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The Rise of “Reverse Discrimination” Claims: Emerging Liability Risks for Employers and Insurers
By Manpreet Kaur
Employers are facing a measurable increase in employment practices liability (“EPL”) claims.1 A large number of these EPL claims are now being brought by individuals who do not belong to historically protected or underrepresented groups, often referred to as “reverse discrimination” claims. While the term is not formally or legally defined, courts have increasingly been treating these claims under the same analytical framework as traditional discrimination claims. These types of claims present employers with nuanced risks that, while not legally novel, reflect shifting societal attitudes and regulatory scrutiny. The uptick in such claims is also due to recent changes at the federal level, namely, the rollback of diversity, equity and inclusion (“DEI”) initiatives in employment and education. The elimination or reduction of affirmative action type policies could potentially expose an employer with robust DEI policies to face allegations of unfair treatment from individuals from a historically favored class.
Under Title VII of the Civil Rights Act of 1964, discrimination is prohibited against any individual based on a protected characteristic such as race, sex, color, religion, or national origin. Under the longstanding legal framework of McDonnell Douglas2, a plaintiff belonging to a minority group must first show a reasonable inference of unlawful discrimination. The law does not distinguish between who is considered a “minority” or “majority” employee. However, historically, many courts did not believe that Congress intended Title VII to provide the same protection for majority employees as it does for minority employees. An employee in the traditional majority had to prove something more to state a reverse discrimination claim. A plaintiff belonging to a historically favored class was required to show “background circumstances” to establish that the employer was the rare employer that discriminates against members of a majority group. This showing could include evidence showing that the adverse employment decision was made by someone in a minority group or that the employer had a pattern of favoring minority candidates over those in majority groups. In other words, white, male, heterosexual, or Christian employees were subject to a heightened evidentiary standard to make a claim. As a result, it was historically much harder for such employees to bring discrimination claims.
Typical Reverse Discrimination Scenarios
Although discrimination laws have not directly changed in recent years, there has been a clear shift in social perception, resulting in a greater willingness among majority employees in bringing these types of claims. Claims most often arise in connection with hiring, terminations, promotions, reductions in force, and compensation decisions. For example, a qualified white male candidate who is not selected for a promotion may allege that he was unfairly passed over in favor of a candidate chosen due to DEI objectives rather than based on merit. Another scenario might involve disciplinary actions perceived differently based on race or gender. For example, a long-time employee disciplined and eventually fired due to offensive behavior might claim reverse discrimination, arguing that a person of a different race, gender, religion or sexual orientation would not have faced similar discipline.3
The Supreme Court Clarifies the Standard for “Reverse Discrimination Claims”
In the recent United States Supreme Court decision in Ames v. Ohio Department of Youth Services4, the Court agreed that plaintiffs who are members of a majority group do not need to show additional “background circumstances to support the suspicion that the defendant is that unusual employer who discriminates against the majority.”
Ames filed a lawsuit in Ohio federal court, alleging that she had been the victim of employment discrimination based on her sexual orientation (heterosexual). Ames applied for a new position within the Ohio Department of Youth Services (the “Department”) in 2019. Not only did Ames fail to get the job she for which she applied, but she was also demoted. The Department had hired a gay woman for the position that she had sought, and it hired a gay man to replace her after she was demoted.
The District Court granted the Department’s motion for summary judgment. The court applied the familiar three-step, burden-shifting framework that the Court established for plaintiffs seeking to prove an employer’s discriminatory intent with circumstantial evidence. McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Then the court applied circuit precedent and held that Ames, as “a member of a majority group,” also had to show “background circumstances that support the suspicion that the defendant is that unusual employer who discriminates against the majority.” The court held that Ames failed to show “background circumstances” and rejected her claim based on the department’s decision to deny her the bureau chief position. The Sixth Circuit Court of Appeals affirmed.
The appeal to the United States Supreme Court followed. There, the justices agreed that the Sixth Circuit was wrong to impose a higher bar for Ames than if Ames had been a member of a minority group. Under Sixth Circuit precedent, a plaintiff who is “a member of a majority group” bears the particular burden at the first step: as part of their prima facie case, a majority-group plaintiff must show “background circumstances that support the suspicion that the defendant is the unusual employer who discriminates against the majority.”5 By eliminating the extra requirement to show that an employer discriminates against the majority, the Supreme Court’s ruling makes it easier for plaintiffs alleging reverse discrimination to prove their case. Justice Jackson, writing for the majority, wrote that the Sixth Circuit’s ruling was inconsistent with the text of the federal employment discrimination law, which bars discrimination against everyone, without distinguishing between members of a minority group and members of a majority group. Jackson noted that “[b]y establishing the same protections for every ‘individual’—without regard to that individual’s membership in a minority or majority group—Congress left no room for courts to impose special requirements on majority-group plaintiffs alone.”6
Ames makes clear that discrimination claims of all Title VII plaintiffs must be evaluated under the same legal framework. Ames removes one argument that may have led to early dismissals of majority group discrimination claims. Additionally, the Ames ruling discourages courts from layering additional burdens onto the process of bringing discrimination claims. Furthermore, Ames is consistent with the position long held by the EEOC. The EEOC has rejected referring to these majority group discrimination claims by their popular moniker of “reverse discrimination” because any adverse action motivated by any protected characteristic is simply unlawful discrimination.7
Liability Exposure and Key Risk Areas
The Ames decision has far-reaching implications for employers, EPLI underwriting, claims management, and overall exposure assessment. Even where employers believe they are correcting historical imbalances, hiring decisions that may be perceived as quota-driven or outcome-oriented can be challenged. Because such claims are now less likely to be dismissed at the pleading stage, employers should anticipate lengthier litigation timelines and more expansive discovery obligations.
