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Employers are facing new challenges as federal employment discrimi nation objectives shift, state leave laws continue to develop and intersect with federal leave law and artificial intelligence use in the workplace becomes more widespread, in light of developing state AI law and reg ulations. Here, the authors address these three developing areas and provide practical steps forward to help to ensure employer compliance.
Employers are operating amid shifting enforcement priorities, evolving federal guidance, and increasingly active state regulation. The discus sion that follows addresses three recurring areas of risk and operational complexity.
First, discrimination and harassment law remains anchored in long standing principles while federal agency guidance and court challenges reshape expectations, especially around sex discrimination and develop ments therein relating to gender identity.
Second, leave administration requires disciplined coordination among various regulatory perspectives, including the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA) and state paid-leave programs, as well as occasionally workers' compensation laws if there were an injury arising out of the course and scope of employment. In this arena, employers must pay careful attention to eligibility, concurrent counting, documentation and the need to engage in the interactive process.
Third, the increasing use of artificial intelligence (AI) in the work place heightens confidentiality concerns and introduces new compliance obligations in hiring and HR, particularly under emerging state laws tar geting automated decision-making tools.
Across these areas, compliance turns on clear policies, timely notices, documentation, consistent application of procedures and alignment of business needs with legal requirements. The sections below provide detail on the evolving regulatory and litigation landscape as it relates to each of these areas as well as provide practical frameworks for ensuring compliance in investigations, leave coordination and AI use, particularly as it relates to risk management.
HANDLING HARASSMENT CLAIMS
1. EEOC Agenda
Employers now face a dynamic enforcement and litigation landscape for harassment claims, shaped by recent federal guidance, shifting agency pri orities, and emerging conflicts between federal and state-law protections.
In April 2024, the Equal Employment Opportunity Commission (EEOC) issued Enforcement Guidance on Harassment in the Workplace. The Enforcement Guidance addresses covered bases and causation, condi tions of employment and employer liability. The Enforcement Guidance reaffirmed core legal principles as they relate to workplace discrimina tion and harassment. Namely, an employee must establish he/she is a member of a protected class, the complained-of conduct was based on a protected characteristic, the conduct was unwelcome and the conduct meets the additional elements related to whether the conduct was from a supervisor/manager and whether it resulted in a tangible job action (what was formerly known as the for either quid pro quo versus hostile work environment analysis).
The Enforcement Guidance then expanded the definition of pro tected class of sex to include sexual orientation and gender identity. Thus, prohibited harassment conduct could include misgendering, out ing and denial of access to sex-segregated facilities consistent with a per son's gender identity. In response, in May 2025, a Texas federal district court vacated on a nationwide basis those portions of the Enforcement Guidance that addressed misgendering, dress codes and bathroom access, concluding that the EEOC had exceeded its statutory authority with respect to expanding Title VII's definition of sex.
With the new administration, enforcement priorities at the federal level have changed dramatically. For example, under Executive Order 14168, federal agencies are directed to enforce laws in a manner that recognizes biological distinctions and rescind prior guidance promot ing gender identity frameworks, including rescission of the 2024 EEOC Enforcement Guidance. The EEOC rescinded the 2024 Enforcement Guidance in January 2026. EEOC Chair Andrea Lucas stated that "[r]escinding this guidance does not give employers license to engage in unlawful harassment," and that "[f]ederal employment laws against dis crimination, harassment, and retaliation, and Supreme Court precedent interpreting those laws, remain firmly in place." Additionally, Ms. Lucas has affirmed that the EEOC's current priorities include "returning to its mission of protecting women from sexual harassment and sex-based dis crimination in the workplace by rolling back the Biden administration's gender identity agenda." For EEOC compliance, investigations and litiga tion this means defending the "biological and binary reality of sex and related rights, including women's rights to single-sex spaces at work."
These developments, on the federal level, have prompted some states to venture into this area, prohibiting under state law some of the conduct that the Enforcement Guidance focused on and imposing on employers in those states a broader concept of the legally protected category of sex. Wise employers will recognize that this patchwork of state laws warrants a close analysis of an employer's responsibility in this area. Employers should continue to review policies in light of applicable federal and state law, as well as, on occasion, laws at the county or city level, especially for those employers in states that explicitly prohibit discrimination based on sexual orientation and gender identity, where there are likely to be challenges to pronoun, dress code and facility-access workplace policies under state and local rules.
2. Practical Steps Forward
As noted, the core legal standards for discrimination and harassment in the workplace remain the same. To establish a claim for workplace discrimination or harassment, an employee is required to provide proof of the following:
(1) The employee is a member of a protected class
(2) That the complained-of conduct was based on a protected characteristic.
(3) That the conduct was unwelcome.
(4) The complained-of conduct meets the additional elements for either quid pro quo or hostile work environment theories.
Effective compliance hinges on understanding these elements, imple menting reasonable investigation protocols and crafting policies to com ply with evolving federal and state frameworks.
The protected classes recognized by federal law include race, color, religion, sex (including pregnancy), national origin, age (40 and over), disability and veteran status. Employer policies that align training and compliance procedures with these categories remain essential safe guards. At the same time, employers should continue to reinforce the distinction between (1) unlawful harassment and policies designed to steer far clear of any such unlawful conduct in the workplace, which should be addressed by prompt and effective remedial action, and (2) non-actionable conduct such as performance management, reasonable work assignments and disciplinary actions, such as routine coaching and counseling, and other escalating disciplinary measures, which do not constitute unlawful harassment but are sometimes projected as offensive by employees trying to use legal jargon to avoid being held accountable. Of course, in the ordinary exercise of managerial authority, employers would be wise to train their management teams in the proper exercise of management authority to avoid even the appearance that their non actionable conduct has crossed the line in a case in which such manage ment exercise was used to diminish or belittle rather than constructively build-up to improve performance.
Employer liability turns on both prevention and correction. A viable defense depends on reasonable care to prevent and promptly correct illegal harassment. That standard is driven by managerial accountabil ity because management is the company and, therefore, a manager's knowledge is imputed on the company. All complaints, whether formal or informal, should be reported and investigated at some level. Managers also should be cautioned not to promise absolute confidentiality but instead communicate that the company will protect against retaliation and will maintain confidentiality to the extent possible in pursuit of an effective investigation.
A well-structured investigative/review process and prompt remedial action, if and as needed, improve legal defensibility, and, more impor tantly, inform employees that the complaint process has integrity and can be trusted. A best practice approach includes documenting the initial report and assembling an investigation team; identifying witnesses; col lecting and reviewing documents; conducting and, if necessary, repeating interviews; reaching findings; imposing corrective action proportionate to the findings; and closing the matter with appropriate communications. Having and abiding by a robust process, rather than the outcome of that process in individual situations, is key to both meeting the reasonable care legal defense standard and promoting confidence among the work force in the integrity of the process.
Thus, the practical imperative today is to anchor compliance in the settled elements of harassment law, maintain thorough and fair inves tigations and adjust policies to a complex and sometimes conflicting framework of federal guidance, court decisions and state and local pro tections. In this environment, periodic legal review of policies, train ing and investigation protocols is prudent, with documentation practices aligned to demonstrate reasonable prevention and prompt corrective action. Employers should continue to monitor the interplay of agency guidance, federal court rulings and state-law protections when updating policies and training.
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