Employers shouldn’t overly rely on reports that the EEOC is no longer interested in disparate impact: Private lawsuits or other entities bringing such claims, both in the traditional discrimination and the emerging “illegal DEI” contexts, still pose legal threats. In this episode, our attorneys discuss disparate impact versus treatment, “job-relatedness” defenses, the role of statistics and the value of privileged disparate impact analyses, and the need for employer vigilance given the ongoing financial and reputational risks associated with disparate impact claims.
Articles Discussing General Issues Under Title VII.
Justice Department Erases Disparate Impact Liability From Title VI Enforcement Regulations
On December 10, 2025, the U.S. Department of Justice (DOJ) issued a final rule removing liability for disparate impact discrimination under Title VI of the Civil Rights Act of 1964. This rule applies to recipients of federal funding, including state and local government agencies, nonprofits, schools, and government contractors.
AI at Work: Who’s Liable When the Algorithm Discriminates? Workplace Wake-Up with Jen Shaw
Artificial intelligence is everywhere—from resume screening to productivity tracking—but what happens when the tech gets it wrong? In this episode, Jen dives…
Reassigned … and Ready to Sue? Fourth Circuit Ruling May Open the Door to More Discrimination Claims by Employees
Following the Supreme Court of the United States’ April 2024 ruling in Muldrow v. City of St. Louis, employers have grappled with determining what constitutes an adverse employment action that will support a claim under federal antidiscrimination laws. A recent decision from the U.S. Court of Appeals for the Fourth
EntertainHR: What Love Island USA Teaches Us About Handling Discriminatory Language in the Workplace
“Yulissa has left the villa.”
Two episodes into Season 7 of the Peacock dating series Love Island USA, contestant Yulissa Escobar was abruptly removed after podcast clips resurfaced of her using a racial slur.
Later in the season, contestant Cierra Ortega was similarly removed for what the series described as
EEOC to Halt Investigations into Disparate Impact Claims
TakeawaysAn internal EEOC memo reportedly directs the agency to discharge all disparate impact discrimination claims.The directive furthers an executive order issued by the president earlier this year.The policy is a significant departure from the EEOC’s previous enforcement strategies and may have the effect of allowing parties alleging disparate impact claims to bypass the administrative process under federal law.Related link
EEOC to Close Investigations of Disparate Impact Discrimination
EEOC to Close Investigations of Disparate Impact Discrimination
The U.S. Equal Employment Opportunity Commission will close almost all pending charges based solely on allegations of disparate impact discrimination by September 30, 2025, according to an internal memorandum obtained by Bloomberg Law. The agency is expected to issue right-to-sue letters to
Can an employee sue for discrimination after being placed on a Performance Plan?
Can an employee sue for discrimination after being placed on a Performance Plan?
We are about to put an employee on a Performance Improvement Plan. Can they sue us for employment discrimination?
Many employers use Performance Improvement Plans, or “PIPs,” as a way to provide clear guidance and direction to employees.
Gender-Affirming Care Exclusions and Title VII
A federal court in Georgia recently held that a self-funded plan’s exclusion for gender-affirming surgery violated Title VII of the Civil Rights Act of 1964. This decision is likely to have far-reaching effects on fully insured and self-insured plans. While there is no black-letter-law requiring health plans to cover gender affirming/sex change surgery, a ruling such as this from a federal appeals court could effectively requires plans to cover these benefits – lest they run afoul of Title VII and open themselves up to potential liability.
WEBINAR: Avoiding Trial: How Employers Can Position Employment Claims for Early Dismissal
Summary judgment is where many employment cases are resolved and where a strong record can mean the difference between dismissal and costly litigation. This session looks at how the decisions employers make during real-time issues — managing performance, documenting concerns, responding to complaints — can shape the legal strategy months down the line. We’ll talk about how courts evaluate records, what makes a case suitable for early dismissal, and how working closely with counsel from the outset can drive better, more efficient outcomes when litigation hits.
