Another Legal Challenge to an AI Interviewing Tool
In the latest lawsuit of its kind, the American Civil Liberties Union recently filed a complaint with the Colorado Civil Rights Division and the Equal Employment Opportunity Commission (“EEOC”) alleging an AI interviewing tool discriminated against a deaf and Indigenous employee at Intuit seeking a promotion.
According to the complaint, when the employee applied for a promotion, Intuit used a HireVue video interviewing platform that scored each candidate on their performance. The complaint alleges that some audible portions of HireVue’s platform lacked subtitles, and the employee’s request for human-generated captioning as an accommodation was denied. The employee was rejected for the promotion, and allegedly received AI-generated feedback from HireVue recommending, among other things, that she “practice active listening. The ACLU alleges this evidence shows the applicant’s hearing disability disadvantaged her in the process. The complaint also alleges “upon information and belief” that the interviewing platform had a disparate impact based on race.
The ACLU’s complaint against Intuit is not the first lawsuit to allege that AI interviewing software ran afoul of statutes intended to protect employees or job applicants. In 2023, an applicant for a job with CVS alleged the company’s use of a video interviewing platform that scored applicants on various competencies including “reliability, honesty, and integrity” violated a Massachusetts statute prohibiting employers from subjecting applicants to lie detector tests as a condition of employment. Baker v. CVS Health Corp., 717 F. Supp. 3d 188 (D. Mass. 2024). After the plaintiff survived a motion to dismiss, the parties reached an individual settlement. In recent months, several other plaintiffs have filed lawsuits bringing similar claims under the Massachusetts statute.
As similar AI solutions gain traction among employers, it is possible that lawsuits such as these will continue to proliferate.
Three Environmental Law Takeaways on President Trump Ordering DOJ to Rescind Civil Rights ‘Disparate Impact’ Regulations
On April 22, the Trump Administration issued an Executive Order (EO) directing the US Department of Justice (DOJ) to begin to unwind “disparate impact” regulations that were established under federal civil rights laws. In the environmental context, the EO likely represents the functional end of some Biden Administration environmental justice (EJ) efforts.
While the EO “Restoring Equality of Opportunity and Meritocracy” is mainly targeted at employment law, it explicitly rescinds specific DOJ “Title VI” regulations used in the EJ space. Additionally, citing to “limited enforcement resources of executive departments and agencies [and] the unlawfulness of disparate-impact liability,” federal agencies are directed to “deprioritize enforcement of all statutes and regulations to the extent they include disparate-impact liability.”
What Is EJ?
Title VI of the Civil Rights Act of 1964 requires that “No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.”
In the United States, environmental and public health measures often correlate to variables like education, income, and a community’s racial makeup. In the five decades since US Congress began to create comprehensive environmental statutes like the Clean Air Act, Clean Water Act, and Comprehensive Environmental Response, Compensation, and Liability Act, there has been much success in improving environmental conditions in some communities, but not others.
Prior to the inauguration, the US Environmental Protection Agency (EPA) defined “environmental justice” as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation and enforcement of environmental laws, regulations and policies.”
Biden Administration EJ Efforts Relying on Title VI
The Biden Administration’s EJ policy focused on improving environmental conditions in “environmentally overburdened” communities. Two examples:
Early in the Biden Administration, EPA issued a letter outlining preliminary findings that Louisiana regulators’ “actions or inactions have resulted and continue to result in disparate impacts on Black residents” at three Louisiana locations. (For more, see here.) The letter relied on Title VI of the Civil Rights Act of 1964 — the statutory law cited in the EO — and related EPA nondiscrimination regulations which apply to entities receiving federal funding. The letter noted that even though the involved facilities appeared to be operating within permitted limits, further evaluation appeared warranted to ensure there were no adverse impacts in surrounding environmentally overburdened communities. EPA’s investigation was dropped when Louisiana pressed EPA to defend the investigation’s legal basis. A federal district court ultimately enjoined EPA from enforcing disparate impact-based requirements against Louisiana. (See discussion here.)
In Chicago, Illinois, federal regulators issued a civil-rights focused finding related to the relocation of a metal recycling facility from a wealthy, largely white neighborhood, to a poor diverse one. (For more see here.) The finding put at risk approximately $375 million per year in housing funds Chicago received from the federal government. While Chicago originally contested the finding, a settlement was eventually reached under which Chicago agreed to develop a cumulative impact assessment process. (For more see here.) Chicago’s cumulative impacts ordinance has not yet been finalized.
Importantly, the Biden Administration EPA was often cautious in relying too heavily on federal civil rights laws. For instance, EPA tailored EJ efforts to deemphasize race as a criteria determining whether a particular community was overburdened. EPA’s mapping and demographics tool, EJScreen, originally explicitly analyzed the percentage of people of color in an affected area, but EPA later revised it to deemphasize race as a factor driving EJ actions. (See our past discussion here.) Instead of race, the revised tool used factors like income, education, and population density to identify environmentally overburdened areas. Similarly, when EPA released its Cumulative Impacts Addendum in January 2023 to its memorandum on Legal Tools to Advance Environmental Justice, it said that program staff should confer with the agency’s attorneys on “interpretive issues” and “consideration of other legal issues,” who presumably would weigh in on whether any benefits to a particular community were worth potentially programmatic risk to EPA as a whole.
