Disparate-Impact Liability Gets Cancelled: Trump Executive Order Seeks to Eradicate Disparate-Impact Liability From Federal (And State) Law

On April 23, 2025, President Donald Trump issued an executive order titled “Restoring Equality of Opportunity and Meritocracy” (“the EO”).

The EO, by its own terms, seeks to “to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible” through several avenues, including eliminating enforcement at the federal level and advocating for preemption at the state level.

Disparate-impact liability is a legal theory by which facially neutral policies or practices may nonetheless violate antidiscrimination laws if they disproportionately affect members of protected classes. Disparate impact claims are typically raised in the context of reductions-in-force and challenges to hiring criteria.

Recognized initially by the U.S. Supreme Court in the 1971 case Griggs v. Duke Power Co., 401 U.S. 424 (1971), disparate-impact liability was later codified into Title VII of the Civil Rights Act by Congress in 1991. Although disparate-impact liability usually centers on federal law and authorities, many states have also codified versions of disparate-impact liability throughout state statutes and regulations.

The EO represents a significant shift in federal enforcement priorities, directing all federal agencies to “deprioritize enforcement of all statutes and regulations” that include disparate-impact liability. For employers, this most acutely signals that the Equal Employment Opportunity Commission (EEOC), among other federal agencies, will no longer pursue enforcement of disparate impact liability in administrative proceedings.

Beyond federal enforcement priorities, the EO seeks to lay the groundwork for preemption of state-law disparate-impact protections. Specifically, the EO instructs the Attorney General and all federal agencies to “determine whether any Federal authorities preempt State laws, regulations, policies or practices that impose disparate-impact liability” based on federally protected characteristics. (In doing so, the EO also explicitly telegraphs the Trump administration’s interest in designating the lack of a college education as a protected trait for equal employment purposes.) Accordingly, the EO’s stated interest in preemption could potentially pave the way for more to challenges to state-level disparate-impact protections.

However, employees can still bring private lawsuits alleging disparate impact claims under both federal and state law, barring further developments in federal case law or statutes.[1] In other words, employers would be ill-advised to eliminate disparate impact analyses when conducting reductions-in-force or considering applicant testing or similar broad-scale hiring criteria.

Ultimately, the law surrounding disparate-impact liability promises to continually change in the months and years ahead. Employers should keep an eye on these developments and consult with counsel if they have questions as to their compliance with federal and state law.

[1] Notwithstanding the EO’s stated changes to federal enforcement and the current administration’s appetite for preemption, employees must still allege disparate-impact claims in their EEOC charge in order to exhaust administrative remedies under federal law — even if the EEOC ceases to investigate or enforce disparate-impact claims. In other words, an employee’s failure to assert disparate-impact claims at the EEOC level could result in dismissal of those disparate-impact claims later on for failure to exhaust administrative remedies. Additionally, employees may continue to assert state-law claims (as applicable), notwithstanding the EO’s demonstrated appetite for federal preemption of state laws on disparate-impact liability. However, employers challenging such state-law disparate-impact claims may take the EO’s invitation and make a preemption argument against such claims — which may then lead to further developments in the case law in this area.