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EEOC Shifts Away from Disparate Impact Enforcement

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The Equal Employment Opportunity Commission (“EEOC”) is moving forward with a significant shift in workplace discrimination enforcement. By September 30, 2025, the agency seeks to administratively close all pending charges based solely on disparate impact theory, issuing “right to sue” letters that will send these cases directly into federal court. This move follows an April executive order, which instructed federal agencies to halt disparate impact enforcement “to the maximum extent possible.”  The EEOC frames the move as a broader realignment of federal enforcement priorities away from impact‑based theories and toward intentional discrimination. 

For those unfamiliar with the legal landscape, “disparate impact” addresses policies that appear neutral but disproportionately harm protected groups, such as hiring practices that screen out minority candidates, unnecessary degree requirements, or criminal background checks. Unlike disparate treatment cases that require proof of intentional discrimination, disparate impact claims focus on statistical patterns of harm.

The change in EEOC enforcement practices does not eliminate the disparate impact legal theory rooted in Griggs v. Duke Power and the Civil Rights Act amendments of 1991. However, the practical consequences are diverse. Traditionally, a plaintiff might benefit from administrative investigations that yield discoverable business records and vet employer defenses. With employers less likely to be subject to EEOC investigations and data gathering, cases will have to move abruptly into federal court, where plaintiffs must now shoulder the full burden of discovery and proof. Alternatively, the burden of investigation could fall upon comparable state agencies in jurisdictions that provide overlapping state remedies.

Nevertheless, Employers should not treat the EEOC directive as a license to cut compliance corners. They should continue to maintain and document disparate-impact analyses, job-relatedness defenses and validation studies for tests and standards. Administrative closure does not immunize against private suits or state enforcement.

Virginia Employment Lawyer

The Introduction of AI Into the Hiring Process

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From initial job postings to final hiring decisions, AI-driven tools are reshaping how companies evaluate and select employees. While these technologies promise unprecedented efficiency, they also introduce a complex web of legal and ethical challenges, chief among them the risk of algorithmic bias and discrimination.  The question is not whether AI can discriminate, but how to prevent it from doing so.

The legal theory of “disparate impact” is particularly relevant to AI hiring systems. Under this doctrine, employers can be held liable for discrimination even if they didn’t intend to discriminate, provided their practices have a disproportionate negative effect on protected groups. This means that an AI system that consistently screens out candidates from certain ages, genders, racial or ethnic groups could violate federal law, regardless of whether the algorithm explicitly considers those factors.  For example, AI may identify and use seemingly neutral data points that are, in fact, proxies for protected characteristics. A candidate’s zip code could be a proxy for their race or national origin.  Gaps in employment history, which can be a proxy for gender, may also be unfairly penalized. Because AI models “learn” from the data they are trained on, if that data reflects historical or societal biases, AI potentially can learn and perpetuate those same biases.

Employers are responsible for the outcomes of their hiring practices, regardless of whether those decisions are made by a human or an algorithm. The EEOC has issued guidance emphasizing that AI selection tools must not result in “disparate impact,” which occurs when a neutral policy or practice disproportionately disadvantages a protected group. The EEOC treats algorithmic tools as selection procedures” under Title VII, expects adverse impact monitoring and warns that employers can remain liable even when vendors design/administer the tool. The EEOC’s position is clear: an employer cannot evade liability by outsourcing their selection procedures.

A growing number of jurisdictions are enacting specific regulations for AI in employment. New York City’s law, for example, requires employers to conduct an independent bias audit of any automated employment decision tools. States like Illinois and Colorado have also passed laws requiring employers to prevent algorithmic discrimination and provide notice to applicants when using AI. Recent court decisions also establish that AI vendors can be held liable as “agents” of employers, representing a fundamental shift in liability. In Mobley v. Workday, a federal court allowed collective action to proceed based on allegations that a software company’s AI screening tools caused disparate impact against applicants 40 and older, and recognizing potential vendor liability under an employer “agent” theory.

