Executive order means major shift in federal anti-discrimination enforcement

In late April, President Donald Trump signed an executive order that directs federal agencies to eliminate the use of disparate-impact liability in civil rights enforcement to the maximum extent permitted by law.

Executive Order 14281 is called “Restoring Equality of Opportunity and Meritocracy.”

Disparate-impact liability allows for claims of discrimination when a neutral policy disproportionately affects members of a protected class, even without intentional bias.

This legal theory has been instrumental in addressing systemic discrimination in various areas, including employment, housing, education and lending.

Key provisions of the Executive Order

The order mandates several actions:

• Federal agencies are to deprioritize enforcement of statutes and regulations that include disparate-impact liability.
• The Attorney General must identify and propose amendments or repeals of existing regulations that impose such liability.
• The Equal Employment Opportunity Commission (EEOC) and the Department of Justice (DOJ) are instructed to assess ongoing investigations and legal actions relying on disparate-impact theory and take appropriate action.
• Agencies are directed to evaluate existing consent judgments and permanent injunctions that rely on disparate-impact theories.
• The Attorney General is to determine whether any federal authority preempts state laws imposing disparate-impact liability and address any legal infirmities.
• The EEOC Chair and the Attorney General are to issue guidance or technical assistance to employers on promoting equal access to employment, regardless of educational background, where appropriate.

Implications for employers

The new executive order signifies a substantial shift in how federal agencies approach anti-discrimination enforcement.

Employers may experience changes in compliance requirements, particularly related to hiring practices and workplace policies. While the order limits federal enforcement of disparate-impact claims, it does not prevent private individuals from pursuing such claims under existing laws.

Employers should also stay informed about potential legal challenges to the order.

Executive Order 14281 reflects a significant change in federal civil rights enforcement, emphasizing a focus on intentional discrimination and individual merit. Going forward, employers are advised to monitor developments and assess how this policy shift may affect their operations and compliance obligations.