10 Big Employment Law Trends to Watch This Year

If you’re looking for employment law predictions for 2025, a new survey from global law firm Norton Rose Fulbright reveals the top employment law trends that should be on HR’s radar this year.

The 20th edition of the firm’s Annual Litigation Trends Survey aims to get a handle on what businesses are experiencing – and what they think is coming next. 

Here’s what stands out as some of the biggest employment law changes this year.

Just under half (45%) of survey respondents reported being involved in employment law and labor disputes last year. That’s down slightly from the previous year when 49% reported facing such litigation. 

Even so, that doesn’t mean businesses aren’t concerned about employment law disputes. More than a third (36%) of respondents expect to be more exposed to labor and employment litigation in 2025, the survey revealed.

Two Key Factors Behind Employment Law Risks in 2025

Two key drivers of this year’s concern about increased risk for labor and employment litigation are economic uncertainty and the upcoming change in administration, according to Kimberly Cheeseman, Co-Head of Litigation and Disputes at Norton Rose Fulbright.

“In the employment space, when there’s economic uncertainty, you often see employees filing more complaints or grievances because there’s a concern that employers will cut costs, or jobs may be on the line,” Cheeseman said.

“We’re also coming off an election year,” Cheeseman pointed out. “We often see an increase in employment litigation when there is a change of administration, and particularly when there’s a change in the associated political party because of changes that happen with employment agencies like the EEOC, NLRB, and Department of Labor.”

Employment Law Trends: What Should Be on HR’s Radar

Specifically, here are the types of employee lawsuits respondents expect to see in 2025.

1. Discrimination and Harassment Claims

Half (50%)  of respondents said discrimination and harassment issues are likely to expose employers to labor and employment law disputes in 2025, the survey revealed. That’s up from 44% in 2024.

While this may seem like familiar info for employers, there’s an important tidbit that employers need to pay close attention to, Cheeseman stressed.

As you know, DEI programs have faced serious backlash over the last year or so. And we’re also seeing a rise in so-called “reverse discrimination” lawsuits.

In October 2024, the U.S. Supreme Court agreed to hear Ames v. Ohio Department of Youth Services to determine whether a majority plaintiff must meet a heightened standard of showing to support a reverse discrimination lawsuit.

If the plaintiff prevails in Ames, Cheeseman predicted that we could see an increase in reverse discrimination lawsuits. So this is a case to keep on your radar. 

Mark your calendar: Oral arguments in the case are scheduled for Feb. 26, 2025.

2. Employee Data Management and Data Privacy Requirements

Nearly half (48%) of respondents said employee data management and data privacy issues are likely to increase in 2025. 

This is a 12% increase over last year when 36% of respondents expected to face data-related problems.

“Data privacy is a hot topic right now,” Cheeseman said. “By nature of being an employer and having employees, companies have to retain so much sensitive information on their workforce.”

In recent years, we’ve seen employment law cases where employees sued their companies after their private data was exposed in a cyberattack. 

As a result, there’s been an increased focus on how to manage employee data and privacy around that, Cheeseman said.

Keeping up with changing data privacy rules is another challenge. Over half (58%) said staying compliant with evolving cybersecurity and data privacy regulations could increase their risk this year, up from 43% in 2024.

3. Employee Classification, Gig Worker and Contract Laws

In addition, 42% of respondents said employee classification, gig worker and contract laws were likely to cause employers to face more litigation risks – that’s up slightly from 37% over last year’s report.

Even so, as the new administration takes office, we’re likely to see some changes to employee classification. As you may recall, during Trump’s first term, the DOL adopted a rule that made it easier for employers to classify individuals as independent contractors instead of employees. 

The Biden administration overturned the Trump-era rule and introduced a new rule for employee classifications. When Trump returns to the Oval Office, we’ll likely see a shift back to the more employer-friendly independent contractor rule.

4. Wage and Hour Issues – Including Pay Equity and Pay Transparency

More than one-third (37%) of respondents said they believe pay issues will open up employers to labor and employment law disputes, down from 39% last year.

With more jurisdictions adopting pay transparency laws, employers will have to track evolving legislation to stay on the right side of the law. If you’re looking for best practices for pay transparency, check out the Top 10 Pay Transparency Actions for Employers in 2025.  

5. The Use of AI in Hiring and Other Employment Decisions

Not surprisingly, the survey highlighted an 8% increase in concerns about the use of artificial intelligence (AI) in hiring and other employment decisions.

Specifically, 36% of respondents said AI use may lead to increased labor and employment law claims, up from 28% last year.

This increasing concern makes sense, Cheesman noted, pointing to a recent Goldman Sachs study that determined that roughly two-thirds of current jobs are exposed to some degree of AI automation. 

“In short, employers are turning to AI to improve efficiency, employee performance and even to increase diversity,” Cheesman said. But this strategy has risks.

For example, Mobley v. Workday, Inc., a federal court in California allowed a disgruntled job seeker to proceed with a class-action lawsuit against an HR technology vendor, Cheeseman explained. The lawsuit accuses Workday, a popular HCM platform used by more than 10,000 companies, of AI hiring discrimination based on race, age and disability.

This is an important case to monitor in 2025, as both AI and HR technology are being widely adopted to streamline HR processes.

6. Disability Accommodations

Just over one-third (34%) of respondents said disability accommodation issues are likely to make employers more exposed to labor and employment law disputes over the next year. That’s down slightly from 36%.

