Last year, the Equal Employment Opportunity Commission issued guidance stating that it would no longer pursue disparate impact discrimination claims against employers under Title VII of the Civil Rights Act of 1964. Disparate impact discrimination involves policies that are neutral on their face, but result in a statistical burden on members of a protected class. For example, a policy that prohibits hiring applicants with a felony conviction does not directly discriminate against any individual based on race or sex. However, in the U.S., minorities (and men in general) have higher criminal conviction rates. Therefore, applying the neutral policy may result in hiring fewer members of those protected classes.

Last week, the Department of Commerce issued final regulations that apply this same reasoning to investigations of a Title VI claim. Title VI is the part of the Civil Rights Act that prohibits certain businesses from discriminating in the provision of goods and services to the public. The new rules state that Title VI’s prohibitions only apply to company policies that are intended to discriminate. Unintentional discrimination claims based on disparate impact will not be pursued by Commerce Department investigators. In a separate portion of the rules, the department removed references to affirmative action obligations by companies found to have violated Title VI in the past.

These regulations do not mean that disparate impact claims cannot be pursued. As with Title VII, private litigants are free to file disparate impact lawsuits, and federal courts have long recognized this discrimination theory. In addition, many states have laws regarding non-discriminatory provision of goods and services, which could be pursued as alternatives to federal claims. While the Department of Commerce may be out of the business of investigating or litigating disparate impact claims, companies should not assume that all lawsuits require proof of intent to discriminate.

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