On April 23, 2025, President Trump issued a new executive order aimed at repealing disparate impact liability. The order, titled “Restoring Equality of Opportunity and Meritocracy” (https://www.whitehouse.gov/presidential-actions/2025/04/restoring-equality-of-opportunity-and-meritocracy/), frames equal treatment under the law as “equality of opportunity, not equal outcomes.”
Disparate impact is a theory of liability that grew out of equal employment opportunity laws, such as Title VI and Title VII of the Civil Rights Act of 1964, and Supreme Court precedent, such as Griggs v. Duke Power Co., 401 U.S. 424 (1971). Disparate impact liability arises when policies or practices appear facially neutral, but have a discriminatory impact in effect. Assessing disparate impact generally requires statistical analyses comparing employment outcomes (such as hiring decisions, promotion decisions, equal pay analysis, etc.) broken down on the basis of protected classes, such as sex/gender or race/ethnicity.
The new executive order seeks to “eliminate the use of disparate impact liability in all contexts to the maximum degree possible.” To accomplish that goal, the executive order:
- Revokes Presidential approval of Department of Justice Title VI regulations that prohibit criteria or methods that have a discriminatory “effect”;
- Deprioritizes federal enforcement of disparate impact liability across all executive departments and agencies;
- Instructs the Attorney General to initiate action to amend or repeal Title VI regulations that contemplate disparate impact liability;
- Instructs the Attorney General and EEOC to assess pending investigations, civil suits, and positions taken that rely on a disparate impact theory under Title VII;
- Instructs the Attorney General to determine whether any federal authorities preempt state laws that impose disparate impact liability; and
- Instructs the Attorney General and EEOC to jointly formulate and issue guidance or technical assistance to employers “to promote equal access to employment regardless of whether an applicant has a college education, where appropriate.”
Some employers, particularly those currently facing federal investigations, may welcome a full repeal of disparate impact liability. However, the April 23 executive order should be seen as an opening salvo rather than the final blow against disparate impact liability. While the executive order does impact federal executive agency priorities and enforcement actions, it does not have the effect of repealing or amending statutes, such as Title VI and Title VII. Further, the executive order is not binding on courts that interpret laws and follow precedent, such as Griggs v. Duke Power Co.
This executive order raises many questions. It is not clear whether or how the executive order interacts with (or may preempt) equal pay laws, state or local affirmative action plan requirements, and many more federal, state, and local employment laws and regulations.
Employers should carefully review and consider their current methods for internally assessing disparate impact. Before making changes, employers should consult their attorneys about whether and how to change any policies or practices. And to the extent that employers elect to continue to perform statistical analyses that consider protected classes or protected characteristics, those employers should consult counsel regarding the methods for producing the statistical analyses, as well as potential risks related to the ultimate uses of any disparate impact analysis.