Insurers must now carefully evaluate Insureds’ employment practices and the extent to which identity-conscious policies shape workforce decisions. Moreover, Insurers must re-evaluate their underwriting questionnaires and risk assessments to account for increased exposure to reverse discrimination claims and whether to implement sublimits and exclusions around EEOC or government investigations. Claims management strategies may also need to adapt to the increased likelihood of reverse discrimination cases advancing into costlier phases of litigation.8
Reconsider Language in Policies and Procedures
Internal emails, presentations, policies, and training materials referencing diversity targets or representation goals may be mischaracterized as evidence of discriminatory intent. Employers must draft material to ensure that policies apply equally to all employees and confirm that employment decisions will not be based on any applicant or employee’s protected class. Company policies should be applied uniformly, with documentation to demonstrate equal treatment.
Employment and Hiring Decisions
Similarly, employment and hiring decisions should be made using specific objectives and consistent criteria. For employers that use generative artificial intelligence (“AI”) in their recruiting processes, the tools should be deployed warily and with a competent understanding of how third-party vendors use data to engineer their algorithms.9 Companies are already facing heightened legal scrutiny for inadvertent generative AI discrimination, particularly in hiring and recruiting.10 Technology should always be used in conjunction with human oversight and backed by clear policies and procedures.11 Furthermore, internal audits of employment decisions can help to identify inconsistencies and risk areas before complaints or litigation arise. There must be an emphasis on articulating “legitimate, non-discriminatory reasons” for adverse employment decisions.
Mitigate Legal Risk
With the removal of the heightened standard for majority-group employees under Title VII, companies should anticipate an increase in internal complaints, administrative complaints, and formal lawsuits alleging reverse discrimination. A single employee complaint can trigger broader investigations into the totality of a Company’s hiring, promotion, and compensation practices, which can be expensive. Successful plaintiffs can recover back pay, front pay, compensatory damages, punitive damages (in limited cases), and attorneys’ fees. Some plaintiffs may even attempt to pursue class-based theories, particularly where company-wide policies are involved. Even unsuccessful class certification efforts can significantly increase litigation costs.
Moreover, employers should exercise caution when taking any employment actions following an employee’s discrimination complaint or allegation. Even seemingly minor changes such as shifts in scheduling, departmental transfers, or altered job duties can be perceived as adverse employment action in retaliation for making a complaint; all of this complicates defense of claims and increases litigation risk.
In anticipating complaints and litigation, companies must consider the implementations in place in the event a claim does arise. EPL insurance typically covers claims related to discrimination, wrongful termination, sexual harassment, retaliation, failure to promote and various other employment-related issues. It generally includes coverage for legal defense costs and settlements/judgments resulting from claims, ensuring employers are financially prepared for litigation and associated expenses.
Takeaways
Reverse discrimination claims are no longer a peripheral risk. These claims reflect a growing area of liability for employers across industries, driven by evolving legal standards and heightened scrutiny of workplace policies. Employers that are able to adapt thoughtfully by aligning DEI efforts with neutral, merit-based decision-making and by strengthening internal policies and practices will be better positioned to defend against claims and avoid unnecessary risk and exposure. Proactive compliance, uniform standards, risk management and policy and practice audits remain effective tools for navigating this evolving risk landscape. 12
In the Court’s concurring opinion in Ames, there was criticism of the McDonnell Douglas framework.13 Justices Thomas and Gorsuch hinted that McDonell Douglas may conflict with Title VII and would be reconsidered if the issue came before the Court. While the framework remains in effect today, these dicta suggest that the court is looking to reshape how employment discrimination claims are assessed. Insurers should continue to regularly evaluate insureds’ employment practices as well as their own underwriting questionnaires and risk assessments. Anticipating these potential changes will be key to remaining compliant and proactive.
1 In the past 12 months, 69% of legal and HR professionals said their organization experienced claims made by employees alleging discrimination, harassment, retaliation, or other employment-related issues. See https://www.qbe.com/media/qbe/north-america/usa/pdf-files/research-and-insights/employment-practices-liability-whitepaper.pdf.
2 McDonnell Douglas Corp. v. Green, 411 U. S. 792 (1973)
3 Duvall v. Novant Health, Inc., No. 22-2142 (4th Cir. 2024); https://www.jdsupra.com/legalnews/recent-settlement-latest-in-developing-4216961/
4 Ames v. Ohio Dept. of Youth Services, 605 US _ (2025).
7 https://www.eeoc.gov/wysk/what-you-should-know-about-dei-related-discrimination-work#_ednref5
8 https://www.berenzweiglaw.com/blog/2026/01/title-vii-after-ames/
10 Id.
11 Id.
13 605 U. S. ____ (2025).