This expectation aligns with data recently released by the EEOC. 

In FY 2024, the agency filed 111 merit lawsuits. Of those, 48 included employment law claims under the Americans with Disabilities Act (ADA). Put another way, 43% of EEOC lawsuits included disability claims last year. 

The agency, through its conciliation process, has also negotiated some hefty ADA settlements for employees and applicants who were denied accommodations by employers. It’s logical to conclude this trend will continue.

7. Regulatory Scrutiny

And 30% of respondents expect increased regulatory scrutiny to contribute to heightened exposure to labor and employment law risk over the next year. That’s a 7% jump from last year when just 23% of respondents expressed the same concern.

Additionally, 73% said the U.S. Supreme Court’s decision to overturn the Chevron doctrine will create greater uncertainty in regulated industries, potentially triggering new legal challenges.

“Post-Chevron, who knows what enforcement is going to look like,” an associate general counsel for a water treatment company commented. “This is a setback for regulators, to be sure.”

With a new administration set to retake the White House in just a few days, questions are arising about whether this heightened regulatory environment is expected to continue, Mayling C. Blanco, Deputy General Counsel, Compliance at  Norton Rose Fulbright pointed out. And that’s adding further complexity to employers’ compliance efforts. So it is another key area to watch.

8. Paid Sick and/or Family Leave Requirements

The survey revealed that 30% of respondents believe paid leave laws could prompt more legal action, up slightly from 27%.

This is another growing area of employment law, so the concerns make sense.

As states and municipalities continue to pass paid family and medical leave laws, more employers must comply at the federal, state and local levels. 

Moreover, three states – Alaska, Missouri and Nebraska – will enact paid sick leave laws in 2025, joining the District of Columbia and 15 other states that require covered private employers to provide paid sick leave to eligible workers.

9. Varying Workplace Requirements and Regulations Across Jurisdictions

More than a quarter (29%) of respondents said juggling employment law compliance issues across jurisdictions will likely result in more claims. That’s up a bit from 24% last year.

Many years ago, California was the lone big player in major state regulation and legislation as it relates to employment law, Cheeseman pointed out. But that’s not the case anymore.

Now, more states — and municipalities — are passing labor and employment legislation so compliance with federal, state and local employment laws has become more difficult.  

Take pay transparency, for example. On Jan. 1, new pay transparency legislation went into effect in Illinois and Minnesota. And three more states will be enacting similar legislation later this year. As more jurisdictions pass varying legislation, multistate employers will have to figure out how to comply with a hodgepodge of laws.

10. Unionization, Collective Bargaining and Worker Efforts to Organize

Almost one-fourth (22%) of respondents said they expected increased exposure to legal risks from unions, collective bargaining and worker efforts to organize – that’s up from 19% last year. 

Of course, the impending arrival of President-elect Donald Trump in the Oval Office may reduce this concern – at least to some degree.

For example, Trump is expected to replace NLRB General Counsel Jennifer Abruzzo and will likely reverse some of the board’s pro-union decisions that came under Abruzzo’s leadership. 

Also Worth Noting: Whistleblower Complaints

The survey also asked respondents about the DOJ’s Corporate Whistleblower Pilot Program, which launched in August 2024. 

Under the pilot program, a whistleblower who provides the government with original and truthful information about corporate misconduct that results in a forfeiture may be eligible for a monetary award, Blanco explained. This creates a huge incentive for the reporting of perceived corporate misconduct.

A significant number of respondents (63%) said they expect the pilot program to increase whistleblower reports. And 17% of respondents said they expected whistleblower complaints to increase the risk of employment law claims. That’s a five-point increase from last year when only 13% of respondents shared similar concerns.

Labor and Employment Law Disputes By Industry

The report also examined respondents’ expected risk of labor and employment claims across various industries. Here’s how many respondents from various industries said they expected an increase in labor and employment law disputes:  

• Food and beverages (52%)
• Technology (47%)
• Retail (38%)
• Healthcare (33%)
• Real estate and construction (32%)
• Logistics and transportation (31%)
• Financial services (28%)
• Energy (26%), and
• Consumer markets (23%),

Rising Legal Costs

Eight in 10 respondents said they were increasingly concerned with the growing prominence of so-called “nuclear verdicts” – unexpectedly high jury verdicts exceeding $10 million. Here are a few examples:

• A $58 million jury verdict for a workplace injury – a California man broke his foot while working at a train manufacturing yard.
• A $35 million jury verdict for an ADA claim – a truck driver in Nebraska alleged he was not hired because he is deaf.
• A $25.1 million jury verdict for unfair pay – a former food and beverage manager in Texas alleged she was paid less than her male colleagues due to the “boy’s club” culture at the company.
• An $11.25 million jury verdict for retaliation – a Black fitness instructor in New York alleged she was fired after she complained about a co-worker’s racist and sexually inappropriate comments.

In light of these massive awards, it’s not surprising that a vast majority of respondents (92%) said settling employment law disputes before trial is important. 

Trump 2.0: More Guidance for 2025

The upcoming change in administration adds more complexity and will likely reshape the legal landscape in 2025.

For an analysis of the upcoming legislative changes impacting HR this year, don’t miss our upcoming webinar, “Trump’s Agenda & HR: Understanding Legislative Actions and Preparing for Impact,” for actionable strategies.