Insights

On Thursday, June 5, 2025, the Supreme Court issued a unanimous decision in Ames v. Ohio Department of Youth Services, rejecting the "background circumstances" rule that would require majority-group plaintiffs to meet a heightened evidentiary standard in Title VII discrimination cases. The decision vacated and remanded the case for further consideration by the Sixth Circuit. In so doing, the Court held that all plaintiffs – whether minority or majority employees – bringing discrimination cases under Title VII are subject to the same evidentiary standards under the McDonnell Douglas framework for evaluating disparate-treatment claims.

Effective January 1, 2026, H.B. 3773 amends Article 5, Section 2 of the Illinois Human Rights Act to explicitly prohibit employers from using artificial intelligence (“AI”) for a broad swath of employment decisions, including recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges, or conditions of employment, if such use has the effect of subjecting employees to discrimination on the basis of a protected class.  The amendment also prohibits employers from using zip code as a proxy for protected classes.  H.B. 3773 further provides that employers will be required to provide notice to employees prior to using AI for such employment-related purposes.  The law applies to any employers employing one or more employees within Illinois during 20 or more calendar weeks during the calendar year. 

On May 17, 2024, Colorado Governor Jared Polis signed S.B. 24-205, Consumer Protections for Artificial Intelligence, the first state law in the country to regulate employers’ use of artificial intelligence in employment decisions.  This law regulates both companies that develop and companies that deploy “high-risk” artificial intelligence systems (“AI systems”).  In particular, the law sets forth a set of provisions designed to ensure that developers and deployers use “reasonable care” to protect consumers from any “known or reasonably foreseeable risks to algorithmic discrimination” arising from the use of the AI system.  The law then creates a rebuttable presumption, for both deployers and developers, that reasonable care was used if they meet specific requirements and disclose key information about high-risk AI systems.  This law will be enforced by the Colorado Attorney General, and a violation of the law constitutes an unfair trade practice.  The law becomes effective on February 1, 2026.

The EEOC has released long-awaited Enforcement Guidance on Harassment in the Workplace, No. 915.064 (Apr. 29, 2024) (the “Guidance"). The Guidance addresses a number of timely issues and should be of great interest and practical use for employers, as it sets out the EEOC’s position on such questions as the tension between pronoun usage and religious practice; abortion in the context of sex harassment; and social media as the basis for a harassment claim. This update is the first of its kind in 30 years, and largely tracks the proposed guidance that the EEOC issued in October of 2023.  

On April 15, 2024, the U.S. Equal Employment Opportunity Commission (“EEOC”) announced in a press release its implementation of a Final Rule on the Pregnant Workers Fairness Act (“PWFA”), published that day in the Federal Register.  The Final Rule fundamentally extended the PWFAs protections, broadly defining what had been ambiguous phrases to expand the scope of individuals qualifying for accommodations, when employees and applicants for employment may seek an accommodation, and how employers should engage with them upon receiving a request for accommodation.

On April 17, 2024, the Supreme Court handed down a unanimous decision in Muldrow v. City of St. Louis, Missouri, No. 22-193, holding that transferees alleging discrimination under Title VII of the Civil Rights Act of 1964 need only show that a transfer caused harm with respect to an identifiable term or condition of employment.  The Court’s decision upends decades of lower court precedent applying a “significant harm” standard to Title VII discrimination cases.  As a result, plaintiffs claiming discrimination under Title VII will likely more easily advance beyond motions to dismiss or motions for summary judgment. In the wake of the Court’s decisions in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College (6-2), No. 20-1199, and Students for Fair Admissions, Inc. v. Univ. of North Carolina (6-3), No. 21-707 (June 29, 2023), Muldrow will also likely continue to reshape how employers conceive of, implement, and communicate workplace Diversity, Equity and Inclusion (“DEI”) efforts.  The decision may be used by future plaintiffs in “reverse” discrimination actions to challenge DEI or affinity programs that provide non-economic benefits to some – but not all – employees.  For example, DEI programs focused on mentoring or access to leadership open only to members of a certain protected class could be challenged under Muldrow by an employee positing that exclusion from such programs clears this new, lower standard of harm. 

