Publications

Culture&Work: Summer 2025

International and Litigation Alert

Featured in this Edition

Introduction

In this issue of Culture&Work, we discuss the administration's enforcement focus on Diversity, Equity, and Inclusion (DEI) activities, stemming from executive orders (E.O.s) and agency activities by the Equal Employment Opportunity Commission (EEOC), Department of Justice (DOJ), Department of Education (ED), and Federal Communications Commission (FCC), with particular attention to the impact on recipients of federal funding, including companies and educational institutions. We also consider what actions state attorneys general are taking with respect to DEI and what other enforcement priorities and litigation risks are emerging in the discrimination and harassment space. Our Risk Factor Spotlight focuses on "Coarsened Social Discourse Outside the Workplace," which can lead to increased risk of harassment inside the workplace and is an issue many workplaces are navigating. 

Executive Orders Related to DEI

Since January 20, the Trump administration has issued five E.O.s aimed at DEI initiatives in the federal government and private sector (collectively, the DEI E.O.s). The DEI E.O.s touch on three main themes: elimination of DEI programs within the federal government and at organizations which receive federal funding, revocation of measures put in place by prior administrations to support historically disadvantaged groups, and the broader prohibition of DEI activities within the private sector. 

Key aspects of the E.O.s are:

  1. E.O. 14173 ("Ending Illegal Discrimination and Restoring Merit-Based Opportunity") orders federal agencies to combat DEI initiatives in the private sector. The E.O. directs federal agencies to establish new contractual requirements for recipients of federal funding, the inclusion of terms making compliance with anti-discrimination law "material" to payment decisions, and requiring contractors to certify that they do "not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws." The E.O.'s characterization of the certification as "material" increases risks for companies under the False Claims Act (FCA), in particular by requiring contract provisions that could make it more challenging to defend against FCA allegations arising under covered federal contracts and grants. 
     
    Notably, the E.O. also requires the Attorney General (AG) to recommend enforcement measures to "encourage the private sector to end illegal discrimination and preferences, including DEI," and to propose a "strategic enforcement plan" that identifies "key sectors of concern." The E.O. instructs each agency to "identify up to nine potential civil compliance investigations" targeting certain organizations, including publicly traded corporations, and to address other strategies to encourage the private sector to end "illegal DEI discrimination and preferences." Agencies should also identify potential litigation, regulatory action, and guidance on "illegal DEI."
  2. E.O. 14151 ("Ending Radical and Wasteful Government DEI Programs and Preferencing") instructs the Director of the Office of Management and Budget (OMB), the AG, and the Director of the Office of Personnel Management (OPM) to terminate all "illegal DEI and 'diversity, equity, inclusion, and accessibility' (DEIA) mandates, policies, programs, preferences, and activities" within the federal government. The E.O. also orders all federal agencies to terminate DEI and DEIA offices, positions, and "equity-related" grants or contracts.
  3. E.O. 14148 ("Initial Rescissions of Harmful Executive Orders and Actions") revokes 67 prior E.O.s and 11 presidential memoranda, including E.O.s related to racial equity and support in underserved communities, preventing and combating discrimination on the basis of gender identity or sexual orientation, advancing equity, justice, and opportunity for Asian Americans, Native Hawaiians, and Pacific Islanders, DEI and accessibility in the federal workforce, promoting pay equity and transparency, and advancing equality for lesbian, gay, bisexual, transgender, queer, and intersex individuals. The E.O. states that "the injection of [DEI] into our institutions has corrupted them by replacing hard work, merit, and equality with a divisive and dangerous preferential hierarchy... The revocations within this order will be the first of many steps the United States Federal Government will make to repair our institutions and our economy."
  4. E.O. 14168 ("Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government") states that it is "the policy of the United States to recognize two sexes, male and female" and directs federal agencies and employees to "enforce laws governing sex-based rights, protections, opportunities, and accommodations to protect men and women as biologically distinct sexes." The E.O. also directs federal agencies to "use the term 'sex' and not 'gender' in all applicable Federal policies and documents" and to "remove all statements, policies, regulations, forms, communications, or other internal and external messages that promote or otherwise inculcate gender ideology, and shall cease issuing such statements, policies, regulations, forms, communications or other messages." The E.O. further proposes legislative action to codify these rules into law.
  5. E.O. 14281 ("Restoring Equality of Opportunity and Meritocracy") states that "[i]t is the policy of the United States to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible" and that "disparate-impact liability has hindered businesses from making hiring and other employment decisions based on merit and skill, their needs, or the needs of their customers because of the specter that such a process might lead to disparate outcomes, and thus disparate-impact lawsuits."