Title VII Lawsuit in Utah Federal District Court Challenges Employee’s Firing After Making Online Posts
An in-house attorney recently sued his former employer in a Utah federal district court for discrimination and retaliation under Title VII of the Civil Rights Act of 1964, alleging he was unlawfully fired after posting social media remarks criticizing gender-affirming care for transgender people and opposing a Utah nonprofit organization
The End of Disparate Impact Claims? Executive Order Calls Into Question Common Theory of Liability
Federal Agencies Directed to End Enforcement of Disparate Impact Discrimination Claims Under President Trump’s New Executive Order
On April 23, 2025, President Trump issued an Executive Order entitled “Restoring Equality of Opportunity and Meritocracy” (“Executive Order”). This Executive Order is one in a series issued by President Trump with the goal of eliminating Diversity Equity and Inclusion (“DEI”) policies and practices. This Executive Order focuses on dismantling legal claims for discrimination based on a disparate impact theory of liability.
Under the Title VII of the Civil Rights Act of 1964 and the California Fair Employment and Housing Act (“FEHA”), among many other federal and state laws, disparate impact liability exists where a neutral policy or practice is shown to have a disproportionately negative effect on a protected group, such as race, national origin, and gender, regardless of intent. There are various legal defenses to disparate impact claims, including showing that the policy or practice is “job-related” or based on a legitimate “business necessity.”
Notwithstanding available affirmative defenses, the new Executive Order broadly asserts that it will “eliminate the use of disparate-impact liability in all contexts.” The Order cites concerns that potential disparate impact claims hinder businesses from making hiring decisions, undermine national values, and are contrary to equal protection under the law. For now, the Executive Order does not change existing law authorizing claims for disparate impact liability because such changes must be handled through the formal regulatory rulemaking or legislative process.
The Executive Order also lays out various steps the Trump Administration intends to take to curtail the use of disparate impact claims in the near future. The Executive Order instructs federal agencies (such as the EEOC)not to pursue administrative claims based on disparate impact liability. Next, the Executive Order requires a review of any pending federal investigations, civil suits, injunctions, and positions taken in ongoing cases to ensure they are consistent with the new Order. Agencies may dismiss pending claims and refuse to advance arguments based on a disparate impact theory, although private litigants will be able to continue to use that theory in their claims.
The EEOC has also been directed to issue guidance and technical assistance to employers to find measures to promote equal access to employment for applicants “regardless of whether [they have] a college education.” While a college education is typically considered a neutral job-requirement (that the Executive Order is intended to support), the Executive Order appears to single out college education as one factor that should not impede access to employment generally. The Executive Order did not explain the basis for this provision under the Purpose section (Section 1).
Finally, the Executive Order instructs the Attorney General to repeal or amend regulations that authorize disparate impact liability based on race, color and national origin discrimination under Title VI of the Civil Rights Act of 1964 (for institutions that receive federal financial assistance). Similarly, the Executive Order states that the Attorney General should try to curtail any disparate impact laws at the state level, including assessing whether arguments can be made that state laws are preempted by federal law or otherwise violate the Constitution.
Summary
In sum, with this Executive Order, employers can expect to face less scrutiny from the EEOC of their policies and practices based on their alleged disparate impact. Litigants would still be able to rely on existing federal statutes, regulations and a developed body of court decisions endorsing disparate impact theories of liability. State law claims based on a disparate impact theory remain in effect, including in California, where the claim is recognized under state statutes such as FEHA.
We will continue to monitor and report on new developments in this area as further guidance is issued by the administration.
Upcoming Webinar: The Future of DEI for California Employers in a Shifting Legal Landscape
CDF will be hosting a complimentary webinar to further explore the impact of recent federal executive orders, including this latest directive concerning disparate impact claims. Join our panel of CDF attorneys for an insightful discussion on ”Upcoming Webinar: The Future of DEI for California Employers in a Shifting Legal Landscape,” this Wednesday, April 30, from 10-11 am (Pacific) – Register HERE to reserve your spot.
Does Employer Disparate Impact Liability Still Exist? The Latest EO Pushes to Eliminate It
TakeawaysFederal agencies are expected to limit their enforcement of disparate impact discrimination claims.Employers should look to remove barriers to equal employment opportunity and avoid making any employment decision based on race, sex, or other protected characteristic. Employers may soon receive agency guidance or technical assistance regarding appropriate methods to promote equal access to employment regardless of whether an applicant has a college education.Related links
President Trump Signs Executive Order Seeking to End Disparate Impact Discrimination
On April 23, 2025, President Donald Trump issued an executive order (EO) calling for an end to disparate impact liability for discrimination and ordering federal enforcement agencies to stop enforcement of antidiscrimination laws based on disparate impact theories.