An April 23, 2025 Trump Executive Order seeking to end discrimination protections based on a disparate impact theory of liability takes a multi-pronged approach. One component of that directs the Attorney General:
- to seek repeal or amendment of regulations under Title VI for all agencies to the extent they contemplate disparate impact liability; and
- to seek to take similar actions with regard to all other federal regulations and guidance.
The executive order additionally directs review of current matters and consideration of future agency action.
In this third segment of our series, we are exploring the what and how, to consider which of the federal employment laws and implementing regulations are in jeopardy, and how that may impact employers.
Step I: Title VI Regulations
Step I of the directive to the Attorney General will likely involve asserting the same legal challenges analyzed and accepted by the district court in Louisiana v. EPA, discussed in detail in Part II of this series. That decision centered on the Spending Clause of the Constitution and the lack of an express statement in Title VI itself that conditions the use of federal funds on ensuring there is no disparate impact on individuals or groups based on race, color, or national origin. Under that theory, the administration will likely seek to revoke implementing regulations adopted by 26 federal agencies related to considering the “effects” of conduct or whether actions have a “disparate impact,” and to do so as expeditiously as possible.
The Administrative Procedure Act dictates an orderly and considered process for revoking or amending federal regulations that includes public notice and comment periods. In an April 9, 2025 presidential memo, the administration invoked a “good cause” exception to the notice and comment period to allow agencies to repeal regulations that the administration deems “unlawful” based on its interpretation of 10 Supreme Court decisions. Five of the referenced Supreme Court decisions arise in the context of environmental regulations – four relate to the reach of the Environmental Protection Agency and cost/benefit analyses, and then Loper Bright Enterprises v. Raimondo (2024), prospectively ended judicial deference to administrative agencies on the interpretation of ambiguous statutes. Consistent with that legal focus, and past pronouncements under the January executive orders directing an end to diversity, equity, and inclusion (DEI) initiatives, it appears that any application of Title VI regulations to the concept of environmental justice is at the top of the administration’s list for prompt revocation.
The other five Supreme Court decisions relate to varied subjects: one on enforcement actions by the Securities and Exchange Commission; one on union organizing initiatives; two involving religious institutions — the use of state funds for religious education and limiting attendance at religious services during the peak of COVID; and finally the Students for Fair Admissions v. Harvard (2023) decision on affirmative action in college admissions. From an employment law perspective, the new directives from the President’s office are doubling down on the targeting of DEI programs and serve as a second-wave attack on those that have been supported or encouraged through Title VI regulations.
How quickly the administration will act in revoking the Title VI regulations and how successful they will be in doing so, remain open questions. For employers, this question matters to those who are federal contractors and grant recipients, who should be cautious about relying too much on the revocation of disparate impact theory under Title VI. That revocation has only been partially effectuated at present and all such actions are likely being added to the roster of challenges making their way through the federal courts.
Step II: Title VII, ADA, ADEA – Which May Fall?
Step II under the directive issued to the Attorney General will be a review of other federal laws prohibiting discrimination. Title VII differs quite fundamentally from Title VI in that the law itself expressly recognizes a disparate impact theory of liability; that provision cannot be overturned simply through an executive order. The Americans with Disabilities Act similarly prohibits “utilizing standards, criteria, or methods of administration… that have the effect of discrimination on the basis of disability.” Both these laws are likely, therefore, to remain in full effect in their protection against discrimination, whether proven to be intentional or proven under a theory of disparate impact.
A disparate impact theory under the Age Discrimination in Employment Act (ADEA) stands on slightly shaky ground because it is not as clearly written into the statute. In Smith v. City of Jackson (2005), the Supreme Court squarely held that the disparate impact theory applies to ADEA claims, noting that it includes the same language as Title VII, prohibiting actions that “otherwise adversely affect” an individual’s status as an employee because of a protected characteristic, and that language was part of the basis for the Court’s prior recognition (in Griggs v. Duke Power Co.) of a disparate impact theory under Title VII. The Court further explained in the Smith case that a provision of the ADEA that recognizes it is lawful for an employer to take action “where the differentiation is based on reasonable factors other than age” only makes sense if a disparate impact claim is plausible. The Court held, however, that an employer’s exposure to liability on a disparate impact claim under the ADEA is more limited than under Title VII because Congress had amended Title VII in 1991 in response to a Supreme Court decision adopting that narrower construction, and Congress has not similarly amended Title VII. Subsequent Supreme Court decisions addressing other interpretative questions under the ADEA have continued to acknowledge the validity of the Smith decision.
