Last week, the Department of Justice issued an opinion concluding that the EEOC’s longstanding guidelines on disparate impact liability under Title VII of the Civil Rights Act are unconstitutional. It is a significant statement of executive branch policy, but it is not, on its own, a change in the law. Employers need to understand both what has shifted and what has not.

The DOJ’s Office of Legal Counsel published a formal opinion finding that the EEOC’s disparate impact guidelines “pressured employers to engage in racial discrimination” by exposing them to liability for unequal hiring and promotion outcomes among different demographic groups, regardless of whether the employer intended to discriminate.

The opinion seeks to implement Executive Order 14281, which rejected disparate impact liability on the basis that it “creates a near insurmountable presumption [that] unlawful discrimination exists where there are any differences in outcomes” among racial, sex-based, or similar groups. Acting Attorney General Todd Blanche characterized the opinion as allowing “businesses to hire based on performance, restoring equal opportunities in the American workplace.” EEOC Chair Andrea Lucas endorsed the analysis, saying it would “provide clarity regarding the Constitutional limits of disparate impact in employment discrimination matters.”

The practical thrust of the OLC opinion is twofold. First, it states that employers can use hiring tools such as aptitude tests, knowledge-based...

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