Yesterday, the Department of Justice Office of Legal Counsel issued a 25-page opinion (full text) concluding that the EEOC's regulations and guidance documents on disparate-impact liability under Title VII are unconstitutional. The OLC's opinion focuses on disparate impact in racial discrimination cases. However, the same rules apply to religious discrimination cases, even though those rules are seldom used in that context. The OLC Opinion says in part:
... Rather than treating disparate impact as an evidentiary mechanism to smoke out intentional discrimination—imposing liability only when disproportionate adverse effects give rise to a strong inference of intentional discrimination—EEOC’s historic interpretations contemplate liability based on disproportionately adverse effects alone, without regard to an employer’s likely intent. Because EEOC’s historic approach divorces liability from circumstances giving rise to a strong inference that intentional discrimination occurred, it functions as a qualified racial-proportionality mandate and spurs employers to engage in race-based decisionmaking to avoid liability. That approach is unlawful and unconstitutional.
Three corrections to that approach are necessary.... First, the business-necessity defense is not a high bar; it requires employers to demonstrate only that the challenged practice is rational, convenient, or helpful for serving a valid business purpose. Employment practices are presumptively job related, and only irrational or arbitrary practices with no plausible job-relatedness can create disparate-impact liability. Second, plaintiffs must satisfy a robust causality requirement by demonstrating ... that the challenged employment practice itself (not external factors or other employer practices) caused the alleged disparate impact. Third, plaintiffs must establish with particular evidence that there is an available alternative practice that causes less disparate impact and would be equally effective for serving the employer’s valid business purpose....
Workplace requirements and selection procedures—such as background checks, aptitude tests, knowledge-based tests, SAT scores, high-school graduation requirements, or blind auditions—are presumptively job-related. Only practices that establish truly “artificial, arbitrary, and unnecessary barriers”—i.e., those that have no plausible job-relatedness—can create liability....
The Justice Department issued a press release announcing the issuance of the OLC Opinion.