Disparate Impact Discrimination: What Employers Need to Know

Author: Vince Pascarella, General Counsel

Disparate impact discrimination has been a core part of U.S. employment law for decades. While the concept itself is straightforward, recent federal developments are changing how it is enforced. Below, we explain the basics and highlight what’s changing so employers can stay compliant.

You can also watch our latest Keeping Up With Compliance session to learn more about disparate impact changes and other regulatory updates happening today.

What Is Disparate Impact?

Disparate impact occurs when a neutral workplace policy has a disproportionately adverse effect on a protected group. It is inadvertent, unintentional discrimination.

For example, a policy requiring a specific degree, an aptitude or skills test, or strict screening criteria may be applied to all candidates equally, but if it screens out one group at a materially higher rate, it may be deemed disparate impact discrimination.

The Root of Disparate Impact: Griggs v. Duke Power

The concept of disparate impact comes from a landmark 1971 Supreme Court case, Griggs v. Duke Power Company.

Griggs and twelve other Duke Power employees challenged their employer’s policy requiring employees to have a high school diploma and pass a general intelligence test to transfer to higher jobs in other departments. These requirements disproportionately excluded Black employees and were shown to be unrelated to an ability to perform the job.

The Supreme Court ruled that this violated Title VII of the Civil Rights Act, explaining that the law prohibits not only disparate treatment discrimination, but also practices that are “fair in form, but discriminatory in operation.”

This case established a key principle still applied by courts and regulators today: if a policy creates unequal outcomes, the employer must show it is job-related and consistent with business necessity.

What’s Changing Now?

While disparate impact has long been recognized under federal and state law, recent actions by the federal Equal Employment Opportunity Commission (EEOC) and U.S. Department of Justice (DOJ) indicate an intent to cease enforcing it.

On June 9, 2026, the DOJ’s Office of Legal Counsel (OLC) issued a non-binding memorandum opinion that asserts disparate impact claims under Title VII of the Civil Rights Act of 1964 violate the U.S. Constitution.

While this opinion does not change the law itself, it is binding on federal agencies’ internal interpretations and will impact whether and how the EEOC investigates and pursues claims of disparate impact discrimination.

Recommended Action Steps for Employers

Given this new uncertainty, employers should focus on consistency, fairness, and proper documentation:

• Review policies for unintended effects: Look at hiring, screening, and promotion practices to identify whether certain groups are disproportionately impacted.
• Ensure requirements are job-related: Every qualification, such as a background check, education requirement, or assessment, should clearly connect to the job.
• Document business reasons: Keep records explaining why policies exist and how they support legitimate business needs.
• Stay aware of state and local rules: Many states and localities will continue enforcing disparate impact standards regardless of these federal enforcement changes.
• Understand that private litigation is still a real risk. Judicial precedent and historic treatment of disparate impact claims are generally unchanged.

Final Takeaway

Disparate impact discrimination is about outcomes, not intent. Even well-meaning policies can create legal risk if they unfairly affect certain groups.

While federal enforcement has shifted, the legal concept is largely unchanged. For employers, the safest path forward is to continue fair, job-related policies and practices, and to be ready to explain and support them if challenged.

Disclaimer: This content is provided for informational and educational purposes only and is not intended to constitute legal advice. It reflects general industry insights and best practices to support discussion and awareness. Organizations should consult with their legal, compliance, or other professional advisors before making changes to their background screening programs to ensure compliance with applicable laws and regulations.