Last week, Donald Trump put on an unprecedented UFC extravaganza at the White House, the World Cup began in America, and we learned that Gavin Newsom and his wife were under federal investigation.
There was so much good news that the best news of all slipped under the radar. The Department of Justice struck a telling blow for the idea of "equality" instead of "equity."
Department of Justice’s Office of Legal Counsel (OLC) concluded that the Equal Employment Opportunity Commission (EEOC)’s "disparate-impact" guidelines actually encouraged employers to discriminate in direct violation of the U.S. Constitution.
The OLC is where the department's most respected lawyers work. Supreme Court members, court of appeals judges, attorneys general, and solicitors general have been drawn from the ranks of OLC lawyers.
"They start here because the OLC is the Justice Department office that issues binding opinions for the rest of the executive branch," writes Manhattan Institute adjunct fellow Dan Morenoff. He also serves as executive director of the American Civil Rights Project. "Those opinions are formally the agency’s best prejudgment of what the executive should expect from courts as interpretations of what the law allows or requires."
EEOC Chairman Andrea Lucas asked the OLC to assess the constitutionality of the Commission's Title VII guidance on two topics: “disparate-impact” liability and “voluntary affirmative action” programs.
"Beneath this legal jargon lies one of the most fundamental divides in American views of racial discrimination," writes Morenoff. “'Disparate-impact' analysis assesses non-discriminatory employment policies: facially neutral in their treatment of different demographic groups and evenhandedly applied by employers who don’t intend to discriminate by race."
"Disparate impact" doesn't look at whether employment policy is intentionally discriminatory. It examines the outcome of a policy and its impact on a protected group. Are fewer blacks or women hired by the company? Unless the company can prove there's a "business necessity" for the disparate impact, they are found liable.
“Voluntary affirmative action” programs are employer-created policies to alter the composition of their workforce. Guided by the EEOC, employers develop these "voluntary" programs when they have good reason to believe they’d be liable (under disparate-impact analysis) if they didn’t.
How did we go from ensuring equal opportunity for all Americans to ensuring equality of outcomes?
In 1971, the Supreme Court unanimously established the doctrine of disparate impact. Chief Justice Warren Burger famously noted that Title VII proscribes not only overt discrimination but also "practices that are fair in form, but discriminatory in operation." The court ruled that Duke Power's requirements for a high school diploma and intelligence tests—which disqualified Black applicants at a much higher rate—were illegal because they were not shown to measure actual job performance.
Then, after a 1989 Supreme Court ruling (Wards Cove Packing Co. v. Atonio) that attempted to lower the burden on employers, Congress stepped in and formally codified the original Griggs disparate impact framework into statutory law through the Civil Rights Act of 1991.
OLC has issued a historic opinion that begins the long process of untangling the disparate impact standard from employment law.
Nearly two decades have passed since Justice Scalia, in Ricci v. DeStefano, lamented the Court’s choice to postpone “the evil day on which” America would have to resolve whether a disparate-impact interpretation of Title VII was “consistent with the Constitution’s guarantee of equal protection,” without answering the question. My colleague Gail Heriot has spent much of the intervening years arguing that Title VII’s disparate-impact regime is not and cannot be constitutional. A year ago, I specifically suggested that the EEOC rewrite exactly these guidance documents to harmonize them with the actual statutory text and to avoid these same serious constitutional problems.
The OLC has now given Chairman Lucas its answer. Citing Heriot’s work at least seven times, the OLC concluded—as we had argued it should—that the existing version of Title VII disparate-impact liability described in the EEOC’s guidance documents could not survive judicial scrutiny as consistent with the Constitution’s requirements.
The OLC opinion argues that by pressuring employers to proactively manipulate or discard employment practices to avoid statistical disparities, traditional disparate impact rules effectively coerce businesses into making race-based decisions. The OLC concluded this violates the Constitution's Equal Protection guarantee, echoing Justice Antonin Scalia's famous warning in DeStefano regarding the inherent conflict between disparate impact and equal protection.
The practical effect of the OLC's ruling will mean that employers no longer need to conduct exhaustive, rigid formal validation studies to justify common screening tools (like aptitude tests, background checks, or diploma requirements). They are now presumptively lawful if they rationally serve a valid, helpful business purpose.
Also, plaintiffs face a significantly higher burden of identifying the specific practice causing the unequal outcome, rather than pointing to broad statistical disparities.
"At some point, these and related issues will need to be resolved, and Congress or the courts must weigh in to ensure that the OLC’s opinion endures," writes Morenoff. "Sooner or later, we’ll have to address the statutory question that the OLC didn’t: whether Title VII actually bars employers from adopting nondiscriminatory policies that disproportionately affect different groups or imposes liability on employers when they do."
It's an argument that needs to happen.