In contrast, the Trump Administration has essentially disavowed the Biden Administration’s approach to EJ. In its March “Greatest Deregulation in History,” EPA announced that it would “terminate” EPA’s EJ arm. (For more, see here.) This built upon prior efforts. Trump’s first-week EOs revoked several Biden-era policies and announced an effort to terminate all EJ and diversity, equity, and inclusion offices and positions. (For more, see here.)
What to Watch
Deprioritizing EJ does not mean no enforcement in “overburdened” communities. While addressing EJ issues per se are not on the Trump Administration’s agenda, at least some efforts to address problems in environmentally overburdened communities will continue. As one example, EPA Administrator Lee Zeldin visited East Palestine, Ohio — an environmentally overburdened community and the site of a recent train derailment and chemical spill — shortly after his confirmation accompanied by the vice president.
Challenges to the EO and state EJ programs may invoke recent US Supreme Court precedent, including the Students for Fair Admissions affirmative action decision. While the federal government deprioritizes EJ as such, many states maintain EJ programs. For example, efforts continue in states as diverse as New York, in which EJ efforts are rooted in recent state statutory changes, and in Louisiana, where they stem from the state constitution. (For more see here.) The EO instructs the Attorney General to determine whether federal law preempts state disparate-impact programs. The Attorney General, or private parties, may file lawsuits against these programs. In such challenges, parties may raise the 2023 Students for Fair Admissions decision (available here), which struck down affirmative action programs at Harvard College and the University of North Carolina on the grounds that these programs violated the Equal Protection Clause of the 14th Amendment. In a concurrence, Justice Neil Gorsuch discussed Title VI and noted that “discrimination” as defined in the statute, “means any disparate treatment amongst individuals on either an individual or aggregate level” and that this “discrimination” is impermissible “without regard to any other reason or motive ….” The Trump Administration may also invoke Students for Fair Admission to defend the EO from possible legal challenge.
Some litigation in this space is wholly separate from regulations addressed in the EO. State zoning laws are often the unseen hand pushing industrial activities to continue to locate in the same communities, which in turn, are environmentally overburdened. Parties other than federal regulators use litigation to address this. This month, inInclusive Louisiana v. St. James Parish, the Fifth Circuit appellate court overturned a district court decision dismissing one such case filed by residents of St. James Parish, Louisiana, seeking a moratorium on further expansion of petrochemical facilities, and thus allowing the litigation to proceed. (See here for case background.)
New Executive Order Aims to End Disparate Impact Liability for Discrimination
On April 23, 2025, President Donald Trump issued an Executive Order titled “Restoring Equality of Opportunity and Meritocracy” (the “Executive Order”) seeking to “eliminate the use of disparate-impact liability in all contexts to the maximum degree possible.”
Disparate impact liability, first recognized under Title VII of the Civil Rights Act of 1964 by the U.S. Supreme Court in Griggs v. Duke Power Co. (1971), provides that a facially neutral policy that is applied without any discriminatory intent can still give rise to a claim of discrimination if it has a disproportionate impact on a protected group.
The Executive Order directs various executive departments and agencies to take the following actions:
All executive departments/agencies are ordered to “deprioritize enforcement of all statutes and regulations to the extent they include disparate-impact liability”;
The Attorney General is ordered to report “(i) 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 (ii) 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” to President Trump;
The Attorney General is ordered to “initiate appropriate action to repeal or amend the implementing regulations for Title VI of the Civil Rights Act of 1964 for all agencies to the extent they contemplate disparate-impact liability”;
The Attorney General and the Chair of the Equal Employment Opportunity Commission (“EEOC”) are directed to “assess all pending investigations, civil suits, or positions taken in ongoing matters under every Federal civil rights law within their respective jurisdictions . . . that rely on a theory of disparate-impact liability, and [] take appropriate action” in accordance with the Executive Order;
All executive agencies are directed to “evaluate existing consent judgments and permanent injunctions that rely on theories of disparate-impact liability and take appropriate action” in accordance with the Executive Order;
The Attorney General is ordered to “determine whether any Federal authorities preempt State laws, regulations, policies, or practices that impose disparate-impact liability based on a federally protected characteristic such as race, sex, or age, or whether such laws, regulations, policies, or practices have constitutional infirmities that warrant Federal action, and [] take appropriate measures”; and
The EEOC Chair and the Attorney General are directed to “jointly formulate and issue guidance or technical assistance to employers regarding appropriate methods to promote equal access to employment regardless of whether an applicant has a college education, where appropriate.”
Key Takeaways
The final scope of this Executive Order is still to be determined. We have previously written about the Trump administration’s efforts to make changes to the country’s antidiscrimination laws. However, these efforts have faced legal challenges, and it is likely that this Executive Order will also face similar challenges given that some of its directives may be in conflict with established precedent. Further, while executive agencies may be restricted from pursuing claims or taking positions based on theories of disparate impact, the Executive Order does not prevent private individuals from pursuing such claims.
