On April 23, 2025, the Administration issued a new Executive Order entitled "Restoring Equality of Opportunity and Meritocracy" along with an accompanying fact sheet. The Executive Order shifts how the federal government approaches civil rights enforcement and how it will analyze allegations of discrimination.  Specifically, the Order limits the federal government’s ability to rely on the disparate impact theory of discrimination in its investigations and enforcement actions.

Notably, the Executive Order does not change existing federal discrimination law or court precedent. Executive Orders do, however, impact federal agency interpretations, and agencies usually begin to effectuate Executive Orders by issuing non-binding agency guidance and binding regulations (through the rulemaking process), revising policies, altering enforcement priorities, and even changing the content and language on government websites and in publications.

There are currently two main theories of liability under federal discrimination law:

1. Disparate treatment, which is intentionally treating someone differently because of their legally protected status; and
2. Disparate impact, which is when policies or practices are neutral on their face, but result in unequal outcomes among different protected groups. Under this liability framework, even unintentional disparities could lead to claims of discrimination.

By limiting or ending  use of the disparate impact legal theory, the Executive Order seeks to require federal agencies to change their interpretation and enforcement of decades of court precedent, agency guidance, and law. The effect could be that an individual or agency, seeking to enforce federal discrimination law through agency enforcement and Department of Justice law suits could only show that they were discriminated against by a business, employer, or institution of higher education if that individual showed that they were treated differently because of their legally protected class, rather than also using a disparate impact theory of liability.

The Executive Order instructs federal agencies and the Department of Justice to:

• Amend or repeal Title VI regulations and policies that incorporate disparate impact theories.
• Review all other regulations, guidance, rules, or orders—including laws and decisions at the state level—that impose disparate impact liability requirements and recommend their amendment, repeal, or other appropriate measures to address them.
• Reevaluate current lawsuits and federal investigations relying on disparate impact theories.
• Deprioritize enforcement based on disparate impact theories ; and
• Determine whether federal authority pre-empts state laws, regulations, policies, or practices that impose disparate impact liability.

This Executive Order is one of several EOs recently issued by the Administration seeking to change existing diversity, equity, and inclusion (DEI) initiatives. For businesses, employers, and institutions of higher education, the implementation of this Executive Order by the DOJ, EEOC, and U.S. Department of Education, among other federal investigatory agencies, have impact how pending and future civil rights investigations are handled.

Consult outside counsel with any concerns related to compliance with federal discrimination law and enforcement actions and investigation by the Department of Education or other executive agencies.