Trump Administration Moves to Dismantle Disparate Impact Liability in Federal Civil Rights Enforcement

On April 23, 2025, President Donald Trump signed an Executive Order (“EO”) entitled, “Restoring Equality of Opportunity and Meritocracy.”  The EO demonstrates a shift in the federal government’s enforcement priorities under the Trump Administration by rejecting the use of disparate impact theories when addressing discrimination.  The EO instructs federal agencies to scale back enforcement efforts based on the disparate impact doctrine.

What Is Disparate Impact Liability?

Disparate impact refers to a method of proving discrimination based on outcomes rather than intent.  It applies when a facially neutral policy disproportionately harms a protected group and cannot be justified by business necessity or less discriminatory alternatives.  Unlike disparate treatment, which requires proof of intentional bias, disparate impact liability can arise even when no discriminatory motive exists.  The concept was first recognized by the U.S. Supreme Court in Griggs v. Duke Power Co. (1971), where the Court found that an employer's high school diploma and aptitude test requirements—though facially neutral—disproportionately disqualified Black applicants and bore no relation to job performance.  Congress later codified this standard in Title VII of the Civil Rights Act of 1991, establishing that such practices are unlawful if they cause unjustified disparities.

Scope of the Executive Order

The key provisions of the EO include:

• Deprioritization of Enforcement: Federal agencies are instructed to stop prioritizing the investigation or prosecution of disparate impact claims under all applicable statutes.
• Regulatory Rollback: The Attorney General is tasked with identifying and initiating the repeal or revision of Title VI regulations across all federal agencies to the extent those regulations impose or contemplate disparate impact liability.
• Review of Existing Matters: Within 45 days, the Attorney General and the EEOC Chair must review all ongoing investigations and lawsuits premised on disparate impact liability and take “appropriate action” consistent with the EO.  Other agencies, including HUD, the FTC, and the CFPB, must do the same under laws they administer, such as the Fair Housing Act and Equal Credit Opportunity Act.
• Revocation of Presidential Actions: The EO revokes prior Presidential approvals of regulations that incorporated disparate impact theories under Title VI of the Civil Rights Act.
• Consent Decree Review: All federal agencies must assess existing consent decrees and injunctions relying on disparate impact theory and take action to limit or eliminate their enforcement.

Additionally, the EO calls for an evaluation of whether state laws allowing disparate impact claims conflict with federal authority or constitutional norms, signaling potential federal challenges to such laws in the future.

Impact on Employers

This EO reflects the Trump Administration’s broader move toward a legal framework that seeks to emphasize individual merit.  As part of this shift, employers can expect fewer investigations and lawsuits initiated by federal agencies, such as the EEOC, that rely on disparate impact theories.

Employers should not, however, interpret the EO as eliminating all disparate impact liability.  The doctrine remains codified in federal law, and private plaintiffs retain the right to pursue such claims in court.  Courts have long upheld disparate impact as a valid theory of discrimination, and the EO does not undo statutory protections passed by Congress or judicial precedents.  Moreover, many state and local laws continue to recognize and enforce disparate impact liability.  The practical effects of the EO will depend on how aggressively federal agencies implement their directives—and how courts respond to any resulting legal challenges.

Looking Ahead

Employers facing compliance questions or ongoing investigations under disparate impact standards should consult with legal counsel to understand how these changes may affect their obligations and potential liabilities.  For assistance, please contact one of Honigman’s Labor and Employment Attorneys here.