Understanding the EEOC’s New Direction

In a surprising move, the Equal Employment Opportunity Commission (EEOC) may be stepping back from its long-standing enforcement of disparate impact discrimination cases.

According to an internal agency memo, investigators have been instructed to close all pending charges that allege only disparate impact discrimination, with limited exceptions. These closures are expected to happen by the end of September, signaling a potential shift in how the EEOC prioritizes discrimination investigations moving forward.

What Is Disparate Impact Discrimination?

Disparate impact occurs when an employer’s policy or practice appears neutral on its face but results in unequal outcomes for a protected group under Title VII of the Civil Rights Act.

For example:

• A strength test that disproportionately disqualifies female candidates
• A background check policy that disproportionately affects certain racial groups
• A degree requirement that inadvertently screens out older applicants

In these cases, the employer’s intent is not the issue. The effect of the policy is what matters. Historically, the EEOC has viewed such disparities as potential evidence of discrimination, even when the employer’s actions were unintentional.

Why This Change Matters

If the EEOC follows through with this shift, it could mark one of the most significant enforcement changes in recent years.

Here is what it could mean for employers:

• Less federal focus on statistical disparities. Employers may see fewer federal investigations triggered by statistical differences alone.
• Greater emphasis on intent-based discrimination. The EEOC may direct more resources toward cases alleging disparate treatment, where discriminatory intent can be proven.
• Possible state-level activity. State civil rights agencies may still investigate disparate impact claims, even if federal enforcement decreases.

However, this does not mean employers can relax their compliance efforts. Courts can still find liability under disparate impact theories, and future administrations could easily reverse this position.

What Employers Should Do Now

To stay proactive and compliant amid changing enforcement priorities, employers should:

• Review Employment Policies and Practices: Evaluate hiring, promotion, testing, and background screening processes to ensure they do not unintentionally disadvantage protected groups.
• Document Business Necessity: For any policy that results in different outcomes across groups, be prepared to show that the requirement is job-related and consistent with business necessity.
• Monitor Workforce Data: Use analytics to identify trends in hiring, promotion, and turnover before they raise red flags.
• Stay Informed: The EEOC’s current direction may shift again. Partnering with experts who track regulatory updates can help your organization stay ahead.

 ✴️Have questions or need help with compliance ? Contact CTR Payroll | HR today!