New Executive Order Attacks ‘Disparate Impact’ Liability

Paul Hastings – President Donald Trump signed the “Restoring Equality of Opportunity and Meritocracy” executive order (the Disparate Impact EO) directing federal agencies to eliminate the use of disparate impact liability “in all contexts to the maximum degree possible … .” Generally, disparate impact liability arises when a facially neutral policy or practice causes adverse impacts to a group based on protected characteristics, and the employer cannot legally justify it.