On Wednesday, April 23rd, President Trump signed an Executive Order (EO) titled “Restoring Equality of Opportunity and Meritocracy,” which renounces disparate impact theories of discrimination, and signals a significant shift for the U.S. Equal Employment Opportunity Commission’s (EEOC) enforcement approach. In the EO, the White House directed all agencies to “deprioritize enforcement of all statutes and regulations to the extent they include disparate-impact liability.” The EO asserted the administration’s stance that disparate impact liability is unlawful, violates our Constitution, and “threatens the commitment to merit and equality of opportunity that forms the foundation of the American Dream.”
What is disparate impact liability?
Disparate impact is a legal doctrine under which employers can be held liable for facially neutral policies if those disproportionately negatively affect a group of people based on a protected characteristic, such as race or gender. The U.S. Supreme Court has recognized disparate impact liability under Title VII since the Griggs v. Duke Power Co. ruling in 1971. It was codified by Congress in the Civil Rights Act of 1991.
Notably, while disparate impact can lead to employer liability for facially neutral policies, there are defenses available for employers. In Title VII disparate impact claims, employers can justify their facially neutral employment practices by demonstrating a valid, non-discriminatory reason for the policy or practice that aligns with business necessity.
What changes can we anticipate following this Executive Order?
This EO signifies a substantial change in the federal government’s approach to enforcement of anti-discrimination laws. Under previous administrations, the EEOC has actively pursued and prioritized litigation based on disparate impact theories. However, this EO instructs the Attorney General and Chair of the EEOC to “assess all pending investigations, civil suits, or positions taken in ongoing matters…that rely on a theory of disparate-impact liability, and… take appropriate action” in line with this administration’s policy towards disparate impact. It also instructs federal agencies to deprioritize enforcement actions related to disparate impact liability and to revise regulations and guidance that recognize disparate impact liability. Based on the EO, we anticipate that this administration will not pursue new cases based on disparate impact and will likely abandon currently active cases and investigations involving disparate impact.
Though this EO marks a sharp change in the federal government’s approach to anti-discrimination cases, it is unlikely to substantially impact cases that do not involve the federal government as plaintiff. Disparate impact theories of liability are still valid law, and private litigants are not subject to the constraints of this EO. Unless Congress enacts changes to the laws or the Supreme Court overturns previous precedent, disparate impact theories of liability will remain available for private plaintiffs and complainants.
Nevertheless, most anti-discrimination cases brought by private litigants do not involve disparate impact. Private litigants often face challenges in obtaining the data necessary to pursue such cases. Consequently, the government’s decision to discontinue the use of disparate impact theories of liability will significantly reduce the overall number of disparate impact cases.
Our team continues to closely monitor developments in employment law and will provide updates on any significant changes or further guidance related to this Executive Order or disparate impact liability. If you have any questions about how these changes may affect your organization, please contact Erik Eisenmann, Nora Evans, or your Husch Blackwell attorney.