Deep Impact: The Trump Administration’s Latest Executive Order Charts a Collision Course for Discriminatory Practices Proof

The Trump Administration issued its latest Executive Order entitled Restoring Equality of Opportunity and Meritocracy (the “EO”) on April 23, 2025. The EO focuses on “disparate impact” discrimination and is the latest in a string of orders impacting the workplace – the effects of which American workplaces are still digesting (see here, here, and here for a few recent examples).

As described in the White House’s accompanying fact sheet, the EO “eliminates the use of disparate-impact liability in various contexts to ensure equal treatment under the law.” The EO is premised on the Administration’s position that “disparate impact liability has hindered 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, which in turn means that employers cannot act in the best interests of the job applicant, the employer, and the American public.” Based on this belief, the EO then takes numerous actions purporting to dismantle the disparate impact liability framework in various settings.

What is Disparate Impact Liability?

Disparate impact can be utilized as an alternative standard for alleging and ultimately proving discrimination in the workplace and in other anti-discrimination contexts. An employee pursuing a “discrimination by disparate impact” claim must show the challenged employment action had a disproportionate effect on members of a protected class (e.g., gender, race, or other Title VII protected categories) without justification rather than having to show that the employer acted with a discriminatory intent or motive. 

The U.S. Supreme Court first recognized the concept of disparate impact in the employment discrimination context in its 1971 Griggs v. Duke Power Co. decision, 401 U.S. 424. In Griggs, the Court invalidated an employer’s requirement that job applicants either have a high school diploma or pass an “intelligence” test to meet a position’s minimum standards, because that requirement served to disproportionately eliminate Black candidates from consideration without justifiable basis. The Griggs Court held Title VII requires the “elimination of artificial, arbitrary, and unnecessary barriers to employment that operate invidiously to discriminate on the basis of race” and other protected categories, and announced that the then-nascent Title VII statute “proscribes not only overt discrimination but also practices that are fair in form, but discriminatory in operation.” Id. at 424, 431. In short, an “employment practice which operates to exclude” members of certain protected classes are prohibited where such practices “cannot be shown to be related to job performance . . . .” Id. at 431. In recent years, the Supreme Court has repeatedly reaffirmed the basic viability of the disparate impact framework, noting it “permits plaintiffs to counteract unconscious prejudices and disguised animus that escape easy classification as disparate treatment.” Texas Dep’t of Hous. & Cmty. Affs. v. Inclusive Cmty. Project, Inc., 576 U.S. 519, 540 (2015). 

But the disparate impact framework is not just applied in the Title VII race discrimination context. It is a key part of other federal laws including Title VI (anti-discrimination applied to recipients of federal funds), the Age Discrimination in Employment Act, and the Fair Housing Act’s anti-discrimination protections. Indeed, Congress effectively codified the Griggs decision and the disparate impact framework in Title VII, which now specifically articulates the burden of proof for disparate impact liability in its text. See 42 U.S.C. § 2000e–2(k). Disparate impact claims are also viable under a number of state anti-discrimination laws such as under California’s Fair Employment and Housing Act, Massachusetts’s General Law 151B, and New York State’s Human Right Law. 

What Does This Executive Order Do? 

To effectuate its dismantling of the disparate impact framework, the EO commands federal agencies and the Attorney General to review existing regulations, “current matters,” and future agency action. Relevant here, this review includes “deprioritizing” enforcement of disparate impact claims under Title VII by evaluating pending EEOC investigations, civil suits, and positions to determine whether disparate impact liability is implicated and to “take appropriate action” in light of the EO. 

The EO does not define “appropriate action” but the potential implications are significant. It could mean that the EEOC ceases investigating charges predicated on disparate impact theories and declines to proceed with charges alleging disparage impact. Likewise, the EO directs federal agencies to review consent judgments and permanent injunctions relying on disparate impact and, again, “take appropriate action.” 

The EO also directs the Attorney General to determine whether federal “authorities” (another undefined term) can preempt state laws that would otherwise impose disparate impact liability. This directive runs in tandem with the directive to federal agencies to identify laws or decisions at the state level that impose disparate impact liability and identify ways to address or perhaps undermine that state authority.

Practical Guidance for Employers

Like previous DEI-related executive orders, the EO raises more questions than it answers. But here are a few points to keep in mind until the courts provide further clarity following expected legal challenges: 

• Employers should not ignore existing or potential allegations of disparate impact; however, it is unclear whether relying on the EO will persuade the judiciary to dismiss or render judgment in an employer’s favor on disparate impact claims. 
• Despite the mandate to assess preemption opportunities, the EO only impacts federal agency actions. It is highly unlikely that states like California, Massachusetts, or New York will voluntarily amend or modify their own robust anti-discrimination laws, which allow proof of disparate impact. Thus, even if disparate impact liability enforcement disappears (in practice) at the federal level, the California Civil Rights Department and similar state agencies will continue to accept, investigate, and issue right-to-sue letters for charges based on disparate impact and those charges will make their way to state courts with state judges to assess state law.
• Employers should be aware that, even aside from a disparate liability framework under Title VII (or state equivalents), many other state and local laws still prohibit various employment practices that legislatures have identified as impermissibly impacting various demographic groups. For example, some state and local laws limit employers’ reliance on criminal history in the hiring process or require employers to show that an applicant’s particular criminal history offense(s) reasonably relate to the position’s essential requirements such that the particular criminal activity actually bears upon the applicant’s qualifications for the position. Other laws regulate pre-employment drug screening, including where certain drug use or histories of the same are not employment-related and where such policies may disproportionately exclude certain racial groups. This list of laws that were legislatively crafted to proscribe or limit certain practices to remedy various societal or historical inequalities is not, of course, exclusive. It is important to consult legal counsel regarding these various policies and programs and analyze whether the EO impacts them.
• The EO does not appear to apply retroactively, but it does make clear that negotiated settlements such as consent judgments and permanent injunctions rendered on disparate impact grounds are fair game for agency review and challenge.  style="mso-spacerun:yes;"> 

• Employers should continue to evaluate the potential for disparate impact liability before implementing policies or practices, whether in the recruiting context, when making layoff determinations, when crafting corporate policies, or otherwise. As noted above, the disparate impact analysis is an alternative method for proving discrimination. It is not the only method. Whether a policy, practice, or action intends to discriminate or has the effect of discrimination, the risk of potential liability remains. 

Conclusion

The magnitude of the effects of the Restoring Equality of Opportunity and Meritocracy EO remain to be seen, and it may be some time before courts provide much needed certainty.  In the meantime, the Mintz Employment team will continue to monitor ongoing announcements by the Trump Administration and other judicial and legislative developments.  We stand ready to assist employers in responding to the rapidly evolving landscape.  
 

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