Our Feed

In Part 1 of this series, the employment law experts at Fahey Schultz Burzych Rhodes PLC tackled critical updates to employment caselaw that impact the way employers need to handle certain types of employment discrimination issues. In Part 2, we will discuss the landscape of federal Executive Orders and what impact those may have on Michigan employers.

With every change in presidential administration comes with it a change in priorities. The current administration is no exception. Since January 2025, a litany of Executive Orders that are purported to be reshaping employers’ workplace obligations have signaled a potential narrowing of Title VII enforcement, suggesting a shift in how federal agencies will (and courts should) interpret and apply workplace discrimination protections. The full impact of these Orders remains uncertain, as implementation and judicial response will truly determine their practical effects.

EXECUTIVE ORDERS AND ACTIONS

First, please be aware that while Executive Orders may signal a narrowing of federal enforcement under Title VII, the Executive Orders cannot override the text of the law or judicial interpretations of it. Instead, the Executive Orders direct agencies to adjust their enforcement priorities, which may affect how discrimination claims are pursued. Agencies such as the Equal Employment Opportunity Commission (“EEOC”) (the agency that enforces federal anti-discrimination in employment laws), Department of Justice (“DOJ”), and the Office of Federal Contract Compliance Programs, now place less emphasis on cases supported solely by statistical disparities or policies that are facially neutral but may have a more substantial impact on protected groups, either intentionally or otherwise.

As a result, employers could see shifts in the types of investigation initiated and the guidance provided by these agencies, even though private litigation theoretically remains unaffected.

(1) Intended Roll-Back Of Disparate Impact Liability Theory

In terms of Title VII liability, Executive Order #14281 Restoring Equality of Opportunity and Meritocracy (April 23, 2025) is the most consequential. The Order revokes prior presidential approval for certain Title VII regulations that supported the use of disparate-impact liability, which is a legal theory that holds entities accountable for practices that unintentionally, but disproportionately affect protected groups. Taking the approach that disparate impact is inherently unlawful, the Order directs the EEOC to either cease or deprioritize enforcement of claims relying on disparate impact theory.

A September 15 internal memo from the EEOC that was leaked (but not released) to the press reportedly directed EEOC staff to discharge any complaints based on disparate-impact liability. Practically, the agency has continued to issue “right to sue” letters for claimants whose cases have been discharged, and plaintiffs can still bring private lawsuits based on disparate-impact liability. However, the EEOC will no longer pursue any disparate impact claims on behalf of complainants, even if those claims are a part of an intentional discrimination claim.

Executive Order #14281 signals a shift in federal policy toward organizations that emphasize group-based considerations over individual qualifications. Although this Order does not substantively change Title VII, it could lead to heightened review of hiring and promotion practices to ensure they align with merit-based principles. The Order also evidences this Administration’s focus on what it calls “unlawful” DEI policies.

Individuals still have access to the same theories of liability they have always had, but without federal agencies prioritizing enforcement of certain legal theories, they may have less access to resources to bring such claims. It is unclear how much an impact this will have from a practical perspective. Unless courts adopt this change in theories of liability, most employment litigation is done through private action anyway, and the de-prioritization from agencies like the EEOC may only have a marginal impact on recourse available to employees.

(2) Gender Identity Discrimination

Another area the administration is focusing on is gender-identity discrimination. Executive Order #14168 Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government, directs federal agencies to interpret “sex” solely as an immutable binary biological classification determined at conception. In short, it argues that the United States Supreme Court’s decision in Bostock v Clayton County, 590 US 644 (2020), which extended Title VII’s sex protections to gender identity, is “untenable.” Executive Order #14168 directs federal agencies to now construe the term “sex” for the purposes of Title VII claims to not include gender identity – in contravention of the Bostock decision of the Supreme Court. As a result, the EEOC has dropped several lawsuits it was maintaining on behalf of employees, including one in Michigan related to alleged gender identity discrimination at Culver’s locations.

