The US EEOC’s first settlement under acting chair Andrea Lucas signalled a shift in the agency’s priorities, with a new focus on addressing national origin discrimination against US workers in the private sector.
Shutterstock.com/Mehaniq
The US Equal Employment Opportunity Commission (EEOC) will increase enforcement of anti-discrimination laws against employers who favour “non-American workers,” Lucas said in a 19 February 2025 press release. Lucas deemed policies that prefer immigrants, migrants and visa holders to be in direct violation of Title VII of the Civil Right Act 1964 and an abuse of the US legal system.
The warning came a day after the EEOC announced a US$1.45 million settlement with LeoPalace Resort, a resort on the US territory of Guam. The EEOC sued the resort in 2017 on behalf of US employees who claimed they were being paid less than their Japanese counterparts. The resort agreed to resolve the matter, though it has maintained that it was asserting the rights of its Japanese parent company, LeoPalace21, under the US-Japan friendship, commerce, and navigation treaty 1953.
The treaty permits companies to hire citizens from either country as technical experts, executive personnel, and other positions as the companies see fit. And it ensures citizens from one country are treated equally when operating in the other.
The EEOC recognised LeoPalace as a US corporation and argued that it could not rely on its parent company. Nevertheless, Genevieve Rapadas, an attorney at Calvo Jacob & Pangelinan who represented LeoPalace in the EEOC settlement, said LeoPalace believes in its right to protect Japanese workers under the longstanding US-Japan treaty.
Rapadas said the EEOC wrongly identified the resort’s treatment of Japanese citizens as national origin discrimination. Rapadas said that because citizenship is not a protected characteristic under Title VII, the case “didn’t really fall under this rubric of discrimination.”
“The [1953] treaty allows for Japanese companies . . . to treat their workers differently because of different circumstances,” Rapadas said. “They’re sending their employees off to a different place to work . . . and because of their status, they’re not similarly situated to their [American] counterparts.”
Andrew Scroggins, partner at Seyfarth Shaw, said the difference between national origin and citizenship will be “a new battleground between the EEOC and employers” as the agency takes action against anti-American employment practices.
“It can be difficult to tease out the differences between national origin and citizenship in context, and sometimes it’s just about how the issue is framed,” Scroggins said. “There’s lots of uncertainty there.”
Workplace policies should align with the 2016 EEOC Enforcement Guidance on National Origin Discrimination. The guidance recognises employment practices that include a citizenship requirement as unlawful if the requirement is a “pretext for national origin discrimination.” Employers should ensure their internal policies do not use citizenship to conceal discriminatory preferences.
Relevant precedent
Rapadas said LeoPalace relied on case law to defend its reading of the US-Japan treaty. She pointed to the US Court of Appeals for the Fifth Circuit’s 1981 decision in Spiess v C Itoh & Company. In that case, the Fifth Circuit held that “the treaty affords American subsidiaries of Japanese corporations the limited right to discriminate in favor of Japanese nationals in filling” managerial and technical positions.
This decision was effectively overturned by the US Supreme Court in a 1982 decision, Sumitomo Shoji America v Avagliano, which the resort also cited, Rapadas said. A group of female US employees at Sumitomo, a US subsidiary of a Japanese company, claimed Sumitomo only hired male Japanese citizens for certain roles.
Sumitomo attempted to assert the rights of its parent company under the 1953 treaty, but the US Supreme Court ruled that Sumitomo, as a US subsidiary of a Japanese company, was itself not a Japanese company covered under the treaty. However, the court expressed “no view as to whether Japanese citizenship may be a bona fide occupational qualification for certain positions” at Japanese-owned US companies, possibly leaving room for interpretation.
LeoPalace’s compliance efforts
Rapadas said LeoPalace is “taking all steps necessary to ensure compliance” with the terms of the settlement. In addition to providing monetary relief, the resort will also hire an external equal employment opportunity monitor and develop an internal complaint procedure.
Though LeoPalace is working to avoid further enforcement action, the resort asserted in the settlement that it “denies all claims and allegations of discrimination and retaliation asserted by the EEOC.” Rapadas said LeoPalace is “not admitting any liability.”
“We wanted to make very clear in the consent decree . . . that this was not a concession, that we still stood on our assertion of the treaty,” Rapadas said. “The issue was not something that has been litigated or decided, so . . . it’s not something that we conceded to.”
Future EEOC action
The EEOC did not mention the resort’s position on the treaty in its announcement of the settlement and maintained that LeoPalace violated Title VII. Lucas touted the resolution’s alignment with US President Donald Trump’s recent executive order, Ending Illegal Discrimination and Restoring Merit-Based Opportunity. The outcome, though not unprecedented for the EEOC, represents significant progress in Lucas’ efforts to re-focus the agency.
“Federal anti-discrimination laws ensure equal employment opportunity for jobs performed by all workers regardless of national origin,” Lucas said. “This case is an important reminder that unlawful national origin discrimination includes discrimination against American workers in favor of foreign workers.”
Roughly eight years have passed since the EEOC filed its initial complaint against LeoPalace, which Scroggins said is “unusual.” He said the agency, under new leadership, may have viewed the case as “an opportunity” to roll out national origin discrimination initiatives.
“This case spent a lot of time in the pipeline and was close enough to these new priorities that they could resolve it . . . with a press release that emphasises how this aligns with the new priorities,” Scroggins said. “Then they could follow it up the next day with sort of a broader statement about the EEOC’s intent to focus on national origin discrimination as it relates to Americans.”
Scroggins said the EEOC “will be doing more” to seek out allegations of anti-American discrimination. He said the agency’s attention will likely turn to industries that rely on migrant and immigrant workers, which could include construction, agriculture, restaurant, and hospitality groups, among others.
National origin discrimination against US workers is not “an issue that we have seen a lot of litigation over in the past,” Scroggins said. Compared to other types of suits, the EEOC has historically filed significantly fewer charges based on national origin discrimination. The agency’s increased enforcement against anti-American employment practices aligns with the Trump administration’s efforts to change the focus from traditionally protected groups to addressing reverse discrimination.
The LeoPalace settlement was, presumably, just the first step in the EEOC’s pursuit to end national origin discrimination against US workers. Scroggins said employers should pay attention to the “composition” of their workforces and determine whether they are an “attractive target” for the EEOC.
“Focus on the basics. Make sure you have a non-discrimination policy. Make sure it’s published to your managers and anybody that’s involved in hiring and employment decisions. Make sure they’re trained on it and following it,” Scroggins said. “Be proactive in your measures to address any issues that you see coming up.”