BLOG OVERVIEW: Despite the Trump Administration’s Executive Order 14281 directing federal agencies to deprioritize disparate impact enforcement and the EEOC’s decision to close disparate-impact-only investigations, four states—California, New York, New Jersey, and Illinois—have recently enacted laws that codify disparate impact liability at the state level, with some formally adopting the Uniform Guidelines on Employee Selection Procedures (UGESP).
In April 2025, the Trump Administration issued Executive Order 14281, “Restoring Equality of Opportunity and Meritocracy,” directing federal agencies to deprioritize disparate impact analysis and stating it is U.S. policy to eliminate disparate impact liability “to the maximum degree possible.” The Equal Employment Opportunity Commission (EEOC) subsequently announced it would no longer investigate cases based solely on disparate impact claims, effective September 30, 2025.
Disparate impact liability allows challenges to policies that appear facially neutral but result in disproportionate harm to protected groups even without discriminatory intent. EEOC has historically relied on this principle in areas such as recruitment, hiring, promotions, and terminations. These developments are particularly significant as the use of artificial intelligence (AI) in hiring continues to grow and concerns about algorithmic discrimination increase.
Four states have recently enacted laws that codify disparate impact liability and/or incorporate...
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