Strategies for Employers

Given the significant legal risks, employers must be proactive in their use of AI. Here are critical steps to take:

  1. Conduct a Disparate Impact/Bias Audits: Before deploying any AI tool and on an ongoing basis, regularly audit its outcomes to ensure it is not disproportionately screening out protected groups. If a disparate impact is found, the tool must either be revised or validated as job-related and consistent with business necessity.
  2. Maintain Human Oversight: AI should be a tool to augment, not replace, human decision-making. Ensure that a human is “in the loop” and can review and override any automated decisions.
  3. Vet Your Vendors: Employers cannot escape liability by outsourcing. Before purchasing an AI tool, demand transparency from the vendor regarding their bias testing, data sources, and the algorithm’s decision-making process. Include contractual protections that hold vendors accountable for discriminatory outcomes.
  4. Provide Reasonable Accommodations: Ensure AI tools are accessible and offer alternative assessment methods for candidates with disabilities, as required by the ADA.
  5. Be Transparent with Candidates: Inform applicants and employees when AI is being used in the hiring process and explain how it will affect them.
  6. Develop Clear Policies: Establish clear internal policies on the ethical and legal use of AI in hiring and provide training to HR staff and managers on how to use these tools responsibly and identify potential bias.

The integration of AI into hiring processes represents a transitional moment in employment law and practice. The technology that was intended to eliminate human bias potentially creates new forms of systematic discrimination. Courts continue to apply traditional anti-discrimination principles to AI-powered hiring decisions, and the legal trajectory clearly favors expanded liability rather than reduced oversight. For employers, the path forward requires a fundamental shift in thinking about AI hiring tools. Rather than viewing them as neutral technological solutions, they must be understood as powerful systems that require active management.

A New Standard for Workplace Discrimination after Muldrow v. City of St. Louis

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Muldrow v. City of St. Louis, 601 U.S. 346 (2024), resets the bar for Title VII discrimination claims. The plaintiff, a police sergeant, alleged an involuntary transfer replaced her with a male officer and imposed less desirable duties, schedule changes, and loss of job privileges, though rank and pay stayed constant. The Eighth Circuit affirmed dismissal under a “material employment disadvantage” test, which the Supreme Court rejected as inconsistent with Title VII’s text and structure. The Supreme Court’s opinion resolves a long-standing circuit split over whether Title VII requires “significant” harm for discrimination claims that do not involve economic losses or formal demotions

In a unanimous decision, the Court held that an employee alleging a discriminatory transfer “must show some harm with respect to an identifiable term or condition of employment,” but that such harm “need not be significant” to violate Title VII. The Court rejected circuit rules demanding a “material employment disadvantage” or other heightened adversity showing, explaining that importing a significance test adds words that Congress did not enact into Title VII’s prohibition on discrimination “with respect to compensation, terms, conditions, or privileges of employment”.

Core standard clarified

Title VII plaintiffs must prove discriminatory treatment and a resulting identifiable injury to the job’s terms, conditions, or privileges, but the injury need only be some harm rather than a heightened “significant” or “material” harm. The Court emphasized that discrimination means being made worse off because of a protected characteristic, and nothing in the statute scales how much worse off one must be; requiring “significance” imposes hurdles contrary to the statute’s plain language.

What counts as “some harm”

The decision requires a tangible, job-related detriment—changes to duties, schedules, prestige, responsibilities, or privileges can qualify if they concretely alter terms or conditions. In Muldrow, the alleged harms included loss of specialized responsibilities and prestige, schedule changes, and loss of an unmarked take-home vehicle, illustrating how non-pay consequences can meet the threshold when tied to job terms or conditions. The Court did not catalog every qualifying harm or define “some” with precision, leaving lower courts to apply the standard case by case.

