New Executive Order Does Not Trump Existing Disparate Impact Discrimination Law

By Kayla E. Snider - Skoler Abbott P.C.

April 29, 2025

On April 23, 2025, President Donald Trump signed an Executive Order entitled “Restoring Equality of Opportunity and Meritocracy” (the “Disparate Impact Order”).  In a disparate impact discrimination case, employees claim that although a policy seems fair on its face, it disproportionately affects one or more protected groups when applied across the board.  For example, assume an employer adopts a policy requiring all candidates to be proficient in English.  This policy may disproportionately impact immigrants and foreign-born applicants.

The Disparate Impact Order declares disparate impact considerations to be incompatible with principles of merit-based decision making and equality of opportunity, and directs federal agencies to no longer prioritize enforcement of disparate impact statutes and regulations.  This move might surprise some people but given the pattern of Executive Orders issued by President Trump, it is not really unexpected. He has issued several Executive Orders since his inauguration mentioning and highlighting merit-based opportunity, specifically his DEI order (“Ending Illegal Discrimination and Restoring Merit-Based Opportunity”), which we have talked about extensively here, here, and here. Now that President Trump has signed this most recent executive order, it is imperative that private employers across the country – regardless of whether they are government contractors – understand the Disparate Impact Order does not change the law surrounding disparate impact discrimination.

What the Executive Order Says

In the Disparate Impact Order, President Trump stated the intent of the Disparate Impact Order is “to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible,” and ordered all federal agencies to “deprioritize enforcement of all statues and regulations to the extent they include disparate-impact liability.”  The Order specifically targets the use of disparate-impact analyses to establish “a near insurmountable presumption of unlawful discrimination,” and to hinder “businesses from making hiring and other employment decisions based on merit and skill, their needs, or the needs of their customers because of the specter that such a process might lead to disparate outcomes, and thus disparate-impact lawsuits.”

To accomplish its goals, the Disparate Impact Order revoked Presidential approval of various federal regulations relating to disparate-impact liability. In terms of concrete actions, the Disparate Impact Order mandates that, within 30 days, the Attorney General submit a report to the President’s Domestic Policy Advisor listing all regulations, guidance, rules, orders, laws, or other decisions (including at the state level) that impose disparate-impact liability, and providing steps for amending, repealing, or challenging all such items. The Attorney General, in conjunction with the EEOC, is also required, within 45 days, to review all pending investigations, civil suits, and positions taken to identify those that rely on disparate-impact liability and take “appropriate action,” consistent with the Disparate Impact Order.

Title VII Still Prohibits Disparate-Impact Employment Practices

As you all are aware, the Civil Rights Act of 1964, particularly Title VII, prohibits employment practices that discriminate because of race, color, religion, sex, or national origin. However, since the 1991 Amendment to the Civil Rights Act, Title VII contemplates not only intentional discrimination, but also neutral practices that have a disproportionate impact on protected groups (the disparate-impact analysis). What this means is that if an employee can show that while a practice may appear neutral on its face, it has the impact of effecting only those within a protected group, then there is a presumption that the practice is discriminatory. Employers can overcome this presumption by showing that the practice is related to the job and part of business necessity.

The 1991 Amendment to the Civil Rights Act came in the wake of the 1971 Griggs v. Duke Power Co. case before the Supreme Court. In that case, employees sued their employer, Duke Power Co. (“Duke”), alleging that Duke had violated the Civil Rights Act by requiring both a high school diploma and a certain intelligence test score for certain jobs. The employees argued that these requirements resulted in racial discrimination. The district court dismissed the complaint, and, upon appeal, the circuit court found that since there was not a discriminatory purpose, then the requirements were proper. The case was then appealed to the Supreme Court, which ultimately concluded that “good intent or absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as ‘built-in headwinds’ for minority groups and are unrelated to job performance.” Essentially, even though Duke may not have intended to discriminate based on race, their requirements had a disparate impact on minority groups and were not related to the job or business necessity.

Takeaways

President Trump’s Disparate Impact Order shifts federal policy, but it does not have the same legal effect as a law passed by Congress, a regulation published by a federal agency, or a decision by a court. While the Disparate Impact Order makes it apparent that President Trump intends to change the laws, regulations, and court decisions regarding disparate-impact liability, that has not happened yet. This newest executive order only represents a statement of the Trump administration’s policy on disparate-impact liability and orders the executive branch of government to further that policy.

As for the EEOC, that agency will likely still accept discrimination charges based on a disparate impact theory.  However, it is unlikely that the EEOC will pursue any investigation and/or initiate litigation in a disparate impact case. It is also likely that the EEOC will withdraw from any pending litigation related to disparate impact and will cease any current investigations into claims of disparate impact. However, employees can still bring disparate impact claims at the state level, through state agencies and state courts, including the Massachusetts Commission Against Discrimination (“MCAD”) and the Connecticut Commission on Human Rights and Opportunities (“CHRO”).

If you or your company has any questions about your obligations under federal or state anti-discrimination laws, consider contacting experienced labor and employment counsel.

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