Labor & Employment Developments Blog

On April 23, 2025, President Trump issued an Executive Order entitled “Restoring Equality of Opportunity and Meritocracy,” directing federal agencies to effectively end the use of “disparate impact” liability in enforcing anti-discrimination laws. This order marks a significant shift in how employers must assess their employment policies and practices, as well as how those policies and practices impact employees.

Over the course of the last year, employers have faced increased claims from employees testing what constitutes an actionable adverse action under the anti-discrimination provision of Title VII of the Civil Rights Act of 1964 (“Title VII”). Emboldened by the Supreme Court’s decision in Muldrow v. City of St. Louis, 601 U.S. 346 (2024), employees have alleged that common employment practices from performance improvement plans (“PIPs”) to negative performance reviews left them “worse off,” and thus, constitute actionable adverse employment actions under Title VII. These claims have caused many employers to reconsider their past practices and policies. 

Classifying a worker as an independent contractor rather than an employee can be one of the more complicated—and risky—decisions an employer can make, as misclassification can lead to serious legal and financial consequences. Once again, however, the proper standard for classifying a worker under the Fair Labor Standards Act (“FLSA”) is in flux.