Disparate impact liability rollback advances with DOL rule on federal funding access
Dive Brief:
- The U.S. Department of Labor issued a final rule on Thursday to eliminate disparate impact liability theory from its antidiscrimination regulations with respect to federal grants and funding opportunities under Title VI of the 1964 Civil Rights Act.
- In a copy of the rule published in The Federal Register, DOL said that the move amends its regulations to align with Title VI’s “original public meaning, avoid constitutional concerns, reduce compliance costs and serve the public interest.” The agency also cited President Donald Trump’s April 2025 executive order directing the federal government to end enforcement of disparate impact liability.
- The rule took effect Thursday and is the latest in a long line of government actions following from Trump’s order. DOL said it had statutory, constitutional and policy concerns about its previous Title VI regulations, adding that the law permits facially neutral policies that result in disparate outcomes where there is no discriminatory intent by a funding recipient.
Dive Insight:
The Trump administration has targeted disparate impact liability on several employment law fronts in accordance with the president’s executive order, which called the legal theory a “pernicious movement” that endangers the “bedrock principle […] that all citizens are treated equally under the law.”
Mere weeks before DOL’s announcement, the U.S. Department of Justice issued an opinion stating that disparate impact guidelines under Title VII of the Civil Rights Act — maintained by the U.S. Equal Employment Opportunity Commission — were similarly unconstitutional. DOJ said in part that disparate impact liability fails to take into account an employer’s intent and may pressure organizations into race-based decision-making to avoid legal liability or a threat of liability.
Critics of Trump’s order and the administration’s broadside against disparate impact theory have consistently pushed back against such claims. Shortly after Trump issued his executive order last year, a former EEOC administrative judge told HR Dive that the order violated federal law and that disparate impact theory appeared in the majority of employment discrimination cases pursued by EEOC up until that point.
Former Democratic officials at EEOC and DOL made similar criticisms around the same time and even went further, warning employers not to follow Trump’s order for fear of violating the law. The officials noted that members of the private plaintiffs’ bar, state and local governments and other parties could still bring disparate impact claims against employers.
With respect to Title VI, however, the U.S. Supreme Court has said that individuals lack a private right of action to sue for disparate impact discrimination, an Ogletree Deakins attorney wrote in a December 2025 analysis.
