By Jordan Meadows
Staff Writer
In 1971, the U.S. Supreme Court issued a landmark decision in Griggs v. Duke Power Co., fundamentally altering the landscape of employment discrimination law. The case marked the Court’s first formal recognition of the “disparate impact” theory, holding that even employment practices that appear neutral on their face can violate Title VII of the Civil Rights Act of 1964 if they disproportionately exclude protected groups and are not directly related to job performance.
This ruling established that discrimination does not require intent; rather, if a policy results in a statistically significant disadvantage to a racial or ethnic group and lacks a clear connection to job requirements, it may be unlawful.
The case originated at the Dan River Steam Station in Eden, North Carolina, where Duke Power had openly discriminated against Black employees for years, confining them to the lowest-paying department. After the Civil Rights Act became law, Duke Power replaced overt racial barriers with seemingly neutral requirements: a high school diploma or a passing score on two standardized tests—the Wonderlic Cognitive Ability Test and the Bennett Mechanical Comprehension Test.
Due to longstanding educational disparities, these requirements had an outsized impact on Black applicants. According to the 1960 Census, only 18% of Black men in North Carolina had a high school diploma compared to 34% of white men. The testing disparity was even more dramatic: while 58% of whites passed the tests, only 6% of Black applicants did.
Although Duke Power claimed no discriminatory intent, the Supreme Court held that the tests and diploma requirements were unlawful because they perpetuated racial exclusion without serving a legitimate business purpose.
Chief Justice Warren Burger, writing for a unanimous Court, stated that Title VII aimed to remove “artificial, arbitrary, and unnecessary barriers to employment” that functioned to “freeze the status quo of prior discriminatory employment practices.”
In reaching its conclusion, the Court drew on precedent from another North Carolina-based case, Gaston County v. United States (1969). In that case, the Court struck down the use of literacy tests for voter registration on the grounds that they effectively disenfranchised Black citizens who had been subjected to segregated and inferior schooling. The Court found that even neutral requirements could be discriminatory when applied in the context of a county’s own historical injustices. This reinforced the principle that facial neutrality does not absolve governments or institutions of the discriminatory effects of their policies.
The Griggs decision led to decades of legal development based on the disparate impact theory, which Congress codified in the Civil Rights Act of 1991. This legal framework has since been used to challenge a wide range of employment practices, from hiring and promotions to reductions in force and, more recently, algorithmic decision-making tools. However, the theory has also been criticized for penalizing employers for demographic disparities.
That criticism culminated in a major shift with the signing of Executive Order 14281 by President Donald Trump on April 23, 2025.
Titled “Restoring Equality of Opportunity and Meritocracy,” the executive order marks a significant departure from the disparate impact doctrine. The EO describes disparate impact liability as a "near insurmountable presumption of unlawful discrimination," arguing that it forces businesses to engage in racial balancing and undermines the principle of equal treatment.
While the EO cannot override statutory law or Supreme Court precedent, it has far-reaching implications for federal enforcement policy. It directs all federal agencies to de-prioritize enforcement of disparate impact theories, conduct audits of all regulations and guidance that rely on disparate impact, and plan for their repeal.
Agencies such as the Equal Employment Opportunity Commission (EEOC) and the Department of Justice (DOJ) are instructed to review and potentially withdraw from ongoing cases based on disparate impact claims. Further, the EO directs Attorney General Pam Bondi to identify and challenge any state or local laws that impose disparate impact liability, particularly those tied to the regulation of artificial intelligence or diversity initiatives.
Importantly, the EO does not require employers to stop conducting adverse impact analyses. In fact, employers may still choose to assess whether their hiring practices yield statistically disproportionate results—particularly during layoffs or restructuring—out of concern for litigation risk from private plaintiffs or compliance with state-level regulations.
Should employment law focus solely on intent and individual fairness, or must it also account for the lasting effects of disparate outcomes, particularly around race, religion, or gender? Griggs and Gaston County both answered that question by recognizing that formal equality can mask deep-seated disadvantages, and it's why the Courts’ opinions emphasized the importance of aligning employment standards with genuine job requirements.
