Author: Gerald L. Maatman, Jr.

By Gerald L. Maatman, and Jennifer A. Riley

Duane Morris Takeaway: In 2025, Artificial Intelligence – AI – continued to influence class action litigation on multiple fronts. First, we saw a growth of class action lawsuits targeting AI, including in the copyright area and employment space, as well as the securities fraud area with claims of “AI washing.” Second, we saw an increasing number of courts and lawyers err in their use of AI to generate documents filed on dockets across the country and encountered numerous examples of the ways in which AI is continuing to impact the efficiencies that underlie the litigation process.

DMCAR Editor Jerry Maatman discusses this trend in detail in the video below:

1. AI Provided Raw Material For Class Action Lawsuits

AI has been an accelerating force in class action litigation as a source of claims stemming from the development, use, and promotion of AI technologies. In 2025, some of those filed claims or ongoing claims included claims stemming from alleged copyright infringement, algorithmic bias or discrimination, and securities fraud.

On the copyright front, courts issued key decisions, including divergent decisions on whether using copyrighted works to train generative AI models constitutes “fair use” under the Copyright Act. In copyright cases, the plaintiffs typically allege that a developer of a generative AI tool violated copyright laws by using publicly available copyrighted works to train and inform the output of the AI tools. In Tremblay v. OpenAI, Inc., No. 23-CV-3223 (N.D. Cal. June 13, 2024), for instance, the plaintiffs alleged that OpenAI trained its algorithm by “copying massive amounts of text” to enable it to “emit convincingly naturalistic text outputs in response to user prompts.” The plaintiffs alleged these outputs included summaries that were so accurate that the algorithm must have collected and retained knowledge of the ingested copyrighted works in order to output similar textual content. The plaintiffs typically invoke the Copyright Act to allege that the defendant willfully made unauthorized copies of thousands of copyrighted works, generating damages up to $150,000 per copyrighted work for willful infringement, and, therefore, to seek billions in damages.

The $1.5 billion settlement reached in Bartz, et al. v. Anthropic is a landmark settlement and a prime example. In that suit, three authors filed a class action lawsuit against Anthropic claiming that Anthropic had downloaded millions of copyrighted books from “shadow libraries” like Library Genesis and Pirate Library Mirror to train its AI systems. In June 2025, Judge William H. Alsup of the Northern District of California denied Anthropic’s motion for summary judgment on the issue of fair use in a split-the-baby decision. The record showed that Anthropic downloaded more than seven million books from pirate sites but also bought and scanned millions more. The court held that Anthropic’s use of legally acquired books for AI training was protected fair use but that downloading and keeping pirated copies was not, noting that a developer that has obtained copies of books “from a pirate site has infringed already, full stop.” In August 2025, Judge Alsup granted the plaintiffs’ motion for class certification, sua sponte defining the class to include “all beneficial or legal copyright owners of the exclusive right to reproduce copies of any book” in the datasets that met his criteria. With tens of billions of dollars on the line, the parties promptly reached a settlement for $1.5 billion, the largest settlement of any class action in 2025.

Notably, shortly after Judge Alsup’s decision on summary judgment, Judge Vince Chhabria of the U.S. District Court for the Northern District of California reached a different conclusion in Kadrey, et al. v. Meta Platforms, Inc., No. 2023-CV-03417 (N.D. Cal. June 25, 2025). In that case, 13 authors, mostly famous fiction writers, sued Meta for downloading their books from online “shadow libraries” and using the books to train Meta’s generative AI models (specifically, its large language models, called Llama). The parties filed cross-motions for partial summary judgment regarding fair use. The court rejected the plaintiffs’ argument that “the fact that the AI developer downloaded the books from shadow libraries and did not start with an ‘authorized copy’ of each book gives them an automatic win.” The court held that, because Meta’s use of the works was highly transformative, to overcome a fair use defense, the plaintiffs needed to show that the AI model harmed the market for the plaintiffs’ works. Because the plaintiffs presented no meaningful evidence of market dilution, the court entered summary judgment for Meta on the fair use defense.

On the employment front, Mobley, et al. v. Workday, Inc., No. 23-CV-770 (N.D. Cal. May 16, 2025), continues to reign as one of the most watched and influential cases. In Mobley, the plaintiff, an African American male over the age of 40, who alleged that he suffers from anxiety and depression, brought suit against Workday claiming that its applicant screening tools discriminated against applicants on the basis of race, age, and disability. The plaintiff claimed that he applied for 80 to 100 jobs, and despite holding a bachelor’s degree in finance, among other qualifications, did not get a single job offer. The district court granted the defendant’s motion to dismiss on the ground that plaintiff failed to plead sufficient facts regarding the supposed liability of Workday as a software vendor for the hiring decisions of potential employers. In other words, the plaintiff failed to allege that Workday was “procuring” employees for its customers and merely claimed that he applied for jobs with a number of companies that all happened to use Workday.

On February 20, 2024, the plaintiff filed an amended complaint alleging that Workday was an agent of the employers that delegated authority to Workday to make hiring process decisions or, alternatively, that Workday was an employment agency or an indirect employer. Plaintiff claimed, among other things, that, in one instance, he applied for a position at 12:55 a.m. and his application was rejected less than an hour later. Judge Rita F. Lin granted in part and denied in part Workday’s motion to dismiss the amended complaint. The court reasoned, among other things that the relevant statutes prohibit discrimination “not just by employers but also by agents of those employers,” so an employer cannot “escape liability for discrimination by delegating [] traditional functions, like hiring, to a third party,” and an employer’s agent can be independently liable when the employer has delegated to the agent “functions [that] are traditionally exercised by the employer.” The court noted that, if it reasoned otherwise, and accepted Workday’s arguments, then companies could “escape liability for hiring decisions by saying that function has been handed to over to someone else (or here, artificial intelligence).”

