The Latest – Title VII, GLP-1 Governance, And The New Wave of ERISA Litigation (February 2026)

Jenny Kiesewetter is a practicing ERISA and employee benefits attorney who partners with HR teams on a wide range of workplace compliance matters — from benefit-plan obligations to day-to-day HR policies and regulatory requirements. Her guidance helps employers spot risks early, navigate regulatory change, and make informed decisions that support both employees and the organization.

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Over the past month, three issues have come up repeatedly in HR news: a recent EEOC decision on single-sex facilities that signals how the Commission is currently interpreting Title VII, growing use of AI in employment decisions, and mounting employee interest in coverage for high-cost medications like GLP-1 drugs.

These topics are more connected than they might seem at first. How AI is used in hiring and promotion has real compliance implications. Health plan design shapes recruiting and retention conversations. And federal agencies are increasingly focused on how policies actually play out, not just how they’re written.

For HR leaders, the common thread is accountability. That means consistency in how policies are applied, transparency with employees about decisions that affect them, and meaningful oversight of the technology being used to make those decisions.

Here’s what’s shifting — and where HR teams should be directing their attention.

Effective Date: February 26, 2026 (EEOC federal-sector appellate decision).

What’s Changing:

On February 26, 2026, the Equal Employment Opportunity Commission (EEOC) issued a federal-sector appellate decision addressing workplace restroom access under Title VII.

In the decision, the EEOC held that:

• “Title VII permits a federal agency employer to maintain single-sex bathrooms and similar intimate spaces,” and
• Title VII “permits a federal agency employer to exclude employees, including trans-identifying employees, from opposite-sex facilities.”

The ruling applies specifically to federal agency employers. However, it provides insight into how the Commission currently interprets Title VII following several shifts in harassment guidance over the past 18 months.

The Supreme Court’s 2020 decision in Bostock v. Clayton County remains controlling law, holding that discrimination based on sexual orientation and gender identity constitutes sex discrimination under Title VII. The February 2026 EEOC decision reflects a narrower interpretation of facility access than prior sub-regulatory EEOC guidance suggested.

In 2024, the EEOC issued updated harassment guidance addressing workplace conduct and gender identity. A federal court vacated portions of that guidance in May 2025, and on January 22, 2026, the EEOC voted to rescind the entire 2024 guidance. The February 26 decision reflects the Commission’s most recent federal-sector position.

HR Takeaway

Review our facility policies deliberately. HR leaders should:

• Evaluate restroom and intimate-space policies in light of current Title VII case law and agency interpretation.
• Assess risk differently for federal-sector versus private-sector environments.
• Monitor ongoing litigation in this area, as courts may continue shaping the boundaries.
• Document the legal rationale supporting policy decisions.

This remains a developing area. Employers should ground decisions in binding precedent and document how policies align with current legal standards.

Effective Date: January 10, 2024 Final Rule effective March 11, 2024; Notice of Proposed Rulemaking issued February 26, 2026 (91 FR 9932).

What’s Changing:

The Department of Labor’s January 2024 Final Rule reinstated the multi-factor “economic realities” test for determining independent contractor status under the Fair Labor Standards Act.

Under that rule, no single factor controls. Agencies evaluate the totality of the working relationship, including:

• The degree of control exercised by the employer
• The worker’s opportunity for profit or loss
• The permanence of the relationship
• Whether the work is integral to the employer’s business

As of March 2026, the 2024 rule remains in effect. However, on February 26, 2026, the Department of Labor issued a Notice of Proposed Rulemaking (NPRM) titled “Employee or Independent Contractor Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act” (91 FR 9932). The proposal signals potential changes to the current framework and expands the rulemaking discussion to include the Family and Medical Leave Act and the Migrant and Seasonal Agricultural Worker Protection Act.

The NPRM does not alter current compliance obligations, but it indicates that the classification standard may shift again.

HR Takeaway

Apply the current rule and monitor developments. HR leaders should:

• Continue evaluating independent contractor relationships under the 2024 economic realities test
• Document classification analyses carefully
• Reassess relationships when job duties or supervision structures change
• Monitor the NPRM process and potential final rule issuance

Classification risk is not static. Employers should comply with the rule currently in effect while preparing for possible regulatory adjustments.

Effective Date: Immediate operational impact; EEOC technical assistance on algorithmic decision-making originally issued May 12, 2022, with continued enforcement emphasis.