Listen to this post
Does Employer Disparate Impact Liability Still Exist? The Latest EO Pushes to Eliminate It
Article
President Donald Trump issued the “Restoring Equality of Opportunity and Meritocracy” executive order (EO) on April 23, 2025. The stated purpose of the EO is “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.” But the “maximum degree possible” is more limited than the words suggest.
What Is Disparate Impact?
The typical discrimination claim is a disparate treatment claim where an individual allegedly is treated differently than someone else because of their race, sex, or other protected characteristic. A disparate impact theory of discrimination would find discrimination when the application of a neutral policy or practice disproportionately affects a particular group. For example, pre-employment testing may expose an employer to disparate impact liability if the results disproportionately exclude women, individuals with disabilities, or candidates from certain racial or ethnic groups from proceeding to the next stage of hiring. The expressed concern with the disparate impact theory of liability is that employers may feel forced to engage in affirmative action or overcorrect for the impact of a neutral policy and make decisions based on race or sex to avoid the threat of liability.
The EO
The latest EO challenges the legitimacy and constitutionality of the disparate impact theory of liability. The EO requires the following:
1. Revokes the Presidential approvals of the parts of regulations that prohibit disparate impact discrimination under Title VI of the Civil Rights Act of 1964 (Title VI prohibits exclusion from federally funded programs or activities based on race, color, or national origin);
2. Instructs federal agencies to deprioritize enforcement of all statutes and regulations to the extent they include disparate-impact liability, including under Title VI and Title VII of the Civil Rights Act;
3. Instructs the attorney general to initiate appropriate action to repeal or amend the implementing regulations for Title VI for all agencies to the extent they contemplate disparate-impact liability and also to provide a report on
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
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
4. Instructs the Attorney General and the Chair of the Equal Employment Opportunity Commission (EEOC) to assess all pending investigations, civil suits, or positions taken in ongoing matters under every Federal civil rights law within their respective jurisdictions, including Title VII of the Civil Rights Act of 1964, that rely on a theory of disparate-impact liability, and take appropriate action with respect to such matters consistent with the policy of the EO;
5. Instructs the Attorney General, the Secretary of Housing and Urban Development, the Director of the Consumer Financial Protection Bureau, the Chair of the Federal Trade Commission, and the heads of other agencies responsible for enforcement of the Equal Credit Opportunity Act, Title VIII of the Civil Rights Act of 1964 (the Fair Housing Act), or laws prohibiting unfair, deceptive, or abusive acts or practices to evaluate all pending proceedings that rely on theories of disparate-impact liability and take appropriate action with respect to such matters consistent with the policy of the EO;
6. Instructs all agencies to evaluate existing consent judgments and permanent injunctions that rely on theories of disparate-impact liability and take appropriate action with respect to such matters consistent with the policy of the EO; and
7. Instructs the Attorney General, in coordination with other agencies, to determine whether any Federal authorities preempt State laws, regulations, policies, or practices that impose disparate-impact liability based on a federally protected characteristic such as race, sex, or age, or whether such laws, regulations, policies, or practices have constitutional infirmities that warrant Federal action, and shall take appropriate measures consistent with the policy of the EO.
What Does This Mean for Employers?
The EO’s most likely immediate impact will be seen at the federal agency level. Employers who are facing agency action based on a disparate impact theory under Title VII or Title VI may be able to rely on this EO to limit or stop the federal agency (including EEOC and Department of Justice) from continuing enforcement efforts at both the charge and litigation phases based on this theory.
Employers who are subject to current injunctions or consent decrees with a federal agency that require action to correct a claimed disparate impact may be able to reduce or limit those obligations.
Employers facing litigation from private parties may use the arguments that the federal government relies upon to challenge disparate impact claims; but with statutory support in Title VII, it is unlikely that the disparate impact theory of liability disappears without further congressional or U.S. Supreme Court action.
What Should Employers Do to Avoid Litigation?
Despite uncertainty regarding disparate impact theories of liability, employers remain well-served to evaluate their practices, policies, job requirements, and tests to ensure that they are necessary and effective for purposes of making the best employment decisions and to remove any artificial barriers to equal employment opportunity. An example of such a barrier can be a degree requirement that may or may not be necessary for the job at issue. Notably, the EO also instructs the attorney general and the EEOC chair “to jointly formulate and issue guidance or technical assistance to employers regarding appropriate methods to promote equal access to employment regardless of whether an applicant has a college education, where appropriate.” The current administration has made clear that it expects employers to focus on equal employment opportunity. In evaluating practices, employers should make sure opportunities are available to everyone and remove artificial barriers and avoid making a decision based on the race or sex of an individual to even out the results.
EEOC Seeks Elimination of Voluntary Reporting Non-Binary Data in EEO-1
On April 15, 2025, the Equal Employment Opportunity Commission (“EEOC”) submitted a “non-substantive” Information Collection Request (“ICR”) to the Office of Management and Budget (“OMB”) for approval ahead of its 2024 data collection. Among the requested changes, the EEOC seeks OMB approval for the elimination of the option allowing employers to voluntarily report on employees who self-identify as “non-binary.” The EEOC states the request is made to comply with Executive Order 14168, “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government.”