On January 30, 2024, the FAR Council issued a proposed rule entitled “Pay Equity and Transparency in Federal Contracting” (“Proposed Rule”). The Proposed Rule would: (1) prohibit contractors and subcontractors from seeking and considering information about job applicants’ compensation history when making employment decisions about personnel working on or in connection with a government contract; and (2) require contractors and subcontractors to disclose, in all advertisements for job openings involving work on or in connection with a government contract placed by or on behalf of the contractor or subcontractor, the compensation to be offered to the hired applicant for any position to perform work on or in connection with the contract.

On June 29, 2023, the Supreme Court held that it is unconstitutional (under the Constitution’s Equal Protection Clause, as to public institutions) and a violation of Title VI of the Civil Rights Act of 1964 (as applicable to private institutions accepting federal financial assistance) for colleges and universities to consider race as a factor in the admissions process. See Students for Fair Admissions, Inc. v. President & Fellows of Harvard Coll., No. 20-1199, 2023 WL 4239254 (U.S. June 29, 2023) (“Harvard”), a summary of which can be found here. This decision upended decades of precedent and has caused employers in the private sector to ask how the decision will impact diversity, equity, and inclusion (“DE&I”) initiatives and employment decisions. This article addresses the impact of Harvard, eight months later.

Following a January 29, 2024 White House announcement and Fact Sheet, on January 30, 2024, the Federal Acquisition Regulation (FAR) Council issued a Notice of Proposed Rulemaking (Proposed Rule) on salary-history bans and pay transparency for applicants and employees of federal contractors and subcontractors. On the same day, the Office of Federal Contract Compliance Programs (OFCCP) issued some FAQs on the compensation history issue. These actions by the federal government to ban prior salary information and require compensation information in job postings echo the efforts of multiple states and municipal governments that have enacted similar salary history bans and/or compensation disclosure requirements:

Illinois is poised to become the latest state to require employers to provide salary information in job postings.  Governor J.B. Pritzker is expected to sign House Bill 3129, which amends the Illinois Equal Pay Act (IEPA) and requires employers to include pay scale and benefits information in job postings.  If the Bill is enacted, its requirements will go into effect on January 1, 2025, and will apply to employers with 15 or more employees and to positions that are (i) physically performed, in whole or in part, in Illinois or (ii) physically performed outside of Illinois where the employee reports to a supervisor, office or other work site in Illinois. 

On May 1, 2023, the National Labor Relations Board issued a decision in Lion Elastomers LLC II, which overruled the Board’s earlier decision in General Motors LLC, 369 NLRB No. 127 (2020), and rejected Trump-era precedent that had made it easier for employers to discipline workers who make profane, harassing or discriminatory comments in the course of a workplace dispute.  In its statement, the NLRB described its decision as “returning to the long-established ‘setting-specific’ standards applicable to cases where employees are disciplined or discharged for misconduct that occurs during activity otherwise protected by the National Labor Relations Act” (the “NLRA” or the “Act”).  

Responding to significant uproar from the federal contracting community, on August 18, 2022, the Office of Federal Contract Compliance Programs (“OFCCP”) issued a revised version of its Directive 2022-01 - Advancing Pay Equity Through Compensation Analysis, which was originally issued on March 15, 2022.  The Revised Directive is, per the OFCCP, intended to clarify its earlier guidance addressing federal contractors’ regulatory obligation to evaluate “compensation systems” as part of their affirmative action programming, and the documentation the OFCCP expects contractors to provide to the OFCCP regarding their analyses.  Most importantly, the Revised Directive steps back from the position the Agency took in the March 15 Directive with regard to the applicability of the attorney-client privilege to analyses contractors are required to undertake pursuant to the Agency’s regulations.  The Agency had previously taken the position that contractors conduct undefined “pay equity” analyses pursuant to the Agency’s regulatory obligation and, as a result, could not assert attorney-client privilege over such analyses. 

