President Trump issued Executive Order (EO) 14281 on “Restoring Equality of Opportunity and Meritocracy” that explains that it is the policy of the U.S. to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible to avoid violating the U.S. Constitution, federal civil rights law, and basic American ideals. According to a White House fact sheet, disparate-impact liability is “a legal theory holding that differences in outcomes among races, sexes, or similar groups indicate unlawful discrimination, even without discriminatory intent or policies.” Disparate impact liability has been recognized in employment and fair housing law and is also a driving factor in how registered apprenticeship programs structure their apprentice selection procedures as explained in the U.S. Department of Labor’s “Quick Reference Guide for Selecting Apprentices for Registered Apprenticeship Programs.” Disparate impact is also the basis for many Equal Employment Opportunity (EEOC) lawsuits brought against apprenticeship programs for using entrance examinations as well as high school diploma and age requirements. It has also been the basis for longstanding consent decrees imposed on some apprenticeship training programs. Under the current regulations on Equal Employment Opportunity in Apprenticeship Programs at 29 CFR Part 30, the theory of disparate impact liability is the basis for the “Utilization Analysis for Race, Sex, Gender and Ethnicity” that registered apprenticeship programs are required to perform under 29 CFR Part 30.5, as well as the “Utilization Goals” under 29 CFR Part 30.6 that apprenticeship programs must develop depending on the outcome of their Utilization Analysis.
To that end, EO 14281 directs the EEOC Chair to assess all pending investigations, lawsuits, and consent judgements that rely on a theory of disparate impact liability and “take appropriate action with respect to such matters consistent with the policy of this order.” With 30 days of the April 23, 2025 issuance date of EO 14281, the Attorney General, in coordination with the heads of all other agencies, shall submit a report to the President detailing: (1) all existing regulations, guidance, rules, or orders that impose disparate-impact liability or similar requirements, and detail agency steps for their amendment or repeal, as appropriate under applicable law; and (2) other laws or decisions, including at the state level, that impose disparate-impact liability and any appropriate measures to address any constitutional or other legal infirmities. It is worth emphasizing, however, that since “disparate impact” arose from the U.S. Supreme Court’s interpretation of civil rights laws enacted by Congress, EO 14281 is not the final word on the continuing viability of this legal theory for the many federal statutes under which it has been applied. That will ultimately be a determination for the courts. The order does not preclude private plaintiffs from pursuing disparate impact liability cases, but it will impact the willingness and frequency of executive branch agencies, including the EEOC and the Justice Department, to pursue cases based on this legal theory while the order remains in effect. The courts will also have the final say about the extent to which the Trump Administration can claim its interpretation of federal civil rights laws preempts state laws and regulations imposing liability based on disparate impact.