for maintaining neutral rules or policies if there was a disparate impact.
Samolis commented that the DOJ opinion provides “a roadmap for employers and defendants to argue that it should be unconstitutional when they face a disparate impact claim.” The opinion may also lead the Supreme Court to revisit the existing framework.
Samolis stated “Applying normal stare decisis [analysis], you would think that the Supreme Court would not follow [the DOJ’s] line of reasoning. But we are in an unprecedented time. In this particular court, it could be a way for them to say that this is the end of disparate impact [liability].”
Specifically, Samolis notes that if the Supreme Court agrees with the DOJ and EEOC, it could also affect state discrimination laws.
Overall, the development could be positive for employers, who may be less concerned about whether otherwise valid policies have a hidden discriminatory impact. Disparate impact claims have long been controversial because even a well-intentioned neutral policy might ultimately be less favorable to certain protected groups, and absent large and expensive studies, employers often would not know there was an issue.
For example, the EEOC has previously held that rejecting applicants based on criminal history without handling the decision on a case-by-case basis disproportionately screens out Black and Hispanic applicants. Because of the perceived disparate impact, the EEOC required criminal background check requirements to be job-related and consistent with business necessity.
Employers should note that even if the Supreme Court sides with the DOJ and EEOC on the standard, completely arbitrary policies and rules that have a discriminatory impact – like the red umbrella example – will likely still not be allowed.
In addition, current and new state laws targeting certain neutral policies that may have a disparate impact, such as state “ban the box” laws or state laws requiring job-relatedness when considering criminal offenses, would not necessarily be impacted by a change in the disparate impact standard, as those laws stem from a different statutory scheme.
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