Key Takeaways

  • Under the DEI E.O.s, companies across industries face heightened risk of investigation and enforcement for ongoing DEI efforts and activities. Although not prohibited by federal law, certain activities may be deemed by the administration to be at odds with its DEI-related priorities. While the administration's enforcement efforts currently target federal contractors and other recipients of federal funding, such as universities, the scope of the E.O.s is broad and could result in other industries and sectors being subject to similar scrutiny.
  • The DEI E.O.s create uncertainty for companies regarding whether their specific DEI programs and activities may be at odds with the administration. The DEI E.O.s introduce the concept of "illegal DEI," but do not address which policies and practices meet that definition. Agency inquiries and enforcement actions to date have not provided clarity on this topic. While guidance has been issued by various agencies (e.g., the OPM memorandum, EEOC and DOJ joint technical assistance documents (discussed further here)) indicating that DEI-related activities will be scrutinized under Title VII standards, the term "illegal DEI" remains undefined.
  • While Title VII and state equivalents remain in effect, companies must now navigate compliance with those federal and state laws while mitigating risk of enforcement under the DEI E.O.s. The new administration has not provided specific guidance on how companies can take lawful action to prevent race- and sex-based preferences in employment matters. Absent such guidance, companies should maintain focus on compliance with established federal and state laws prohibiting discrimination and harassment against their employees regardless of race, gender, ethnicity, or other protected characteristics. 
  • Companies should stay tuned for additional agency actions. Moving forward, entities should continue to closely monitor this space — including new E.O.s, regulatory and administrative guidance, and the numerous lawsuits challenging the government's actions — to ensure compliance in this ever-evolving landscape. Companies should be particularly attentive to pending agency reports to the AG and to the White House as requested under AG Bondi's memorandum and E.O. 14173. While these memoranda will not have the force of law, they may provide greater clarity on the administration's priorities and help companies to better assess investigation risks and the risk of other administrative actions. 

For insights on how the E.O.s affect government contractors, continue reading.

DOJ Launches Civil Rights Fraud Initiative to use False Claims Act to Combat Civil Rights Violations

As covered in this alert, on May 19, 2025, Deputy Attorney General (DAG) Todd Blanche announced the launch of the Civil Rights Fraud Initiative (CRFI), through which the DOJ plans to leverage the FCA against entities that receive federal funds and allegedly engage in discriminatory practices. The announcement follows AG Bondi's February 5 "Ending Illegal DEI and DEIA Discrimination and Preferences" memorandum, directing the Civil Rights Division and the Office of Legal Policy to submit a report containing recommendations for enforcement.

DAG Blanche's memorandum specifically called attention to higher education institutions and others who receive federal funding. It also referred to E.O. 14173, which establishes new contractual requirements for recipients of federal funding and stated that compliance with anti-discrimination law is "material" to payment decisions, requiring federal contractors to certify that they do "not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws." 

Consistent with E.O. 14173, DAG Blanche's memorandum "strongly encourages" private parties to act as qui tam relators by filing and litigating lawsuits under the FCA and to report discrimination to the DOJ. Referencing 31 U.S.C. § 3730, the memorandum explicitly notes that private parties stand to share in any monetary recovery obtained as a result of such litigation.

Key Takeaways

  • The CRFI is focused on educational institutions. The memorandum draws attention to universities, which have been a consistent focus of executive actions under the current administration. It notes that a university that receives federal funds could be found to violate the FCA when it "encourages antisemitism, refuses to protect Jewish students, allows men to intrude into women's bathrooms, or requires women to compete against men in athletic programs." This announcement comes only days after the DOJ issued a Civil Investigative Demand to investigate alleged FCA violations by Harvard University on a similar basis. (We have previously discussed the risks faced by universities here and further discuss risks to educational institutions here.)
  • Federal contractors and other recipients of federal funding are a key target area. The memorandum also explicitly extends beyond universities, noting that the CRFI "is also implicated whenever federal-funding recipients or contractors certify compliance with civil rights laws while knowingly engaging in [alleged violations]." Again, the administration has already explicitly laid the groundwork for application of the FCA to government contractors more broadly, including through E.O. 14173's requirement that such entities certify that they do not operate any DEI programs or initiatives that violate federal anti-discrimination laws. DAG Blanche's memorandum confirms the administration's intent to pursue this avenue of enforcement.
  • The CRFI is organized around joint leadership and nationwide coordination. To "ensure a comprehensive approach," the memorandum expects the Civil Rights Section and Civil Rights Division to regularly coordinate with each other, the Criminal Division, and other federal agencies. In addition, each of the 93 U.S. Attorney's Offices is tasked with appointing an Assistant U.S. Attorney to support the CRFI.

DOJ and EEOC Release Technical Assistance Documents for Filing Discrimination Claims Related to DEI and Supreme Court Clarifies Standard for Title VII Claims

On March 19, 2025, the DOJ and EEOC each announced the release of new guidance on filing discrimination claims stemming from DEI initiatives. The guidance follows a broader push by the administration to "end[] illegal DEI initiatives, policies, and programs," as previously discussed here and here. 

The March guidance includes a one-page technical assistance document, released jointly by the DOJ and EEOC, as well as a technical assistance document in Q&A form, released only by the EEOC. Both documents emphasize that although DEI is not defined in Title VII, Title VII's anti-discrimination protections extend to DEI initiatives. The one-page technical assistance document states: "DEI policies, programs, or practices may be unlawful if they involve an employer or other covered entity [such as an employment agency or labor organization] taking an employment action motivated—in whole or in part—by an employee's race, sex, or another protected characteristic." Even when a protected characteristic is only one factor contributing to an employment action, that action may still constitute unlawful discrimination. The document cites examples of unlawful DEI as using quotas, making hiring or promotion decisions, or limiting membership access to workplace affinity groups based on protected characteristics, such as race or sex. In addition, the EEOC and DOJ note that providing DEI training may also create a hostile work environment. Consistent with this guidance, the technical assistance documents instruct individuals who believe they have suffered discrimination, including as a result of unlawful DEI, to file a charge of discrimination with the EEOC before filing a lawsuit in court.

The EEOC's ability to issue official guidance is currently limited because the agency lacks a quorum. The EEOC's leadership is generally comprised of five commissioners and three are necessary for a quorum. In January, President Trump dismissed two of the then-four sitting commissioners, leaving only two commissioners in their roles. No commissioners had previously been dismissed prior to the ends of their terms. While the EEOC operates without a quorum, the agency can continue to enforce federal anti-discrimination laws but is unable to vote on rulemaking, issue new policies, or rescind existing guidance documents. Acting EEOC Chair Andrea Lucas is able to issue technical assistance documents, such as the two discussed above.

On the heels of these technical assistance documents, on June 5, in Ames v. Ohio Department of Youth Services, a unanimous Supreme Court overturned the Sixth Circuit's heightened evidentiary standard for majority-group plaintiffs to bring a Title VII disparate-treatment claim. The Court held that the additional requirement to show "'background circumstances to support the position that the defendant is the unusual employer who discriminates against the majority'... is not consistent with Title VII's text or our case law construing the statute." In doing so, the Court resolved a circuit split on the heightened standard issue. The Court made clear that "the standard for proving disparate treatment under Title VII does not vary based on whether or not the plaintiff is a member of a majority group" and that the pleading standard for any plaintiff, regardless of majority or minority status, is to first "make a prima facie showing that the defendant acted with a discriminatory motive." 

Key Takeaways

  • The technical assistance guidance demonstrates how two agencies are refocusing their enforcement efforts on "illegal DEI." In light of Trump's E.O.s aimed at eliminating DEI programs and initiatives, the EEOC and DOJ are now taking additional steps to prescribe the types of DEI activities that would run afoul of federal anti-discrimination laws. The guidance identifies a broad swath of activities that may give rise to potential liability, including any decisions or actions motivated by an individual's protected characteristic that involve hiring, firing, promotion, compensation, selection for interviews, or exclusion from trainings, mentoring programs, or fellowships, among others. Separating employees based on race, sex, or another protected characteristic, or even offering DEI training itself may also present risk. 
     
    As noted above, this guidance does not resolve the fundamental question as to what constitutes "illegal DEI." Instead, the guidance documents reiterate well-established anti-discrimination principles and describe examples of DEI activities that "may" be illegal and encourage parties to file complaints. As such, companies face ongoing uncertainty and heightened risks of investigations, enforcement, and litigation. Employers should carefully consider their own programs and initiatives to identify areas of possible exposure. 
  • The technical assistance documents do not alter or change existing federal anti-discrimination laws. While the EEOC, DOJ, and the Trump administration more broadly are focused on "illegal DEI," the underlying laws continue to exist. Rather, the technical assistance documents give the public insight into the types of issues that the agencies will be particularly interested in going forward — in this case, DEI — but employers should not lose sight of traditional discrimination, harassment, and retaliation issues, as those also continue to be prohibited by anti-discrimination laws. 
  • The Ames decision clarifies the legal standard for Title VII claims just as the DOJ and the EEOC are encouraging parties to file complaints related to DEI initiatives. Although Ames did not address the legality of any particular DEI activities, it makes clear the prima facie standard that will apply to members of majority groups who seek to challenge those efforts until Title VII. 

