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The Equal Employment Opportunity Commission issued technical assistance on May 18, 2023 explaining how Title VII disparate impact analysis applies to software, algorithms and AI used in hiring, promotion and performance management. The EEOC removed its AI guidance documents from its website on January 27, 2025. Technical assistance was never law: Title VII itself still applies. Executive Order 14281 (April 23, 2025) tells federal agencies to deprioritize enforcement of disparate-impact liability, naming the Title VII provision, and told the EEOC chair to review pending matters that rely on that theory. On June 4, 2026 the EEOC rescinded its 2024-2028 Strategic Enforcement Plan and replaced it with a National Enforcement Plan for fiscal years 2025-2029, which says the agency will eliminate disparate impact theories in investigations to the maximum degree possible and will not commence, develop, or continue litigation advancing disparate impact claims. These change federal enforcement priorities, not the statute: Title VII still contains its disparate-impact section (42 U.S.C. 2000e-2(k)). Correction, October 21, 2026: an earlier version of this entry said the 2024-2028 Strategic Enforcement Plan still listed technology-related discrimination as a priority; that plan was rescinded in June 2026.
If you use any AI tool in hiring decisions, such as resume screening, interview scheduling, assessment scoring, or reference checking, you can be liable under federal employment discrimination law if the tool has a disparate impact on a protected class. The guidance is gone and the EEOC says it won't litigate disparate-impact claims, but the statute is the same and private plaintiffs can still bring those claims in court, so the exposure is not gone. Don't count on your AI vendor to carry it: the 2023 technical assistance said an employer may be responsible under Title VII even if an outside vendor developed the test.
From 2012 to 2020, Rite Aid used AI facial recognition in hundreds of stores to flag suspected shoplifters. The FTC said the system produced false matches that led staff to accuse customers of wrongdoing, that its actions disproportionately affected people of color, and that Rite Aid did not test or document the system's accuracy.
Outcome: Rite Aid is prohibited from using facial recognition for surveillance for five years. It must delete, and direct third parties to delete, images collected by the system and any algorithms built from them, and implement an information security program overseen by top executives.