Constangy Webinar - Disparate Impact Theory: Dead, Dying, or More Important Than Ever?

In this webinar, Constangy partner Cara Crotty, co-chair of the firm's EEO/Contractor Compliance, Reporting & Analytics, and DEI Compliance practice groups, examines whether disparate impact theory remains a meaningful risk for employers even as federal enforcement priorities shift. She traces the legal foundation of disparate impact claims, walks through the Trump administration's executive order and the Department of Justice's recent opinion questioning the EEOC's disparate impact framework, and explains why state laws — particularly those addressing AI in employment decisions — are becoming a bigger factor in employer risk.

What Is Disparate Impact Theory and Where Does It Come From?

Cara explains the legal foundation of disparate impact theory, including its origin in the Supreme Court's Griggs v. Duke Power Co. decision, the Uniform Guidelines on Employee Selection Procedures, and the 1991 Civil Rights Act amendments to Title VII. She also walks through a simple hypothetical to illustrate how selection rates — not just raw hiring numbers — drive a disparate impact analysis, and addresses several common misconceptions employers have about the theory.

How Has the Trump Administration Changed Federal Enforcement of Disparate Impact Claims?

The webinar covers the administration's executive order on "Restoring Equality of Opportunity and Meritocracy" and the EEOC's resulting national enforcement plan deprioritizing disparate impact litigation. Cara explains why a shift in federal enforcement priorities is not the same as a repeal of disparate impact liability under Title VII, and what courts have continued to do with these claims in the interim.

What Does the DOJ's New Opinion on Disparate Impact Mean for Employers?

Cara breaks down the Department of Justice's Office of Legal Counsel opinion questioning the EEOC's existing disparate impact framework, including its reliance on Ricci v. DeStefano, and the specific changes DOJ has proposed to the causation, business justification, and alternative-practice steps of a disparate impact claim. She also outlines what the opinion does and does not change about existing law.

How Are State Laws and AI Regulations Expanding Disparate Impact Risk?

As AI tools play a growing role in hiring, promotion, and workforce decisions, state laws are moving faster than federal law in this space. Cara discusses how states like Illinois, New Jersey, and California are addressing algorithmic discrimination, and why multi-state employers need to look beyond federal enforcement priorities when assessing their risk.

What Should Employers Do Now to Manage Disparate Impact Risk?

Cara closes with practical action items for employers, including how to evaluate AI-driven selection tools, what to look for in vendor contracts, and how to think through the current debate over whether to continue collecting race and sex data from applicants and employees.

Key Takeaways for Employers

• Continue evaluating selection procedures for disparate impact, especially AI-driven employment tools, regardless of shifting federal enforcement priorities.
• When a statistically significant disparity appears, investigate its cause and determine whether a less discriminatory alternative practice is available.
• Review vendor contracts for AI and algorithmic employment tools to confirm audit rights, model validation data, and cooperation obligations in the event of a claim.
• Track state and local AI and civil rights developments, since requirements vary widely by jurisdiction and are expanding faster than federal law.
• Carefully evaluate whether to continue collecting race and sex data from applicants and employees before discontinuing the practice based on federal policy changes alone.
• Involve employment counsel early when designing or implementing new employment decision-making tools or practices.

Related Resources

• Beyond the Uniform Guidelines: Why Employers Should Continue Monitoring for Disparate Impact
• EEO/Contractor Compliance, Reporting & Analytics

Webinar Speakers

Cara Crotty

Partner

Cara co-chairs Constangy's practice groups relating to EEO/Contractor Compliance, Reporting & Analytics, and DEI Compliance, guiding employers through federal contractor obligations, pay equity, and DEI-related compliance. She has deep knowledge of disparate impact principles and advises employers on affirmative action compliance under Section 503 of the Rehabilitation Act and VEVRAA, including AAP preparation and EEO-1/VETS-4212 reporting. Before joining Constangy, she served as an Attorney-Advisor in the Office of Administrative Law Judges at the U.S. Department of Labor.