In April 2025, the Administration ordered federal agencies to cease enforcement of a legal theory known as “disparate impact,” a neutral policy applicable to all, that disproportionately harms members of a particular race, sex, or other protected category like disability or age. These theories were often used, for example, in cases involving employee selection procedures and criminal background checks. As a result of such executive orders, the Equal Employment Opportunity Commission (EEOC) reportedly has concluded all disparate impact cases and has issued right to sue letters allowing workers to bring their disputes in federal court, without the handling of such cases by the EEOC. In situations where the discrimination charges include both disparate impact allegations and intentional discrimination claims, known as “disparate treatment,” the disparate treatment claims are continued, but the EEOC will not continue investigating or prosecuting disparate impact claims. In December 2025, the Justice Department issued a rule that it will focus solely on “intentional discrimination” in its regulation of federally funded programs, and that the Department of Justice’s (DOJ’s) Title VI Civil Rights Regulations “do not prohibit conduct or activities that have a disparate impact.” The regulation follows the executive order calling for the elimination of “the use of disparate-impact liability in all contexts to the maximum degree possible.”
There has been some push-back on the new policies, as some former EEOC officials have objected to the new policy and at least one lawsuit has been brought contending that the EEOC is legally required to at least investigate discrimination charges using the disparate impact theory. A federal district court recently rejected this claim and the court found the plaintiff lacked standing in the claim by not suffering “a cognizable injury” from the change in policy. Ross v. EEOC, Motion to Dismiss Granted 11/25/25 (D.D.C., No. 1:25-cv-03702).
Editor’s Note: It is critically important for employers to note that the Administration’s abandonment of the disparate impact method of proving discrimination does not apply to “private” lawsuits brought by individuals or class representatives, as the change in policy only applies to government enforcement, not private litigation. Thus, employers are reminded to still be aware of potential liability under the disparate impact theory in private litigation.
This article is part of our January 2026 Newsletter.
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