Articles by Our Attorneys

Our August 2025 Employment Law Update highlights three major developments that could reshape employer liability and compliance obligations. From the DOJ’s crackdown on certain DEI practices, to the ALI’s controversial new sexual assault liability rule, to the Sixth Circuit’s break from EEOC harassment guidance, these shifts signal important changes every employer should be watching. 

DOJ Issues Strict Guidance Targeting DEI Practices, Raising Compliance Risks for Employers 

The U.S. Department of Justice (DOJ) has issued its most detailed guidance yet on diversity, equity and inclusion (DEI) programs, outlining practices it considers unlawful and signaling heightened scrutiny for employers and institutions that receive federal funding. Although the guidance is limited to these organizations, its reach could extend to the private sector through future EEOC enforcement. Released in a recent memo from Attorney General Pam Bondi, the guidance identifies potentially discriminatory practices and offers “nonbinding suggestions” for compliance.   

A central focus of the memo is “proxy” discrimination – the use of seemingly neutral criteria, such as cultural competence or geographic targeting, that in practice serve as stand-ins for protected traits like race or sex. The DOJ cautioned that such methods, along with prioritizing candidates from underrepresented groups, could amount to unlawful bias. 

The guidance also flagged “diverse slate” requirements, where employers commit to including candidates from specific backgrounds in hiring pools. The DOJ said these practices create unequal treatment and violate federal law, putting employers on notice that such initiatives may invite enforcement actions. 

Other key areas include DEI-related training sessions, which the DOJ warned against if they stereotype or segregate employees, and policies governing “intimate spaces” or athletic competitions, where the agency emphasized protections for sex-based privacy and opportunities. The DOJ repeatedly cited the Supreme Court’s 2023 Students for Fair Admissions decision, reiterating the Trump Administration’s application of that case into the world employment law.  

Employers may want to reassess their DEI policies, particularly those involving candidate selection and training, given the DOJ’s now-stricter interpretation of anti-discrimination laws. 

ALI’s New Sexual Assault Liability Rule Could Greatly Expand Employer Risk 

The American Law Institute (ALI) has approved a new and controversial provision in the Restatement of the Law Third, Torts that could dramatically expand employer liability for sexual assaults committed by employees. Known as the “Special Rule on Vicarious Liability for Sexual Assault,” the provision allows employers to be held strictly liable when four conditions are met: the employee’s role creates a foreseeable risk of assault; the victim is “particularly vulnerable”; the employer grants the employee power or authority over that individual; and the assault occurs during assigned work or within the employer’s control. 

This rule marks a sharp departure from the traditional doctrine, which has long treated sexual assault as categorically outside the scope of employment. Historically, employers have only been vicariously liable when misconduct somehow advanced their business interests – such as a company driver speeding to complete a job. By contrast, the ALI’s new approach attaches liability based on power dynamics and job conditions, not employer negligence or intent. 

Industries such as healthcare, education, hospitality, and entertainment could face significant new exposure, given the frequency of employee interaction with vulnerable populations. The rule could also eliminate traditional defenses, allowing plaintiffs to succeed even when employers complied with existing standards of care. 

It remains uncertain which courts will formally adopt this rule. Notably, Pennsylvania courts have declined to adopt the Third Restatement in other contexts such as products liability law, suggesting the possibility that the ALI Rule will not be adopted in this jurisdiction. 

However, even without formal adoption of the rule, employers can take proactive steps to mitigate risk based upon the metrics emphasized by the ALI rule. Helpful measures can include strengthening background checks, reinforcing workplace policies, enhancing monitoring and documentation, reviewing insurance coverage, and ensuring contracts clearly allocate liability. If courts embrace this rule, companies must be prepared for a legal landscape where strict liability replaces negligence as the governing standard in sexual assault cases. 

Sixth Circuit Breaks From EEOC, Limits Employer Liability for Customer Harassment 

The Sixth Circuit has adopted a notably strict approach to employer liability for harassment by customers, ruling that companies can only be held responsible if the companies intended for the customer harassment to occur. This decision in Bivens v. Zep Inc. diverges from decades of U.S. Equal Employment Opportunity Commission (EEOC) guidance and rulings from multiple other federal appeals courts. 

The case arose after Dorothy Bivens, a sales representative for Zep Inc., alleged she was locked in an office and propositioned by a client during a site visit. Although Zep reassigned the client after Bivens reported the incident, she was laid off soon after and claimed the termination was retaliatory and racially motivated. A federal judge granted summary judgment for Zep, and the Sixth Circuit affirmed. 