On August 10, 2022, an amendment to Colorado’s non-compete law, which sets stricter limits on employers and the potential for higher penalties, went into effect. H.B. 22-1317 amends Colorado’s existing law, following a recent trend to prohibit non-compete agreements for workers earning less than a certain salary threshold. Notable changes include increasing the penalty for violations to $5,000, prohibiting non-compete agreements for all employees who are not “highly compensated,” and prohibiting customer non-solicitation agreements for all employees making under a certain yearly salary. 

On May 12, 2022, the Equal Employment Opportunity Commission (“EEOC”) published guidance to help employers using artificial intelligence (“AI”) technology to remain compliant with the Americans With Disabilities Act (“ADA”). On the same day, the Department of Justice posted its own guidance regarding AI-related disability discrimination. Both are consistent with recent emphasis by the EEOC on the potential interaction of the usage of AI in employment decisions with disability rights. This new guidance comes after EEOC Chair Charlotte A. Burrows, in October 2021, launched the agency’s Artificial Intelligence and Algorithmic Fairness Initiative to examine the use of AI, machine learning, and other emerging technologies in the context of federal civil rights laws.

On March 15, 2022, the Office of Federal Contract Compliance Programs (“OFCCP”) issued its first Directive under the Biden Administration.  Directive 2022-01, Pay Equity Audits (the “Directive”) makes clear that pay equity is at the forefront of the OFCCP’s enforcement agenda, and issues a shot across the bow in the Agency’s longstanding battle with contractors regarding whether internal pay equity analyses must be produced to the Agency during an audit. 

The Office of Federal Contract Compliance Programs (OFCCP) has announced the opening of its Affirmative Action Program (“AAP”) Verification Interface, which will be available through a new online Contractor Portal. The new system implements a new requirement that contractors and subcontractors (“contractors”) certify, on an annual basis, whether they have developed and maintained an AAP for each establishment and/or functional unit, as applicable. The portal also allows scheduled contractors to submit to their AAPs during compliance evaluations by the OFCCP. In FAQs issued on December 2, 2021,the Agency notes that it “implemented the Contractor Portal with the objective of ensuring that all covered contractors are meeting their obligation to develop and maintain written AAPs.”

On July 21, 2021, the Department of Labor (“DOL”) announced that it is seeking public comment on a proposed rule which would require federal contractors to pay a $15.00 per hour minimum wage by January 30, 2022. The rule would implement President Biden’s April 27, 2021 Executive Order 14026 (“EO 14026”), which mandated an increase in the minimum wage of workers on federal government contracts (and associated subcontracts). Currently, the minimum wage for workers on federal contracts is $10.95 per hour and the tipped minimum wage is $7.65 per hour.  EO 14026 builds on President Obama’s 2014 Executive Order 13658, which established a $10.10 per hour federal contractor minimum wage that would increase annually. The final rule covering EO 14026 is scheduled to be issued by November 24, 2021, and the new minimum wage obligations are slated to go into effect on January 30, 2022. 

On April 27, 2021, President Biden signed an Executive Order (the “EO”) increasing the hourly minimum wage for certain federal government contractors (and subcontractors) to $15.00 per hour ($10.50 per hour for tipped workers), beginning January 30, 2022. Beginning in January 2023, the applicable minimum wage rate will be adjusted annually based on the annual percentage increase in the Consumer Price Index.

The Trump administration continues to pursue enforcement of its Executive Order 13950 (the EO), while lawsuits filed by two civil rights groups’ work their way through federal courts. The EO bans federal contractors from utilizing training that “inculcates in its employees any form of race or sex stereotyping,” which is defined as “ascribing character traits, values, moral and ethical codes, privileges, status, or beliefs to a race or sex, or to an individual because of his or her race or sex.”