Understanding Disparate Impact in 2026

The Equal Employment Opportunity Commission (EEOC) and the Department of Justice (DOJ) have both recently taken new stances on disparate impact claims and how they should be treated under Title VII of the Civil Rights Act. At the same time, the Supreme Court of the United States has been asked to review a case that impacts how employment discrimination cases achieve summary judgment.

Title VII outlines two main forms of discrimination: disparate treatment and disparate impact.

Disparate treatment means intentional discrimination based on a protected class. This can involve an employer favoring or disadvantaging an employee because of characteristics such as race, gender, age, religion, or ability.

Disparate impact is when a seemingly neutral policy disproportionately impacts different groups of a protected class. Disparate impact can still happen unintentionally. This can show up in policies or procedures like hiring assessments, credit checks, or physical requirements.

The key difference between disparate impact and treatment is intent. For example, choosing not to hire an applicant because of their age is disparate treatment. If your application system screens out older applicants disproportionately, that would be considered disparate impact.

The EEOC released its new National Enforcement Plan (NEP) that will replace the Biden administration’s Fiscal Years 2024- 2028 Strategic Enforcement Plan. The EEOC plans to prioritize disparate treatment over disparate impact claims. The agency also stated that it will eliminate the use of disparate impact theories in investigations to the maximum degree possible and will not commence, develop, or continue litigation advancing disparate impact claims.

The DOJ’s Office of Legal Counsel issued a recent opinion concluding that the EEOC’s existing guidance on disparate impact is unconstitutional. Why? Because it allows liability based solely on unequal outcomes, without regard to whether the employer likely intended to discriminate, causation, business necessity, and alternative practices.

Around the same time, the Supreme Court received a petition for Certiorari, which could change how employment discrimination cases achieve summary judgment. This petition for review is asking the Supreme Court to reconsider the McDonnell Douglas framework, which is used by courts to evaluate employment discrimination claims when there may not be any direct evidence of discrimination.

What do employers need to know from this? Disparate impact is not gone. Title VII still includes language about disparate impact, and private lawsuits may still be brought.

The EEOC’s enforcement priorities have changed. The agency will be focusing on intentional discrimination. Blatant discriminatory policies, quotas, preferences, and some DEI-related employment practices will receive greater scrutiny.