Employment Law’s Latest Plot Twists

by Sarah T. Glaser

Federal employment law has seen several notable developments over the past year, many of them coming from federal agencies and the executive branch rather than Congress. The Equal Employment Opportunity Commission (“EEOC”) has changed its enforcement posture, the Department of Justice’s Office of Legal Counsel (“OLC”) has issued a significant opinion on disparate-impact liability under Title VII, and the Department of Labor’s 2024 overtime rule has been vacated, restoring the prior salary thresholds for the white-collar exemptions.

For employers, the main point is not that compliance obligations have disappeared. Title VII, the Americans with Disabilities Act (“ADA”), the Fair Labor Standards Act (“FLSA”), the Pregnant Workers Fairness Act (“PWFA”), and other employment statutes remain in effect. What has changed is the federal enforcement environment. Employers should pay attention to those shifts while continuing to document employment decisions, apply policies consistently, and evaluate risk under the statutes and case law that remain controlling.

DOJ Weighs in on Disparate Impact

One of the most significant recent developments is the June 9, 2026 opinion from the OLC addressing disparate-impact liability under Title VII.¹ The opinion was requested by EEOC Chair Andrea Lucas and asked whether the EEOC’s disparate-impact provisions, including the Uniform Guidelines on Employee Selection Procedures, are constitutional as currently interpreted and applied.²

Disparate-impact theory has long allowed plaintiffs to challenge facially neutral employment practices that disproportionately affect members of a protected group, even without proof of intentional discrimination. Classic examples include physical tests that exclude female employees and criminal background searches or credit checks that disproportionately exclude minority applicants. Employers typically defend the practice as based in business necessity. The theory began with the Supreme Court’s decision in Griggs v. Duke Power Co. and was later codified by Congress in the Civil Rights Act of 1991.³

The OLC opinion takes the position that the EEOC’s existing approach is unconstitutional because, in OLC’s view, it permits liability based on disproportionate adverse effects alone, without requiring a sufficient connection to intentional discrimination.⁴ The opinion also states that employment practices should generally be treated as job-related when they rationally serve a valid business purpose, that plaintiffs must identify the specific practice causing the disparity, and that plaintiffs must point to an equally effective alternative practice with less disparate impact.⁵

That is a significant shift in the federal government’s enforcement position, but it is important to be precise about what the opinion does and does not do. An OLC opinion binds the executive branch, but it is not a court ruling and does not bind federal courts. The Supreme Court has not held that disparate-impact liability is unconstitutional, and private plaintiffs may still bring disparate-impact claims. For now, the opinion primarily signals that federal agencies like the EEOC are unlikely to prioritize disparate-impact enforcement in the way they have in the past.⁶

For employers, this is not a reason to abandon careful review of hiring, promotion, testing, background-check, or other selection practices. The better takeaway is to make sure those practices are tied to actual job needs, applied consistently, and supported by clear documentation.

EEOC’s New National Enforcement Plan

The EEOC’s new National Enforcement Plan for fiscal years 2025 through 2029 reflects a similar shift.⁷ Approved on June 4, 2026, the plan replaced the prior Strategic Enforcement Plan and sets the agency’s enforcement priorities for the next several years.⁸

Several features are especially important for employers. First, the plan directs EEOC staff to eliminate the use of disparate-impact theories in investigations “to the maximum degree possible” and states that the agency will not commence, develop, or continue litigation advancing disparate-impact claims.⁹ Second, the plan identifies facially discriminatory policies, practices, and programs as priorities, including programs labeled as “diversity, equity, and inclusion” or similar terms.¹⁰ Third, the plan prioritizes cases involving recent Supreme Court precedent and unresolved questions of statutory interpretation.¹¹

For public employers, this matters because changes in EEOC priorities can affect how charges are investigated, conciliated, and referred. But employers should resist treating agency priorities as though they are law. The statutes remain in force, and courts may continue to evaluate claims differently from the current enforcement position of the EEOC.

Harassment Guidance Rescinded, But Harassment Law Remains

The EEOC also voted on January 22, 2026 to rescind its 2024 Enforcement Guidance on Harassment in the Workplace in its entirety.¹² The 2024 guidance had been the agency’s first comprehensive harassment update in more than twenty years and addressed harassment based on race, religion, disability, national origin, age, sex, sexual orientation, and gender identity.¹³ The guidance used current-day examples (such as remote work issues) and recent case law to outline the parameters of harassment law.

Before the rescission, a federal court in the Northern District of Texas vacated portions of the guidance addressing gender identity, including provisions related to repeated intentional misgendering and restroom access.¹⁴ After the EEOC regained a quorum, the Commission voted to rescind the full guidance, not just the provisions addressed by the court.¹⁵

The rescission does not eliminate employer obligations to prevent and correct unlawful harassment. EEOC Chair Lucas stated that rescinding the guidance does not give employers permission to engage in unlawful harassment and that federal employment laws and Supreme Court precedent remain in place.¹⁶ The Supreme Court’s decision in Bostock v. Clayton County also remains controlling law on Title VII’s protection against discrimination based on sexual orientation and gender identity.

The practical change is that employers now have less current EEOC-issued guidance on certain workplace issues, including what conduct rises to the level of actionable harassment. Those questions should be handled carefully, with attention to the facts, applicable court decisions, and the employer’s own policies.

