President Donald Trump on April 23, 2025, issued an executive order (EO) titled "Restoring Equality of Opportunity and Meritocracy," mandating the cessation of federal enforcement of the "disparate impact" theory of liability. The EO states that it is the policy of the United States to eliminate the use of disparate impact liability in all contexts to the maximum extent possible to avoid violations of the U.S. Constitution, federal civil rights laws and fundamental American principles. In support of this objective, the EO rescinds previous presidential actions that implemented the disparate impact doctrine, directs federal agencies to cease all utilization of the disparate impact theory of liability and calls for a comprehensive review and replacement of all implementing regulations for Title VI of the Civil Rights Act of 1964, as well as all other regulations, guidance, rules or orders, to the extent that they contemplate disparate impact liability.
The disparate impact theory is a long-recognized legal doctrine under which employers or other entities may be held liable for a particular employment practice or policy that, although facially neutral, results in a significant adverse effect on a protected group (such as a race) and cannot be justified as serving a legitimate business purpose for the employer or entity.
The EO signifies a continued strategic priority shift for the U.S. Equal Employment Opportunity Commission (EEOC) and its mandate under the Trump Administration. Pending congressional action or a revocation by the U.S. Supreme Court, the disparate impact doctrine, however, appears to remain a viable cause of action for private litigants. The history of the doctrine and the EO's practical impact are discussed below.
Relevant History
The Supreme Court first recognized disparate impact as a viable theory for pursuing discrimination claims under Title VII of the Civil Rights Act of 1964 in a unanimous decision in Griggs v. Duke Power Co., 401 U.S. 424, 91 S. Ct. 849, 28 L. Ed. 2d 158 (1971). The plaintiff in Griggs filed a class action on behalf of several other African American employees against their employer. The lawsuit challenged the company's "inside" transfer policy, which required employees who wanted to work in all but the company's lowest-paying department to obtain a specific score on two separate aptitude tests and have a high school diploma. The Court determined that these requirements disproportionately prevented African American employees from being hired by, or advanced to, higher-paying departments within the company. Specifically, the Court found that the aptitude tests were not directed at or intended to measure employees' ability to learn or perform a particular job within the company. The Court concluded that these requirements served to protect the company's illegal policy of giving job preference to white employees seeking internal opportunities for advancement.
Congress codified the disparate impact theory and set forth the burden of proof in disparate impact cases in the 1991 amendments to the Civil Rights Act, which the Senate passed by a bipartisan 93-5 margin. See 42 U.S.C. § 2000e-2(k); Civil Rights Act of 1991, Pub.L. No. 102-166, § 105(a), 105 Stat. 1071, 1074-75. Per the amendments, an employee bringing a claim under disparate impact theory has the burden of proof to show that a particular employment policy or practice has a disparate impact on a protected group. An employee may attempt to meet this burden using statistical evidence. If successful, the burden shifts to the employer to show that the practice is job-related and consistent with business necessity. Even if the employer meets this burden, the employee may still prevail if he or she can show that there is a less discriminatory and equally effective alternative policy or practice that the employer declined to adopt.
Practical Implications
As a practical matter, the EO will profoundly shift the EEOC's enforcement priorities. It is unlikely that the EEOC will initiate new litigation based on a disparate impact theory or that it will investigate or issue "cause" findings based on that theory. Because the EO directs the EEOC to assess all pending investigations, civil suits or positions taken under every federal civil rights law within their respective jurisdictions and take appropriate action, the EEOC may even dismiss or withdraw from its ongoing litigation that is based on a disparate impact theory, akin to its recent handling of cases involving discrimination claims based on transgender status.
Though the EEOC's priorities will shift due to the EO, the effects of it will likely be fairly contained for private litigants on matters that do not involve the government. Although private litigants must first file a charge alleging disparate impact liability and discrimination with the EEOC, they can subsequently proceed in private litigation without the involvement or approval of the EEOC. Further, private litigants can file lawsuits under a number of state antidiscrimination laws that permit a disparate impact theory of liability. However, the EO instructs the U.S. Attorney General to determine whether any federal authorities preempt those state laws, which could potentially limit a private litigant's ability to utilize them to recover under a disparate impact theory of liability.
Conclusion
As noted above, the disparate impact theory remains codified in federal law and is supported by court precedent as an actionable claim of discrimination. Until the Supreme Court makes a ruling on this issue or Congress amends federal law, disparate impact remains a viable theory of liability for private litigants under the federal civil rights laws, and all employers should continue complying with all applicable federal and state laws.
This is an ongoing situation, and the EEOC will likely provide additional guidance on how the EO will affect the agency's enforcement activities in the coming months.