Broader implications

By lowering the degree-of-harm threshold, the Court made it easier for discrimination claims based on transfers to proceed past pleading and summary judgment, particularly where prior circuit precedent demanded “material” adversity. The ruling is not confined to transfers; its reasoning applies across Title VII discrimination claims so long as the plaintiff shows some injury to identifiable terms or conditions of employment caused by protected-class discrimination. The decision still may leave intact separate, higher adversity standards in retaliation cases, which many courts continue to frame as requiring “materially adverse” actions in that distinct context.

2025 Amendments to the Virginia Non-Compete Statute

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Effective July 1, 2025, Virginia will expand its restrictions on non-compete agreements, broadening the definition of employees protected from non-competition covenants. Under current law, Virginia Code § 40.1-28.7:8, employers already are prohibited from entering into or enforcing non-compete agreements with “low-wage employees,” defined as those earning less than the Commonwealth’s average weekly wage. This threshold figure adjusts annually and was set at $76,081 annually for 2025.


Under the statutory amendments (Senate Bill 1218), the new definition of “low-wage employee” now expands to include all employees classified as non-exempt under the Fair Labor Standards Act (FLSA), regardless of their earnings. Non-exempt employees typically are eligible for overtime. With the amendment, new non-compete agreements will be banned for any employee who does not qualify for an FLSA exemption (such as executive, administrative, professional, outside sales, or certain computer employees), even if they earn more than the average weekly wage. However, employees whose pay is primarily from sales commissions, incentives or bonuses remain excluded from the definition of “low-wage employee”.

Existing Non-Compete agreements in place prior to July 1, 2025 are not voided and still could be enforced if they meet other reasonableness tests. The law and these amendments do not prohibit nondisclosure agreements (NDAs) or agreements protecting trade secrets, confidential, or proprietary information, provided they do not function as de facto non-competes.

Supreme Court Lowers Bar for “Reverse Discrimination” Lawsuits

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In today’s (6/5/2025) Ames v. Ohio Dept. of Youth Srvcs. ruling, the U.S. Supreme Court’s unanimously made it easier for individuals from majority groups to bring workplace discrimination claims, often referred to as “reverse discrimination” lawsuits. The ruling involves a woman who alleged she was denied a promotion and later demoted because of her sexual orientation. The plaintiff argued that these decisions were motivated by bias against her as a heterosexual woman and that her employer favored LGBTQ employees. Previously, lower court had required members of a majority group to show not only the standard elements of a discrimination claim under Title VII of the Civil Rights Act of 1964, but also to provide additional evidence—so-called “background circumstances”—suggesting her employer was unusually likely to discriminate against majority group members. The Supreme Court concluded that the evidentiary standard for discrimination claims should be uniform, regardless of the claimant’s identity.

It’s important to note that the Supreme Court did not rule on whether Ames actually suffered discrimination. Instead, the justices focused solely on the legal standard required to bring such a case to trial. Ames’s lawsuit now returns to the lower courts for further proceedings under the new, less stringent standard.

Overtime Exemption Thresholds for Salaried Workers Set to Change in 2025

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The U.S. Department of Labor’s final rule on overtime exemptions, announced on April 23, 2024, is set to bring significant changes to the salary thresholds for exempt employees starting July 1, 2024, with further increases planned for 2025. This rule aims to extend overtime protections to millions of workers and update the regulations under the Fair Labor Standards Act (FLSA).

Key Changes

On July 1, 2024, the minimum salary threshold for executive, administrative, and professional employees to be classified as exempt from overtime rose to $844 per week or $43,888 annually. This marks a substantial increase from the previous threshold of $684 per week or $35,568 annually. As currently planned, an even more significant change is scheduled for January 1, 2025, when the salary threshold will further increase to $1,128 per week or $58,656 annually. Similarly, the highly compensated employee exemption increased to $132,964 on July 1, 2024, and is set to increase again to $151,164 on January 1, 2025.