Past Supreme Court decisions also have recognized the disparate impact theory for Title VI claims, which may prompt the question as to why I am predicting a more favorable outcome for the longevity of the theory under the ADEA. In Louisiana v. EPA, the district court distinguished the prior Supreme Court cases because they did not consider an argument based on Title VI’s roots in the Spending Clause and unique requirements associated with spending federal dollars under that clause. The ADEA and other federal anti-discrimination laws in the employment context, however, arise from Congress’s authority to regulate interstate commerce, not the Spending Clause, and thus one key legal theory that the district court used to undo the Title VI regulations on disparate impact will be inapplicable to the employment law protections.
Another key theory relied upon in the Louisiana case was application of the “major questions” doctrine, which limits Congress’s delegation of legislative power to the executive branch for matters of deep economic and political significance, typically involving millions or billions of people or dollars. The Louisiana case involved an action against the State of Louisiana, predicated on a theory of environmental justice that had similarly been applied to several other state governments. Those stakes are considerably higher in dollars and breadth than the context of individual employment discrimination claims, and it therefore seems like a greater stretch to invoke the major questions doctrine in the context of an ADEA claim.
There may yet be additional legal theories that the Trump administration will be looking to deploy to challenge disparate impact theory under the federal equal employment opportunity laws. That battle, however, seems likely to be far more challenging for the administration to win. At present, employers should assume that the disparate impact theory is alive and well under Title VII, the ADA and the ADEA.
Step III: Deprioritize and Recalibrate
Where the administration may be more successful, with potentially beneficial impact to employers at least in the short-term, is in deprioritizing its consideration of disparate impact claims. The executive order approaches this in three ways:
1. It directs all agencies to deprioritize enforcement of statutes and regulations to the extent they include disparate-impact liability, and particularly specifies Title VII and most of the Title VI regulations it is looking to revoke.
2. It directs the Attorney General and the Chair of the Equal Employment Opportunity Commission (EEOC) to assess all pending investigations, civil suits and positions that rely on disparate impact theory and “take appropriate action” consistent with the executive order.
3. It further directs evaluation of existing consent judgments and permanent injunctions that rely on theories of disparate-impact liability and taking “appropriate action,” consistent with the executive order.
In short, employers should expect that the Trump administration has little or no interest in enforcing Title VI or the EEO laws based on a disparate impact theory. That likely means the government will discontinue all pending investigations to the extent they are predicated on a disparate impact theory, abandon that theory in all pending civil suits, amicus briefs, and other legal submissions, and dismiss all claims and seek to withdraw from all cases that cannot be supported by proof of discriminatory intent. It also will likely seek to close all federal consent judgments predicated on disparate impact claims, and may elect not to enforce or even seek to settle, have dismissed, or otherwise resolve permanent injunctions that were issued based on a disparate impact theory.
Where This Leaves Employers
The outlook is different for employers depending on their relationship with the federal government.
Federal contractors and grant recipients may be relieved of certain liability risks with regard to the discriminatory impact of actions taken in contracted programs.
All private sector employers should assume that the federal EEO laws prohibiting discrimination based on race, color, religion, national origin, sex, age, and disability are fully applicable in the context of claims asserted by employees or job applicants on an individual or class basis. Job applicants and employees must file a charge with the EEOC before pursuing a claim under Title VII, the ADA or the ADEA, and the EEOC must then issue a notice of right to sue before a claim can be filed in court under Title VII and the ADA. The EEOC has extremely limited authority to dismiss a charge without issuing a notice of right to sue. The regulations permit dismissal only if the claim is untimely, or if no portion of it states a potentially viable claim under Title VII or the ADA. Given our prior analysis of the Title VII and ADA provisions recognizing a disparate impact theory of liability, it therefore seems unlikely that the EEOC will have authority to decline issuing right to sue notices in those cases.
The modest set of private sector employers that have been defending discrimination claims pursued by the EEOC on a disparate impact theory at the administrative level or in court may see relief from the further pursuit of those claims. Those employers can leverage the executive order to initiate settlement discussions or dismissal of the charge or litigation.
Employers that have current federal consent judgments or are bound by permanent injunctions based on disparate impact claims can and should use this opportunity to request relief from those ongoing legal obligations.
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This five-part series addresses the Trump Executive Order seeking to end discrimination protections based on a disparate impact theory of liability. Our approach is threefold:
- Explore the why – Part II of our series focuses on the origins of disparate impact theory and what may be driving the administration’s current attack.
- Assess the what and how – Parts III and IV look at federal laws and regulations, while Part V looks at state and local laws to consider what is gone already, what is targeted for revision, and how that might be effectuated.
- Consistently reflect back on the impact – Parts III and V particularly highlight what this means for employers, where the change is potentially beneficial to them, and what the guideposts are going forward.
By Tracey I. Levy