The change would apply to the Instruction Booklet and not to the data collection template. The EEOC’s proposed revision to the Instruction Booklet’s “Reporting by Sex” section would reduce the section to one sentence, to state:
“The EEO-1 Component 1 data collection provides only binary options (i.e., male or female) for reporting employee counts by sex, job category, and race or ethnicity.”
The EEOC’s 2023 Instruction Booklet previously stated that:
“The EEO-1 Component 1 data collection currently provides only binary options (i.e., male or female) for reporting employee counts by sex, job category, and race or ethnicity. However, employers may voluntarily choose to report employee demographic data for non-binary employees – that is, employees who do not identify as exclusively male or female – by sex (i.e., non-binary), job category and race or ethnicity in the “comments” section of the report(s). Employers that voluntarily choose to report non-binary employees in the “comments” section of the report(s) should not assign such employees to the male or female categories or any other categories (i.e., job category and race or ethnicity) within the report(s).”
The ICR indicates the EEOC intends to collect 2024 EEO-1 data, which had been an open question since the change in Administration earlier this year. Data collection is scheduled to open on Tuesday, May 20, 2025, and the deadline for filing is scheduled for Tuesday, June 24, 2025. Dates are subject to change. Final dates should be published on the EEOC’s website.
Federal Judge Blocks Key DEI Executive Order Provisions
On April 14, 2025, the U.S. District Court for the Northern District of Illinois issued a preliminary injunction preventing the U.S. Department of Labor (“DOL”) from enforcing a certification provision and termination clause included in the executive orders titled Ending Illegal Discrimination and Restoring Merit-Based Opportunity (“EO 14173”) and Ending Radical and Wasteful Government DEI Programs and Preferencing (“EO 14151”).
The ruling prevents the DOL from enforcing the provision in EO 14173 requiring federal contractors and grantees to certify that they do not operate “illegal” DEI programs that violate any federal anti-discrimination laws. The ruling also enjoins the DOL from terminating a federal grant issued to the plaintiff based on language in EO 14151, which requires agencies to terminate all “equity-related” grants.
Background
Plaintiff, Chicago Women in Trades (“CWIT”), provides programming and training to prepare women across the country for jobs in skilled trades such as electric work, plumbing and carpentry. CWIT receives approximately 40% of its annual budget from federal funding and specifically, a Women in Apprenticeship and Nontraditional Occupations (“WANTO”) grant from the DOL Women’s Bureau. On February 26, 2025, CWIT sued President Trump, the DOL, and several other federal agencies and agency heads, claiming the following provisions of EOs 14173 and 14151 violate the First Amendment, Fifth Amendment, constitutional spending powers held by Congress and the separation of powers principle:
The “Certification Provision” (EO 14173 § 3(b)(iv)), which orders each agency to include certifications in every contract or grant award that the contractor or grantee does not operate illegal DEI programs and that compliance with federal anti-discrimination laws is “material to the government’s payment decisions for purposes of” the False Claims Act;
The “Termination Provision” (EO 14151 § 2(b)(i)), which orders each “agency, department, or commission head” to “terminate, to the maximum extent allowed by law, all ‘equity-related’ grants or contracts.”
CWIT sought a declaration that the Certification Provision and Termination Provision are unlawful and unconstitutional, and preliminary and permanent injunctions enjoining the Defendants, other than President Trump, from enforcing those sections of the EOs that are found to be unlawful and unconstitutional.
Court’s Opinion and Reasoning
District Judge Matthew F. Kennelly issued a nationwide injunction enjoining the DOL’s use of the Certification Provision and enjoining the DOL from terminating the WANTO grant based on the Termination Provision in EO 14151.
As to the Certification Provision, the Court found the government’s argument that the certification is permissible because it simply requires the grantee to certify that it is not breaking the law, unavailing. The Court instead found that the language was unclear and left the meaning of illegal DEI programs up “to the grantee’s imagination” by not defining what DEI is or what makes a DEI program “violate Federal anti-discrimination laws.” The Court noted that the Certification Provision applies to all federal grantees and contractors and that there is a critical urgency to protect grantees and contractors from irreparable injury to their free-speech rights.
The ruling therefore held that CWIT is likely to succeed on the merits in showing that the Certification Provision violates First Amendment rights. The Court also found that the nature of the First Amendment right at stake supported a broad preliminary injunction, not only limited to CWIT, as every contract and grant offered by an agency would likely contain the provision. The Court did, however, limit the injunction to the DOL, noting that CWIT had “demonstrated a risk of imminent harm with regards only to DOL,” and “it is hard to see – and CWIT does not suggest – a basis upon which it would seek grants from agencies other than DOL.”
On the issue of the Termination Provision, the Court similarly found that CWIT showed sufficiently imminent injury as CWIT’s grants were directly targeted by the provision. However, the Court found that, unlike the Certification Provision, “there is likely a low risk that other grantees who risk termination or are terminated will not challenge enforcement of this provision against them.” Therefore, the Court declined to extend the injunction and limited its reach to enjoining the DOJ from terminating CWIT’s WANTO grant.