Impact and Considerations

Assuming they take effect as scheduled, employers must carefully evaluate their workforce to identify roles that may be affected by the new thresholds. Some key considerations include:

  1. Reclassification: Employers may need to reclassify some exempt employees as non-exempt if their salaries fall below the new thresholds.
  2. Salary Adjustments: For employees near the threshold, companies might consider raising salaries to maintain exempt status.
  3. Compliance Costs: Businesses should anticipate increased labor costs, either through higher salaries or potential overtime payments.
  4. State Laws: Employers must also be aware of state-specific overtime laws, which may have higher thresholds or different requirements

Like all Agency regulations, final implementation may be challenged or delayed by court challenges or politics. As we near the implementation of the 2025 date, Employers should monitor U.S. Department of Labor updates to track the status of this pending change.

Preventing Workplace Harassment

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Workplace harassment remains a significant challenge for many organizations, with far-reaching consequences for both employees and employers. Proactive strategies are essential for creating safe, respectful, and legally compliant work environments. To prevent workplace harassment, it is crucial to foster a culture of respect and accountability. This involves not only setting clear behavioral expectations but also empowering employees to report concerns without fear of retaliation.

Understanding Legal Obligations

The legal landscape for workplace harassment is evolving, with significant recent developments emphasizing the importance of proactive measures. In Virginia, employers must comply with both federal and state laws. Key federal laws include Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, gender and sex, including sexual harassment. Virginia’s state laws reinforce these protections and can include additional requirements.

Notably, not all workplace harassment or bullying is illegal. Harassment is a form of employment discrimination that violates specific laws such Title VII or the Americans with Disabilities Act. For harassment to be considered unlawful, it must be unwelcome or unwanted, it must be severe or pervasive enough to create a hostile or offensive work environment for reasonable people, and it must relate back to a protected category or right. Isolated incidents and annoyances are generally not considered illegal, unless they are extremely serious. Additionally, the unwelcome conduct generally must be based on factors such as race, color, religion, sex, pregnancy, national origin, age or disability. Rude or offensive behavior that does not meet these standards may be discouraged and subject to discipline, though not necessarily unlawful.

Developing Comprehensive Anti-Harassment Policies

The foundation of any strategy to prevent workplace harassment is a comprehensive anti-harassment policy. This policy should clearly define what constitutes harassment, outline the procedures for reporting and investigating complaints, and specify the consequences for violators. Key elements of an effective policy include:
Clear Definitions: Define harassment broadly to include sexual harassment and other forms of discriminatory behavior. A company may also extend its policies to incorporate additional standards relating to bullying, threats of violence or similar behaviors.
Reporting Mechanisms: Provide multiple channels for employees to report harassment, ensuring confidentiality and protection from retaliation.
Investigation Procedures: Establish clear, fair, and prompt investigation procedures to address complaints.

Training and Education

Training is crucial in fostering a harassment-free workplace. Employers should implement regular training programs that educate employees about their rights and responsibilities, the company’s policies, and how to recognize and report harassment. Training should be:
Mandatory and Regular: Ensure all employees, including managers and supervisors, undergo regular training sessions.
Tailored to the Workplace: Customize training content to address specific workplace environments and challenges.

Foster a Culture of Respect

Building a respectful workplace culture goes beyond compliance with legal requirements. It involves fostering an environment where all employees feel valued and safe. Strategies to create such a culture include:

Leadership: Ensure that company leadership demonstrates a strong commitment to preventing harassment by modeling respectful behavior and actively promoting the company’s policies.
Employee Engagement: Encourage employees to participate in creating a positive work environment through open communication and involvement in policy development.
Zero-Tolerance Policy: Enforce a zero-tolerance policy for harassment consistently, ensuring that all complaints are taken seriously and addressed promptly.

