Environmental, social and corporate governance (ESG) efforts can create hazards for multinationals with US operations due to the risk of reverse discrimination litigation under US law. According to McDermott’s Ludia Kwon, a recently filed lawsuit (Kafiti v. AB Electrolux, Case No. 3:21-CV-00029 (W.D. NC. 2021)) highlights the risk in implementing ESG efforts in the United States. US employment discrimination laws swing both ways, as the prohibition against sex discrimination protects men as well as women.
On September 22, 2020, US President Donald Trump issued an Executive Order, which prohibits federal contractors and recipients of federal grants from conducting certain workplace training on race and sex stereotyping. This Executive Order is likely to be challenged on various grounds, including First Amendment grounds, but all employers may wish to review their workplace training materials in anticipation of future Equal Opportunity Commission (EEOC) action for reverse discrimination.
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