The court opined that, given Workday’s allegedly “crucial role in deciding which applicants can get their ‘foot in the door’ for an interview, Workday’s tools are engaged in conduct that is at the heart of equal access to employment opportunities.” The court also denied Workday’s motion to dismiss the plaintiff’s disparate impact discrimination claims reasoning that “[t]he zero percent success rate at passing Workday’s initial screening” combined with the plaintiff’s allegations of bias in Workday’s training data and tools plausibly supported an inference that Workday’s algorithmic tools disproportionately rejected applicants based on factors other than qualifications, such as a candidate’s race, age, or disability. Thereafter, the court conditionally certified a collective action of all individuals aged 40 and over who applied for jobs using Workday’s platform and were rejected. In doing so, it authorized plaintiff to send notice of the lawsuit to applications nationwide. This litigation has been closely watched for its novel case theory based on artificial intelligence use in making personnel decisions and, given its success to date, is likely to prompt tag along and copycat litigation.

On the securities front, over the past three years, plaintiffs have filed dozens of lawsuits alleging that various defendants made false or misleading statements related to AI technology or related to AI as a driver of market revenue or demand, including claims that companies overstated their AI capabilities, effectiveness, or revenue generation in a practice known as “AI washing.” For instance, on April 17, 2025, the plaintiff Wayne County Employees’ Retirement System filed suit against AppLovin Corporation, No. 25-CV-03438 (N.D. Cal.), alleging that, among other things, the company falsely attributed its financial success to its enhanced AXON 2.0 digital ad platform and the use of “cutting edge” AI technologies to match advertisements to mobile games. In the complaint, the plaintiffs claim that the company’s revenue instead stemmed from manipulative ad practices, such as forced, silent app installations and that, upon release of short-seller reports disclosing the alleged practices, the company’s share price declined more than 12%.

Because investors have shown a willingness to pay a premium for shares of companies that appear positioned to capitalize on the effective use of AI, such statements have had the tendency to boost share prices. When projections fail to materialize, however, and share prices decline, plaintiffs are poised to take advantage.

In another example, plaintiffs filed a securities class action against Apple in the Northern District of California alleging that Apple made misleading and false statements regarding Siri’s generative AI features. The plaintiffs allege that Apple, at its annual Worldwide Developers Conference and on earnings calls, made claims that its AI solution called Apple Intelligence would create a more advanced and capable Siri. The plaintiffs allege that Apple continued to maintain that these features would arrive in early 2025 until March 2025 when it admitted that “[i]t’s going to take us longer than we thought.” The plaintiffs allege that, in the wake of these announcements, Apple’s share price dropped almost $47.

In sum, with AI continuing to flourish, the implications of its development, use, and advertisement are providing the raw material for creative plaintiffs’ class action lawyers. We should expect to see an upward trend of key decisions and new cases in 2026 and beyond as this burgeoning area of the law continues to expand.

2. AI Continued To Impact The Litigation Process

As legal professionals on both sides leverage AI to attempt to increase efficiency and gain a strategic advantage, examples of improper use abound. Rarely a day passes without a headline reporting attorney misconduct. To date, much of the AI misuse has centered on attorneys submitting or courts generating filings and legal briefs with fake citations. So-called “AI hallucinations” can take the form of citations to cases that do not exist or, even worse, the attribution of incorrect “hallucinated” holdings or quotations to existing opinions.

Bar associations have compiled dozens if not hundreds of instances of attorneys misusing generative AI in complaints, legal memoranda, expert reports, and appellate briefs. Perhaps more disturbing, these examples are joined by at least two instances of courts withdrawing decisions due to the incorporation of AI-generated contend.

Such conduct has led to severe sanctions, including fines and suspensions for violation of ethical duties, as well as (presumably) terminations. To date, claims of overbilling for such AI-generated worked product have not been made public, and lawyers continue to reiterate and train that AI is a tool and not a substitute for the application of legal analysis and judgment.

At the same time, AI is becoming an asset in the hands of more cautious connoisseurs who are taking advantage of its efficiencies for projects involving data analytics, document reviews, and form generation. Its use has become transformative in the settlement administration process where it has exposed vulnerabilities in the claims administration process by, for example, generating thousands of entries that dilute legitimate claims, thereby reducing legitimate recoveries.

Similar to classrooms where teachers use AI to detect AI, recipients are responding with their own AI-based tools to detect irregularities.

As the technology continues to evolve, it continues to impact that class action space in particular, which is particularly susceptible to mass-generated claims, demand letters, and form complaints. As a result, we are likely seeing the tip of the iceberg in terms of AI’s influence on the class action space.

By Gerald L. Maatman, Jr. and Jennifer A. Riley

Duane Morris Takeaway: In 2025, case law continued to develop in fragmented ways among the federal circuits on issues material to plaintiffs’ ability to maintain and certify class actions, enhancing the likelihood of and incentive for forum shopping. In terms of standards governing conditional certification of FLSA, EPA, and ADEA matters, 2025 saw the crystallization of four distinct standards, ranging in the burdens applicable to plaintiffs, as well as in the review and consideration of the evidence presented. A second chasm relates to courts’ approaches uninjured class members, or the notion that each member of a putative class as defined might not have experienced a concrete injury sufficient to provide such individual standing to pursue a claim. A third chasm reflects courts’ divergent views relative to personal jurisdiction and whether a court that cannot exercise general personal jurisdiction must have a basis for specific personal jurisdiction as to each putative class member.

DMCAR co-editor Jennifer Riley explains this trend in detail in the video below:

These fractures have made forum selection more consequential than ever. Plaintiffs are increasingly skewing their filings toward federal circuits where they anticipate a greater likelihood of a favorable outcome, including toward jurisdictions where judges are taking a more lenient approach to certification or a more permissive view on issues like standing and jurisdiction. To date, efforts to persuade the U.S. Supreme Court to take up cases that would resolve these splits have failed, so we expect they will continue to drive uncertainty in class-related litigation through 2026.

