Employer settles gender identity bias lawsuit after EEOC withdraws claims

Cosmetics retailer Lush has agreed to settle a gender identity discrimination lawsuit that continued after the U.S. Equal Employment Opportunity Commission withdrew its claims, highlighting how private litigation may proceed even as federal enforcement priorities shift.

The EEOC originally filed suit in 2024 in federal court in California, alleging that Lush discriminated against a nonbinary employee based on gender identity, including allegations related to harassment and workplace treatment.

Following a change in enforcement posture, the agency moved to dismiss its claims. However, the individual claimant and other intervening plaintiffs continued to pursue the case independently.

Settlement and procedural posture

Lush ultimately agreed to resolve the remaining claims through a settlement.

The resolution follows the EEOC’s earlier decision to step back from the case, which was part of a broader shift in how the agency approaches gender identity discrimination matters.

The case illustrates that even when the EEOC withdraws from active litigation, underlying claims may proceed through private plaintiffs or intervenors and still result in employer liability.

Enforcement trends at the agency level do not necessarily eliminate exposure under Title VII. Courts continue to recognize claims involving gender identity discrimination, and plaintiffs may pursue those claims even without EEOC participation.

The case also reflects ongoing tension between shifting administrative priorities and established legal precedent recognizing gender identity discrimination as a form of sex discrimination.

Maintaining a compliant workplace

Employers should not assume that changes in agency enforcement priorities reduce legal risk in this area.

Be aware that claims involving gender identity and sexual orientation may proceed through private litigation even if the EEOC declines to pursue them.

Employers should ensure that internal complaints should be addressed consistently and promptly, and enforce workplace policies and training that address harassment and discrimination based on gender identity.

Documentation and response protocols remain critical in defending against claims that may proceed outside agency enforcement.