Enforcement Focus on "Anti-American Bias"

Upon her appointment as Acting Chair of the EEOC on January 21, 2025, Andrea Lucas announced that one of her priorities would be "protecting American workers from anti-American national origin discrimination."

Less than a month later, on February 18, 2025, the EEOC announced a settlement with the LeoPalace Guam Corporation (LeoPalace). The EEOC alleged that "from as early as 2015, LeoPalace provided non-Japanese employees — including multiple former employees of American national origin — in Guam with less favorable wages, benefits, and terms and conditions of employment compared to employees from Japan who held equal or lesser positions." LeoPalace agreed to pay $1,412,500 and to engage an independent monitor to "oversee compliance, training and review of policies and procedures, as well as overseeing the reinstatement of former employees who are interested in going back to work for LeoPalace" and to "conduct periodic audits and report to the EEOC." 

On February 19, 2025, the day after the LeoPalace settlement was announced, Acting Chair Lucas released a statement further emphasizing the EEOC's prioritization of national origin discrimination and tying the EEOC's commitment to "anti-American bias" enforcement to the Trump administration's focus on immigration. Lucas stated that "if you are part of the pipeline contributing to our immigration crisis or abusing our legal immigration system via illegal preferences against American workers, you must stop." She asserted that "[m]any employers have policies and practices preferring illegal aliens, migrant workers, and visa holders or other legal immigrants over American workers — in direct violation of federal employment law prohibiting national origin discrimination" and that "[c]racking down on this type of unlawful discrimination will shift employer incentives, decreasing demand for illegal alien workers and decreasing abuse of the United States' legal immigration system." In publishing Lucas's statement, the EEOC further noted that "[a]lthough Title VII's national origin nondiscrimination requirement generally means that employers cannot prefer American workers, it equally means that employers cannot prefer non-American workers and disfavor Americans." 

Key Takeaways

  • The LeoPalace settlement is the first EEOC enforcement action of the second Trump administration to require an independent monitor, signaling that such mechanisms are still on the table despite the administration's general disfavor towards monitors (including in the context of FCPA settlements and in the DOJ's newly updated May 12, 2025 Memorandum on the Selection of Monitors in Criminal Division Matters). To avoid the potentially costly and intrusive nature of an independent monitor, companies looking to settle with the EEOC should consider conducting their own risk assessments and monitoring designed to implement ongoing compliance program improvements. Effective use of these practices can demonstrate that there is no need for an external party to review their remediation. 
  • Acting Chair Lucas's statement puts employers and employees on notice of the second Trump administration's enforcement priorities and echoes general sentiment surrounding immigration, but does not give significant guidance on what exactly would rise to the level of violating Title VII's national origin prohibition. Careful tracking of federal and state enforcement efforts may help employers identify government priorities and the risks they may create as to their own programs.
  • The LeoPalace matter is not the EEOC's first anti-American discrimination case. In 2023, the EEOC settled with a job search website for its failure to control for job postings that exclude those of American origin, and in 2009, the EEOC charged a farm with employment practices and decisions disadvantaging seasonal American workers (many of whom were African American) over foreign employees. However, historically, the EEOC has brought enforcement actions for more traditional national origin discrimination cases, with only a few cases alleging anti-American bias or national origin discrimination against Americans. In the first few months of this administration, the EEOC also settled such traditional national origin discrimination cases including settling with a California construction company for harassment of male Hispanic workers based on national origin or race and gender, a restaurant chain for its treatment of a Iranian employee based on national origin, and three Florida companies for their treatment of Black and Hispanic employees. None of these settlements involved anti-American bias.

Department of Education Issues Letters and Begins Investigations into Educational Institutions Regarding DEI and Antisemitism

In recent months, the ED has taken a series of actions aimed at addressing what it considers pervasive discrimination on educational campuses in the U.S. and, for the time being, courts have enjoined several of these initiatives. On April 24, 2025, a federal court in New Hampshire, in the matter of National Education Association (NEA) v. U.S. Department of Education, enjoined the ED from "enforcing and/or implementing" the Dear Colleague Letter (DCL) discussed below. The New Hampshire court held that the ban on DEI embodied in the Dear Colleague Letter is "ill defined" and unconstitutionally vague. This injunction, however, only limits enforcement to the plaintiffs in the case – the NEA, NEA New Hampshire, and the Center for Black Educator Development, and their respective affiliates – and is not applicable nationwide. However, the ED has stated that, as a result of the litigation, "the Department of Education's Office for Civil Rights will not take any enforcement action, or otherwise implement, the February 28, 2025, Dear Colleague Letter, associated FAQs, the End DEI Portal, or the certification requirement until further notice."