1. Courts Disagree Over The Standards For Conditional Certification Of Collective Actions

The standards for conditional certification under the FLSA, EPA, and ADEA, continue to diverge such that district and appellate courts are applying any of at least four distinct approaches. These statutes provide little guidance as to the process they intended to incorporate for so-called conditional certification. In 29 U.S.C. § 216(b), the FLSA provides that “[a]n action . . . may be maintained against any employer (including a public agency) . . . by any one or more employees for and in behalf of himself or themselves and other employees similarly-situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become a party and such consent is filed in the court in which such action is brought.” 29 U.S.C. § 216(b). Courts have interpreted such language to authorize a process by which courts grant “conditional certification” of a collective action, authorize notice to persons who fall within the defined group, and permit those persons to “opt-in” by returned their consent forms. Courts, however, have disagreed over the standards plaintiffs must satisfy to initiate this process. In other words, how and when should a court determine if such persons are “similarly-situated”? 

To date, federal courts that have addressed these issues have developed or adopted one of four primary schemes.

First, for many years, court accepted the familiar and lenient two-step standard set forth in Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987), and the U.S. Court of Appeals for the Second Circuit expressly adopted this standard in Scott v. Chipotle Mexican Grill, Inc., 954 F.3d 502, 515 (2d Cir. 2020), while the First, Third, Tenth, and Eleventh Circuits had done the same by “acquiescence” without express adoption. See Kwoka v. Enterprise Rent-A-Car Company of Boston, LLC, 141 F.4th 10, 22 (1st. Cir. 2025); Zavala v. Wal Mart Stores Inc., 691 F.3d 527, 534 (3d Cir. 2012); Thiessen v. General Electric Capital Corp., 267 F.3d 1095, 1105 (10th Cir. 2001); Hipp v. Liberty National Life Insurance Co., 252 F.3d 1208, 1219 (11th Cir. 2001)

Under Lusardi, a court considers at “step one” whether a plaintiff has made a “modest factual showing” based on his or her evidence, which often comprises one or more declarations, and may or may not even look at competing evidence submitted by the employer. If the court determines that a plaintiff has satisfied his or her “lenient” burden, the court authorizes notice. At the close of discovery, the employer then can move to decertify the conditionally certified collective action, and the court will consider based on the evidence whether the plaintiff has demonstrated that the persons who joined the action are similarly situated.

The Ninth Circuit clarified in Campbell v. City of Los Angeles, 903 F.3d 1090, 1114 (9th Cir. 2018), that the plaintiff must show he or she is similarly situated with respect to “some material aspect” of his or her claim and not merely in some way that is irrelevant to the claims asserted.

Second, in the first example of a court revisiting and examining the text of the FLSA, the Fifth Circuit prompted the ensuing split with its decision in Swales v. KLLM Transportation Services, LLC, 985 F.3d 430, 443 (5th Cir. 2021). In that decision, the Fifth Circuit rejected Lusardi’s two-step approach outright and directed district courts to “rigorously enforce” the FLSA’s similarity requirement at the outset of the litigation in a one-step approach. “[T]he district court needs to consider all of the available evidence” at the time the motion is filed and decide whether the plaintiff in fact has “met [his or her] burden of establishing similarity.” Id. at 442-43.

Third, in the wake of Swales the Sixth Circuit likewise revisited the standard in Clark v. A&L Homecare & Training Center, LLC, 68 F.4th 1003 (6th Cir. 2023). The Sixth Circuit rejected Lusardi, but also declined to adopt Swales. Instead, the court likened the standard to one comparable to the standard for obtaining a preliminary injunction. An employee must show a “strong likelihood” that others are similarly situated to the employee before the district court may authorize the plaintiff to send notice of the action. The Sixth Circuit left open the standard by which the court should consider a potential motion for decertification down the line. Id. at 1011.

Fourth, most recently, the Seventh Circuit addressed the same issue in Richards, et al. v. Eli Lilly & Co., 149 F.4th 901 (7th Cir. 2025). The Seventh Circuit rejected the Lusardi framework but declined to go as far as Swales or Clark. Instead, the Seventh Circuit ruled that “a plaintiff must first make a threshold showing that there is a material factual dispute as to whether the proposed collective is similarly situated” to secure a ruling authorizing notice, and an employer “must be permitted to submit rebuttal evidence” for the court to consider. Id. at 913. The court declined to set any bright line rule as to whether a court should decide the similarly situated question in a one or two step approach, noting that the analysis is not an “all-or-nothing determination.” Id. at 913-914.

The U.S. Courts of Appeal for the District of Columbia, Fourth, and Eighth Circuits have not yet opined on the proper method, leaving district courts to exercise their discretion. These divergent standards have influenced forum selection, as plaintiffs significantly have decreased the number of collective actions they pursue in the Fifth and Sixth Circuits in particular, in favor of filing in forums that apply more lenient standards.

2. Courts Continue To Disagree Over Standing And Personal Jurisdiction

Courts continue to disagree regarding the impact and treatment of uninjured class members, a key issue that remains unresolved. It is axiomatic that individuals who did not suffer injury as the result of the defendant’s conduct cannot maintain claims, and courts do not have the power to award them relief. As the U.S. Supreme Court reiterated in its seminal 2020 decision in TransUnion, “Article III does not give federal courts the power to order relief to any uninjured plaintiff, class action or not.” TransUnion LLC v. Ramirez, 141 S.Ct. 2190, 2208 (quoting Tyson Foods v. Bouaphakeo, 577 U.S. 442, 466 (2016) (Roberts, C.J., concurring)). In this respect, the “plaintiffs must maintain their personal interest in the dispute at all stages of the litigation . . . And standing is not dispensed in gross; rather, plaintiffs must demonstrate standing for each claim that they press and for each form of relief that they seek.” Id.

Despite this admonition, courts continue to grapple with the application of these concepts in the class certification context and, in particular, they disagree over whether to certify a class, a plaintiff must demonstrate that every putative class member has standing, or, stated differently, must demonstrate that the class excludes those individuals who did not suffer harm. In TransUnion, the Supreme Court expressly left open the question of “whether every class member must demonstrate standing before a court certifies a class.” Id. at n.4. Such a requirement has significant consequences for the class action landscape.

