EEOC activity report signals increased litigation risk

The EEOC's FY 2025 activity does more than recap agency performance. It signals future employment practices liability (EPL) exposures. Despite shifts in enforcement priorities under the current administration, the data tell a clear story: Claim activity is increasing, recoveries are growing and employers face an increasingly complex risk environment.

While charge filings remained relatively stable between FY 2024 and FY 2025, the agency continued to receive hundreds of thousands of inquiries from employees and applicants regarding potential workplace discrimination. From an employment practices liability perspective, charge activity remains a leading indicator of future litigation. Though not every charge leads to a lawsuit, a growing pipeline of administrative claims often drives increased defense costs, settlement activity and more litigation in the years ahead. This trend mirrors what many EPL insurers are currently experiencing across their portfolios, with claim frequency remaining elevated despite changing economic conditions.

Bigger recoveries signal greater exposure

Beyond increased claim activity, the amount of money being recovered through enforcement efforts has also increased. The EEOC secured approximately $41.4 million through litigation settlements and verdicts in FY 2025, up significantly from roughly $26 million in FY 2024.

A notable resolution involved a large university that agreed to pay approximately $21 million to resolve a commissioner-initiated charge alleging a pattern or practice of religious discrimination, national origin discrimination and harassment against Jewish employees. The matter underscores the agency’s willingness to pursue high-profile investigations involving workplace culture, protected-class harassment and systemic allegations.

These results also highlight a broader reality: Employment claims continue to become more expensive. Even when matters don’t proceed to trial, investigation costs, legal fees, business disruption and settlement values can create significant financial exposure.

A shift in enforcement priorities

A significant takeaway from FY 2025 is where the agency is directing its attention. The current EEOC has placed particular emphasis on:

• Religious discrimination
• National origin discrimination
• Race and sex discrimination associated with DEI initiatives
• Pregnancy-related discrimination and accommodation issues
• COVID-19 vaccine accommodation and exemption disputes involving religion and disability.

This marks a clear shift from many of the priorities emphasized during the prior administration. Religious discrimination, in particular, has become a major enforcement focus. The agency has repeatedly highlighted the need for employers to carefully evaluate religious accommodation requests and avoid adverse employment actions that could be viewed as discriminatory. Likewise, litigation involving religious and disability-based objections to COVID-19 vaccination requirements continues to work its way through courts and enforcement agencies.

Claims routinely arise from a breakdown in the interactive process. It’s imperative that employers engage with counsel and routinely review their accommodation processes, exemption request procedures and manager training programs.

What the litigation data reveals

While agency priorities tell part of the story, the actual lawsuits filed by the EEOC reveal where risk continues to emerge most frequently.

According to the agency's FY 2025 litigation data, disability discrimination, sex discrimination and retaliation allegations represented the most common bases asserted in lawsuits. Sex and pregnancy-related cases were particularly prevalent. These results reinforce several longstanding trends in EPL claims:

• Accommodation requests remain a significant source of disputes
• Retaliation allegations continue to accompany many discrimination complaints
• Pregnancy-related claims remain an area of growing exposure following enactment of the Pregnant Workers Fairness Act
• Employee terminations continue to generate scrutiny, especially when employers lack consistent decision-making processes

Systemic cases may be declining, but risk remains

One notable FY 2025 trend was a decline in systemic litigation activity. Multiple factors may explain the drop, including broader policy changes following President Trump's executive order directing federal agencies away from reliance on disparate impact theories in certain contexts. Nevertheless, employers should be cautious about interpreting fewer systemic filings as reduced exposure. Systemic investigations continue to produce significant recoveries and often target practices affecting broad groups of employees. It should also be noted that the executive order does not affect private litigation, or state law claims.

Large-scale hiring practices, promotion procedures, compensation systems, accommodation processes and workforce reductions remain areas where employers should periodically conduct internal reviews.

The bigger picture: EEOC data Is only part of the story

Federal charge activity tells only part of the employment litigation story. Many claims are filed through state and local fair employment practices agencies, some of which maintain broader protections than federal law. In addition, plaintiffs' attorneys continue to pursue workplace claims directly through state courts under an expanding array of state employment statutes. As a result, EEOC statistics should not be viewed in isolation. The overall employment liability environment remains active, even when certain federal filing categories fluctuate.

The employment liability landscape is also becoming increasingly complicated. Employers today must navigate:

• Increased charge activity
• Greater regulatory scrutiny
• Expanding accommodation obligations
• AI-driven employment decision-making
• Social media's ability to rapidly amplify workplace disputes
• Growing jury skepticism toward employers
• An increase in "nuclear verdicts" and large settlements

The introduction of artificial intelligence into recruiting, hiring, performance management and workforce analytics creates additional uncertainty. At the same time, workplace issues that once remained internal can now become public within hours through social media, creating both legal and reputational risk.

Rising verdict values and increasing defense costs continue to pressure the EPL insurance market. Employers should expect continued underwriting scrutiny and pricing pressure, particularly for organizations with prior claims activity, workforce culture issues, large employee populations or significant regulatory exposure.

Steps you can take to mitigate EPL risk

These measures can help you identify problems earlier, demonstrate more consistent decision-making and respond more effectively when a complaint or claim arises:

1. Review policies and procedures regularly. Update discrimination, harassment, retaliation, accommodation, hiring, promotion, termination and workforce-reduction practices to reflect changing federal, state and local requirements. Apply them consistently and document the reasons for employment decisions.
2. Strengthen accommodation and complaint-handling processes. Establish clear channels for employees to raise concerns, respond promptly and conduct fair, well-documented investigations. Managers and human resources teams should understand their responsibilities in the interactive process and be trained to recognize conduct that could lead to discrimination or retaliation allegations.
3. Provide targeted manager training. Focus training on accommodation requests, retaliation, performance management, terminations and other high-risk decisions. Consistent communication and coordination among human resources, legal counsel, risk management, insurers and defense counsel can also improve the management of claims when they arise.
4. Add safeguards around AI-assisted employment decisions. Inventory the tools used in recruiting, hiring, performance management and terminations. Assess them for potential bias, understand how vendors develop and test their systems, maintain meaningful human oversight and document who is accountable for final decisions.
5. Assess exposure before a claim occurs. Use claim data, workforce information and scenario analysis to identify company-specific risk drivers and evaluate potential loss severity. These insights can help you prioritize controls and make more informed decisions about limits, retentions and the overall cost of risk.
6. Reassess insurance protection. Review EPL coverage against the organization’s workforce profile, claims history, geographic footprint and emerging exposures. Confirm that limits and retentions remain appropriate, and understand where employment-related claims may fall outside other liability policies.

Looking ahead

The EEOC's FY 2025 results suggest that employment practices liability exposures are not diminishing. If anything, increasing charge activity points toward a growing pipeline of future litigation, while evolving enforcement priorities create new areas of scrutiny for employers.

The challenge now expands beyond compliance. Success will require proactively identifying emerging risks, adapting to changing enforcement priorities and maintaining workplace practices that can withstand scrutiny from regulators, plaintiffs' attorneys, juries and the court of public opinion.