Similarly, a district court in Maryland, in American Federation of Teachers (AFT) v. U.S. Department of Education preliminarily held that the plaintiffs are likely to succeed on their claim that the DCL does not comply with the federal Administrative Procedure Act (APA) and is therefore presumptively invalid. The court imposed a nationwide stay of the DCL until legal challenges to the DCL are decided on their merits. While that court declined to stay the ED's rollout of its FAQs and the End DEI portal, finding that neither initiative is a final agency action, the court found the requested compliance certification to be invalid in so far as it is a means to implement the Dear Colleague Letter. 

Where an action has been enjoined, we note "enjoined/temporarily not enforced" below. 

ED Issues "Dear Colleague" letter on Eradicating Racial Discrimination within Educational Institutions

[enjoined/temporarily not enforced]

On February 14, 2025, Craig Trainor, the ED's Acting Assistant Secretary for Civil Rights, issued the "Dear Colleague Letter" to several universities, contending that some educational institutions have engaged in discriminatory practices against students of certain racial backgrounds, including white and Asian students from underprivileged or low-income families under the guise of DEI. The letter states that the ED is committed to reviewing whether schools and agencies are complying with anti-discrimination laws and exhorts all federally funded educational institutions to "(1) ensure that their policies and actions comply with existing civil rights law; (2) cease all efforts to circumvent prohibitions on the use of race by relying on proxies or other indirect means to accomplish such ends; and (3) cease all reliance on third-party contractors, clearinghouses, or aggregators that are being used by institutions in an effort to circumvent prohibited uses of race." Relatedly, on February 28, 2025, the ED published a Frequently Asked Questions Document About Racial Preferences and Stereotypes under Title VI of the Civil Rights Act (the FAQ) and created an "End DEI" portal for parents, students, teachers, and the broader community to submit reports of discrimination based on race or sex in publicly funded K-12 schools. 

The ED Sends Letters Requiring Certification from K-12 Schools; Currently Paused by the Courts

[enjoined/temporarily not enforced]

On April 3, 2025, the ED announced that it sent a letter and certification to state commissioners overseeing K-12 State Education Agencies (SEAs) and Local Education Agencies (LEAs). 

The letter and certification, titled, "Reminder of Legal Obligations Undertaken in Exchange for Receiving Federal Financial Assistance and Request for Certification under Title VI and SFFA v. Harvard," requested certification of review and compliance with the document and acknowledgement that compliance was a "material condition for the continued receipt of federal financial assistance." 

The document reflects the ED's position on the applicability of the Supreme Court's 2023 decision in Students for Fair Admissions, Inc. v. President & Fellows of Harvard Coll., 600 U.S. 181 (2023) to K-12 education and specifically that "the use of [DEI] programs to advantage one's race over another — is impermissible." The SEAs were given a 10-day deadline to submit the required certifications.

The ED's OCR Initiates Title VI Investigation into Institutions of Higher Education

In a March 14, 2025 press release, the ED's Office for Civil Rights (OCR) announced that it opened investigations into universities for alleged violations of Title VI of the Civil Rights Act of 1964. The OCR's investigations against these universities concern:

  • Investigations of 45 universities for allegedly "engaging in race-exclusionary practices in their graduate programs." The allegations stem from university partnerships with "The Ph.D. Project," an organization that provides doctoral students with networking and academic support, but which purportedly limits eligibility based on race.
  • Investigations of seven universities for allegedly impermissible race-based scholarships and race-based segregation.

The ED Starts Investigations of Five Universities and Issues Letters to 60 Universities Regarding Antisemitism

On February 3, 2025, the ED announced that, consistent with the "Additional Measures to Combat Antisemitism" E.O., it had opened investigations into five universities "where widespread antisemitic harassment has been reported." The universities under investigation are Columbia University, Northwestern University, Portland State University, the University of California, Berkeley, and the University of Minnesota Twin Cities. The ED's announcement states that the focus of the investigations is Title VI of the Civil Rights Act, "which protects students from discrimination and harassment based on national origin, including shared ancestry." Universities were identified as the priority of the multi-agency Task Force to Combat Antisemitism, which was also announced on February 3.

Approximately one month later, on March 10, 2025, the ED's OCR sent letters to 60 higher education institutions warning of potential enforcement actions if they fail to fulfill their obligations under Title VI, which includes protecting Jewish students and ensuring their uninterrupted access to campus facilities and educational opportunities.

