Illinois may soon join California, New York and New Jersey in codifying state law prohibitions against disparate impact discrimination. The final version of SB 3777 was sent to Illinois Governor J.B. Pritzker on June 1 at the close of the 104th legislative session. If signed, the law will take effect either immediately or on Jan. 1, 2027. Disparate impact claims arise when an employer’s facially neutral policy or practice disproportionately harms workers based on a protected characteristic, such as race or sex.

California has long recognized disparate impact under its civil rights laws. After the Trump administration issued Executive Order 14281, which called for dismantling disparate impact liability under federal laws, Democratic-led states including New Jersey, New York, and now Illinois have introduced legislation to follow California’s lead and preserve state-law protections for disparate impact claims.

On June 4, the EEOC released its National Enforcement Plan for Fiscal Years 2025–2029, identifying the agency’s enforcement priorities and signaling which discrimination issues may receive increased attention. Although Title VII of the Civil Rights Act of 1964 expressly recognizes disparate impact as an unlawful employment practice, the EEOC has backed away from focusing on disparate impact, stating in its Plan that intentional discrimination is a “more egregious form” of discrimination. The agency further announced that, to comply with Executive Order 14281, it will “eliminate the use of disparate impact liability theories in investigations ‘to the maximum degree possible’” and “will not commence, develop or continue to pursue litigation advancing disparate impact claims.”

It remains unclear whether the EEOC will dismiss pending disparate impact litigation. But the message is clear, at the federal level, disparate impact claims are unlikely to advance.

For employers, the legal landscape is likely to become more fragmented. Following California, New Jersey, New York, and soon Illinois, additional states may seek to codify disparate impact protections in state laws, potentially leading to more state agency claims and a patchwork of requirements that will be especially challenging for multi-state employers.