Implementing Preventive Measures

Proactive measures are essential to prevent harassment before it occurs. These can include:

Regular Audits and Surveys: Conduct regular workplace audits and employee surveys to identify potential risks and areas for improvement.
Anonymous Reporting Systems: Implement anonymous reporting systems to allow employees to report harassment without fear of retaliation.
Monitoring and Evaluation: Continuously monitor the effectiveness of anti-harassment policies and training programs, making adjustments as needed based on feedback and incident reports.

Legal Compliance and Updates

Staying informed about legal developments is critical for compliance. Employers should:

Monitor Legislative Changes: Keep abreast of changes in federal and state laws and consult with legal experts to ensure policies and practices are up-to-date and legally compliant.
Documentation and Record-Keeping: Maintain thorough documentation of all harassment reports, investigations, and training activities to demonstrate compliance and support potential legal defenses.

Responding to Complaints

When harassment complaints arise, the response must be swift, fair, and thorough. Key steps include:

Immediate Action: Take immediate action to address complaints, including separating the parties involved if necessary.
Fair Investigation: Conduct a fair and impartial investigation, ensuring confidentiality and respect for all parties.
Appropriate Remedies: Implement appropriate remedies, including disciplinary action against perpetrators and support for victims.

Preventing workplace harassment in Virginia requires a comprehensive, proactive approach that combines strong policies, effective training, a respectful workplace culture, and continuous legal compliance. By implementing these strategies, employers can not only comply with legal obligations but also create a safer, more inclusive, and productive work environment for all employees.

dsgordonlaw.com

Recent Developments in U.S. Employment Law: Top 5 Issues for 2024

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As we move through 2024, several key developments in U.S. employment law are poised to impact employers and employees alike. Here are the top five issues shaping the landscape:

  1. Overtime Pay Expansion
    The Department of Labor (DOL) has proposed changes to the Fair Labor Standards Act (FLSA) that would increase the salary threshold for overtime pay eligibility. The new rule would raise the threshold to $55,068 annually, making an additional 3.6 million workers eligible for overtime pay. The rule, if implemented, will require employers to adjust their payroll practices to ensure compliance​.
  2. Non-Compete Agreements Under Scrutiny
    The Federal Trade Commission (FTC) is advancing a rule to ban non-compete agreements. This proposed rule aims to void existing non-compete clauses and prohibit future agreements. The rule has generated significant debate and legal challenges, with final decisions expected later this year. Employers should review their contracts to prepare for potential changes​.
  3. Joint Employer Status
    The National Labor Relations Board (NLRB) has revised the standard for determining joint employer status. The new rule, effective February 26, 2024, broadens the criteria to include indirect and reserved control over essential employment terms. This change means that businesses could face increased liability for labor practices of their contractors and franchisees​.
  4. Minimum Wage Increases
    Several states and localities have enacted minimum wage increases effective January 1, 2024. Employers need to adjust their payroll systems to comply with these new rates​.
  5. OSHA’s Expanded Reporting Requirements
    The Occupational Safety and Health Administration (OSHA) has introduced new reporting requirements for high-hazard industries. Effective January 1, 2024, businesses with 100 or more employees in certain sectors must submit detailed injury and illness records electronically. This rule aims to enhance workplace safety transparency and accountability​.

These developments reflect a broader trend towards greater worker protections and regulatory oversight. Employers should stay informed and proactive in adapting to these changes to ensure compliance and foster a fair and safe working environment.

New FTC Rule Targets Non-Compete Clauses: Key Implications and Ongoing Legal Battles

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The Federal Trade Commission (FTC) has introduced a transformative rule that fundamentally alters the landscape of non-compete agreements in the United States. Published in the Federal Register on May 7, 2024, the rule is set to take effect on September 4, 2024. This sweeping regulation prohibits employers from entering into non-compete agreements with most workers, aiming to eliminate what the FTC views as an “unfair method of competition.”