Key Takeaways

  • Court challenges have paused certain ED DEI-related initiatives for now. As with many of the administration's DEI-related efforts, there is ongoing litigation. Multiple courts have issued injunctions against the DCL sent to higher education and K-12 schools. In the coming months, courts will issue decisions in the cases and there will likely be appeals and further challenges. 
  • Investigations have not been paused by injunctions. Although some of the administration's DEI-related efforts have been enjoined, the administration's ability to conduct investigations has not been impacted. As of this writing, the ED's investigations into 45 universities for potential Title VI violations and into five universities for antisemitism are ongoing. And, importantly, the ED is not enjoined from continuing to launch additional investigations. 

Federal Communications Commission Launches DEI Investigations into Telecommunications and Media Companies

Over the last few months, the FCC has taken action against telecommunications and broadcast companies within its purview on the basis of DEI. On February 11, 2025, the FCC announced an investigation into Comcast and NBCUniversal's DEI practices and on February 27, 2025, the FCC sent a letter to Verizon referencing the Comcast investigation and criticizing Verizon's DEI practices (notably, Verizon has since committed to changes, as discussed below). The following month, on March 27, 2025, the FCC announced a similar investigation into the DEI practices of Disney and ABC. The FCC letters are indicative of the way at least one agency is interpreting its mandate from recent executive orders to curb DEI in the private sector. As FCC Chairman Brendan Carr wrote in his letter to Comcast, "President Trump's Executive Order [14173] also tasked federal agencies with combatting illegal private-sector DEI preferences, mandates, policies, programs, and activities."

Comcast and NBCUniversal

On February 11, 2025, Carr announced an FCC Enforcement Bureau investigation into the DEI practices of telecommunications conglomerate Comcast and its media and entertainment subsidiary, NBCUniversal. Carr's letter to Comcast announcing the investigation stated that "the Communications Act and Commission rules prohibit regulated entities — like Comcast and NBCUniversal — from discriminating on the basis of race, color, religion, national origin, age, or gender" and expresses "concern[] that Comcast and NBCUniversal may be promoting invidious forms of DEI in a manner that does not comply with FCC regulations." 

As examples of alleged instances of non-compliance, Carr pointed to statements from Comcast's website that promote DEI as "a core value of our business" and "public reports... that Comcast has an entire 'DEI infrastructure' that includes 'DEI day[s],' 'DEI training for company leaders,' and similar initiatives." The letter stated that NBCUniversal has "similar DEI initiatives, including executives specifically dedicated to promoting DEI across the TV and programming side of the business."

Verizon and Frontier

Verizon similarly received a letter from the FCC in connection with its proposed acquisition of Frontier, although the Verizon letter, unlike the one sent to Comcast, did not specifically reference the opening of an investigation. Instead, invoking "the apparent lack of progress at Verizon" regarding ending "invidious forms of DEI discrimination," the FCC directed Verizon "to reach out to the agency personnel that have been working on Verizon's pending transactions at the FCC" – ostensibly referencing Verizon's mergers and acquisitions activity – in order to "aid FCC's resolution of these matters."

The letter stated that Verizon had made statements in favor of DEI, including that DEI is "more than the right thing to do – it is a source of strategic business value for Verizon" and that "Verizon leadership is committed to DEI and has built DEI considerations into companywide programs and processes." 

On May 16, 2025, the FCC announced that it had approved Verizon's acquisition of Frontier. The FCC's press release states: "Ensur[ing] that Discriminatory DEI Policies End. Verizon has also committed to ending DEI-related practices as specified in the FCC's record and has reaffirmed the merged entity's commitment to equal opportunity and nondiscrimination. This will ensure that the combined business will enact policies and practices consistent with the law and the public interest."

Disney and ABC

On March 27, 2025, Carr issued a similar letter to The Walt Disney Company, announcing an FCC investigation into the DEI practices of Disney and its subsidiary, ABC. The March 27 letter characterizes "numerous reports" as "indicat[ing] that Disney's leadership went all in on invidious forms of DEI discrimination a few years ago." The letter stated that the FCC has observed that Disney "recently made some changes to how it brands certain efforts," and that "it is not clear that the underlying policies have changed in a fundamental manner — nor that past practices complied with relevant FCC regulations." The letter is specifically critical of Disney's alleged prioritization of "explicit race- and gender-based criteria across its operations," pointing to activities related to affinity groups, inclusion standards, executive bonuses, and the use of "race-based hiring databases and restricted fellowships to select demographic groups." 

