New Trump order targets disparate impact liability

In his administration’s continued quest to “encourage meritocracy and a colorblind society” and oppose “race- or sex-based favoritism,” President Trump issued a new Executive Order on April 23, 2025, titled “Restoring Equality of Opportunity and Meritocracy.” The order specifically targets disparate impact liability.

Background on Title VII disparate impact liability

Title VII of the Civil Rights Act of 1964 prohibits two kinds of discrimination—disparate treatment and disparate impact. Disparate treatment includes an employer’s failure or refusal to hire, discharging an individual, or otherwise discriminating against an individual with respect to the terms and conditions of employment because of that person’s race, color, religion, sex, or national origin. In other words, a disparate treatment claim involves some type of alleged discriminatory intent or animus.

On the other hand, disparate impact includes an employer’s limiting, segregating, or classifying employees or applicants in a way that would tend to deprive any individual of employment opportunities or adversely affect their status as an employee because of race, color, religion, sex, or national origin. To prove a disparate impact claim, in general, the complaining party must demonstrate that the employer doesn’t have a job-related reason that is consistent with business necessity for the challenged practice.