New England Biz Law Update
Lawyers see a legal opinion recently issued by the U.S. Department of Justice as setting the stage for future battles over constitutional limitations on holding employers liable for facially neutral employment policies that are alleged to have a disparate impact on groups protected under civil rights laws.
The DOJ’s Office of Legal Counsel issued an opinion finding the Equal Employment Opportunity Commission’s guidelines on disparate impact liability under Title VII were unconstitutional because they “contemplate liability based on disparate effects alone, without regard to an employer’s likely intent, and pressure employers to engage in race-based decisionmaking.”
The opinion will have little impact on current EEOC operations, according to Alicia J. Samolis, a management-side labor and employment lawyer at Patridge, Snow & Hahn.
“Even before this opinion, the EEOC had made it very clear that they were backing away from disparate impact cases,” Samolis said. “But it will provide a roadmap for employers and defendants to argue that it should be unconstitutional when they face a disparate impact claim.”
Last December, the DOJ employed similar reasoning in revising its regulations under Title VI of the Civil Rights of 1964, which prohibits discrimination on the basis of race, color and national origin in programs and activities receiving federal financial assistance.
The DOJ made clear the department’s Title VI regulations “do not prohibit conduct or activities that have a disparate impact and prohibit only intentional discrimination, and the Department thus will not pursue Title VI disparate-impact liability against its Federal-funding recipients.”
While the DOJ opinion on Title VII disparate impact claims doesn’t have the force of a court decision or agency action, Terence P. McCourt of Greenberg Traurig said it will still be impactful.
“The biggest impact is that there will be less emphasis and less risk for employers in terms of federal enforcement actions by the DOJ or the EEOC,” McCourt said. “But that doesn’t remove all legal risk because this opinion doesn’t bind the courts. Disparate impact has been around for a long time. It’s firmly enshrined in Supreme Court precedent.”
McCourt added that the DOJ opinion will be useful to employers in arguing that the business necessity defense should be relaxed in accordance with the DOJ’s guidance.
“However, I would not advise an employer to simply let its guard down and not carefully review its employment decisions with respect to disparate impact because I don’t think it gives employers a free pass in any way,” he said.
Employment lawyer Monica R. Shah of Zalkind, Duncan & Bernstein said the opinion will have “far-reaching impact” in that it provides legal guidance to the federal agency responsible for enforcing laws against workplace discrimination.
“For some time now, the EEOC has not been bringing its own disparate impact cases against employers,” Shah said. “So this opinion is only reinforcing decision-making that its investigators have already made.”
Shah added that the opinion will set the stage for future litigation over the interpretation of Title VII guidance on disparate impact.
