Last year, President Trump issued an executive order directing the Equal Employment Opportunity Commission to cease investigating claims of disparate impact discrimination and to dismiss pending investigations or litigation. Disparate impact discrimination claims involve employer policies or practices that are neutral on their face, but in practice have negative consequences for members of a protected class. For example, if an employer adopts a rule automatically disqualifying applicants based on a criminal background, this policy will tend to exclude minorities because they are arrested and convicted at a higher rate than non-minority individuals.

According to the executive order, charging parties must allege intentional discrimination in order to challenge such employer policies. Despite this order, disparate impact discrimination was recognized by the U.S. Supreme Court in 1971 as a viable legal claim, and despite the EEOC’s new position, plaintiffs can still file lawsuits alleging discrimination on this basis.

Last week, the Department of Justice issued a non-binding memorandum to the EEOC asserting that disparate impact claims violate the U.S. Constitution because they force employers to make policy decisions based on race or other classifications in order to avoid legal liability. According to the memo, if the employer’s policy is based on a reasonable business purpose, plaintiffs would have to show that it directly causes the discriminatory outcome, and articulate an alternative policy that would achieve the same business goals without resulting in such discrimination.

The ultimate purpose of these regulatory efforts may be to persuade the Supreme Court to revisit the legality of disparate impact claims. For now, employers sued under the disparate impact theory could assert constitutional equal protection claims based on the DOJ position.

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