October 2025 Newsletter

The Department of Justice issued new guidance warning that certain DEI-related practices, such as race-based preferences, segregated programming, “diverse slate” hiring requirements, and proxy-based selection criteria, or training may violate federal antidiscrimination laws, signaling increased enforcement risk for federal contractors, grant recipients, and other covered employers.

Effective June 24, 2025, Rhode Island enacted the nation’s first law requiring employers to provide reasonable accommodations for employees experiencing menopause symptoms, prohibiting discrimination, forced leave, and denial of job opportunities based on menopause-related conditions.

In a series of significant federal appellate rulings, the Second Circuit held that the EEOC may continue investigating a charge even after issuing a right-to-sue letter and the filing of a private lawsuit; the Fifth Circuit lifted an injunction against the Pregnant Workers Fairness Act’s enforcement in Texas, rejecting arguments that proxy voting violated the Constitution’s Quorum Clause; and the Sixth Circuit diverged from other courts in holding that employers can only be liable for harassment committed by a customer under Title VII if they intended, or were substantially certain, that the harassment would occur.

Illinois enacted multiple employment-related laws affecting paid and unpaid leave entitlements, paid lactation breaks, discrimination procedures, wage reporting, and workplace accommodations. Several provisions impose new compliance obligations effective immediately or in the coming year.

U.S. DOJ Issues Guidance Warning Employers That Certain DEI Practices May Violate Federal Antidiscrimination Laws

The U.S. Department of Justice issued agency guidance aimed at reshaping how federal antidiscrimination laws apply to what it identifies as “Diversity Equity and Inclusion” (DEI) related policies and programs. Released on July 29, 2025, the guidance outlines DOJ’s legal position under the federal Title VI, Title VII, and Title IX of the Civil Rights Act, and warns that certain DEI practices may violate federal law, such as race-based preferences, demographic-driven hiring requirements, segregated programming, and the use of “proxy” criteria like “lived experience” or “overcoming obstacles” (when such neutral criteria are used as a proxy for race, sex, or other protected characteristics). Although non-binding, the guidance signals heightened enforcement risk for federal contractors, grant recipients, educational institutions, and other federally funded entities. DOJ also emphasized potential liability under the False Claims Act for entities that falsely certify compliance with civil rights laws, particularly where federal funds are involved.

The guidance outlines five categories of DEI practices that DOJ now considers unlawful or legally risky, including preferential treatment based on protected characteristics, race- or gender-based selection benchmarks, training programs that contain a “severe or pervasive use of presentations, videos, and other workplace training materials that single out, demean, or stereotype individuals based on protected characteristics,” and facially neutral policies used as stand-ins for race or sex. DOJ further urges employers to eliminate quota-based practices, ensure incusive access to workplace programs, activities and resources, and implement strong anti-retaliation protections. While the document does not ban many DEI efforts, it cautions that programs tied to demographic outcomes must be carefully structured to avoid triggering federal enforcement. DOJ also provided non-binding “best practices” and advised organizations to proactively review their compliance posture.

Rhode Island Bars Workplace Discrimination Based on Menopause Symptoms

In a first-in-the-nation law, on June 24, 2025, Rhode Island enacted a law amending the state’s anti-discrimination protections to prohibit employment discrimination based on menopause symptoms. Employers are now required to provide reasonable accommodations for workers experiencing menopause, similar to those already required for pregnancy and childbirth. The law also prohibits forcing employees to take leave if a reasonable accommodation can be provided, and bars denial of employment opportunities based on a refusal to accommodate menopause-related conditions.

The law imposes strict notice requirements, including updating workplace postings, notifying new hires starting June 24, 2025, and notifying all existing employees by October 22, 2025. Covered accommodations may include modified schedules, telework, additional breaks, temporary transfers, or light duty assignments. Employers must also provide written notice to employees within ten days of learning of a condition related to pregnancy, menopause, or similar medical needs. To ensure compliance and reduce legal exposure, Rhode Island employers will be reviewing their accommodation policies, updating required postings, and educating HR teams and managers on the expanded protections.
Read more: RI – Menopause Accommodation Law | House Bill 6161

U.S. Federal Courts Weigh in on EEOC Authority, Pregnancy Accommodation Law, and Employer Liability for Customer Harassment

In August 2025, three U.S. federal appellate courts issued significant decisions affecting employers’ obligations under Title VII of the Civil Rights Act and related federal laws. The rulings addressed the U.S. Equal Employment Opportunity Commission’s (EEOC) post-litigation investigative authority, the constitutionality of the federal Pregnant Workers Fairness Act, and the standard for employer liability when harassment is committed by a customer or other third party.