In rejecting the EEOC’s negligence-based framework – which holds employers liable if they knew or should have known about harassment and failed to act – the panel emphasized that courts are not bound by EEOC interpretations. Instead, it concluded liability exists only if the employer wanted or was substantially certain that harassment would occur. 

This stance on Title VII currently isolates the Sixth Circuit from other jurisdictions.  However, the decision – by judges who were all appointed by President Trump – may signal a narrowing of employer liability that could expand to other jurisdictions with more conservative jurists.  

Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment. Jeff also practices in commercial litigation as well as counsels businesses on commercial contract matters. 

In July 2025, federal actions on civil rights and labor policy made headlines, as Columbia University reached a record $21 million settlement over antisemitism claims, a federal court reversed job protections for a transgender teacher under Florida’s pronoun law, and the Department of Labor paused enforcement of an Obama-era rule expanding wage protections for home care workers. Get the details in this month’s employment law update. 

Columbia University Reaches Historic $21 Million Antisemitism Settlement with EEOC 

Columbia University has agreed to pay $21 million to resolve claims of antisemitic harassment against Jewish employees, marking the largest such settlement ever reached by the U.S. Equal Employment Opportunity Commission (“EEOC”), the agency announced. The deal addresses both individual complaints and a rare “commissioner’s charge” filed by acting EEOC Chair Andrea Lucas after the October 7, 2023, Hamas attacks on Israel, which reportedly led to increased harassment on campus. 

This EEOC agreement is part of a broader $221 million settlement Columbia reached with the Trump administration to address failures in protecting Jewish staff and students. While the university admitted no wrongdoing, it agreed to implement policy reforms aimed at combating antisemitism and reaffirmed its commitment to academic independence. 

Lucas emphasized that universities, as workplaces, must uphold civil rights laws and not allow antisemitism under the guise of free speech. She praised Columbia for establishing a substantial claims fund for affected employees. 

The EEOC called the resolution “historic,” noting it is the largest settlement for any religious discrimination case in nearly two decades. The case reflects a growing federal focus on antisemitism, reinforced by recent executive actions prioritizing investigations into religious harassment in educational institutions. 

11th Circuit Reverses Injunction Protecting Trans Teacher’s Job in Pronoun Case 

A federal appeals court has overturned an injunction that had allowed Florida high school teacher Katie Wood to keep her job while she challenges a state law banning public school employees from using pronouns or titles that don’t align with their biological sex. The Eleventh Circuit ruled 2–1 that Wood was unlikely to succeed on her First Amendment claim, finding that her use of “she/her” pronouns and the honorific “Ms.” in the classroom constituted government speech. 

The majority, both judges appointed by former President Trump, concluded that public school teachers speaking to students are acting in an official capacity. Under Supreme Court precedent, such speech isn’t protected under the First Amendment. Judge Kevin Newsom wrote that the ruling applies only to classroom interactions during instruction. 

In a strong dissent, Judge Adalberto Jordan, an Obama appointee, warned the majority’s logic could let the state mandate how teachers identify themselves, even forcing female teachers to use “Mrs.” or generic titles like “Teacher Smith.” He argued that personal pronouns aren’t inherently government speech and cited Supreme Court precedent supporting limited personal expression by public employees. 

The decision reflects growing legal tensions over free speech, gender identity, and state regulation in public education. 

The case is Wood v. Florida Department of Education et al., case number 24-11239, in the U.S. Court of Appeals for the Eleventh Circuit. 

DOL Halts Enforcement of Obama-Era Home Care Worker Rule 

The U.S. Department of Labor (“DOL”) announced it will stop enforcing a 2013 rule that expanded wage protections for certain home care workers under the Fair Labor Standards Act (“FLSA”), as it begins the process of rescinding the regulation. The Obama-era rule limited the ability of third-party agencies to claim exemptions from paying minimum wage and overtime to domestic workers providing companionship services. 

Under the original 1974 FLSA amendment, live-in domestic workers were exempt from overtime pay, and companionship workers were exempt from both minimum wage and overtime. The 2013 rule tightened those exemptions. 

In a field assistance bulletin, the DOL’s Wage and Hour Division said the pause is intended to ensure clarity during the ongoing rulemaking process. A proposal to roll back the rule was issued July 2, and public comment will guide the department’s final decision. 

Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment. Jeff also practices in commercial litigation as well as counsels businesses on commercial contract matters.