President Trump signed an executive order on April 23, 2025, directing that federal agencies stop using the disparate impact theory of liability under federal civil rights law, including Title VII of the Civil Rights Act of 1964.
The EO, titled “Restoring Equality of Opportunity and Meritocracy,” deprioritizes disparate impact and specifically states “it is the policy of the United States to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible to avoid violating the Constitution, Federal civil rights law, and basic American ideals.”
Disparate impact is a legal theory of liability under civil rights laws pursuant to which employers may be held accountable for a specific employment practice or policy that may be neutral on its face but has a disproportionate adverse effect on a protected class of individuals. Disparate impact claims do not require proof of intentional discrimination.
The new EO likely means that at least through the current administration, the EEOC will not pursue charges or investigations of discrimination premised on the disparate impact theory of liability. It is not, however, clear whether the EEOC will move to dismiss pending lawsuits in which it alleges disparate impact liability.
Employers should remain diligent in the implementation of their policies and practices, however, because until Congress changes Title VII, disparate impact liability is still a viable theory of liability in both state and federal courts once a plaintiff has exhausted their administrative requirements in the EEOC or state civil rights commission.
If you have questions regarding these updates, please contact Dani Smid or your BrownWinick attorney.
