10-01-2026
Employer Insight: Employers in CA, DE, HI, IL, MD, MA, MI, MN, NV, NM, NY, OR, VT, and WA may still face liability for disparate impact discrimination under state law. Disparate impact liability refers to actions and policies that seem neutral but may have a disparate impact on protected groups, causing “unjustified and disproportionate” harm.
In June 2026, the U.S. DOJ issued an opinion concluding that the EEOC’s Title VII guidelines on disparate impact liability were unconstitutional, stating that Title VII only “guarantees equal treatment, not equal outcomes.” The DOJ contends that this approach effectively pushes employers toward race-conscious decision-making, resulting in indirect race discrimination.
Per the opinion, disparate impact liability under Title VII may only be for “practices that reflect a significant likelihood of intentional discrimination.” Consequently, the EEOC and other federal agencies are deemed unlikely to pursue or enforce discrimination complaints.
However, employers based in the states listed above could continue to be liable for policies creating a disparate impact under respective state laws. The attorneys general issued joint guidance indicating that these states will continue to enforce disparate-impact protections, contending that the DOJ decision does not “disturb the legality of disparate impact liability itself.”
Employers in the named states should evaluate employment practices on both intentional and disparate impact discrimination. The U.S. Supreme Court and higher courts in those states have not yet issued decisions following the DOJ’s opinion letter on this issue. **
More on the DOJ Opinion on EEOC Disparate Impact Guidelines, as EPS shared in June of this year: DOJ Opinion Concludes EEOC’s Disparate Impact Guidelines Unconstitutional