(3) DEI Policies

Executive Order #14151 Ending Racial and Wasteful Government DEI Programs and Preferencing, eliminated all DEI policies and programs throughout the federal government. Although the Executive Order only applied directly to the federal government itself, many large employers did make news when they announced scaled back (or disavowed) DEI policies, including Meta, AT&T, Target, and Amazon.

Further, the EEOC has taken several steps indicating its desire to scrutinize DEI policies. On March 17, 2025, the EEOC Chair, Andrea Lucas, sent letters to high-profile law firms seeking information to better understand whether their firm’s policies resulted in race and sex based disparate treatment against white or male employees. Four of the firms entered into settlement agreements with the EEOC, even though there was no charge or complaint pending. As a part of these “settlements,” the firms admitted no wrongdoing, affirmed their commitment to “lawful merit based” hiring, promotion and retention practices, and agreed not to engage in unlawful discrimination or preferences-based on race, sex or other protected characteristics which were previously labeled as DEI programs.

On September 18, 2025, the DOJ launched an investigation into whether the City of Austin’s use of DEI policies violated Title VII.  The letter sent to the City specifically focused on the City’s Office of Equity and Inclusion, Equity Division which “works across all City departments…to build capacity and leadership in working from a racial equity lens,” and alludes to specific hiring policies that include “racial equity.” The investigation is still pending as of this publication, but this DOJ action signals the Administration’s active targeting of DEI policies and prioritization of these matters. We expect more investigations of this type from federal agencies, including the EEOC, for employers who maintain DEI policies that this Administration believes to be unlawful.

President Trump’s employment-focused Executive Orders are facing significant legal challenges, alleging things like First Amendment violations for infringing on the free expression of private entities, challenges arguing that the Orders are unconstitutionally vague, and that the Orders are unenforceable on the grounds of separation of powers (i.e., an overreach of the Executive Branch).

(4) Effects on the MDCR and Local Enforcement

These Executive Orders may also have an impact on how Michigan’s Department of Civil Rights (“MDCR”) processes claims made under a theory of disparate impact or those involving gender identity.

In response to Executive Order #14281’s directive to explore whether federal authority preempts state anti-discrimination law, the EEOC issued a memo to state civil rights agencies suggesting that the EEOC would no longer contribute any funds to investigations undertaken by those state agencies that might involve claims of disparate impact or gender-identity discrimination. That memo has not been released publicly, but state agencies representatives have confirmed receipt and confirm the message within it.

The MDCR has not released any update or guidance related to any potential rollback of gender identity discrimination or disparate impact liability. As of this publication, the MDCR apparently intends to maintain investigations related to those gender identity and disparate impact claims. It is not known whether the EEOC has followed through on its declaration that it will not financially support these investigations. If the proposed cut in funding is acted upon, it could undermine the MDCR’s ability to pursue and investigate disparate impact and gender identity claims, which the MDCR must investigate in maintaining adherence to Michigan’s civil rights law, the Elliott-Larsen Civil Rights Act.

CONCLUSION

Overall, at the federal level, executive actions have narrowed Title VII enforcement with federal agencies discharging and abandoning claims related to disparate impact and gender-identity discrimination. Based on developments at both the state and federal level, employers are encouraged to review their policies in line with the developments outlined in this Article. The U.S. Senate’s confirmation of commissioner Brittany Panuccio now means the EEOC has a quorum, which will permit it to approve certain litigation, and issue guidance and regulations. This, coupled with the fact that the DOJ has already circulated memos targeting DEI policies, means employers should be on the lookout for DOJ investigations and potential EEOC charges against employers who utilize DEI in hiring, promotion and retention.

The employment law experts at Fahey Schultz Burzych Rhodes PLC will continue tracking these matters and will update our clients as these developments emerge.

By: Thomas Forgione

This publication is intended for educational purposes only. This communication highlights specific areas of law and is not legal advice. The reader should consult an attorney to determine how the information applies to any specific situation.