On April 23, 2025, President Trump signed an Executive Order instructing federal agencies to “deprioritize” enforcement of disparate-impact discrimination claims (the “EO”).
Titled “Restoring Equality of Opportunity and Meritocracy,” the EO states it is intended to combat a “pernicious movement” by which America’s promise of equal opportunity is endangered by “a divisive pursuit of results preordained by irrelevant immutable characteristics[.]”
In the employment context, “disparate impact” refers to a subset of discrimination claims in which an employer engages in a facially lawful employment practice that causes a disparate impact on the basis of a protected category. Disparate impact claims often arise from pre-employment tests that have a disproportionate impact on a single group of candidates or employees. Critically, disparate impact does not require a discriminatory intent, unlike the more common disparate treatment claims in which an individual alleges that an employer treated them worse because of their race, color, sex, religion, age, or other protected category.
The EO contends that disparate-impact liability has hindered businesses from making employment decisions based on merit because of the threat that it could lead to disparate outcomes. According to the EO, “This has made it difficult, and in some cases impossible, for employers to use bona fide job-oriented evaluations when recruiting, which prevents job seekers from being paired with jobs to which their skills are most suited — in other words, it deprives them of opportunities for success.” In essence, the EO argues that enforcement of disparate-impact claims is itself a form of reverse discrimination because it “all but requires individuals and businesses to consider race and engage in racial balancing to avoid potentially crippling legal liability.”
The EO instructs the Attorney General to repeal or amend the implementing regulations of Title VII of the Civil Rights Act of 1964 (Title VII) to the extent they contemplate disparate-impact liability. Within 45 days, the Attorney General must work with the Chair of the Equal Employment Opportunity Commission (EEOC) to assess all pending investigations and civil suits under federal civil rights law within their jurisdiction that rely on a disparate-impact theory, in order to take appropriate action consistent with the EO. Presumably, this would mean dismissing pending investigations and lawsuits to the extent they assert disparate-impact theories.
Notably, while the EO only pertains to federal regulations and enforcement actions, many states have their own laws and regulations that prohibit disparate-impact discrimination. As such, the EO requires the Attorney General to provide a report of other laws or decisions, including at the state level, that impose disparate-impact liability and any appropriate measure to address any constitutional or legal infirmities. The Attorney General must also determine whether any federal authorities preempt state laws, regulations, policies, or practices that impose disparate-impact liability based on a federally protected characteristic such as race, sex, or age, or whether such laws, regulations, policies, or practices have constitutional infirmities that warrant federal action. The Attorney General is instructed to take appropriate measures consistent with the policy of EO.
Notably, the EO obligates Attorney General to work with the EEOC Chair to issue guidance to employers to promote equal access to employment “regardless of whether an applicant has a college education, where appropriate.” This clause of the EO, which has no particular tie-in to the rest of the EO, seems to characterize education level as a protected status, akin to race, color, sex, and other categories protected by law. However, no federal employment statute recognizes education level as a protected class.
The EO’s rejection of disparate impact as unlawful discrimination directly conflicts both with the language of Title VII and U.S. Supreme Court precedent. Title VII expressly provides for a cause of action based on a disparate-impact theory. The employer may defend such claim by demonstrating that the challenged practice is job-related for the position in question and consistent with business necessity. Likewise, the Supreme Court has repeatedly upheld disparate impact as a basis for successful unlawful discrimination claims in several landmark cases, explaining that the anti-discrimination laws prohibit not only overt discrimination but also practices that are fair in form but discriminatory in operation.
The EO undoubtedly seeks to shake up the landscape of employment litigation, particularly with respect to government enforcement. However, the practical effects are somewhat limited in the civil litigation arena, as the text of Title VII and other federal employment laws like the Americans with Disabilities Act (ADA) and the Age Discrimination in Employment Act (ADEA) explicitly require aggrieved employees to exhaust their administrative remedies by filing a charge of discrimination with a state or federal agency before filing suit. As the laws were enacted by Congress, the president cannot unilaterally remove these requirements. However, pursuant to the EO, the EEOC will likely immediately dismisses any charges purporting to allege disparate-impact, allowing aggrieved individuals to then file suit in state or federal court, where judges would still be obligated to enforce the statutes as written.