As a result, in January 2025, the U.S. Supreme Court granted a petition for certiorari in Laboratory Corporation Of American Holdings v. Davis, 145 S.Ct. 1608 (2025). In Davis, plaintiffs filed suit on behalf of a putative class of legally blind patients alleging that Lab Corp. violated the ADA by failing to make its self-service check-in kiosks accessible. In May 2022, the district court certified a broad class of that included all legally blind individuals were denied full and equal enjoyment of its goods and services due to “LabCorp’s failure to make its e-check-in kiosks accessible,” emphasizing that individualized damages questions do not defeat the predominance requirement. Lab Corp. sought interlocutory appeal, arguing that plaintiffs’ class definition swept in uninjured individuals who would not have used kiosks anyway. The Ninth Circuit granted the petition and affirmed. Applying Ninth Circuit precedent, the appellate court reasoned that Rule 23 permits certification of a class even when the class “‘potentially includes more than a de minimis number of uninjured class members.’” The U.S. Supreme Court granted certiorari in January 2025. Following briefing and oral argument, the U.S. Supreme Court declined to resolve the issue and dismissed the writ as improvidently granted. Justice Kavanaugh authored a dissent from such decision noting that, if given the opportunity, he would hold that “[f]ederal courts may not certify a damages class under Rule 23 when, as here, the proposed class includes both injured and uninjured class members.”

Without guidance from the U.S. Supreme Court, lower federal courts have continued to reach varying decisions on the issue. For instance, on July 17, 2025, the Fifth Circuit issued its decision in Wilson v. Centene Management Co., 144 F.4th 780 (5thCir. 2025). The plaintiffs in this case asserted breach of contract claims against the defendant insurance companies, alleging that it issued inaccurate provider lists and thereby caused the plaintiffs to pay artificially inflated premiums for access to providers who were not available. The district court denied class certification finding that the plaintiffs lacked standing. On appeal, the Fifth Circuit held that, at the class certification state, a plaintiff need only demonstrate his or her own standing, and the district court erred in its determination of the plaintiff’s standing, which it reached through a merits-based evaluation of the plaintiff’s expert.

The Seventh Circuit addressed the question in Arandell Corp. v. Xcel Energy Inc., 149 F.4th 883 (7th Cir. 2025). In that case, the plaintiffs brought a putative state-wide class action alleging that defendants engaged in a price-fixing conspiracy to manipulate natural gas prices. The Seventh Circuit noted that, to the extent defendants suggested that, before class certification, the plaintiffs must show all class members suffered some injury, “that is not correct.” It reiterated its prior holding that that “a class should not be certified if it is apparent that a great many persons who have suffered no injury at the hands of the defendant,” it clarified that “[t]here is no precise measure for ‘a great many.’  Such determinations are a matter of degree and will turn on the facts as they appear from case to case.”

In contrast, the Fourth Circuit took a different approach in Freeman v. Progressive Direct Insurance Co., 149 F.4th 461 (4th Cir. 2025). After an automobile collision, the plaintiff’s insurer provided her a payment based on the “actual cash value” of her car that it determined using a “projected sold adjustment.” Although the plaintiff accepted the payment, and did not contest the valuation, she filed suit for breach of contract. Although the district court certified a class, the Fourth Circuit reversed. The Fourth Circuit explained that, to succeed on her claim, the plaintiff needed to show that her insurer paid her less than the actual cash value of her vehicle and, likewise, that her insurer paid members of the class less than the actual cash value of their vehicles, regardless of whether the “projected sold adjustment” was used in determining that value. Yet, the class was defined to include anyone who was paid “compensation for the total loss of a covered vehicle, where . . . the actual cash value was decreased based upon Projected Sold Adjustments.” Thus, the class was defined to include insureds who accepted the insurer’s offer of payment, insureds who negotiated a higher payment, and insureds who invoked the appraisal process in the policy, simply because in each circumstance the insurer made its calculation using the Projected Sold Adjustment. “Yet, none of those could claim injury because each agreed to resolution of the loss. . . This characteristic of the certified class alone justifies reversal of the class certification order.”  

Similarly, courts have continued to disagree regarding the scope of a court’s personal jurisdiction over the defendant in the class action context. In short, the U.S. Supreme Court decided Bristol Myers Squibb v. Superior Court, 137 S. Ct. 1773 (2017), in 2017 and ruled that a court must have a basis for exercising personal jurisdiction over a defendant for each claim it adjudicates. In that case, which involved a mass tort action, the U.S. Supreme Court concluded that the existence of similar claims asserted by plaintiffs who purchased a drug in California did not provide a court with personal jurisdiction over the defendant for purposes of adjudicating claims asserted by plaintiffs who purchased the same drug outside of California.

Again, despite this clear ruling, courts have continued to grapple with the application of these concepts in the class certification context and, in particular, they disagree over whether, to certify a class that includes nationwide class members, a plaintiff must demonstrate that the court can exercise personal jurisdiction over the defendant for purposes of resolving each of their claims or, stated differently, must demonstrate that each claim arises from or relates to a foreign defendant’s contacts with the forum state.

On July 1, 2025, the Ninth Circuit became the latest to address this issue. In Harrington, et al. v. Cracker Barrel Old Country Store, 142 F.4th 678 (9th Cir. 2025), the Ninth Circuit ruled that the U.S. Supreme Court’s decision in Bristol-Meyers applies to collective actions brought under the FLSA. The Ninth Circuit held that, when a plaintiff relies on specific personal jurisdiction as the basis for personal jurisdiction over the defendant in an FLSA collective action, district courts must assess whether they can exercise specific personal jurisdiction over the defendant on a claim-by-claim basis. This means that the claim of every opt-in plaintiff must arise out of or relate to the defendant’s activities in the forum state, and opt-in plaintiffs with no connection to the forum cannot rely on the connections of the named plaintiffs to establish personal jurisdiction.

In sum, courts continue to disagree as to their power in the class action context and the extent to which a procedural rule like Rule 23 can alter otherwise fundamental concepts of subject matter and personal jurisdiction for putative class members. Given the implications of such rules, we can anticipate that such questions will continue to influence forum selection for plaintiffs and continue to fuel uncertainty for defendants through 2026.

By Gerald L. Maatman, Jr. and Jennifer A. Riley

Duane Morris Takeaway: Government enforcement litigation is similar in many respects to class action litigation. In lawsuits brought by the U.S. Equal Employment Opportunity Commission (EEOC), as well as the U.S. Department of Labor (DOL), the government asserts various claims on behalf of or as a representative of numerous allegedly impacted individuals. These cases typically present numerous claimants, as well as significant monetary exposure.

The video below featuring DMCAR editor Jerry Maatman explains this trend in detail:

While plaintiffs in private party class actions must meet the requirement of Rule 23 to secure class certification, the law does not require the government to clear such hurdle. For example, systemic “pattern or practice” lawsuits brought by the EEOC follow a framework established by the U.S. Supreme Court in International Brotherhood Of Teamsters v. United States, 431 U.S. 324 (1977), rather than Rule 23. Nonetheless, EEOC systemic lawsuits present similar issues and similar risk for corporate defendants.

While the EEOC and DOL historically have been among the most aggressive litigants in terms of their pursuit of claims, the Trump Administration has had a profound impact on these agencies and their enforcement agendas. President Trump ran for election on a platform that runs counter to many of the “emerging issues” on the EEOC’s priority list, foreshadowing a realignment of litigation priorities.

The Trump Administration has kept its promise of less government oversight and regulation and has shifted the priorities of these agencies to more closely match the administration’s objectives.

1. Litigation And Settlement Trends

In fiscal year (FY) 2025, which ran from October 1, 2024, to September 30, 2025, the EEOC’s litigation enforcement activity stalled significantly as compared to previous years.

By the numbers, the EEOC filed a total of 94 lawsuits, far fewer than it filed at the height of filings in FY 2018, when it filed 217 lawsuits.

The decline in enforcement activity shows that, for President Trump’s second term in office, companies should expect the EEOC to be less aggressive as compared to past regimes in terms of the volume of enforcement lawsuits filed.

Each year, the EEOC’s fiscal year ends on September 30, and the agency engages in a sprint to the finish as it files a substantial number of lawsuits during the month of September. In FY 2025, the EEOC filed 94 lawsuits. Of these, it filed 35 – or 37% of the annual total – during September, the last month of its fiscal year. The overall number represents a decrease from prior years, but the filings followed a somewhat similar pattern. In FY 2024, the EEOC filed 110 lawsuits. It filed 67 of these actions, or more than 60%, during the month of September. By comparison, in FY 2023, the EEOC filed 144 lawsuits, with a similarly heavy September tranche of 35.We track the EEOC’s filing efforts across the entire fiscal year from its beginning in October through the anticipated filing spree in September.

Unlike other fiscal years, during 2025, the EEOC’s filing patterns were consistent in the first half of FY 2025, peaking with 14 lawsuits in January. Filings again slowed until the summer, when the EEOC filed another 14 lawsuits in June 2025. Thereafter, lawsuit filings dipped until the “eleventh hour” in September.  The following shows filing activity by month:

2. Lawsuit Filings By EEOC District Office

In addition to tracking the total number of filings, the litigation filing patterns of the EEOC’s 15 district offices are telling. Some districts tend to be more aggressive than others, and some focus on different case filing priorities. The following chart shows the number of lawsuit filings by each of the EEOC district offices in FY 2025.

In FY 2025, Philadelphia and Chicago led the pack in filing the most lawsuits, with 11 each, followed by Indianapolis with eight filings, then Atlanta, Birmingham, Houston, and Phoenix with seven filings, and Charlotte, New York, and Miami each with six filings.

St. Louis had five filings, Los Angeles and San Francisco had four filings, and Dallas had three filings. Memphis had the lowest amount with only two filings.

As in FY 2024, Philadelphia proved itself as a leader in EEOC enforcement filings. Chicago remained steady with 11 filings, the same as FY 2024. St. Louis (two filings in FY 2024) and Phoenix (four filings in FY 2024) showed increases in filing numbers as compared to FY 2024.

Other offices comparatively lagged in enforcement activity. Atlanta (11 filings in FY 2024), Indianapolis (nine filings in FY 2024), and Houston (eight filings in FY 2024) showed slight decreases in enforcement activities. Across the board, filings generally became more even for district offices compared to FY 2024, but filing activity decreased.

3. Lawsuit Filings Based On Type Of Claim

The types of claims the EEOC filed in FY 2025 provides a window into its shifting strategic priorities.

When considered on a percentage basis, the distribution of cases filed by statute skewed significantly in favor of Title VII cases when comparing FY 2025 to prior years.

The EEOC again based most of its claims on alleged violations of Title VII, but these claims comprised 50% of its filings in FY 2025, compared to 58% of its filings in FY 2024. Those numbers represent a significant decrease from FY 2023 and FY 2022, when Title VII claims represented 68% of the EEOC’s filings in FY 2023 and 69% of its filings in FY 2022.

Overall claims for alleged violation of the ADA made up the next most significant percentage of the EEOC’s FY 2025 filings – totaling 31.5%. This share again shows a decrease from prior years when ADA claims comprised 42% of filings in FY 2025, 34% of filings in FY 2023, and 37% of filings in FY 2021. The percentage is marginally higher than FY 2022, when ADA filings on a percentage basis comprised 29.7% of all filings.

The EEOC filed more claims for alleged violation of the ADEA in FY 2025. It filed nine ADEA cases in FY 2025, as compared to six ADEA age discrimination cases in FY 2024, but it filed 12 ADEA age discrimination cases in FY 2023 and seven in FY 2022.

As in FY 2024, this past year the EEOC pursued claims under the Pregnant Worker’s Fairness Act. It filed six cases, compared to three in FY 2024. In addition, the EEOC filed slightly more claims for alleged violation of the Pregnancy Discrimination Act in FY 2025. It filed five such cases, as compared to four in FY 2024.

Notably, the EEOC refrained from filing any claims for alleged violation of the Equal Pay Act in FY 2025 and any cases for alleged violation of the Genetic Information Nondiscrimination Act.

The following graph shows the number of lawsuits filed according to the statute under which they were filed.

The grounds for such claims are reflect the stated priorities of the Trump Administration, including by reflecting a decreased emphasis on targeting alleged racial discrimination, and an increased emphasis on routing out disparate treatment based on gender and health-related and family-related conditions.  Claims based on alleged disability discrimination, sex discrimination, and retaliation led the way. Collectively, these three theories provided the foundation for 59.4% of FY 2025 EEOC filings.

Notably, in FY 2025, the EEOC filed only three lawsuits asserting discrimination based on race or national origin, a total of 2.3% of the lawsuit filings. In FY 2024, 8.9% of all filings included claims based on race. The following graph shows a breakdown of the allegations underlying the FY 2025 filings.

4. Lawsuits Filings Based On Industry

In terms of filings by industry, FY 2025 aligned with prior years and reflected the EEOC’s focus on a few major industries. In FY 2025, two industries remained among the EEOC’s top targets – hospitality and healthcare.

On a percentage basis, hospitality industry employers (restaurants / hotels / entertainment) were recipients of 25% of EEOC filings, and healthcare industry employers received 21.3%. In FY 2025, manufacturing (15% of FY 2025 filings, 12.1% of FY 2024 filings) overtook retail (11.3% of FY 2025 filings; 23.1% of FY 2024 filings) as the next most targeted industry, with retain experiencing a double-digit decline. Only one other industry, transportation & logistics received a double-digit percentage share of EEOC-initiated lawsuits (with 10%). Filings against employers in staffing and construction remained flat in terms of relative percentage in FY 2025 as compared to FY 2024 (8.8% and 8.8% of filings, respectively). As in FY 2024, in FY 2025, the EEOC did not file any of its enforcement lawsuits against employers in the automotive, security, and/or technology industries.

5. Strategic Priorities

Moving into FY 2026, the EEOC’s budget justification includes a $19.618 million decrease from FY 2025. This move is reflective of the Trump Administration’s stated priority of returning to the “agency’s true mission.” The EEOC aims to return to its founding principles and restore evenhanded enforcement of employment civil rights laws on behalf of all Americans.

Every new presidential administration brings with it an array of objectives focused on different priorities. Since President Trump’s inauguration, the Trump Administration has taken unique steps to significantly reshape the EEOC. Among its moves to overhaul the agency, President Trump dismissed two Democratic-appointed EEOC commissioners and its General Counsel and replaced them with officials viewed as more aligned with his agenda. The Administration appointed new leadership, including Chair Andrea Lucas and Acting General Counsel Andrew Rogers. On October 7, 2025, Brittany Panuccio was confirmed by the Senate as a commissioner, thereby restoring a quorum.

President Trump has issued a series of executive orders reflecting its shift in enforcement priorities, particularly against DEI initiatives. On January 20, 2025, the White House issued an executive order, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” and, on January 21, 2025, the White House issued, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” The latter’s stated purpose is to end “dangerous, demeaning, and immoral race- and sex-based preferences under the guise of so-called ‘diversity, equity, and inclusion’ (DEI) or ‘diversity, equity, inclusion, and accessibility’ (DEIA) that can violate the civil-rights laws of this Nation.” President Trump ordered all executive departments and agencies to terminate all “discriminatory and illegal preferences” and to “combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.”

Shortly thereafter, in February 2025, the EEOC took prompt action to implement the Administration’s shift in direction. Citing the Trump Administration’s Executive Order on “gender ideology extremism,” the EEOC announced that it would withdraw seven lawsuits it had filed across the country, including: 

EEOC v. Sis-Bro Inc., No. 25-CV-968 (S.D. Ill.)
EEOC v. Harmony Hospitality LLC, No. 24-CV-357 (M.D. Ala.)
EEOC v. Brik Enterprises, Inc., et al., No. 24-CV-12817 (E.D. Mich.)
EEOC v. Reggio’s Pizza Inc., No. 24-CV-8910 (N.D. Ill.)
EEOC v. Lush Handmade Cosmetics LLC, No. 24-CV-6859 (N.D. Cal.)
EEOC v. Boxwood Hotels, LLC, No. 24-CV-902 (W.D.N.Y.)
EEOC v. Starboard Group Inc., No. 24-CV-2260 (S.D. Ill.)

On February 18, 2025, in EEOC v. LeoPalace, No. 25-CV-4 (D. Guam), the EEOC settled a lawsuit for more than $1.4 million and entered into a three-year consent decree with LeoPalace Resort, a large hotel in Guam. The EEOC alleged that LeoPalace provided employees of non-Japanese national origin with less favorable wages and benefits than their Japanese counterparts. This lawsuit is significant because it was the first seven figure settlement that the Commission procured after President Trump took office in January 2025 – and because it was accompanied by a statement from Chair Andrea Lucas announcing the Commission’s new enforcement agenda and its intent to protect all workers from national origin discrimination and “Anti-American Bias.”

In the accompanying press release, Chair Lucas announced that “Federal anti-discrimination laws ensure equal employment opportunity for jobs performed by all workers regardless of national origin. . . . This case is an important reminder that unlawful national origin discrimination includes discrimination against American workers in favor of foreign workers.” This was the Commission’s first publicized settlement since Lucas was appointed Acting Chair of the EEOC. One day after the settlement was announced, the EEOC published a second press release on its Newsroom “putting employers and other covered entities on notice” that the Commission was committed to protecting all workers from unlawful national origin discrimination, including American workers.

The Commission has stated that it is committed to carrying out President Trump’s policy agenda, consistent with his executive orders related to (1) “unlawful DEI-motivated race and sex discrimination,” (2) “defending the biological and binary reality of sex and related rights,” (3) “protecting workers from religious bias and harassment, including antisemitism,” and (4) “anti-American national origin discrimination.”

Further evidencing these stated objectives, among other things, Acting Chair Lucas has announced that one of her priorities for compliance, investigations, and litigation is to defend the biological and binary reality of sex and related rights, including women’s rights to single-sex spaces at work. She likewise removed the agency’s “pronoun app,” a feature in employees’ Microsoft 365 profiles, which allowed an employee to opt to identify pronouns, which then appeared alongside the employee’s display name across all Microsoft 365 platforms, including Outlook and Teams. This content was displayed both to internal and external parties with whom EEOC employees communicated. She also has ended the use of the “X” gender marker during the intake process for filing a charge of discrimination and directed the modification of the charge of discrimination and related forms to remove “Mx.” from the list of prefix options.

On December 19, 2025, Chair Lucas announced in an interview with Reuters that, “[i]f you have a DEI program or any employee program that involves taking an action in whole or in part motivated by race or sex or any other protected characteristic, that’s unlawful.” She confirmed that federal inquiries into corporate diversity programs are underway and warned that initiatives tied to hiring, promotion, or marketing may come under scrutiny. Lucas reiterated the White House’s position that white men have been subject to discrimination in the workplace through DEI programs and encouraged the submission of complaints.

In several respects, FY 2025 represented a hard pivot in enforcement targets. While total filings decreased, the new administration foreshadowed a new direction and targeted approach in upcoming EEOC enforcement.

By Gerald L. Maatman, Jr. and Jennifer A. Riley

Duane Morris Takeaway: Arbitration agreements with class action waivers provide the foundation for one of the most potent defenses to class action litigation. While the U.S. Supreme Court has continued to promote arbitration agreements, plaintiffs have continued to attack their enforceability, and courts across the country have continued to apply exceptions in inconsistent and expansive ways.

Watch Review Editor Jerry Maatman explain this trend below:

One of the most impactful examples is the transportation worker exemption, which courts have applied expansively to local workers, such that the U.S. Supreme Court is poised to examine the exemption again, for a third time in the past five years. A defendant’s ability to enforce an arbitration agreement containing a class or collective action waiver continues to reign as one of the most impactful defenses in terms of shifting the pendulum of class action litigation.  The U.S. Supreme Court cleared the last hurdle to widespread adoption of such agreements with its decision in Epic Systems Corp. v. Lewis, et al., 138 S. Ct. 1612 (2018).

In response, more companies of all types and sizes updated their onboarding systems, terms of use, and other types of agreements to require that employees and consumers resolve any disputes in arbitration on an individual basis.

1. Defendants Continued To Enforce Arbitration Agreements At High Rates

To date, companies have enjoyed a high rate of success enforcing those agreements and using them to thwart class actions out of the gate. In 2025, defendants continued to win most of the motions to compel arbitration they filed. Across substantive areas of class action litigation, courts issued rulings on approximately 189 motions to compel arbitration, and defendants prevailed on 122 of those rulings, for a success rate of approximately 65%.

Their success rate in 2025 was not wholly out of line with their success rates over the past two years. In 2024, courts issued rulings on 167 motions to compel arbitration, and defendants prevailed in 91 of those rulings, a success rate of approximately 54%. In 2023, courts issued rulings on 187 motions to compel arbitration, and defendants prevailed on 123 motions, which translated into a success rate of 66%.

2. The Transportation Worker Exemption Continued To Fuel Inconsistent Results

Given the potency of the arbitration defense, the plaintiffs’ class action bar has continued to press potential exceptions to its coverage. One of the most litigated is the transportation worker exemption to the FAA. Over the past year, plaintiffs made significant strides in terms of expanding that exemption as courts issued a mixed bag of rulings. Many lower federal courts continued to apply the transportation worker exemption in a broad manner to workers who handled goods that moved in interstate commerce, irrespective of whether the workers played a direct and necessary role in transporting the goods across borders, leading to divergent outcomes for last-mile delivery drivers, warehouse workers, and local distributors.

Section 1 of the FAA exempts from arbitration “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The third category for workers “engaged in commerce” commonly is called the “transportation worker” exemption. Although the U.S. Supreme Court has instructed lower courts to interpret the exemption “narrowly,” its parameters have proved a slippery slope for lower courts.

In Southwest Airlines Co. v. Saxon, et al., 142 S.Ct. 1783 (2022), the U.S. Supreme Court considered application of the transportation worker exemption to an airport ramp supervisor. Considering the language of the exemption, the U.S. Supreme Court reasoned that the exemption turns on the actual work that the “class of workers” to which the plaintiff belongs “typically carr[ies] out.” Id. at 1792. The parties did not contest that the plaintiff, a ramp supervisor, frequently loaded and unloaded cargo. The U.S. Supreme Court held that, to be “engaged in foreign or interstate commerce,” the class of workers must “at least play a direct and necessary role in the free flow of goods across borders” or, put another way, must “be actively engaged in transportation of those goods across borders via the channels of foreign or interstate commerce.” It concluded that cargo loaders exhibited this central feature, reasoning that “there could be no doubt that [interstate] transportation [is] still in progress” when they do the work of loading or unloading cargo. Id. at 1793-94.

This ruling set off a barrage of disparate decisions as courts struggled to find a workable line. As a result, in April 2024, the U.S. Supreme Court took up Bissonnette, et al. v. LePage Bakeries Park Street, LLC, 601 U.S. 246 (2024). As in Saxon, the U.S. Supreme Court emphasized that the test for application of the transportation worker exemption focuses on the work performed and not the employer’s industry. Addressing the employer’s argument that its test would fold virtually all workers who load or unload goods, such as pet shop employees and grocery store clerks, into the exemption, the U.S. Supreme Court stated that the exemption has “never” been interpreted to apply in “such limitless terms.” Id. at 256. It held that, for the exemption to apply, the worker “must at least play a direct and necessary role in the free flow of goods across borders.” Id.

The Bissonnette decision, however, appears to have had a smaller impact on the lower courts, which continued to issue opinions before and after Bissonette that broadly construe the transportation worker exemption. In 2025, rulings by lower courts diverged substantially, particularly with respect to workers who move goods, which have crossed or ultimately will cross state borders, within a facility or local area.

The court in Wolford, et al. v. United Coal Co. LLC, 2025 U.S. Dist. LEXIS 15681 (W.D. Va. Jan. 28, 2025), for example, rejected plaintiffs’ attempts to apply the exception to mine workers like electricians and machine operators who did not directly transport coal across state lines. The plaintiffs argued that their work was closely related to the interstate transportation of coal via a beltline, which crossed state lines into Virginia, because they interacted with the beltline. The court found that the plaintiffs’ work did not qualify them as transportation workers under the FAA. Although coal crossed state lines, the court opined that the plaintiffs were primarily involved in tasks performed within the mine in Kentucky and their work was too far removed from the interstate transportation of coal to be considered transportation work.

Similarly, the court in Rubio-Leon, et al. v. Fresh Harvest, Inc., 2025 U.S. Dist. LEXIS 181816 (N.D. Cal. Sept. 16, 2025), ruled that the plaintiffs, a group of seasonal farm workers who hauled and trucked agricultural products, failed to show they qualified for the exemption. The plaintiffs demonstrated that they moved products from fields to a cooling facility at the farm’s processing plant but did not produce evidence as to what then happened with the products. The plaintiffs pointed to statements on the defendant farms’ websites indicating the farms’ products were distributed nationally, but the court found such statements insufficient to show how, when, and where the products moved through the supply chain or how the plaintiffs played a meaningful role in that movement. The court therefore concluded that the FAA applied and compelled individual arbitration.

By contrast, numerous courts reached opposite conclusions. For example, the court in Mitchell, et al. v. Lineage Logistics Services, LLC, 2025 US Dist. LEXIS 35792 (E.D. Cal. Feb. 27, 2025), applied the transportation worker exemption to plaintiff, a warehouse worker, who organized boxes of goods and therefore denied the employer’s motion to compel arbitration. Although the court found the plaintiff to be part of a class of workers that organizes boxes in preparation for storage or shipment, it concluded that such work was tied to the movement of goods in interstate commerce and thus applied the exemption. The court explained that “preparing boxes for egress from the facility or organizing them for storage before they are ready to be shipped is necessary to the subsequent transit of those goods out of the facility. In other words, those goods cannot be transported without the workers like Plaintiff.” Id. at *15.

In Joyner, et al. v. Frontier Airlines, Inc., 2025 U.S. Dist. LEXIS 101068 (D. Colo. May 19, 2025), the court applied the exemption to three customer service agents who worked for an airline. Two of the plaintiffs worked at ticket counters and the third plaintiff worked at the boarding gates. The defendant argued that the plaintiffs were not supposed to touch customer baggage but were instead required to supervise passengers as they tagged and loaded their own bags onto conveyer belts. The plaintiffs argued that they often weighed bags, tagged bags, and loaded them onto conveyer belts or, if the conveyer belts malfunctioned, loaded baggage on to carts. As such, the court found that the plaintiffs belonged to a class of workers who lift, weigh, inspect, and tag baggage and move it to conveyer belts or carts during a route to a destination on a plane. The court concluded that the plaintiffs played a direct and necessary role in ensuring that passengers’ baggage moves through the airport for loading on to planes and that this sufficed to establish the plaintiffs’ status as transportation workers.

Finally, in Silva, et al. v. Schmidt Baking Distribution, LLC, No. 24-2103-CV (2nd Cir. Dec. 22, 2025), the Second Circuit applied the exemption to commercial truck drivers who created their own corporations and executed arbitration agreements in their capacities as presidents of their own companies.  The drivers filed a putative class action alleged violation of wage & hour laws and, after the district court granted the defendant’s motion to compel arbitration, the appellate court reversed.  The appellate court noted that, before and after they formed their own corporations, their daily responsibilities involved driving commercial trucks to the defendant’s warehouse to pick up baked goods, delivering the product to retail outlets within their assigned territories, unloading the goods, and stocking the goods on retail shelves.  The Second Circuit held that truck-driving work directly impacts the free flow of goods and, therefore, concluded that the drivers qualified as transportation workers without any examination of whether their routes or the goods crossed borders.  It also credited the workers’ allegations that they were faced with a Hobson’s choice of adopting a corporate form or losing their jobs and, therefore, declined to allow such form to circumvent the transportation worker exemption. 

These and other decisions reflect continued inconsistent application of the transportation worker exemption. In 2025, this led the U.S. Supreme Court to grant a writ of certiorari in Flower Foods, Inc. v. Brock, No. 24-945, 2025 U.S. LEXIS 3947 (U.S. Oct. 20, 2025). That case involves a plaintiff who worked as a local distributor of baked goods. He placed orders for products, most of which were produced by Flowers bakeries outside the state, picked up the products at a local warehouse, loaded them onto his own vehicle, and delivered them to his customers within the same state. The district court denied Flowers’ motion to compel arbitration based on the transportation worker exemption, and the Tenth Circuit affirmed that decision. The U.S. Supreme Court granted a writ of certiorari and is set to answer the question of whether workers who locally deliver goods, which traveled in interstate commerce, are transportation workers for purposes of the FAA exemption.

Thus, the Supreme Court is set to add some clarity to the scope of the transportation worker exemption in 2026, and its ruling could have a profound impact on class actions. Because nearly all products travel across state lines, the ruling effectively could exempt most workers from the FAA, weakening the force of arbitration agreements, or it could significantly curtail the broad reading the lower courts have given Saxon. Either way, given the enduring impact of the arbitration defense in class action litigation, the plaintiffs’ class action bar is apt to continue to attempt to develop creative work arounds to arbitration agreements and to continue to push the boundaries of the transportation worker exemption.