Blog - Tag: discrimination

Federal regulators have stepped up their regulatory focus on corporate diversity, equity and inclusion initiatives and “reverse discrimination,” announcing settlements and lawsuits against notable employers such as Nike as well as smaller companies..

The new push is being conducted under President Trump’s executive order and Equal Employment Opportunity Commission guidance declaring DEI programs and reverse discrimination illegal. Since 2025, the Department of Justice and the EEOC have been targeting employers for these violations, alongside typical workplace discrimination claims involving gender, race and religion.

The new focus has added to employers’ potential liability, and the financial consequences can be significant for those sued.

The Equal Employment Opportunity Commission and the Department of Justice have made clear that DEI enforcement is now a major priority. EEOC Chair Andrea Lucas recently warned Fortune 500 companies that programs labeled as DEI could violate Title VII if employment decisions are influenced by race or sex instead of merit.

Some recent legal actions include:

• The EEOC is attempting to enforce a subpoena against Nike as part of an investigation into whether the company’s workforce representation goals discriminated against white employees and applicants. The agency pointed to company statements about building a “representative” workforce and internal diversity targets.
• The agency sued Coca-Cola Beverages Northeast, alleging the company violated Title VII by holding a women-only networking event that excluded male employees while paying participating women to attend.
• The Justice Department recently settled with PayPal over a pandemic-era investment initiative focused on minority-owned businesses. Federal officials said the case reflects the administration’s broader effort to eliminate what it considers unlawful DEI programs.

At the same time, employers should not assume that scaling back DEI efforts eliminates legal exposure. The EEOC continues to pursue traditional discrimination claims involving harassment, retaliation and hiring bias. Recent cases include a $2 million consent decree involving alleged systemic sex discrimination and a race harassment settlement against another employer.

Proceed with caution

Employers that overreact by dismantling compliance programs may create new problems. Eliminating anti-harassment training, suspending pay equity reviews or abandoning workplace complaint procedures can increase the risk of discrimination claims and weaken defenses if litigation occurs.

Instead, legal experts recommend that employers carefully review workplace policies and programs to ensure hiring, promotions, compensation and development opportunities remain merit-based and job-related.

Key steps employers should consider include:

• Reviewing employee handbooks and anti-discrimination policies.
• Auditing hiring and promotion practices for neutral, job-related criteria.
• Ensuring mentorship and leadership programs are open to all employees.
• Continuing anti-harassment and anti-discrimination training.
• Conducting pay equity reviews under attorney-client privilege.
• Carefully evaluating DEI language used in recruiting materials and internal communications.
• Documenting employment decisions thoroughly.
• Avoiding demographic quotas or preferences tied to protected characteristics.

Another growing concern is litigation risk from individuals. Reverse discrimination lawsuits by white employees have become more common, particularly after a recent Supreme Court ruling made it easier for majority-group plaintiffs to bring discrimination claims. One widely watched case involved a former Novant Health executive who won a $4.8 million verdict after alleging he was terminated as part of a diversity push.

Review your coverage

With employment litigation risks rising from multiple directions, employers should also review their employment practices liability coverage.

EPLI policies can help cover legal defense costs, settlements and judgments arising from discrimination, harassment and wrongful termination claims. As enforcement activity intensifies, maintaining strong EPLI coverage may become increasingly important for businesses of all sizes.

Employers that are hit with a discrimination complaint must act fast to compare the allegations in the lawsuit to the earlier complaint the worker filed to the Equal Employment Opportunity Commission.

If the employer can find that the allegations in the complaint filed with the EEOC do not match those in the subsequent lawsuit filed by the worker, it can quickly move to have the case dismissed, but if it waits too long, it loses the chance.

Under procedural rules, employees filing suit under Title VII Title VII of the Civil Rights Act of 1964 must first file a complaint with the EEOC.

The decision that paved the way for this new procedural rule was a unanimous U.S. Supreme Court ruling in the case of Fort Bend County vs. Lois M. Davis in 2019.

The ruling means that employers that are sued for discrimination under Title VII have a limited amount of time to challenge the lawsuit if the allegations differ in any way from the original EEOC complaint. If they act fast, then they stand a good chance of convincing the court to throw out the complaint.

However, if an employer dawdles and waits too long to challenge the case if they find a discrepancy, they may lose the opportunity.

If the employer in this case had acted quickly, it would never have gone to the Supreme Court, legal experts say.

The case details

An IT worker in Texas had reported that her director was sexually harassing her, and after an investigation he was fired. But after that, her supervisors began retaliating by cutting back on her work responsibilities. She filed a charge with the EEOC and, while the charge was pending, she was told to report to work on a Sunday. She refused and went to church instead.

She tried to supplement her allegations and wrote the word “religion” by hand on her EEOC intake questionnaire, but she didn’t change her formal charge document by adding that word.

The case went to trial and was appealed, and then it was sent back to the local U.S. District Court to decide the remaining charge of religious discrimination. The case had been in the courts for three years at that point.

That’s when her former employer asserted that the District Court didn’t have jurisdiction of the case because she had failed to state the claim in her EEOC charge papers. That issue was taken all the way to the Supreme court, which wrote in its decision that an objection to a charge because of a discrepancy may be forfeited “if the party asserting the rule waited too long to raise the point.”

The takeaway

If your organization is the target of a discrimination lawsuit, make sure to check the original EEOC charge for any discrepancies. If there are any, you can consult with your lawyers about filing a motion to have the complaint dismissed.