On April 16, 2025, the DOJ filed a Preliminary Injunction Compliance Status Report confirming its compliance with the Court’s preliminary injunction order and attaching an email that was sent to agency heads in the DOJ and other relevant parties including the Court’s order.
Other cases involving challenges to the EOs discussed in this article include: Nat’l Ass’n of Diversity Offs. in Higher Educ. v. Trump, F. Supp. 3d, No. 25 C 333 ABA, 2025 WL 573764 (D. Md. Feb. 21, 2025); Nat’l Urban League v. Trump, No. 25 C 471 (D.D.C.); and S.F. AIDS Found. v. Trump, No. 25 C 1824 (N.D. Cal.). Other Proskauer articles on this topic include: Federal Court Issues Partial Preliminary Injunction Halting Enforcement of DEI-Related EOs, Fourth Circuit Temporarily Allows DEI-Related EOs to Continue, EEOC and DOJ Release Guidance on DEI and Workplace Discrimination, President Trump Issues Sweeping Executive Orders Aimed at DEI.
White House Executive Order Eliminates Disparate-Impact Liability Enforcement
On April 23, the White House issued an Executive Order entitled Restoring Equality of Opportunity and Meritocracy, directing federal agencies to “eliminate the use of disparate-impact liability in all contexts to the maximum degree possible.” The Executive Order marks a potential shift in how federal fair lending laws will be enforced across the financial services sector.
Federal agencies have historically used disparate-impact liability to evaluate facially neutral policies that may result in unequal outcomes for protected classes. The Executive Order now instructs agencies to reassess their enforcement strategies and deprioritize claims rooted in disparate impact, including under the Equal Credit Opportunity Act, the Fair Housing Act, and other fair lending statutes.
Specifically, the Executive Order directs the Attorney General to identify and initiate repeal or amendment of regulations, guidance, or rules that impose disparate-impact liability. It also calls on federal agencies, including the CFPB, to review all pending investigations, litigation, and consent orders based on disparate-impact claims. Additionally, the Attorney General must evaluate whether federal law preempts state-level disparate-impact regimes and recommend further action where such state laws may conflict with federal policy.
Putting It Into Practice: The Executive Order reflects a broader policy shift on how discriminatory conduct is litigated. (previously discussed here). The Executive Order will certainly impact federal fair lending and anti-discrimination oversight, particularly in areas where enforcement has traditionally relied on statistical disparities rather than explicit intent. Market participants should also prepare for potential divergence between federal and state priorities in some jurisdictions.
Trump Administration Issues Executive Order Aimed at Eliminating Disparate Impact Liability Under Anti-Discrimination Laws
On April 23, 2025, the White House issued an Executive Order (“EO”) entitled “Restoring Equality of Opportunity and Meritocracy,” which aims to “eliminate the use of disparate-impact liability in all contexts to the maximum degree possible.”
First recognized under Title VII of the Civil Rights Act of 1964 (“Title VII”) by the U.S. Supreme Court in Griggs v. Duke Power Co. (1971), disparate impact liability provides that a policy or practice that is facially neutral and applied without discriminatory intent may nevertheless give rise to a claim of discrimination if it has an adverse effect on a protected class, such as a particular race or gender. Disparate impact liability has also been recognized under fair housing laws and in other contexts.
The EO characterizes disparate impact liability as creating “a near insurmountable presumption of unlawful discrimination . . . where there are any differences in outcomes in certain circumstances among different races, sexes, or similar groups, even if there is no facially discriminatory policy or practice or discriminatory intent involved, and even if everyone has an equal opportunity to succeed.” The EO further states that disparate impact liability “all but requires individuals and businesses to consider race and engage in racial balancing to avoid potentially crippling legal liability” and “is wholly inconsistent with the Constitution.”
To that end, the EO, among other things:
directs all executive departments and agencies to “deprioritize enforcement of all statutes and regulations to the extent they include disparate-impact liability,” including but not limited to Title VII;
orders the Attorney General, within 30 days of the EO, to report to the President “(i) 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 (ii) 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”;
orders the Attorney General and the Chair of the EEOC, within 45 days, to “assess all pending investigations, civil suits, or positions taken in ongoing matters under every Federal civil rights law within their respective jurisdictions . . . that rely on a theory of disparate-impact liability, and [] take appropriate action” consistent with the EO;
orders all agencies, within 90 days, to “evaluate existing consent judgments and permanent injunctions that rely on theories of disparate-impact liability and take appropriate action” consistent with the EO;
orders the Attorney General, in coordination with other agencies, to “determine whether any Federal authorities preempt State laws, regulations, policies, or practices that impose disparate-impact liability based on a federally protected characteristic such as race, sex, or age, or whether such laws, regulations, policies, or practices have constitutional infirmities that warrant Federal action, and [] take appropriate measures” consistent with the EO; and
orders the Attorney General to initiate action to repeal or amend regulations contemplating disparate impact liability under Title VI of the Civil Rights Act of 1964, which prohibits race, color, and national origin discrimination in programs and activities receiving federal financial assistance.
