Disparate impact discrimination theory under threat

he United States is experiencing a time of great change and agitation in the legal landscape. Among those areas of the law targeted for change is the legal theory of disparate impact discrimination.

On April 23, 2025, President Donald Trump issued Executive Order 14281: Restoring Equality of Opportunity and Meritocracy, which is intended to begin the process to do away with the legal theory of disparate impact discrimination. Other administration actions such as the Department of Education’s (ED) Dear Colleague Letter on diversity, equity and inclusion (DEI) issued in February 2025 seeks to restrict the use of disparate impact specifically in schools. This would present a sea change in both employment and education contexts, as this theory originated more than 50 years ago and has been repeatedly affirmed by the U.S. Supreme Court. While the Executive Order and Dear Colleague Letter do not completely eliminate disparate impact theory, this is a good time to recall the purposes and legal underpinnings of this theory and the Supreme Court jurisprudence that has upheld it.

Disparate impact theory is an alternative to proving intentional discrimination and originated in the employment arena in 1971 in the U.S. Supreme Court case, Griggs v. Duke Power Co. ((1971) 401 U.S. 424.) Disparate impact theory “involve[s] employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another that cannot be justified by business necessity.” (Teamsters v. United States (1977) 431 U.S. 324, fn. 15.) For example, height requirements for firefighter positions that do not specify gender may nonetheless disproportionally exclude women who are shorter than men, on average, but are otherwise qualified for the job. Proponents of disparate impact theory’s use in the employment context argue that it is a best practice “aimed at ensuring that employers hire the candidates with the best relevant job skills,” according to Susan D. Carle, a professor at the American University Washington College of Law. That is because unnecessary requirements that weed out candidates who are otherwise qualified means a smaller pool of qualified candidates to select from. The Executive Order, on the other hand, claims that disparate impact theory in itself is discriminatory and does not provide for hiring based upon merit.

In Griggs, the employer instituted a requirement for employees to have a high school diploma or reach a certain score on two intelligence tests. This resulted in African American candidates receiving fewer jobs or losing out on promotions. The Court found that this constituted discrimination under Title VII of the Civil Rights Act, because the requirements were not necessary to determine qualification for the jobs. The Court held that Title VII “proscribe[d] not only overt discrimination but also practices that are fair in form, but discriminatory in operation.” Indeed, even non-discriminatory intent “does not redeem employment procedures or testing mechanisms that operate as ‘built-in headwinds’ for minority groups and are unrelated to measuring job capability.” Instead, the valid defense to a disparate impact claim is “business necessity,” where the employer can prove that it has a need to require certain qualifications (e.g., it is not discrimination to require a teaching credential for teaching positions, even if that results in hiring more of a certain group).

There is an interesting wrinkle to the case law on disparate impact discrimination — it may not be used to make race-based decisions in the other direction. Specifically, in 2009, the Supreme Court decided Ricci v. DeStafano ((2009) 557 U.S. 557), in which white firefighters and one Hispanic firefighter sued New Haven, Connecticut, when the city threw out the results of a firefighter exam in which white candidates outperformed minority candidates. The city rejected the test results because “too many whites and not enough minorities would be promoted were the result lists to be certified.” The Supreme Court held, “[w]ithout some other justification, this express, race-based decision-making violates Title VII’s command that employers cannot take adverse employment actions because of an individual’s race.” (Id. at 579.) In other words, disparate impact theory may not be used in reverse, to affect the rights of members of other groups.

In its February 2025 Dear Colleague Letter, the ED indicated that attempts to address disparate impact by public educational institutions would constitute discrimination. The letter stated, for example, that it would be unlawful for an educational institution to eliminate standardized testing to achieve a desired racial balance or to increase racial diversity. In other words, even though the removal of standardized testing would apply to all regardless of race, it could still be viewed by the ED as discriminatory. This is an expansion on the Ricci decision, which was based on the specific, documented negative impacts on certain individuals, to any facially neutral policy used to address disparate impacts. For example, in California, the unduplicated counts in the Local Control Funding Formula are race-neutral, but may have positive impacts on certain racial minorities. Another example is the Legislature’s prohibition on using willful defiance as a basis for suspension in Senate Bill 274, which was neutral in that it applies to all students regardless of race, but was intended to address disparate impacts of willful defiance on certain racial minority groups.

The Dear Colleague Letter is currently not being enforced as it has been enjoined, and the Executive Order only takes initial steps to remove disparate impact as a legal theory. Further, to completely remove disparate impact, Congress would have to amend statutory language of the Civil Rights Act, Fair Housing Act, ADEA and other statutes that incorporate disparate impact theory or the U.S. Supreme Court would have to revise its prior precedent. However, this is part of a broader movement to remove various protections in the law that are intended to create equity and could also affect state- and local educational agency-level decisions intended to, for example, address past or systemic discrimination.