Key Takeaways

  • The FCC letters present a new frontier for companies navigating a changing DEI landscape. Per its mandate, as set forth by the Communications Act, the FCC reviews transactions to determine whether the proposed transaction would serve "the public interest, convenience, and necessity." Although not detailed in the letters, it is possible that the FCC is stretching its application of the "public interest standard" to include whether a company implements DEI programs that the administration views as unlawful based on the position that such programs are against the public's interest. 
  • Although the law on discrimination has not changed, companies before the FCC will need to think critically about what specific aspects of their employee programs may make them vulnerable to FCC investigation. At the same time, as noted above, companies should carefully consider what aspects of those programs are necessary to prevent discrimination and harassment under Title VII and state law equivalents. 

What States Are Doing

State AGs have begun to act in response to the Trump administration's issuance of DEI-related executive orders. 

Missouri Sues Starbucks for Alleged Race and Sex-Based Discrimination

In February 2025, the Missouri AG Andrew Bailey filed a lawsuit against Starbucks alleging race, sex, and sexual-orientation based discrimination in violation of federal civil rights laws (the Civil Rights Acts of 1866 and 1964) and the Missouri Human Rights Act (MHRA). 

The Missouri AG alleges in the complaint that "Starbucks has decided to require outright race- and sex-based discrimination in hiring via quotas, segregate employees on unlawful bases, and single out preferred groups for additional training and employment benefits." The lawsuit compares Starbucks's DEI programs to affirmative action practices in college admissions, and alleges that Starbucks's programs constitute quotas and racial balancing that the Supreme Court found unlawful in the context of college admissions programs in Students for Fair Admissions, Inc. v. Pres. and Fellows of Harvard Coll., 600 U.S. 181 (2023).

The lawsuit takes aim at Starbucks's DEI initiatives in several areas, including: 

  • Aspirational diversity goals, which the Missouri AG characterizes as unlawful quotas
  • The "Starbucks Diversity Mentorship Program," which the Missouri AG alleges excludes white men
  • Participation in the Board Diversity Action Alliance, which the Missouri AG describes as "committ[ing] itself to using a quota for its corporate boards"
  • Adding an executive compensation metric to evaluate success in building inclusive and diverse teams, which the Missouri AG described as implementing a quota system
  • Maintaining "partner networks" based on shared identity and experience, which the complaint describes as discriminatory

Starbucks filed a motion to dismiss the complaint on April 7, arguing deficiencies in personal and subject-matter jurisdiction, lack of standing of the Missouri AG to bring the claims, and failure to state a claim for each of the 10 claims brought. Starbucks emphasized that despite making conclusory allegations about discrimination in the policies and practices described, the complaint fails to identify any specific example of an individual whose hiring, training, advancement opportunities, board appointment opportunities, or other employment benefit was specifically harmed. 

Sixteen AGs Issue Guidance Encouraging DEI Programs, Emphasizing Legality and Value

In February 2025, AGs from 16 states issued joint guidance on DEIA initiatives, in response to the Trump administration's January "Ending Illegal Discrimination and Restoring Merit-Based Opportunity" E.O. The AGs "aim[] to clarify the state of the law" and "help businesses, nonprofits, and other organizations operating in our respective states understand the continued viability and important role of diversity, equity, inclusion, and accessibility efforts… in creating and maintaining legally compliant and thriving workplaces." 

The guidance is issued by the AGs of Arizona, California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Oregon, Rhode Island, and Vermont, and clarifies that the E.O. does not outlaw DEIA programs. The AGs critique the E.O.'s "inaccurate and misleading" conflation of "unlawful preferences in hiring and promotion" with "sound and lawful best practices for promoting diversity, equity, inclusion, and accessibility in the workforce."

The AGs encourage the use of DEIA initiatives, emphasizing their value in preventing unlawful discrimination and contributing to organizational success. The guidance outlines best practices for the use of lawful DEIA initiatives in recruitment and hiring, professional development and retention, and assessment and integration. 

Key Takeaways

  • Companies should evaluate their recruiting and hiring practices. Companies should ensure that recruiting and hiring practices are appropriately tailored to mitigate the risk of discrimination on the basis of race, gender, and other protected characteristics while not extending to practices under scrutiny by the current administration (e.g., hiring quotas or targets). The AG guidance for recruitment and hiring includes focusing on attracting a wide pool of diverse applicants, using panel interviews to help eliminate bias and increase fairness, establishing standard criteria for evaluating candidates, and ensuring accessibility in recruitment and hiring protocols, including providing appropriate accommodations. 
  • Companies should similarly evaluate professional development and retention programs to mitigate the risk of administrative action, while nevertheless advancing the goal of preventing discrimination under Title VII and state law equivalents. The AG guidance recommends ensuring equal access to professional development regardless of background, creating Employee Resource Groups for employees with shared backgrounds or experiences without excluding other groups, conducting training "on topics such as unconscious bias, inclusive leadership, and disability awareness," and "ensuring equal access to all aspects of employment, including through reasonable workplace accommodations."
  • Companies should conduct ongoing monitoring and periodic assessment of their anti-discrimination and anti-harassment activities and programs. The AG guidance recommends monitoring the success of implemented policies and practices at achieving goals including "retaining qualified talent, ensuring an inclusive, accessible, and collaborative environment," creating opportunities for employees to discuss workplace experiences and "clear protocols" for reporting harassment and discrimination, creating working groups to focus on inclusivity, and promoting "belonging and unity" in everyday practices.

