Trump Bar on Disparate Impact Complicates EEOC’s Diversity Focus

President Donald Trump’s directive stopping federal agencies from bringing unintentional bias claims eliminates a tool for the EEOC to enforce new priorities, including combating the diversity programs it deems discriminatory.

Trump’s recent order tells federal agencies, including the Equal Employment Opportunity Commission, to eliminate use of disparate impact theory, which asserts facially neutral workplace practices can be discriminatory if they disproportionately harm workers based on protected traits like race and sex.

It’s one of several Trump administration executive orders seeking to influence both civil rights enforcement and to topple corporate diversity, equity, and inclusion programs. But removing key agencies’ ability to investigate and bring litigation targeting unintentional bias may have inadvertently put the administration at odds with some of its own priorities.

“They think by taking this away it will make it harder,” for plaintiffs to bring discrimination claims, “but it makes it harder even for their own objectives,” said Marjorie Mesidor, a founding partner at Mesidor PLLC.

Trump’s April 23 order builds on the backlash conservatives have long voiced against disparate impact, arguing it focuses too much on outcomes over intent and requires employers to “engage in racial balancing” to avoid liability.

Impact vs. Treatment

The order affecting claims under Title VII of the 1964 Civil Rights Act and other discrimination laws leaves the commission only with disparate treatment, which is based around different handling of certain classes or intentional discrimination.

EEOC Acting Chair Andrea Lucas said the commission will “fully and robustly comply” with the order, but employers should “take care not to conflate the two” bias theories.

“The Commission will continue to relentlessly combat unlawful patterns or practices of intentional discrimination in violation of Title VII, including race and sex discrimination that may arise from DEI programs and national origin discrimination involving anti-American bias,” Lucas said in a statement.

Disparate treatment may be the more commonly used theory of the two, but it requires the EEOC to find examples of intentional discrimination through hiring practices or DEI programs the agency outlined as illegal in a joint guidance with the Department of Justice.

The EEOC’s guidance said DEI policies may be unlawful if they are “motivated —in whole or in part—” by protected characteristics.

But corporate diversity programs broadly do not set racial or gender quotas or limit applicants because of their gender, which would be considered “intentional racism,” said Mesidor. So by banning disparate impact theory the administration has raised the bar “all the much higher” for itself to challenge diversity initiatives, she said.

Without disparate impact, for instance, it will be harder for a White male to allege they didn’t get a job because it was slated for a Black woman “unless they have that direct evidence,” she said.

“They can’t show the fact that they only recruited at an historically Black university, or only recruited at an all female university, as a basis for saying ‘this had a disparate impact,’” Mesidor added.

The trend of EEOC charges or lawsuits over DEI programs is recent, leaving relatively scant precedent for how judges view these claims both under both main theories.

But a disparate impact argument has been raised within at least one lawsuit filed in Texas federal court in January, alleged Target Corp.'s DEI policies resulted in race and age discrimination.

The complaint brought claims under the Age Discrimination in Employment Act and Title VII, citing Target’s DE&I goals as well as the company’s website which promoted inclusion of employees by different traits, but “denied recognition” to White and older employees.

The parties since agreed to dismiss the case.

The EEOC may no longer be empowered to bring disparate impact cases, but Trump’s order doesn’t eliminate the right of private workers to do so. The US Supreme Court recognized disparate impact under Title VII in its 1971 Griggs v. Duke Power Co. decision.

The loss of the EEOC’s investigative and litigation power though, makes it harder for workers bringing these cases through private action since they are resource intensive, said Chris DeGroff, an attorney with Seyfarth Shaw LLP.

EEOC Goals

Other EEOC goals under Trump include rooting out anti-American bias and religious bias, which are often viewed as discrimination against majority groups.

The disparate impact ban could lead to employers using non-merit based hiring systems with a “net effect” that is “against the exact groups that they are trying to protect,” said David Cohen, founder and president of DCI Consulting.

It would limit the EEOC’s ability to cite potential unintentional discrimination, such as a hiring personality test to measure agreeableness that produces results favoring women, or an artificial intelligence program using lowest total labor costs that doesn’t select for any US citizens in favor of migrants, Cohen said.

“Is that really what they’re saying? That as long as it’s not intentional that all of these tools that could potentially screen out systematically Whites, Christians, and males, they are not going to be pursued by the federal government?” Cohen said.

Emerging AI-based bias claims are also often harder to prove without disparate impact, labor attorneys said, as it’s easier to statistically analyze the results of algorithmic hiring tools than it to discern the intent behind choices made by AI.

“If your goal is to actually win cases,” against DEI programs, “versus just to threaten people, it’s going to be much harder to do without disparate impact theories,” said Adam Pulver, an attorney at Public Citizen Litigation Group.

Although the EEOC has now lost an important tool to bring sweeping cases with a class affected by a single facially neutral policy, the agency can still fulfill an objective of targeting DEI, even if its based on individual charges.

“The EEOC can make as much political noise around a single claimant case as it can around a large scale case,” said DeGroff.

If its main goal is for “secondary deterrence” and to “make an example” of a company, they’re still able to achieve that without a large class case, he said.