EEOC to Close All Pending Disparate Impact Investigations by September 30, 2025 | Franczek P.C.

The Equal Employment Opportunity Commission (EEOC) will administratively close by the end of September all pending charges based solely on disparate impact—claims of unintentional discrimination based on facially neutral policies that disproportionately affect a protected class. According to an internal agency memorandum, staff must close those cases by September 30 and issue “right to sue” letters by October 31, giving charging parties 90 days to pursue litigation in federal court. 

This development follows President Trump’s April 23, 2025 executive order, Restoring Equality of Opportunity and Meritocracy, which directed federal agencies to eliminate reliance on disparate impact liability. The administration’s position is that disparate impact theory encourages racial balancing, undermines meritocracy, and is inconsistent with the Equal Protection Clause. 

Background on Disparate Impact 

The U.S. Supreme Court first recognized disparate impact as a valid basis for liability under Title VII of the Civil Rights Act of 1964 in Griggs v. Duke Power Co. The doctrine has been a cornerstone of systemic discrimination enforcement, allowing the EEOC and private litigants to challenge policies such as criminal background checks, pre-employment tests, and grooming standards that  do not intentionally discriminate based on a protected category such as race or gender but disproportionately affect a protected group and lack a sufficient business justification. The “disparate impact” theory of liability was codified into Title VII itself by the 1991 Civil Rights Act.  

Impact of the Executive Order 

The EEOC will no longer investigate or resolve charges based solely on disparate impact, and ongoing matters that also allege intentional discrimination may proceed only on that theory. The agency has already withdrawn from several suits, and other federal agencies have been instructed to review consent decrees and injunctions that rely on disparate impact, creating uncertainty about the status of existing monitoring agreements. In addition, the Department of Justice, the Department of Housing and Urban Development, the Consumer Financial Protection Bureau, and the Federal Trade Commission must apply similar restrictions in the areas of fair housing, credit, and consumer protection. 

 Practical Consequences 

The EEOC’s withdrawal from disparate impact marks a significant change in how the agency enforces anti-discrimination laws. Although most EEOC cases have always centered on intentional discrimination, disparate impact has been an important tool for addressing workplace policies with unintended but systemic effects. The agency’s exit from this area means there will be less government oversight, leaving private lawyers and employees to carry more of the burden.  

Employees may still file disparate impact lawsuits in federal courts, and disparate impact discrimination is prohibited by the text of Title VII itself, and other courts have interpreted other statutes to similarly prohibit disparate impact discrimination, even in the absence of explicit statutory language recognizing the “disparate impact” theory of liability. Workers who believe a policy unfairly impacts them must find private counsel, file in court on their own, and take on the cost and complexity of proving the case.  

Employer Takeaways 

• Continue reviewing hiring, testing, and workplace practices for unintended disparate effects, as private parties may still bring disparate impact suits and courts will continue to recognize “disparate impact” liability notwithstanding the Trump Administration’s position that the disparate impact theory is inconsistent with the Constitution’s Equal Protection Clause. This is the federal government’s litigation position; it is not the law.  
• Be mindful that existing consent decrees or monitoring agreements tied to disparate impact may be subject to review, though only courts can modify or end them.
• Practices involving AI-based hiring tools, criminal background checks, and grooming standards remain areas of potential litigation risk. 
• This is only a change in the enforcement priority of the federal government and does not create immunity from liability.