On April 23, 2025, President Trump signed Executive Order 14281, Restoring Equality of Opportunity and Meritocracy (the “EO”).
This EO states its purpose as a solution to claims of employment discrimination based on “disparate-impact liability,” characterized as a “key tool” of a “pernicious movement” that threatens the foundation of the American Dream. The EO states a policy goal of eliminating “the use of disparate-impact liability in all contexts to the maximum degree possible” and includes numerous provisions that will affect federal agency enforcement priorities and may influence employer practices.
This Insight explains the concept of disparate impact liability, analyzes the EO and its directives, and provides practical considerations for employers.
In 1971, the Supreme Court of the United States (SCOTUS) recognized in Griggs v. Duke Power Co. that Title VII of the Civil Rights Act of 1964 (“Title VII”) “proscribes not only overt discrimination but also practices that are fair in form, but discriminatory in operation.” Practically speaking, SCOTUS thus gave its imprimatur to claims where there was a statistically significant showing that a practice or policy adversely impacted a protected class, even though the practice or policy appeared fair or neutral on its face. Congress codified the burden of proof in disparate impact cases at 42 U.S.C. § 2000(e)-2 (k), when it passed the Civil Rights Act of 1991.
In 2009, a divided SCOTUS...
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