The EO also orders the Attorney General and the Chair of the EEOC to “jointly formulate and issue guidance or technical assistance to employers regarding appropriate methods to promote equal access to employment regardless of whether an applicant has a college education, where appropriate.”
Takeaways
This EO is the latest evidence of shifting enforcement priorities by the federal agencies tasked with enforcing civil rights laws, including the EEOC. The ultimate scope of the EO’s impact remains to be seen, particularly as it relates to the potential for preemption of disparate impact liability under state or local anti-discrimination laws. Congress has the authority to amend any federal statutes to specifically address a disparate impact theory of liability, and the courts will continue to have the ultimate say on whether and to what extent such a theory is cognizable under particular statutes. We anticipate further updates in this area and will continue to monitor and report on these updates.
Beltway Buzz, April 25, 2025
The Beltway Buzz™ is a weekly update summarizing labor and employment news from inside the Beltway and clarifying how what’s happening in Washington, D.C., could impact your business.
Congress Out, Agenda Delayed. The U.S. Congress is currently in the second week of its spring break recess and will return to Washington, D.C., on April 28, 2025. Upon returning, Republican leaders are expected to move forward with their budget reconciliation package that is expected to address military spending, energy production, taxes, and immigration. The Buzz will also be monitoring potential U.S. Senate confirmation hearings for individuals nominated to lead labor and employment–related agencies. President Donald Trump has nominated individuals to lead the U.S. Department of Labor’s (DOL) Occupational Safety and Health Administration and Wage and Hour Division, as well as the General Counsel’s office of the National Labor Relations Board, but those nominees have not yet had their Senate confirmation hearings.
Executive Order Seeks to Limit Use of Disparate-Impact Liability. On April 23, 2025, President Trump issued an executive order (EO) titled “Restoring Equality of Opportunity and Meritocracy.” The EO states, “It is the policy of the United States to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible.” Currently, employers may be held liable under a disparate-impact theory of discrimination if an otherwise neutral employment policy or practice results in an adverse impact on a protected class. The EO directs all federal agencies to “deprioritize enforcement of all statutes and regulations to the extent they include disparate-impact liability” and further instructs the attorney general and the chair of the U.S. Equal Employment Opportunity Commission to review all current legal matters that rely on a theory of disparate-impact liability, and to “take appropriate action with respect to such matters consistent with the policy of th[e] order.” T. Scott Kelly, Nonnie L. Shivers, and Zachary V. Zagger have the details.
Disparate-impact liability in employment discrimination cases was first established by the Supreme Court of the United States in 1971 and codified by Congress in the Civil Rights Act of 1991. In February 2025, U.S. Attorney General Pam Bondi issued a memorandum instructing U.S. Department of Justice (DOJ) officials to deemphasize disparate-impact theories of liability.
Senate HELP Committee Chair Outlines Independent Contractor Proposals. Senator Bill Cassidy (R-LA), chairman of the Senate Committee on Health, Education, Labor, and Pensions, has released a white paper advocating for various legislative proposals related to independent contractors. The white paper, titled, “Portable Benefits: Paving the Way Toward a Better Deal for Independent Workers,” builds on Cassidy’s 2024 “request for information seeking feedback from stakeholders on ways to remove federal legal and regulatory barriers to portable benefits for independent workers.” Among the proposals advanced in the paper are a single statutory test for determining employment status, as well as legislation that would allow employers to provide health and retirement benefits to workers without those benefits triggering employment status. (The Buzz recently detailed bills in the U.S. House of Representatives that address these issues.)
Immigration Policy Update. Recent developments in the immigration policy arena include the following:
The U.S. District Court for the District of Massachusetts issued an order blocking the Trump administration’s rescission of Cuba, Haiti, Nicaragua, and Venezuela (CHNV) humanitarian parole program. Emphasizing the need for a case-by-case review prior to revoking grants of parole, the judge ruled that the “categorical termination of existing grants of parole was arbitrary and capricious.” Amanda M. Mullane and Daniela Medrano Sullivan have the details.
Secretary of State Marco Rubio announced sweeping changes to the operational structure of the U.S. Department of State. While the Bureau of Consular Affairs—the subagency within the State Department responsible for issuing visas—does not appear to be impacted at this early stage, the Buzz will continue to monitor the situation as it develops.
DOL Staff Exit. Workers at the DOL are leaving, either pursuant to deferred-resignation offers from the new administration or involuntary reductions in force.
Deferred Resignations. Almost 20 percent of the DOL’s employees will reportedly leave their positions in September 2025 after accepting deferred-resignation offers.
OFCCP Continues to Shrink. According to media reports, most employees in the Office of Federal Contract Compliance Programs’ (OFCCP) enforcement division’s national office and five of its six regional offices have been placed on administrative leave in advance of planned reductions in force at the agency. (Employees in the Southwest and Rocky Mountain Region—often referred to by practitioners as “SWARM”—were not impacted.) The action follows on the heels of a February 2025 DOL memo indicating that 90 percent of OFCCP employees would eventually be removed from their positions. A group of Democratic senators and representatives wrote a letter to Secretary of Labor Lori Chavez-DeRemer, warning that the dramatic reduction in staff at OFCCP would leave veterans and individuals with disabilities vulnerable to discrimination.