EEOC v. AAM Holding Corp. (2d Cir. Aug. 25, 2025): The Second Circuit held that the EEOC retains authority to investigate charges of discrimination even after issuing a right-to-sue letter and after the charging party has filed a private lawsuit. The court affirmed enforcement of an EEOC subpoena, emphasizing that Title VII requires the EEOC to complete investigations “so far as practicable,” which does not impose a strict cutoff. The ruling deepens a circuit split, aligning the Second Circuit with the Ninth and Seventh Circuits, and rejecting the Fifth Circuit’s contrary view that the EEOC’s investigative authority ends once litigation begins.
State of Texas v. Bondi (5th Cir. Aug. 15, 2025): The Fifth Circuit reversed a district court’s injunction that had blocked enforcement of the Pregnant Workers Fairness Act (PWFA) against the State of Texas. Texas had argued that the PWFA was invalid because it passed the U.S. House of Representatives using proxy voting during the COVID-19 pandemic, allegedly violating the Constitution’s Quorum Clause. The Fifth Circuit rejected that argument, holding that physical presence is not constitutionally required and that proxy voting was a permissible exercise of House rules.
Bivens v. Zep, Inc. (6th Cir. Aug. 8, 2025): In a departure from longstanding EEOC guidance and other federal circuit court precedent, the Sixth Circuit ruled that an employer can only be held liable for workplace harassment by a customer or nonemployee if the employer intended for the harassment to occur or was substantially certain it would result. Rejecting the negligence-based standard applied by most other circuits, the court emphasized that Title VII liability in such cases must be grounded in intentional discrimination and found that Zep, Inc. could not be held liable under this heightened standard. The ruling is currently binding only within the Sixth Circuit.
Read more: EEOC v. AAM Holding Corp. | State of Texas v. Bondi | Bivens v. Zep, Inc.

Illinois Enacts Multiple Employment Law Changes

On August 15, 2025, Illinois enacted a series of employment-related laws affecting leave, wage reporting, anti-discrimination procedures, and employee accommodations. Employers should be aware of these new obligations heading into 2026.

Illinois amended its Nursing Mothers in the Workplace Act to require covered employers to provide paid lactation breaks. Employers are also prohibited from reducing an employee’s rate of pay and from requiring an employee to use paid leave during the break. Effective January 1, 2026. See 2025 Ill. SB 212.
Illinois amended its Unemployment Insurance Act to provide that employers who refuse or fail to file new hire reports or monthly unemployment insurance wage reports may be enjoined from operating as a business. Effective January 1, 2026. See 2025 Ill. HB 3200.
Illinois enacted the Family Neonatal Intensive Care Leave Act, which requires covered employers to provide unpaid leave to an employee whose child is a patient in a neonatal intensive care unit. Employers with 16–50 employees must provide up to 10 days of leave, and employers with 51 or more employees must provide up to 20 days of leave. Effective June 1, 2026. See 2025 Ill. HB 2978.
Illinois amended its Human Rights Act to make it discretionary rather than mandatory that the state Department of Human Rights conduct a fact-finding conference in its investigation of an unlawful employment discrimination charge. The amendment also provides for civil penalties for each specific violation and each injured party. Effective January 1, 2026. See 2025 IL S.B. 2487.
Illinois amended its military leave law to permit, but not require, employees to use accrued paid leave during a period of active military service. Effective August 15, 2025. See 2025 Ill. HB 1362.
Illinois amended its Employee Blood and Organ Donation Leave Act to make part-time employees eligible for paid leave to serve as an organ donor. Effective January 1, 2026. See 2025 Ill. HB 1616.
Illinois amended its Family Military Leave Act to rename it the Military Leave Act and to require covered employers to provide up to 8 hours of paid leave per month to an employee who participates in a funeral honors detail at the funeral of a veteran. Effective August 1, 2025. See 2025 Ill. SB 220.