Dive Brief:
- The Illinois legislature earlier this week approved a bill that bans disparate impact discrimination, pushing back against an executive order from the president rejecting the liability theory.
- The bill targets policies and practices that may seem neutral, but disproportionately harm protected groups.
- The legislation was backed by the state government’s department of human rights, but the governor did not respond to a question about whether he would sign the bill.
Dive Insight:
President Donald Trump’s 2025 executive order directed federal agencies like the U.S. Equal Employment Opportunity Commission to drop the theory from their enforcement efforts.
An individual serving as an EEOC administrative judge at the time told HR Dive the order was “highly illegal,” and former agency officials urged employers to ignore the EO.
Title VII of the Civil Rights Act of 1964 “explicitly outlaws unjustified disparate impact as well as intentional discrimination. Moreover, the Supreme Court has repeatedly upheld the concept of disparate impact liability under Title VII and other civil rights laws,” the former officials wrote. “Employers should not expect that they will have a free pass on disparate impact liability simply because the President has instructed federal agencies not to pursue enforcement of the law.”
Management-side attorneys similarly warned employers about private litigation and urged them to review relevant state laws.
Several states had disparate impact bans on their books at the time, and at least two further codified theirs following the EO: first, New Jersey, and now, Illinois.
In practice, disparate impact concerns have focused on employment requirements such as strength tests or criminal background checks that were arguably unnecessary for the job in question. Now, emerging artificial intelligence technology could create new disparate impact concerns through automated decision-making, according to guidance on New Jersey’s new regulations.
Notably, Trump’s EO also directed the attorney general to determine whether state laws codifying the theory are preempted by federal law or have constitutional “infirmities” — and whether federal action should be taken against them. If Illinois’ governor signs the most recent disparate impact bill, the state will join a small group that have set the stage for a fight over federal preemption.
