The EEOC sued Lush for gender identity discrimination.
Five months later, it dropped the case.
That didn’t end it.
Lush still settled.
This sequence highlights a common misunderstanding: when an agency steps back from a case, employers may assume the underlying risk has diminished. That assumption can create problems.
This case is a good example of how employer risk can remain even after the EEOC drops a case.
What Happened in the Lush Case
Emma Cate Robertson began as a Manager in Training at Lush’s Santa Clara store in late 2020. Robertson identifies as a pansexual nonbinary woman.
According to the allegations, the Store Manager openly and repeatedly sexually harassed direct reports. He allegedly made comments such as, “Someone is on her period because I can smell it,” and suggested to a female employee that a male customer was her type because he was “big.”
He also told Robertson she was “not gay enough” because she had a male partner and outed a Floor Lead who identifies as gender fluid and nonbinary.
Despite threats of retaliation—and claims he was too valuable to be fired—Robertson reported the conduct to a Regional Manager, including recordings. Other employees also complained. The behavior allegedly continued.
After unsuccessful conciliation efforts, the EEOC filed suit in September 2024. It later withdrew from the case in February 2025 following a shift in enforcement priorities regarding gender identity and sexual orientation claims, as outlined in this case summary.
Why the Case Didn’t End When the EEOC Stepped Back
At first glance, that sequence might suggest the risk had diminished. That’s not what this case—and its settlement—reflects.
The allegations were not limited to gender identity or sexual orientation. They included conduct that could support multiple claims, including sexual harassment.
More importantly, stepping away from one theory does not change the underlying facts.
Even when an agency or a plaintiff chooses not to pursue a particular claim, the conduct can still support others—as it did here. While the EEOC withdrew, Robertson did not. She retained private counsel and continued the case.
The Risk Employers Often Miss
This is where employer risk often gets misunderstood—particularly when the EEOC drops a case.
Many employers assume that once a case ends—whether by verdict, settlement, dismissal, or otherwise—the underlying problem has been resolved.
However, resolving a claim does not necessarily resolve what led to it.
This is especially true when one party steps away from a case. If the organization does not address the behaviors and decisions that created the issue in the first place, the risk remains.
Dropping One Claim Doesn’t Eliminate Liability
In this matter, the EEOC chose not to pursue the claim following a shift in enforcement priorities.
However, assuming the allegations were true, the manager’s conduct and the company’s response still exposed Lush to liability. Robertson still had a viable claim.
A decision by one party not to pursue a claim does not eliminate the conduct—or the potential for liability.
Additionally, other employees had also complained. Even without Robertson’s claim, the company still faced a broader workplace issue. The risk did not disappear—it continued to grow.
That likely factored into Lush’s decision to settle. The terms have not been disclosed.
What This Means for Employers
Employers—and the advisors guiding them—can’t afford to read enforcement signals as risk reduction.
While enforcement priorities may shift, the underlying law does not—and neither does the exposure that arises from workplace conduct.
The exposure is in the conduct, not the label placed on it.
Employers usually create most of the risk long before a case reaches this point.
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