EEOC Halts Funding For State And Local Investigations Of Transgender Bias And Disparate Impact

June 11, 2025

 

What's New

The Equal Employment Opportunity Commission will no longer reimburse state and local agencies for investigating gender identity, transgender, or disparate impact claims. However, states may continue to fund such investigations on their own, and plaintiffs may still sue in federal court.

A May 20 memorandum from EEOC’s Office of Field Programs announced the policy shift, which applies retroactively to January 20, when President Trump’s second term began. This change aligns with President Trump’s executive orders restricting disparate impact theory (Executive Order 14281) and defining sex as strictly binary (Executive Order 14168).

What It Means

Workplace discrimination based on sexual orientation and gender identity is still prohibited under the U.S. Supreme Court’s ruling in Bostock v. Clayton County.

States and local jurisdictions can still investigate these claims using their own resources, but the loss of EEOC funding may hinder their enforcement efforts. States affected by the funding cuts could challenge this policy in court.

Employees can sue even if the agencies decline to enforce these types of claims, but it may be harder for them to prevail because they will not have whatever evidence the agency investigations would have revealed.

What You Should Do

CWC members should consult our State Standards Compliance resources for information about their state and local laws. Employers also must remember that individuals retain the right to sue under federal and state anti-discrimination laws.





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