Litigation pressures are shifting and HR sits at the center of risk

Employment litigation may not dominate headlines the way cybersecurity breaches do, but HR leaders remain on the front line of legal risk in 2026. According to the 2026 Annual Litigation Trends Survey from global law firm Norton Rose Fulbright, employment and labor disputes continue to rank among the most common and fastest-evolving areas of exposure for U.S. employers, even as overall litigation volumes fluctuate. Risk is not disappearing; it’s changing shape, and policies that once felt settled now require closer scrutiny and tighter execution.

Employment disputes remain persistent, not predictable

While fewer organizations reported employment litigation in 2025 than the prior year, 31% still experienced increased exposure, and 30% expect that exposure to rise again in the next 12 months. That disconnect signals volatility rather than relief. Respondents pointed less often to traditional drivers like harassment or classification disputes and more frequently to disability accommodations and paid sick or family leave requirements.

That shift creates operational pressure for HR teams managing inconsistent state laws, remote-work arrangements and heightened employee expectations. Kimberly Cheeseman, co-head of Norton Rose Fulbright’s Litigation and Disputes department, underscored the risk.

“Discrimination risk isn’t going away—it’s evolving,” she said. “Employers must ensure their policies are not only well-intentioned but applied consistently across the workforce, including in ways that protect against emerging reverse-discrimination claims.”

State enforcement fills federal gaps

Regulatory activity declined overall in 2025, but the survey shows states stepping in aggressively as federal enforcement slows. Eighty-two percent of respondents reported increased state enforcement tied to shifting federal priorities. For HR, that translates into a compliance landscape where local rules matter more, and national policies that lack flexibility create exposure.

HR teams should reassess where policies rely on federal baselines alone and identify areas where state-specific guidance, training or documentation would reduce risk, especially around leave laws, accommodations and pay practices.

Verdict anxiety raises the stakes for consistency

Concerns about “nuclear verdicts,” defined as awards over $10 million, reached 77% among respondents. These verdicts often hinge on narratives of unfair treatment, inconsistent enforcement or poorly documented decisions. HR’s role in maintaining defensible processes has never been more critical.

Practical steps HR leaders should prioritize include:

• Auditing accommodation decisions for consistency across roles and locations
• Reviewing manager discretion in discipline, scheduling and performance decisions
• Strengthening documentation standards before disputes arise.

Preparedness is slipping as complexity grows

Only 29% of respondents said they feel very prepared for litigation in the year ahead, down sharply from last year. Staffing constraints, rising costs and legal complexity all contribute, but HR can counterbalance those pressures by tightening policy governance and improving manager education.

As employment disputes grow more nuanced and less predictable, HR’s ability to align intent, execution and documentation may determine whether emerging risks stay manageable or escalate into costly litigation.