What’s Changing:

AI has worked its way into nearly every stage of the employment lifecycle — from resume screening and interview scoring to performance modeling and workforce planning. Most employers adopted these tools for practical reasons: speed, consistency, scale.

What some didn’t anticipate is where accountability lands when something goes wrong. The EEOC has been consistent on this point: if an algorithmic tool produces a discriminatory outcome, the employer is responsible for that outcome. The vendor doesn’t assume liability, and “the software did it” isn’t a defense.

Layered on top of federal expectations is a growing patchwork of state and local laws targeting algorithmic bias. For employers operating across multiple jurisdictions, that’s a compliance picture that keeps getting more complicated.

HR Takeaway

AI adoption requires structure. HR leaders should:

• Create an inventory of AI-enabled tools affecting employment decisions.
• Request validation studies and bias testing documentation from vendors.
• Build human review checkpoints into automated workflows.
• Train HR professionals to evaluate AI outputs critically.

Governance should develop alongside implementation rather than after concerns arise.

Effective Date: Active issue in 2026 plan administration and renewal cycles.

What’s Changing:

GLP-1 medications for weight loss and diabetes management remain one of the most closely watched components of employer health plans in 2026. These drugs can exceed $1,000 per month without coverage, and utilization rates have remained elevated.

For plan sponsors, this is now an operational issue rather than a forecast. Increased demand affects:

• Current pharmacy spend
• Stop-loss renewals and attachment points
• Prior authorization standards
• Clinical management protocols
• Overall plan affordability

GLP-1 coverage is coming up in open enrollment conversations and, in some organizations, it’s showing up in recruiting discussions too. Employees want to know whether these drugs are covered, excluded, or buried under medical-necessity requirements that are hard to meet.

That pressure doesn’t make the fiduciary question go away. For ERISA-governed plans, how sponsors manage costs still has to line up with plan terms, what’s been communicated to participants, and how the plan is actually administered day to day.

HR Takeaway

Treat GLP-1 coverage as a governance decision. HR leaders should:

• Analyze current utilization and pharmacy spend impact.
• Model renewal scenarios before carrier negotiations.
• Confirm plan documents align with actual coverage practices.
• Evaluate clinical criteria for consistency and defensibility.
• Communicate coverage scope clearly to participants.

GLP-1 decisions require structured analysis and documented rationale. Cost control alone is not enough; process and communication matter just as much.

Effective Date: Lawsuits filed December 23, 2025; litigation developments continuing in early 2026.

What’s Changing:

On December 23, 2025, four coordinated class actions were filed in federal courts in Illinois and New York against several large national employers — including a major airline, a multistate healthcare system, a national laboratory services company, and a nationwide security services provider — as well as prominent global benefits consulting firms.

The complaints allege breaches of ERISA fiduciary duties and prohibited transactions involving voluntary insurance programs, such as accident, critical illness, and hospital indemnity coverage.

Plaintiffs contend that plan participants paid excessive premiums due to broker compensation structures and alleged conflicts of interest. They also argue that the programs fall outside the Department of Labor’s voluntary plan safe harbor, making them subject to ERISA fiduciary standards.

Historically, excessive fee litigation focused on retirement plans. These cases attempt to extend similar fiduciary theories to employee-paid voluntary benefits, an area courts have not extensively addressed.

The complaints seek class certification, recovery of alleged losses, disgorgement of compensation, and removal of fiduciaries.

HR Takeaway

Voluntary benefits warrant deliberate governance review.

HR and benefits leaders should:

• Evaluate whether voluntary programs qualify for safe harbor treatment.
• Review broker and consultant compensation structures for transparency.
• Benchmark premiums and plan value against market alternatives.
• Clarify fiduciary roles and vendor oversight processes.
• Confirm Form 5500 reporting where programs qualify as ERISA welfare benefit plans.

Even if courts narrow these claims, the filings signal expanding scrutiny of welfare benefit governance practices.

None of what surfaced in February is entirely new — but the pressure is building. Enforcement is more active, AI use in employment decisions is drawing more scrutiny, and employees are paying closer attention to what their health plans actually cover.

The response doesn’t have to be complicated. Policies should be current and consistently applied. If AI tools are involved in employment decisions, there should be a clear governance process behind them. Benefit design changes need to be modeled carefully and documented, not just decided.

The organizations that hold up under scrutiny tend to be the ones that made deliberate decisions and kept records showing why.

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The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter.