The Trump Administration has directed a sweeping change to employment discrimination liability under Title VII in its recent executive order titled, “Restoring Equality of Opportunity and Meritocracy.” The EO announces a new policy to “eliminate the use of disparate-impact liability in all contexts to the maximum degree possible to avoid violating the Constitution, Federal civil rights laws, and basic American ideals.”

Under current law, established by the Supreme Court in 1971 and codified by Congress through a 1991 amendment to Title VII, plaintiffs can pursue employment discrimination claims under one of two theories: (1) disparate treatment, by claiming that an employer intentionally treats an individual differently based on membership in a protected class; or (2) disparate impact, by claiming that an employer has a facially neutral policy or practice that nevertheless has a disproportionately negative impact on individuals in a protected class. In the latter case, a plaintiff need not present evidence that the employer intended to adversely affect the plaintiff or the protected group. Disparate impact theory has historically been used to challenge such policies as minimum height requirements, education or degree requirements not closely tied to job-related skills, and aptitude/personality tests.

The Trump executive order announces that disparate impact liability “is wholly inconsistent with the Constitution and threatens the commitment to merit and equality of opportunity that forms the foundation of the American Dream.” The EO therefore directs that:

• Federal departments and agencies deprioritize enforcement of all statutes and regulations to the extent that they include disparate impact liability.
• The Attorney General (AG) and EEOC assess pending investigations and suits that rely on disparate impact theory and take action consistent with the EO.
• Federal agencies review any consent judgments or permanent injunctions that rely on the disparate impact theory and take appropriate action;
• The AG assess whether the new federal policy preempts state laws or regulations that impose disparate impact liability;
• The AG and EEOC jointly issue new guidance or technical assistance to employers on appropriate methods to promote equal access to employment.

The practical implications of the executive order remain to be seen. The EO is not law, and it cannot override Supreme Court precedent or existing statutory regulations. While private plaintiffs may continue to pursue disparate impact discrimination claims, employers can assume that the EEOC will not investigate or pursue disparate impact claims moving forward. We may also see challenges to state and local laws that permit disparate impact claims on the basis that those laws are preempted by new federal policy. For now, employers should act consistent with current applicable federal and state laws, carefully reviewing neutral employment policies and practices to ensure that they do not have a disproportionately negative impact on members of any protected group.

The attorneys and HR professionals at Lake Effect can provide guidance on employment-related executive actions, employment laws, regulations, and agency guidelines. We continue to monitor important legal and HR developments, as well as other information that could impact the workplace. Please watch our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.