July 22, 2026
When Client Demands Lead to Liability for Discrimination
The U.S. EEOC announced that a staffing agency agreed to pay $150,000 to settle a lawsuit alleging it engaged in unlawful sex discrimination when it acquiesced to a client’s demands. The client reportedly told the agency to not refer any females for its laborer jobs that required “heavy lifting.”
It’s not just staffing agencies. Companies in the services industries, from health care to home improvement to financial services, government contracting, and more, face this dilemma. And it’s not just on the hiring end. More frequently, I get questions about a client’s demand to fire or remove an employee from a contract or worksite, and the employer has no other job to which it can transfer the employee.
Now what? Do you comply with a client’s demand that you know may be unlawful in order to keep the contract and revenue stream? Or do you decline the request, try to educate the client about the legal risk, and create your own risk of losing the contract and revenue?
Whether you are an HR professional, manager, or contracting officer protect yourself from individual liability and try to do the same for your employer. If you are faced with a client or customer demand that you think creates risk, don’t go it alone. Push the request up the chain of command and consider including legal counsel.
Note 1. What about the client employer? Didn’t they get sued? Yep! That’s the big headline. About two weeks later, the EEOC announced they agreed to pay $2.6M.
Note 2. The claim filed by the EEOC noted, “Defendant failed to train its employees not to comply with the type of discriminatory client preferences such as TCI instructing Defendant not to assign females to work in its laborer positions.” I think that’s a proactive tip aka a clue. When you provide your management team training, remind them that your EEO and non-discrimination policies and practices apply to client and customer demands, too!
Note 3. Why was the settlement with the client so high compared to the staffing agency? It might have something to do with the fact that this same employer agreed to pay $90,000 in May of 2024 to settle a claim of unlawful retaliation related to a sex discrimination investigation. Oops!
