Recent shifts within the executive branch have significantly reshaped the regulatory environment, introducing new compliance challenges and potential liabilities for employers. Concurrently, emerging developments such as the proliferation of pay transparency legislation and a growing wave of litigation related to algorithmic bias and AI-driven employment decisions underscore the need for organizations to remain agile and proactive. This white paper explores key trends and evolving risks in employment liability, offering insights to help companies navigate an increasingly complex legal landscape.

Shifting EEOC Priorities

The second Trump Administration has ushered in notable changes to the Equal Employment Opportunity Commission’s (EEOC) leadership and enforcement priorities. Andrea Lucas, the newly appointed Acting Chair of the EEOC, marked a significant pivot in the agency’s direction. Under Andrea Lucas’s leadership, the EEOC has begun reversing several initiatives from the previous administration and introducing new priorities that represent a marked departure from past enforcement goals. Employers should remain attentive to these changes and assess their policies accordingly.

EEOC’s Renewed Emphasis on Sex-Based Rights and Workplace Policies

Under the leadership of Andrea Lucas, the EEOC has announced a strategic shift in enforcement priorities, aligning with executive order 14168 issued on January 20, 2025, titled, Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government. A central focus of this shift is the defense of “the biological and binary reality of sex and related rights, including women’s rights to single-sex spaces at work.”¹

Lucas has expressed concern that requiring employers to allow restroom access based on gender identity may effectively eliminate single-sex workplace facilities and infringe upon the rights of female employees.² In response, the EEOC has begun reviewing and revising internal policies and public-facing materials to reflect a binary, biological definition of sex. This includes removing gender-neutral options from intake forms and discontinuing the use of pronoun identifiers in employee profiles.³

The EEOC has also signaled a strong commitment to enforcing the Pregnant Workers Fairness Act (PWFA), which took effect in June 2023. The PWFA “requires a covered employer to provide a ‘reasonable accommodation’ for an employee’s “known limitations related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions.”⁴ Notably, the PWFA sets a federal baseline standard and does not override more protective federal, state or local laws. These developments signal a broader regulatory trend that may impact compliance obligations and litigation risk.

Executive Order 14168 and EEOC Litigation Shifts

One of the most consequential developments under the new administration is the EEOC’s dismissal of several gender identity discrimination lawsuits. Following the issuance of Executive Order 14168, federal agencies were directed to recognize only two immutable sexes: male and female.⁵ In alignment with this directive, the EEOC filed motions to dismiss six active cases involving allegations of discrimination against transgender or gender non-conforming employees.⁶

While the EEOC is unlikely to pursue new gender identity discrimination claims under current leadership, employers should remain mindful of applicable state and local laws, which may still provide broader protections. Additional developments related to workplace DEI initiatives are addressed in a separate post linked here.⁷

Rise in Pay Transparency Laws and Litigation Exposure

Since 2019, state legislatures have increasingly adopted pay transparency laws to address wage gaps and promote equitable compensation practices. In 2024 alone, five states, including Hawaii, Illinois, Minnesota, Vermont, Maryland and Washington, D.C., enacted or expanded such laws.⁸ These regulations require employers to disclose salary ranges in job postings and provide employees with access to compensation data.⁷

Washington has emerged as the most litigious state in this area, with detailed requirements and a surge in class action lawsuits targeting noncompliant employers. In response to business community concerns, Washington amended its Equal Pay Act in May 2025 to include a “five-day window to fix job postings that are missing required benefits information.”⁹ However, most other states do not offer similar grace periods, making it essential for multi-state employers to align with the strictest applicable standards.

AI and Discriminatory Hiring Practices

In January 2025, the Trump Administration issued Executive Order 14179, Removing Barriers to American Leadership in Artificial Intelligence, which revoked the Biden-era directive that emphasized ‘equity and civil rights’ in AI development.” ^{10 11} The new order shifts focus towards developing AI systems “free from ideological bias or engineered social agendas,” and enhancing “America’s global AI dominance.”¹²

Following this shift, the EEOC and the Department of Labor rescinded prior guidance on AI in employment. However, employers must remain vigilant, as state and local regulations continue to evolve. For example, the New Jersey Attorney General recently issued guidance on the use of AI in hiring. At the same time, Illinois and Colorado enacted laws regulating how employers use AI in evaluating job applicants.13 14 Artificial intelligence legislation is expected to expand, and employers should identify the most stringent applicable laws in their jurisdiction. Compliance should include technology audits and training for HR and hiring teams to ensure lawful and equitable use of AI tools.

Conclusion

As the regulatory landscape shifts under the new administration, employers face evolving risks in employment liability at the federal and state levels. At the federal level, key developments include reorientating EEOC priorities, including a rollback of protections related to gender identity and a heightened enforcement of the Pregnant Workers Fairness Act. Simultaneously, at the state level, the rise of pay transparency laws and AI hiring regulations signals a growing complexity in local regulations. Employers must proactively assess and adapt their policies to remain compliant across jurisdictions.

Key Takeaways:

• EEOC Priorities: The EEOC is emphasizing “biological binary” sex-based rights and rolling back prior gender identity discrimination cases in line with Executive Order 14168.
• PWFA Enforcement: The Pregnant Workers Fairness Act is now a focus of EEOC litigation; employers must provide reasonable accommodations.
• Pay Transparency: States like Washington are aggressively enforcing pay transparency laws, with class actions and penalties on the rise.
• AI in Hiring: Despite federal deregulation, states such as New Jersey, Illinois and Colorado are implementing strict rules on AI use in employment decisions.
• Compliance Strategy: Employers should identify the most stringent applicable laws across jurisdictions and ensure HR policies, training and technologies are aligned.

1. Removing Gender Ideology and Restoring the EEOC’s Role of Protecting Women in the Workplace | U.S. Equal Employment Opportunity Commission
2. Commissioner Andrea R. Lucas’s Statement On EEOC Enforcement Guidance On Harassment In The Workplace | U.S. Equal Employment Opportunity Commission
3. Removing Gender Ideology and Restoring the EEOC’s Role of Protecting Women in the Workplace | U.S. Equal Employment Opportunity Commission
4. What You Should Know About the Pregnant Workers Fairness Act | U.S. Equal Employment Opportunity Commission
5. 2025-02090.pdf
6. EEOC seeks to drop a gender discrimination case over Trump’s orders | AP News
7. Balancing Act | The Benefits and Challenges of DEI in the Workplace – Brown & Brown
8. 2024 State-By-State Pay Transparency Laws: Key Insights For Employers
9. Relief from Steep Pay Transparency Penalties for Businesses in Washington State | Littler – JDSupra
10. FACT SHEET: President Biden Issues Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence | The White House
11. Trump’s AI Executive Order Revokes Biden’s AI Policies
12. Federal Register :: Removing Barriers to American Leadership in Artificial Intelligence
13. New Jersey’s AI Discrimination Guidance: Employer Compliance Stra
14. State and Federal Artificial Intelligence Regulations

 Nola Adedigba

Claims Analyst

Jane Hahn

Senior Managing Director

Jessica Merino

Executive Liability & Cyber Intern