President Trump has issued a sweeping executive order that takes aim at the decades-old “disparate impact” legal theory, fundamentally changing how federal agencies handle race-based discrimination cases.

At a Glance

• Trump’s executive order “Restoring Equality of Opportunity and Meritocracy” aims to eliminate disparate-impact liability in federal enforcement
• The order challenges the legal practice of interpreting race-neutral standards as discriminatory when they produce unequal racial outcomes
• Federal agencies including the EEOC must review and potentially withdraw from cases based on disparate impact theories
• The administration argues disparate impact liability creates a presumption of discrimination without requiring proof of discriminatory intent
• The move represents a significant shift toward merit-based, colorblind legal standards

Challenging a Contentious Legal Theory

President Donald Trump has signed an executive order titled “Restoring Equality of Opportunity and Meritocracy” that takes direct aim at the controversial legal doctrine known as “disparate impact.” This legal theory, which has shaped civil rights enforcement for decades, allows findings of discrimination when facially neutral policies disproportionately affect protected groups, even without evidence of discriminatory intent. The order calls for federal agencies to roll back regulations and enforcement actions based on this theory.

The executive order specifically criticizes disparate impact theory for creating “a near insurmountable presumption of unlawful discrimination… where there are any differences in outcomes in certain circumstances among different races, sexes, or similar groups, even if there is no facially discriminatory policy or practice or discriminatory intent involved, and even if everyone has an equal opportunity to succeed.”

Justice Clarence Thomas has previously noted that “The author of disparate-impact liability under Title VII was not Congress, but the Equal Employment Opportunity Commission (EEOC).” This criticism aligns with the administration’s position that the doctrine represents regulatory overreach without proper legislative foundation.

New Executive Order Directs Federal Agencies to Deprioritize Disparate Impact: What Employers Need to Know Now https://t.co/ZkIuxhhoLA | by @seyfarthshawllp

— Constitutional Law (@Constitutional) April 25, 2025

Far-Reaching Implementation

The order instructs federal agencies to “eliminate the use of disparate-impact liability in all contexts to the maximum degree possible.” This includes specific directives to the Attorney General and the Chair of the Equal Employment Opportunity Commission to review pending investigations and civil suits that rely on disparate impact liability. The agencies must evaluate whether to withdraw from or settle these cases, fundamentally changing the government’s approach to civil rights enforcement.

“The way to stop discrimination on the basis of race is to stop discriminating on the basis of race.”, Chief Justice John Roberts said.

The order revokes specific presidential approvals of regulations under Title VI of the Civil Rights Act that supported disparate impact liability and directs officials to repeal or amend these regulations. It also requires agencies to evaluate existing consent judgments and injunctions based on disparate-impact liability, possibly unwinding years of legal settlements across multiple industries.

Trump Signs the Most Impactful Executive Order Yet https://t.co/HEtfbJaD3w
On April 23, Donald Trump signed an executive order entitled “Restoring Equality of Opportunity and Meritocracy,” which will end "disparate-impact theory." 
Disparate-impact theory states "that if a…

— ZeroDEIUSA (@zeroDEIUSA) April 26, 2025

Real-World Applications and Implications

The disparate impact theory has been used to challenge various standards and practices in American society, from basic proficiency tests to criminal background checks for employment. One notable example cited is the EEOC’s pursuit of the Sheetz convenience store chain for racial discrimination due to its policy of not hiring individuals with criminal records – a policy the agency claims disproportionately affects Black applicants despite having no explicitly discriminatory language.

“Disparate-impact theory holds that if a neutral, colorblind standard of achievement or behavior has a disproportionately negative effect on underrepresented minorities (overwhelmingly, on blacks), it violates civil rights laws.”, said Heather MacDonald.

The executive order argues that disparate impact liability “all but requires individuals and businesses to consider race and engage in racial balancing to avoid potentially crippling legal liability,” which the administration contends contradicts constitutional principles of equal treatment under the law. Critics of the theory have long maintained that it forces employers and institutions to implement de facto racial quotas to avoid liability, while supporters see it as necessary to address persistent systemic inequalities.

Looking Forward

While the executive order makes a bold statement about the administration’s priorities, the ultimate fate of disparate impact liability may rest with Congress and the courts. The Supreme Court has previously upheld certain applications of disparate impact theory, particularly in employment discrimination cases under Title VII. Legislative action would likely be needed to fully eliminate the doctrine from federal civil rights statutes.

The order aligns with the Consumer Financial Protection Bureau’s 2025 supervision and enforcement priorities, which no longer pursue disparate impact theories of discrimination. This represents a significant shift in how federal agencies approach equal employment opportunity, fair lending, and housing discrimination cases, with potentially far-reaching consequences for businesses and civil rights enforcement.