On April 23, 2025, the Trump Administration issued an Executive Order Restoring Equality of Opportunity and Meritocracy. This order focuses on eliminating the use of disparate impact liability by federal agencies, such as the Equal Employment Opportunity Commission (EEOC), in their enforcement of civil rights laws.
Disparate impact is a legal doctrine primarily used under Title VII of the Civil Rights Act. In employment law, it prohibits employers from having seemingly neutral policies or practices that disproportionately affect members of the protected class, even if the harm was not intentional. If an employee makes a disparate impact claim, the burden shifts to the employer to prove the policy is job-related and a business necessity. However, even with such poof, an employee can still prevail by showing a less discriminatory alternative exists.
The Executive Order states that disparate impact liability “runs contrary to equal protection” and is thus, unconstitutional because it “all but requires individuals and businesses to consider race and engage in racial balancing to avoid potentially crippling legal liability.”
The Executive Order includes the following directives related to employment law:
- Revoking Certain Presidential Actions: Revokes any prior Presidential actions that allowed federal agencies to enforce disparate impact liability.
- Enforcement Discretion to Ensure Lawful Governance: Mandates federal agencies to deprioritize enforcement of all statutes and regulations that include disparate impact liability.
- Existing Regulations: Directs the U.S. Attorney General, in coordination with federal agency heads, to report to the President within 30 days:
- Every current regulation, rule, guidance, and order that allows the use of disparate impact liability and their plans to repeal or amend as legally appropriate; and
- Identify other federal and state laws and court decisions that impose disparate impact liability, and suggest appropriate actions to resolve any constitutional or legal issues.
- Review Current Matters:
- Directs the U.S. Attorney General and the Chair of the EEOC to assess within 45 days all pending investigations, lawsuits, or positions that rely on disparate impact liability and take appropriate action consistent with this Executive Order;
- Directs all federal agencies to evaluate within 90 days, all existing consent judgments and permanent injunctions that rely on disparate impact liability and take appropriate action consistent with this Executive Order.
- Future Agency Action:
- Directs the U.S. Attorney General, in coordination with other agencies, to determine whether federal law preempts state laws that impose disparate impact liability within state discrimination statutes or if those laws are unconstitutional, and to take appropriate action consistent with this Executive Order;
- Directs the U.S. Attorney General and the Chair of the EEOC to jointly formulate and issue guidance or technical assistance to employers regarding appropriate methods to promote equal access to employment regardless of whether an applicant has a college education.
It is important to note that this Executive Order has the effect of eliminating EEOC’s enforcement of disparate impact but does not eliminate disparate impact as a legal theory under Title VII. Accordingly, employers must still comply with Title VII and state/local anti-discrimination laws as interpreted by courts, including obligations to maintain workplaces free from discrimination and harassment. For example, Oregon’s Bureau of Labor and Industries retains authority to enforce state anti-discrimination laws, and employees can still pursue discrimination claims, including disparate impact, under Oregon law.
Cascade will continue to monitor this executive order and provide updates should state law be impacted.