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Paul Graham wrote the following in March 2005:

One advantage startups have over established companies is that there are no discrimination laws about starting businesses. For example, I would be reluctant to start a startup with a woman who had small children, or was likely to have them soon. But you're not allowed to ask prospective employees if they plan to have kids soon. Believe it or not, under current US law, you're not even allowed to discriminate on the basis of intelligence. Whereas when you're starting a company, you can discriminate on any basis you want about who you start it with.

In March 2005, was it illegal for employers to discriminate on the basis of intelligence under US law?

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There is a hilariously funny book by Rob Grant called Incompetence where the story takes place in a European Union that has banned discrimination on the grounds of competence. Many hilarious encounters ensue, strangely close to reality in a world that has not yet gone that mad. –  matt_black Jan 2 at 16:14

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The controlling case law in this area is Griggs v. Duke Power, 401 U.S. 424 (1971).

The United States Supreme Court held:

The [Civil Rights Act of 1963] requires the elimination of artificial, arbitrary, and unnecessary barriers to employment that operate invidiously to discriminate on the basis of race, and if, as here, an employment practice that operates to exclude Negroes cannot be shown to be related to job performance, it is prohibited, notwithstanding the employer's lack of discriminatory intent.

Applying that standard to the facts of the case, they ruled:

On the record before us, neither the high school completion requirement nor the general intelligence test is shown to bear a demonstrable relationship to successful performance of the jobs for which it was used. Both were adopted, as the Court of Appeals noted, without meaningful study of their relationship to job performance ability.

Thus, it is not illegal to discriminate based on intelligence, but any test must be "shown to bear a demonstrable relationship to successful performance of the jobs for which it was used".

As an example, (Hatch 2008) assesses the NFL's use of the Wonderlic test under this standard, argues that it isn't predictive of job performance, and advocates for a football-related intelligence test.

References

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