Multinationals weigh UK legal risks as US EDI enforcement shifts

The federal agency in the US responsible for enforcing workplace discrimination law - the Equal Employment Opportunity Commission  - has voted to rescind guidance that had expanded workplace protections, including in relation to harassment and LGBTQ workers. The move, reported by Reuters, highlights how US policy on workplace inclusion is shifting and is the latest example of why so many multinational employers are reassessing their approach to EDI. So, if US enforcement expectations are changing, what risks do UK employers face if they respond by cutting back on EDI at home? We’ll ask a diversity expert that question.

The decision by the Commission is the latest example of enforcement expectations shifting under the Trump administration. The guidance that has been rescinded wasn’t law, but it set out how the Commission would interpret and enforce existing anti-discrimination legislation, and it was often relied on by employers when shaping workplace policies and training.

Its removal sends a clear signal that, in the US, the enforcement bar around certain inclusion and harassment issues is being lowered in practice, even though the underlying legislation has not been repealed. That creates understandable pressure on multinational employers, particularly those with a significant US footprint, to review how visible or extensive their EDI programmes are. 

But that’s where the risk for UK employers begins. While US enforcement priorities may be shifting, the legal position in the UK has not followed the same path. The Equality and Human Rights Commission continues to emphasise employer responsibilities around discrimination, harassment and equality, and there has been no indication of any wholesale retreat from those expectations.

At the same time, the broader direction of UK employment law is towards strengthening, not weakening, protections. The Employment Rights Act and related reforms reinforce the importance of preventative steps and employer accountability, particularly in relation to workplace conduct and harassment. Against that backdrop, assumptions that EDI activity can simply be scaled back without consequence become far more risky.

And UK employment tribunals continue to scrutinise employer behaviour closely in this area, especially where harassment or discrimination claims arise. Training, policies, and other preventative measures often sit at the heart of whether an employer can successfully rely on the reasonable steps defence, and tribunals have been increasingly clear that outdated or purely tick-box training will not be sufficient.

There’s also a reputational and cultural dimension to consider. Highly visible rollbacks in the US have already attracted pushback, and employers operating in the UK are being watched by employees, candidates and other stakeholders who may question why US political developments are driving changes locally.

While it’s understandable that organisations are reassessing their position in light of US developments, the key question for UK employers is how to do that without creating new legal or reputational risks at home.

So, let’s get a view on that. Kate Dodd heads up Pinsent Masons’ D&I consultancy, Brook Graham, and earlier she joined me by video link. So, what’s the risk for UK employers if they start cutting back DEI because of US political developments?”

Kate Dodd: “So the risk is really a twofold risk. One is in relation to claims – so it's a litigation risk – and then the other is in relation to reputation. So taking each of those in turn. There is an increased risk of claims for employers who cut back on the provisions that they make, particularly in relation to training. There is all sorts of mandatory training that is required in the UK and across Europe, and those types of things haven't changed, and they're not going to change, and it's very important for an employer who thinks of that type of training as being voluntary, or something that they can opt in or out of, to look at that very carefully and to conduct an audit, to say, well, hold on, what of this is nice to have and what of this is mandatory? So it's there, it's required in order for us to meet our obligations as a reasonable employer. So for example, talking to employees about harassment, talking to employees about discrimination, bullying, etcetera, because there is a risk there that if that type of training, or if that kind of upskilling, is lost then there will be higher claims and we've already seen training in the spotlight. We've already seen a real direction of travel in the employment tribunals that say that tick box training, or training that is not regularly refreshed, is not going to be sufficient to meet the reasonable steps defence and, therefore, for an employer, or for an HR professional, who is being asked to change the training, or to pull away from what they have been doing, they need to go through that training really carefully to work out the essential parts to avoid legal liability versus the stuff that could be seen as more nice to have. Then secondly, as I said, it's reputational. There has been a real pushback in the US against businesses that are seen to be rolling over too readily, and that continues also to businesses who are seen to be moving too quickly because of their US presence and moving too widely. So I think there's certainly an understanding that businesses need to do what they need to do in order to continue to operate successfully in the US, but question whether or not that does need to extend into the UK, for example in the way that some businesses have done so. So not just, of course, in relation to the employees there, but also in relation to other stakeholders. So those two are the kind of the key things there. It's going to be the legal and then also the cultural side of things.”

Kate and her team at Brook Graham are currently working with a number of clients to help them to manage the risks around this issue and get the balance right. If this is something which affects your business and you would like help then please do contact Kate – her details on the screen for you.