Executive Order dismantles disparate impact liability

Consistent with the current administration’s rollback of diversity-based initiatives in both public and private enterprises, President Donald Trump issued the “Restoring Equality of Opportunity and Meritocracy” Executive Order (EO) on April 23, 2025. The EO is intended to eliminate the use of the “disparate impact” theory of liability, which stems from a neutral policy or practice that has a disproportionately negative effect on a particular protected class, such as one based on race, sex, etc. The EO finds that such litigation is “wholly inconsistent with the United States Constitution,” threatens the nation’s commitment to merit and equality of opportunity, and “hinder[s] businesses from making hiring and other employment decisions based on merit and skill, their needs, or the needs of their customers.”

What the order does

The EO directs all agencies to deprioritize enforcement of all statutes and regulations based on assertions of disparate impact liability, specifically Titles VI and VII of the Civil Rights Act of 1964. Private lawsuits based on disparate impact theory remain viable, as does the authority of state and local civil rights laws and agencies (at least for now).