Other Areas of Activity

Although the EEOC has shifted some priorities, it has not become inactive. Since January 2025, the agency has filed sixteen religious discrimination lawsuits and recovered more than $63 million on behalf of religious workers.¹⁷ That makes religious discrimination and religious accommodation an important area for employers to watch.

The PWFA also remains an active compliance focus. The PWFA requires employers with fifteen or more employees to accommodate known limitations related to pregnancy, childbirth, or related medical conditions, unless doing so would impose an undue hardship.¹⁸ Although a Louisiana federal district court vacated the portion of the EEOC’s PWFA rule requiring accommodation of elective abortions, the core PWFA accommodation obligation otherwise remains intact.¹⁹

The Department of Labor has also restored the 2019 salary thresholds for the executive, administrative, and professional exemptions under the Fair Labor Standards Act after the 2024 overtime rule was vacated.²⁰ The current federal threshold is $684 per week, or $35,568 annually, for white-collar employees, and $107,432 annually for highly compensated employees.²¹ Employers should remember that salary level is only one part of the exemption analysis; the employee’s actual job duties still matter.²²

Takeaways

Employers should continue reviewing selection procedures, documenting legitimate business reasons for employment decisions, and ensuring that supervisors know when to involve human resources or legal counsel. Accommodation requests, harassment complaints, religious accommodation issues, pregnancy related limitations, and classification questions should still be handled through ordinary, documented processes.

Federal agency priorities may change with administrations, but courts, private plaintiffs, and state laws remain part of the employment law landscape. In that environment, the best risk management tools remain familiar ones: clear policies, consistent application, good documentation, and careful attention to the facts before making employment decisions.

¹Opinion Letter on Constitutionality of Disparate-Impact Liability Under Title VII, 50 Op. O.L.C. _ (June 9, 2026), https://www.justice.gov/olc/media/1444871/dl?utm_medium=email&utm_source=govdelivery.
²Id.
³Griggs v. Duke Power Co., 401 U.S. 424 (1971).
⁴Opinion Letter on Constitutionality of Disparate-Impact Liability Under Title VII, 50 Op. O.L.C. _ (June 9, 2026), https://www.justice.gov/olc/media/1444871/dl?utm_medium=email&utm_source=govdelivery.
⁵Id.
⁶U.S. Equal Emp. Opportunity Comm’n, DIRECTIVES TRANSMITTAL NO. 600.001, Rescission of Strategic Enforcement Plan Fiscal years 2024-2028 and Replacement Thereof with National Enforcement Plan Fiscal Years 2025–2029 (June 4, 2026), https://www.eeoc.gov/sites/default/files/2026-06/NEP_-_signed.pdf.
⁷EEOC Release New National Enforcement Plan, U.S. EQUAL EMP. OPPORTUNITY COMM’N (June 4, 2026), https://www.eeoc.gov/newsroom/eeoc-releases-new-national-enforcement-plan.
⁸Id.
⁹Id.
¹⁰Id.
¹¹Id.
¹²EEOC Commission Votes to Rescind 2024 Harassment Guidance, U.S. EQUAL EMP. OPPORTUNITY COMM’N (Jan. 2026), https://www.eeoc.gov/newsroom/eeoc-commission-votes-rescind-2024-harassment-guidance.
¹³Id.
¹⁴Texas v. EEOC, 785 F. Supp.3d 170 (N.D. Tex. 2025).
¹⁵EEOC Commission Votes to Rescind 2024 Harassment Guidance, U.S. EQUAL EMP. OPPORTUNITY COMM’N (Jan. 2026), https://www.eeoc.gov/newsroom/eeoc-commission-votes-rescind-2024-harassment-guidance.
¹⁶Id.
¹⁷EEOC Delivers on Administration Priorities and President Trump’s Executive Orders, U.S. EQUAL EMP. OPPORTUNITY COMM’N (May 2026), https://www.eeoc.gov/newsroom/eeoc-delivers-administration-priorities-and-president-trumps-executive-orders.
¹⁸Position of Acting Chair Lucas Regarding the Commission’s Final Regulations Implementing the Pregnant Workers Fairness Act, U.S. EQUAL EMP. OPPORTUNITY COMM’N, https://www.eeoc.gov/wysk/position-acting-chair-lucas-regarding-commissions-final-regulations-implementing-pregnant.
¹⁹Louisiana v. EEOC, 784 F. Supp.3d 886 (W.D. La. 2025).
²⁰State of Texas v. U.S. Dep’t of Labor, No. 4:24-cv-468-SDJ (E.D. Tex. 2024).
²¹U.S. DEP’T OF LABOR, WAGE & HOUR DIV., Earnings thresholds for the Executive, Administrative, and Professional exemption from minimum and overtime protections under the FLSA, https://www.dol.gov/agencies/whd/overtime/salary-levels.
²²29 U.S.C. § 213(a)(1); 29 C.F.R. pt. 541.

Sarah Glaser is Managing Director and Chair of the Firm’s Employment Law Practice Group. Claire Wills is a student from the University of Houston Law Center. If you would like additional information or have questions related to these or other matters, please contact Sarah at 512.322.5881 or sglaser@lglawfirm.com.