Webinar: Managing Risks Within Your Employment Practices
Federal enforcement has shifted aggressively against perceived discriminatory DEI programs in 2026, exposing employers to rising reverse discrimination claims and regulatory scrutiny.
Key takeaways
- •The Trump administration's 2025 executive orders and EEOC leadership changes have prioritized enforcement against race- or sex-based preferences in employment decisions, rescinding prior guidance and targeting DEI initiatives.
- •Employers face heightened risks of litigation from majority-group plaintiffs alleging unlawful discrimination, alongside ongoing claims in areas like AI bias, pay transparency, and harassment under evolving laws.
- •Stable but potentially hardening EPL insurance markets signal increasing claim frequency in high-risk sectors, with premiums possibly rising modestly amid regulatory volatility and litigation costs.
Shifting Enforcement Priorities
The landscape for managing employment practices risks has tightened considerably in early 2026 following a series of federal actions. Executive orders issued in January 2025 directed agencies including the EEOC to end what they described as illegal discrimination under the guise of diversity, equity, and inclusion programs, emphasizing merit-based decisions and scrutinizing any use of protected characteristics in hiring, promotions, or other employment actions.
Under new EEOC Chair Andrea Lucas, the agency has consolidated authority, revoked 2024 harassment guidance portions seen as overreaching on gender identity issues, and signaled aggressive investigation of DEI-related practices that may violate Title VII. This includes outreach to major firms for information on their programs and public encouragement for white male employees to file claims if they believe they face discrimination.
These changes coincide with persistent and emerging risks. Artificial intelligence in hiring continues to draw scrutiny for potential bias, with prior EEOC settlements highlighting age and gender discrimination allegations. Pay transparency laws in various states add compliance burdens, while the Pregnant Workers Fairness Act, effective since 2024, generates new accommodation-related claims. Overall, employment practices liability claims have trended upward, driven by regulatory shifts, social dynamics, and higher litigation costs.
The stakes involve substantial financial exposure: defense and settlement costs for discrimination suits often reach six or seven figures, reputational damage can affect talent attraction in tight labor markets, and non-compliance risks EEOC investigations or private lawsuits. High-risk industries like tech, healthcare, and hospitality, or operations in states such as California and New York, face particular pressure, with some insurers adjusting rates modestly upward.
A key tension lies between maintaining inclusive workplaces—still valued by many employees and potentially beneficial for performance—and avoiding practices that regulators now view as preferential treatment. Employers must navigate this without clear safe harbors, balancing compliance with federal priorities against state-level requirements and workforce expectations.
Sources
- https://www.wtwco.com/en-us/insights/2026/02/employment-practices-liability-a-look-ahead-to-2026
- https://www.shrm.org/advocacy/2026-top-five-workplace-issues
- https://ogletree.com/insights-resources/blog-posts/eeoc-consolidates-power-signaling-aggressive-america-first-agenda-enforcement
- https://www.trustage.com/business/webinars-events/schedules
- https://www.federalregister.gov/documents/2025/01/29/2025-01953/ending-radical-and-wasteful-government-dei-programs-and-preferencing
- https://foundershield.com/blog/forecasting-2026-epl-insurance-pricing-trends