Following a series of executive orders issued earlier this year, the U.S. Equal Employment Opportunity Commission (EEOC) issued a new internal directive, according to a recent internal agency memo acquired by Bloomberg Law. The memo requires EEOC staff to close pending charges related to disparate impact discrimination by September 30, 2025, unless special permission is granted by EEOC leadership. This aligns with the broader federal initiative to eliminate reliance on disparate impact liability, as outlined in a recent executive order from President Donald J. Trump on April 23, 2025.
What is “disparate impact?”
Disparate impact refers to the concept of employment practices that are neutral on their face or appear to be unintentionally biased but result in unequal outcomes for protected groups (e.g., based on race, sex, age), even if it is without discriminatory intent. In the past, the EEOC investigated claims for unequal opportunity under Title VII of the Civil Rights Act of 1964. If you are not up to speed on events leading up to the announcement, below is a quick timeline of relevant executive orders and publicly available announcements in 2025:
According to the article released on September 17th by Bloomberg Law, the deadline for EEOC investigators to close all pending disparate impact charges, unless special permission is granted, ended on September 30, 2025. The deadline for issuing “Notices of Right to Sue” to charging parties, who will then have 90 days to file suit in federal court, ends on October 31st. As a result, courts may see an increase in disparate impact lawsuits as charging parties receive Notices of Right to Sue.
A quick summary of Restoring Equality of Opportunity and Meritocracy
President Trump’s Executive Order on April 23rd asserts the need for equal opportunity and fair treatment for all citizens, alleging that disparate impact liability:
- Encourages race-based decision-making and undermines meritocracy.
- Forces employers to consider race to avoid legal liability.
- Contradicts the Constitution’s guarantee of equal protection and opportunity under the law.
Directives and revocations
President Trump ordered adjustments regarding equal opportunity policies through a series of orders and revocations of previous presidential approvals for federal agencies, including the EEOC, to:
- Deprioritize enforcement of disparate impact regulations.
- Revoke prior presidential approvals of disparate impact liability.
- Assess and potentially terminate investigations and lawsuits based on this theory.
To learn more about the executive order, Restoring Equality of Opportunity and Meritocracy, take a closer look here.
What does this mean for HR leaders and employers?
While the shift in how disparate impact is handled is directed at federal agencies, these developments are important for employers across the United States to keep an eye on because:
- It marks a fundamental shift in federal enforcement priorities, affecting how workplace discrimination claims are handled.
- The reduction in EEOC oversight and shifting stance may potentially mean greater responsibility for internal compliance and risk management in certain circumstances.
Employers should meet with their legal counsel to reassess internal practices, ensure compliance, and prepare for any potential private litigation. Verified Credentials will attempt to provide further updates as they become available.
This content is for informational purposes only and shall not constitute legal opinion or advice. Consult your legal counsel to ensure compliance.
