Updates
New Trump Executive Order Dismantles Disparate Impact Liability
On April 23, President Trump issued an executive order, "Restoring Equality of Opportunity and Meritocracy" (EO), intending to abolish a longstanding liability theory for workplace discrimination claims. Emphasizing the need for a "meritocracy and color-blind society," the EO aims to "eliminate the use of disparate-impact liability in all contexts." This move could significantly impact policy and practice considerations for employers. Below is a summary of the EO and how it may impact your business.
Pay Equity Pitfalls: Varying Standards for "Equal Work" and Valid Comparators in Pay Equity Litigation
The Equal Pay Act of 1963 (the EPA) and related state laws require employers to pay men and women equally for equal work. The premise is simple enough, but pay equity lawsuits present unique challenges for employers. Standards of proof, and specifically the standard for identifying a valid comparator, can vary depending on state law or the court's interpretation, and the variance can make it difficult for employers to anticipate and defend against pay equity claims.
Legal Showdown: Harvard and Trump Administration Spar Over Alleged Federal Civil Rights Violations, Federal Funding Freeze
Since President Trump's return to office in January, his administration has intensified efforts to combat antisemitism on college campuses, positioning the issue as a central pillar of its civil rights agenda. To carry out those efforts, the administration has directed the Department of Education (DOE) and other federal agencies to closely monitor institutions of higher education (IHEs) for potential violations of federal law, with particular focus on Title VI of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, or national origin in programs and activities receiving federal financial assistance.
Supreme Court Endorses Plaintiff-Friendly Prohibited Transaction Pleading Standard
In April, we wrote about the Supreme Court's resolution of a circuit split on the appropriate pleading standard for a specific type of prohibited transaction claim under ERISA. As we noted then, the impact of the Cunningham v. Cornell University decision allows a precedent for plaintiffs to state a claim more easily, and it makes it more difficult for defendants to have those claims dismissed.
As we explore this case in the article, we cover the broader applicability of the decision and next steps plan sponsors can take in response.
Attorney Spotlight
Rebecca Lee: Arbitration agreements remain one of the most cost-effective ways to limit liability, particularly in the class action context. This is especially true in states like California, where class and representative action claims can pose significant liability for employers, even with a relatively small class size. Employers should be sure to check that they have signed arbitration agreements that comply with recent updates in federal and state law.
In Case You Missed It
The Supreme Court Says Employers Can Be Liable for Discriminating Against Majority Groups
Earlier this month, in a long-awaited ruling, the U.S. Supreme Court sided with a straight white woman who claimed to have lost out on two positions to LGBT candidates and was also demoted in favor of them. The Court held that majority groups do not face a higher legal standard than minorities under Title VII of the Civil Rights Act (Title VII), the federal law that prohibits employment discrimination on the basis of protected characteristics. The Court's decision in Ames v. Ohio Department of Youth Services could make it easier for members of majority subsets of protected categories to successfully sue their employers for discrimination.
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We are continuing to monitor key trends and significant updates that affect employers across a wide variety of industries. We want to make sure we touch upon issues that are of concern to you. We invite you to take a moment and let us know what you would like to hear more about in this newsletter. Click below to email our team of attorneys.
About the Labor and Employment Group
The national, 40-person Labor and Employment team at Venable provides guidance and support across the full spectrum of workplace dynamics – helping employers control costs, avoid disputes, and defend themselves when litigation arises. As co-editors of this newsletter, Michael Volpe and Allison Gotfried invite you to share the content with your colleagues and reach out with any questions.