Trump chips away at “disparate impact” policy, precursor to CRT

To avoid discriminating against potential employees and tenants, companies and landlords have to discriminate against potential employees and tenants. At least, that’s what the White House and legal scholars say has been the case for decades. Late last month, President Donald Trump signed an executive order seeking to change that. The order instructed federal agencies to stop enforcing federal disparate impact liability regulations.

Disparate impact liability, a feature of anti-discrimination law, penalizes employers or landlords for adopting workplace standards, hiring policies, or renter application requirements that unintentionally make it harder for people to obtain jobs, promotions, or housing because of their race, color, religion, sex, or national origin.

While workers’ unions and housing advocates have criticized Trump’s order as opening the floodgates to more discrimination in the workplace and the housing market, some legal scholars are celebrating the decision. They argue that disparate impact liability has done more harm than good—and getting rid of it will give employers and landlords more freedom not to discriminate.

Jonathan Segal, an attorney with Duane Morris LLP, explained what disparate impact liability looks like in the real world. “One of the classic disparate impact cases is if you had a rule that said someone needs to be 6 feet tall,” Segal said. “There are women more than 6 feet and there are men that are not. But that rule is going to have an adverse impact on women.” As a result, if an employer required someone to be 6 feet tall for a certain job, they would put themselves at risk of a disparate impact liability lawsuit.

Employers could adopt that height requirement if they could prove it was necessary for the job they were hiring for. But proving in court that the requirement is necessary for the job can be a heavy lift.

“It tends to cause employers to avoid having clear hiring criteria out of fear that someone will claim … that their criteria are having a disparate impact on some group,” Gail Heriot, a law professor at the University of San Diego, told WORLD. And the downside to that is: “When hiring criteria are vague, it’s much harder to detect actual discrimination.”

“Disparate impact liability actually creates this perverse incentive where employers can be forced to intentionally discriminate in order to avoid disparate impact liability. Because disparate impact liability isn’t about intent,” said GianCarlo Canaparo, a legal scholar at the Heritage Foundation. “If anything you do with respect to hiring, firing, et cetera has a disparate impact across a protected group—which, of course, everything does for all sorts of reasons—you can be liable. Even if you don’t intentionally discriminate. And in order to avoid that liability, sometimes you have to intentionally discriminate.”

When Congress first passed the Civil Rights Act of 1964, the legislation didn’t recognize the idea of disparate impact liability. The Equal Employment Opportunity Commission first developed the concept during the 1960s, according to Heriot. In 1971, the Supreme Court formally recognized the disparate impact idea, though it didn’t use the exact phrase, as something that employers could be held liable for in its Griggs v. Duke Power Co. decision. Two decades later, Congress embedded the concept into federal law in the Civil Rights Act of 1991.

On paper, a federal law holding employers liable for disparate impacts was seemingly bound to reduce someone’s chances of being discriminated against based on their race or sex. But in reality, the law has quite possibly increased someone’s chances of being discriminated against, Heriot argued.

The Supreme Court heard arguments in 2009 about a situation in which disparate impact liability motivated an employer to engage in discrimination. In Ricci v. DeStefano, the city fire department in New Haven, Conn., conducted objective examinations to decide which firefighters it should promote. When white firefighters overwhelmingly scored higher on the examinations, the department decided not to certify the results of the examination and opted instead to promote firefighters from a range of different ethnicities.

The firefighters who passed the examination but were not promoted sued, saying they were discriminated against based on their race. Lawyers for the city argued that, if the department had promoted the plaintiffs instead of a collection of individuals from various ethnicities who’d passed the test or not, it would have exposed itself to a disparate impact liability lawsuit. The court ultimately ruled against the fire department in Ricci. But the situation still illustrates the predicament before employers, Canaparo explained.

“The average person knows that people should be judged according to their individual merits, and that color doesn’t matter,” Canaparo said. “Disparate impact rejects that entirely, actually. Disparate impact is like woke CRT, woke discrimination, operationalized. And it says, ‘No. What matters is not you as an individual. What matters is groups. And what matters is that groups are equal in all outcomes.’ And so as long as disparate impact exists in the law, that perverse current, that perversion of our understanding of civil rights, persists. And it means that we keep thinking about race in terms of group outcomes.”

But Jonathan Segal argued that disparate impact liability has had a net positive effect on the workplace. Mainly, it has forced employers to look at the bigger picture of how their job requirements could negatively affect some individuals’ chances of landing a job or snagging a promotion, he said.

“It’s a good thing if it encourages employers to look beyond individual cases and look for patterns,” Segal said. “Where disparate impact cases can be problematic is it may discourage employers from looking at more subjective criteria, such as performance—who’s the least qualified or who’s the most qualified—for fear of the adverse impact. And that is inconsistent with the idea of merit.”

Trump’s executive order cannot—and does not attempt to—overturn Congress’s 1991 Civil Rights Act or the Supreme Court’s 1971 Griggs ruling initially recognizing the idea of disparate impact liability as legitimate. Nonetheless, it does say that federal agencies will no longer enforce disparate impact liability regulations against landlords or employers.

Kim Johnson, senior director of public policy at the National Low Income Housing Coalition, said the executive order could negatively affect certain groups in the housing market. She pointed to crime-free nuisance ordinances, which allow landlords to evict tenants who utilize emergency services too frequently. But those laws could put women who are in abusive relationships at risk of getting evicted, she explained.

“Disparate impact gives people the ability to challenge these laws, even if the laws were not made with the intention of discriminating,” Johnson said. “Without disparate impact—or with a severely weakened version—it is likely more people will experience housing discrimination but will have fewer avenues for accountability.”

When it comes to the workplace, Jonathan Segal warns that the executive order doesn’t mean employers all of a sudden can’t be sued based on disparate impact. Plenty of states have disparate impact liability regulations of their own, and more are likely to add them following the order, he explained. Also, private individuals can still bring disparate impact liability lawsuits against employers or landlords if they bring their issue to the EEOC and the EEOC decides not to act on it, Segal said.

While it doesn’t eliminate the possibility of all disparate impact claims, Trump’s policy is still a step in the right direction, said Gail Heriot. “The Trump administration recognizes that disparate impact liability has made the law incoherent. Constitutional experts within the Trump Administration rightly doubt its constitutionality,” she said. “They are trying to get us back to the equal treatment model that Congress originally intended in 1964.”