The Buzz will keep tabs on how staff reductions at the DOL in general, and OFCCP specifically, will impact the department’s regulatory and enforcement agendas.
Remember the Maine! On April 25, 1898, Congress declared war on Spain. The Cuban War of Independence, the rise of sensationalistic “yellow journalism,” U.S. self-interest, and the February 15, 1898, explosion of the USS Maine in Havana Harbor all contributed to a series of congressional actions that culminated in a declaration of war. The declaration read:
A bill declaring that war exists between the United States of America and the Kingdom of Spain.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, first. That war be, and the same is hereby, declared to exist, and that war has existed since the twenty-first day of April, A.D. 1898, including said day, between the United States of America and the Kingdom of Spain.
Second. That the President of the United States be, and he hereby is, directed and empowered to use the entire land and naval forces of the United States, and to call into the actual service of the United States the militia of the several States, to such extent as may be necessary to carry this act into effect.
Approved, April 25, 1898.
The war ended several months later with the signing of the Treaty of Paris on December 10, 1898, and resulted in the United States’ acquisition of Puerto Rico, Guam, and the Philippines.
Disappearing Act: Latest Executive Order Takes Aim at Disparate Impact Liability
On April 23, 2025, President Trump signed an executive order aimed at eliminating enforcement of “disparate impact” discrimination claims, asserting that the disparate impact liability theory—used by courts for over five decades—violates the U.S. Constitution, “by requiring race-oriented policies and practices to rebalance outcomes along racial lines.” The executive order, titled “Restoring Equality of Opportunity and Meritocracy,” broadly addresses federal civil rights laws, including Title VII of the Civil Rights Act, by:
Revoking certain presidential actions that approve the disparate impact theory of liability.
Ordering all federal agencies to “deprioritize enforcement of all statutes and regulations” that “impose” disparate impact liability (notably including by its terms “other laws or decisions, including at the State level, that impose disparate impact liability”).
Directing the U.S. attorney general to repeal or amend Title VI regulations that contemplate disparate impact liability (Title VI of the Civil Rights Act of 1964 protects every person in the U.S. from discrimination based on race, color, or national origin in programs or activities receiving federal financial assistance).
Requiring the U.S. attorney general and the chair of the EEOC to review all pending investigations and suits under federal civil rights law that rely on a theory of disparate impact liability, and “take appropriate action with respect to such matters consistent with the policy” of the executive order (i.e. ceasing enforcement of a disparate impact claims for liability.
Instructing the U.S. attorney general and chair of the EEOC to formulate and issue guidance to employers regarding ways to promote equal access to employment.
Notably, the executive order cannot and does not change or supersede state or federal law or Supreme Court precedent and does not affect how individual employees can assert claims against employers. However, the executive order does indicate the federal government’s enforcement priorities in employment cases, at least for the foreseeable future.
What’s Changed
Under the current statutory and common law framework, in addition to direct discrimination claims, employers can be held liable for facially neutral policies that have a discriminatory impact on individuals based on a protected characteristic such as their race or gender. Under such disparate impact theory of liability, courts are asked to consider the effects of a policy—not the intent—and review policies that disproportionately impact protected groups.
For example, if an employer requires a certain level of education to be eligible for a job, and that requirement disproportionately impacts employees in a protected class, then such requirement may be said to have a disparate impact on the affected individuals, even though the employer may not have been motivated to discriminate against any protected class on the basis of race, color, religion, sex, or national origin.
Under the new executive order, President Trump has directed enforcement arms of the executive branch to stop using disparate impact as a basis for pursuing discrimination claims, because, as the executive order argues, disparate impact liability itself contravenes the principles of equality and meritocracy as they relate to ensuring a “colorblind society.”
How the Executive Order Impacts Employers
At least for the next several years of the Trump administration, employers can expect that the EEOC and other federal agencies will quickly terminate all enforcement efforts relating to disparate impact theories of discrimination.
This means that if an employer is currently under investigation or is being sued based on a disparate impact claim, all investigations or prosecution efforts will cease. Additionally, while employees can still bring disparate impact claims under state and federal law, such claims may be more difficult to prove in the face of disappearing and amended rules and regulations (albeit applicable statutes and state and federal case law on point remains untouched by the EO).
Furthermore, employers should be on the lookout for additional guidance from the Office of the Attorney General and the EEOC regarding enforcement activities.
New Executive Order on HBCUs Establishes Initiative to ‘Promote Excellence And Innovation’
On April 23, 2025, President Donald Trump issued an executive order (EO) that moved a long-standing presidential initiative focused on supporting Historically Black Colleges and Universities (HBCUs) from the U.S. Department of Education to the White House.
Quick Hits
On April 23, President Trump issued a new EO designed to “elevate the value and impact of our nation’s HBCUs as beacons of educational excellence and economic opportunity that serve as some of the best cultivators of tomorrow’s leaders in business, government, academia, and the military.”
The EO establishes an initiative—“the White House Initiative on Historically Black Colleges and Universities”—“housed in the Executive Office of the President and led by an Executive Director designated by the President.”
