The disparate impact theory of discrimination—under which a facially neutral policy or practice may be challenged based on its effects rather than direct evidence of discriminatory intent—is facing renewed federal scrutiny under the Trump Administration. Three recent actions from the Department of Justice, the Department of Transportation, and the Department of Labor reflect a narrower federal approach to effects-based civil rights enforcement, and a departure from historic civil rights enforcement under previous administrations.

For employers, the developments do not eliminate disparate impact liability under Title VII (or state and local laws), but they may affect federal enforcement priorities and future litigation strategy.

DOJ:  EEOC’s Disparate Impact Framework Is Unconstitutional

On June 9, 2026, the Department of Justice (DOJ) issued a memorandum opinion titled Constitutionality of Disparate-Impact Liability Under Title VII. The DOJ took the position that the Equal Employment Opportunity Commission’s (EEOC) existing regulations and interpretations under Title VII are unconstitutional to the extent they allow liability based on disparate effects alone, without regard to an employer’s likely intent.

The opinion focuses on the EEOC’s historic interpretations of Title VII, including the Uniform Guidelines on Employee Selection Procedures, which employers have long used to evaluate hiring, promotion, and other employment practices. The DOJ’s opinion asserts that establishing liability on disparate impacts alone is unconstitutional. According to the DOJ, disparate impact may be permissible only if it operates as an evidentiary tool to help identify intentional discrimination, rather than as an independent basis for liability based solely on disproportionate effects.

The opinion further states that the EEOC’s traditional approach may pressure employers to consider race or other protected characteristics in employment decisions in order to avoid disparate impact claims, creating constitutional concerns. The DOJ, therefore, concludes that the EEOC’s prior guidelines on disparate impact are unlawful.

DOT:  Eliminates Disparate Impact from Its Title VI Regulations

On June 10, 2026, the Department of Transportation (DOT) issued a final rule amending its Title VI regulations to state that the DOT’s rules prohibit only intentional discrimination and that the Department will not take enforcement action based on disparate impact liability. As a result, the DOT’s enforcement position is now limited to intentional discrimination and no longer covers certain criteria or methods of administration based solely on their effects on individuals of a particular race, color, or national origin. Accordingly, the DOT’s rules no longer prohibit criteria or methods of administration which have the effect of subjecting persons to discrimination because of their race, color, or national origin, or have the effect of defeating or substantially impairing accomplishment of the objectives of the program with respect to individuals of a particular race, color, or national origin.

Although the DOT’s rule arises under Title VI rather than Title VII, it reflects the same broader emphasis on intentional discrimination rather than facially neutral policies or practices that produce unequal outcomes absent evidence of discriminatory intent.

DOL:  Follows Suit by Repealing Regulations on Disparate Impact Liability

Last week, the Department of Labor (DOL) followed suit by repealing portions of its Title VI regulations dealing with the disparate impact theory of liability.  On July 1, 2026, the DOL issued a final rule to eliminate disparate impact theory from its rules, explaining that:  “This rule makes clear that the Department’s Title VI regulations do not prohibit conduct or activities solely on the basis that they have an unintentional disparate impact.” Instead, the DOL asserts that Title VI only prohibits intentional discrimination, consistent with the earlier rules, opinions, and decisions by the Trump Administration to change the face of civil rights enforcement.

What This Means for Employers

These developments do not mean that employers can ignore disparate impact risk. Title VII still contains a statutory disparate impact framework, and private plaintiffs may continue to bring disparate impact claims. Courts will determine the ultimate scope and constitutionality of disparate impact liability in employment cases. Regardless of federal enforcement, plaintiffs may still bring disparate impact claims under applicable state and local laws.

At the same time, the federal enforcement environment is changing, consistent with the Trump Administration’s marked departure from historic civil rights enforcement and practices. Consistent with this backdrop, the DOJ’s opinion may influence agency enforcement positions, litigation strategy, and arguments about the constitutional limits of effects-based liability. Employers should consult with counsel to review their hiring, promotion, and other employment-related practices in light of this changing landscape.