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Background
In response to President Trump's April 23, 2025 executive order, the Equal Employment Opportunity Commission (EEOC) is scaling back (though not entirely abandoning) its enforcement of disparate impact discrimination claims. Disparate impact discrimination claims refer to those which allege that a facially neutral employment policy disproportionately harms a protected group or groups. The U.S. Supreme Court first recognized the theory of disparate impact liability under Title VII of the Civil Rights Act of 1964 in Griggs v. Duke Power Co. in 1971. The Court there ruled that an employer's policy requiring employees in its highest-paying departments to attain a particular level of education or pass an internal test as a condition for employment was unlawful because the policy had a disparate impact on racial minorities. The EEOC will no longer pursue such claims, standing alone. Only those disparate impact claims which are accompanied by an intentional discrimination claim, otherwise known as a disparate treatment claim, may continue. Importantly, however, even under Trump's executive order, Title VII and Griggs still provide grounds for private individuals to pursue disparate impact claims directly.
An Ideological Shift At The EEOC
According to a recent internal memorandum, the EEOC has directed its staff members to close most pending disparate impact investigations and begin issuing right-to-sue letters to the charging parties, permitting them to file private claims in federal court. The intention was to conclude those cases by September 30, 2025, and issue letters to affected parties by October 31, 2025. The issuance of right-to-sue letters may have been delayed due to the recently ended government shutdown. The change in the EEOC's enforcement policies is a direct response to the Executive Order's mandate, and it is likely to create a surge in private litigation as individuals and advocacy groups seek to pursue claims in court where agency enforcement is lacking.
The EEOC has already begun to withdraw disparate impact lawsuits initiated by the Commission in response to President Trump's April 2025 executive order. In response, plaintiffs are continuing to pursue the claims in federal court, serving as an example of the path we can expect many similarly situated claimants to follow. The Commission's decision to stop the investigation of disparate impact claims in the absence of an intentional discrimination claim has also resulted in litigation against the Commission. Recently, a claimant filed a lawsuit against the EEOC after the Commission stopped investigating the claimant's unintentional discrimination charge. In that lawsuit, the claimant alleges that the Commission violated its statutory obligation to investigate discrimination complaints, including ones that involved disparate impact. The claimant also alleges the Commission exceeded its authority under the Administrative Procedures Act by issuing its disparate impact directive. The case, Cross v. EEOC (No. 1:25-cv-03702), was filed on October 20, 2025, in the United States District Court for the District of Columbia.
The October 27, 2025 swearing in of Republican Brittany Panuccio as an EEOC Commissioner formally created the three-member quorum and restored the agency's ability to vote on major policy changes and litigation for the first time since January. With the government reopening, this development will allow the new EEOC leadership to carry out its agenda which, under Acting Chair Lucas, will include initiating litigation, challenging DEI programs and targeting religious discrimination in the workplace.
Moving Forward
Despite the executive order, legislative avenues remain open. Congress retains the authority to amend statutes explicitly to restrict or define the scope of disparate impact liability. As legal challenges and court decisions unfold, the landscape remains fluid. Courts are likely to grapple with the tension between statutory rights, Supreme Court precedent and the executive branch's policy directives. Employers and federal contractors must adapt to this evolving environment. In the short term, they should:
- Conduct comprehensive audits of employment practices, testing and selection procedures to ensure compliance with current legal standards.
- Monitor regulatory guidance and administrative agency positions, especially regarding the use of disparate impact analysis and anti-harassment guidance.
- Continue to implement fair, inclusive practices that focus on merit and individualized assessments, avoiding quotas or race-based decision-making.
In the longer term, employers should prepare for potential shifts in litigation patterns. While federal agencies may exercise restraint, private plaintiffs, state agencies and advocacy groups can continue to pursue disparate impact claims. State laws, such as California's Fair Employment and Housing Act, New Jersey's Law Against Discrimination and New York's Human Rights Law, remain active avenues for systemic discrimination claims. While the legal foundations remain intact, the administrative enforcement landscape is shifting, with federal agencies deprioritizing such claims and courts potentially seeing an increase in private litigation.
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