Overview of the Final Rule

The Final Rule broadly defines a non-compete clause as any employment term that prevents or penalizes a worker from seeking or accepting work with another employer or starting a business in the U.S. after their current employment ends. This applies not only to employees but also to independent contractors, externs, interns, and volunteers. The FTC’s prohibition targets both new non-compete agreements and existing ones, making them unenforceable after the effective date.

Prohibitions on Existing and New Non-Compete Agreements

While the rule applies comprehensively, it carves out a specific exception for “senior executives.” These are defined as individuals earning at least $151,164 annually and holding policy-making positions. Employers can maintain existing non-compete agreements with these senior executives, but cannot enter into new ones post-September 4, 2024. This exception, however, is quite narrow and applies only to those who meet stringent criteria regarding compensation and decision-making authority.

Noteworthy Exceptions

Bona Fide Sale of a Business: Non-compete clauses associated with the genuine sale of a business entity remain permissible. The FTC defines a bona fide sale as one conducted in good faith between independent parties with the opportunity for negotiation, excluding agreements tied to stock repurchase rights or mandatory redemption programs.

Other Post-Employment Restrictions: While the rule does not explicitly ban non-disclosure agreements or non-solicitation agreements, it prohibits any post-employment restriction that effectively functions as a non-compete. Thus, overly broad or onerous restrictions could be scrutinized under this rule.

Garden Leave Arrangements: These arrangements, where an employee remains employed and compensated during a notice period, may be allowed if they do not impose post-employment restrictions. Careful drafting is essential to ensure they do not act as de facto non-competes.
Pre-Effective Date Breaches: The rule allows for enforcement actions related to breaches of non-compete agreements that occur before the effective date.

Pre-existing Causes of Action: Employers can still enforce non-compete clauses if the cause of action related to the non-compete accrued before the rule’s effective date​

Notification Requirement

Employers are mandated to notify affected workers in writing that their non-compete clauses are no longer enforceable. This notice must be delivered individually by hand, mail, email, or text message before the rule’s effective date. The FTC has provided model notices to facilitate compliance with this requirement.

Ongoing Legal Challenges

The implementation of the Final Rule is not without contention. Since its publication, multiple lawsuits have been filed challenging the FTC’s authority. These legal battles argue that the FTC overstepped its constitutional and statutory authority. They also assert that non-compete agreements traditionally have been governed by state law. These challenges will likely result in prolonged litigation, creating uncertainty about the rule’s final implementation and enforcement​

Navigating Social Security Disability: Understanding Waiting Periods and Medicare Eligibility

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Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) are vital lifelines for individuals unable to work due to medical conditions. Understanding the nuances of these programs, including waiting periods and Medicare eligibility, is crucial for those seeking support.

SSDI Waiting Period:

For SSDI applicants, there’s a five-month waiting period before receiving benefits. This waiting period, however, doesn’t apply to SSI recipients. The waiting period begins on your alleged onset date, the day you claim your disability began. If proven, this date marks the start of the five-month waiting period. Should your onset date precede your application, the SSA subtracts five months from your past due benefit amount.

Certain conditions, like ALS or Lou Gehrig’s disease, waive the waiting period. Additionally, if you attempt to return to work and then find yourself unable to continue due to your disability, benefits can be reinstated without another waiting period, provided it’s within five years. Moreover, if you’re applying as the child of a disabled worker, you’re exempt from the waiting period.

Medicare Waiting Period:

Those receiving SSDI must satisfy a two-year waiting period for Medicare coverage, unless they’re 65 or older. For instance, if approved for SSDI at 64, Medicare coverage will commence at 65. However, if applying at any other age, the full two-year wait is necessary. Exceptions exist for life-threatening conditions like ALS or End-Stage Renal Disease (ESRD), where the waiting period is waived, and coverage begins sooner. These exceptions recognize the urgent need for medical care in such cases.

For legal assistance with a pending Social Security Disability Appeal, call attorney D. Scott Gordon at 804-440-6557 or visit dsgordonlaw.com