There are approximately one hundred HBCUs in the United States. Although HBCUs were originally founded to educate Black students, they now enroll students who are not Black.
The executive order establishes the White House Initiative on Historically Black Colleges and Universities under the executive office of the president, to be led by an executive director designated by the president. The executive order outlines two primary missions for the initiative: (1) increasing the private-sector role, including the role of private foundations, in strengthening and further supporting HBCUs; and (2) enhancing HBCUs’ capabilities to serve the country’s young adults. Specifically, the executive order calls for increasing the private-sector role in:
assisting HBCUs with “institutional planning and development, fiscal stability, and financial management”;
“upgrading institutional infrastructure, including the use of technology”; and
“providing professional development opportunities for HBCU students to help build America’s workforce in technology, healthcare, manufacturing, finance, and other high-growth industries.”
In addition, the executive order calls for enhancing HBCUs’ capabilities to serve the country’s young adults by:
“fostering private-sector initiatives and public-private and philanthropic partnerships to promote centers of academic research and program excellence at HBCUs”;
“partnering with private entities and [K-12] education stakeholders to build a pipeline of students that may be interested in attending HBCUs”;
“addressing efforts to promote student success and retention at HBCUs, including college affordability, degree attainment, campus modernization, and infrastructure improvements.”
The executive order establishes, within the U.S. Department of Education, a board, referred to as “the President’s Board of Advisors on Historically Black Colleges and Universities.” The board is to be comprised of current HBCU presidents and representatives in philanthropy, education, business, finance, entrepreneurship, innovation, and private foundations. The board is tasked with advising the president on matters pertaining to the HBCU PARTNERS Act, which became law in 2020.
Furthermore, the initiative will organize an annual White House summit on HBCUs “to discuss matters related to the [i]nitiative’s missions and functions.”
While the executive order does not specifically identify or otherwise promise funding for the initiative, the White House also released a fact sheet that references HBCU-related funding secured during President Trump’s first term.
One-Two Punch Delivered to Department of Education on DEI
Separate District Courts Take Divergent Routes to Temporarily Bar Enforcement of the Dear Colleague Letter on DEI in Education
On April 24, 2025, the U.S. District Courts for the District of New Hampshire and the District of Maryland issued separate orders blocking enforcement of all, or large portions of, the Dear Colleague Letter (“DCL”) issued by the Department of Education (“DOE”) on February 14, 2025. The DCL related to the viability of various “DEI” programs in the wake of last year’s Supreme Court decision in Students for Fair Admissions v. Harvard.
After the DCL, the DOE also issued a February 28, 2025, Frequently Asked Questions document About Racial Preferences and Stereotypes under Title VI of the Civil Rights Act (the “FAQ”) and later created the End DEI Portal pursuant to the DCL. Further, on April 3, 2025, the DOE issued a compliance certification requirement (the “Certification Requirement”), mandating state and local education agencies certify adherence to Title VI of the Civil Rights Act of 1964 and the 2023 Supreme Court ruling in Students for Fair Admissions v. Harvard. Certification is reportedly an imposed condition for receiving federal financial assistance.
In the New Hampshire case, NEA, et al v. U.S. Dept. of Education, the court preliminarily enjoined the enforcement or implementation of the DCL, the February 28 FAQ, the End DEI Portal, and the Certification Requirement. The Court found that the plaintiffs had a high likelihood of establishing that the DCL, FAQs, and Portal are facially unconstitutional due to their vagueness, and thus enjoined enforcement of these documents and the Certification Requirement until further action of the court. The injunction, however, only limits enforcement as to the plaintiffs in the case, the NEA, NEA New Hampshire and the Center for Black Educator Development as well their respective affiliates. Thus, the order is not a nationwide injunction.
In the second case, AFT v. U.S. Department of Labor, the Maryland federal court took a different path to a similar end. The court preliminarily held that in issuing the DCL, DOE failed to comply with the federal Administrative Procedure Act, and as a result, the DCL was presumptively invalid. Rather than enjoin enforcement, as the New Hampshire court had done, the Maryland court held that a nationwide stay of the DCL was the appropriate remedy under the APA. The court declined to stay the FAQs or the Portal, however, finding neither to be a final agency action. Similarly, the court did not stay the Certification Requirement, holding it was not identified or raised in the Amended Complaint, but cryptically ruled “Insofar as the Court considers the Certification Requirement as an implementation of the Letter, it would of course be improper for the government to initiate enforcement based on a stayed policy, through certification or otherwise.” The stay, nevertheless, effectively precludes enforcement of the DCL nationally against any party.
Significantly, the court explained that only those aspects of the DCL that represented a change from pre-existing law were stayed, and that the stay would also preclude enforcement based on the FAQs to the extent they were based on changes made in the DCL. This will leave room for argument about which portions of the DCL are “new” law and which are merely declarative of prior law.
As a practical matter, the two decisions give educational institutions (particularly those who employ or contract or work with members or affiliates of the NEA) some breathing room to assess how to respond to the administration’s focus on DEI efforts in educational programming. While the issue is unlikely to go away entirely, enforcement of the penalties and the Certification Requirement have been kicked down the road for now.