For each of these areas, legal and compliance departments should work closely with human resources to review recruiting and hiring practices to ensure ongoing compliance with Title VII.

Industry Spotlight: Government Contractors

Government contractors are among those most directly impacted by the DEI E.O.s, which aim to deter DEI practices both within the federal government and at private entities that do business with the government. Contracts for services related to DEI have been canceled and terminations will continue as agencies work through the executive directives. Many contractors have received notices about modifications to existing contracts or pending solicitations to remove provisions that prohibited discrimination and imposed equal employment opportunity requirements. 
 
E.O. 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, directs heads of executive agencies to include in every contract or grant award terms requiring recipients of federal funds to certify that they do not operate any programs that promote DEI in violation of federal anti-discrimination laws and that compliance with such laws is "material" to the government's payment decisions. The terms of the certification raise potential FCA risks because, to maintain an FCA suit, the government or a whistleblower must show that a defendant's alleged violation of law was "material" to the government's decision to pay a given claim. So, by signing a materiality certification upfront, contractors may have more difficulty defending FCA suits based on allegations of unlawful DEI. Additionally, by revoking prior E.O.s (11246 and 3672), E.O. 14173 means federal contractors are no longer obligated to have affirmative action plans or to submit specific demographic data. The E.O. also directs the Office of Federal Contract Compliance Programs (OFCCP) to immediately cease holding federal contractors responsible for taking affirmative action.
 
The DEI landscape is further complicated for contractors because they still must comply with federal and state anti-discrimination laws, which have not changed. As we explain here, it remains illegal for businesses to discriminate on the basis of race, color, religion, sex, or national origin, and employers have a continuing obligation to provide a safe, harassment-free workplace. In response to the DEI E.O.s, attorneys general of 16 states issued a multi-state guidance (discussed above) affirming the states' commitments to enforcing state anti-discrimination laws. 

Key Takeaways

How can federal contractors best position themselves amid shifting DEI requirements?

  • Stay up to date. Keeping up with the rapid changes affecting contractors' obligations is a difficult task. For example, on February 21, 2025, a district court in Maryland issued an injunction temporarily suspending the certification requirement imposed on contractors by E.O. 14173. On March 14, the Fourth Circuit dissolved the injunction. Then on April 16, a district court in Illinois issued a preliminary injunction preventing the Department of Labor (DOL) from enforcing the certification requirement. Since contractors should avoid making unnecessary certifications but also do not want to risk non-compliance, frequent communication with the contracting officer is key.
  • Review internal practices and policies. Contractors should conduct a careful review of DEI, recruitment, and human resources practices and policies (as well as training manuals, internal communications, and public-facing communications) to identify any practices that may constitute a violation of applicable anti-discrimination laws. That should include a look at affirmative action plans submitted in the past to comply with previous federal contracting requirements. The new OFCCP director instructed her staff in a late-March email to review those submissions "to determine whether they indicate the presence of long-standing unlawful discrimination" that could prompt further investigation and enforcement action. It is also important for contractors to maintain robust documentation regarding any reviews or assessments of DEI practices and policies to support any certifications of compliance that may be required by federal agencies, prime contractors, or other higher tier customers.
  • Gather documentation. Contractors involved in "equity-related" or "DEIA-related" work should prepare for possible contract terminations in 2025 or early 2026. Such terminations would likely be terminations for convenience, entitling the contractor to payment for work performed and for costs incurred as a result of the termination. In the event of termination, appropriate documentation of expenses will be critical in any termination settlement proposal or subsequent dispute. 
  • For multinational contractors, assess whether any DEI requirements imposed by other applicable jurisdictions may conflict with the E.O.s. To the extent that any such conflicts exist, assess whether any adjustments to DEI policies and activities may be necessary – globally or in the particular entities involved in providing goods/services to the U.S. government. According to media reports, U.S. embassies issued letters to numerous multinationals based in non-U.S. jurisdictions, indicating that the U.S. government seeks to impose the E.O. requirements on non-U.S. companies who do business with the U.S. federal government. 

Risk Factor Spotlight: Coarsened Social Discourse Outside the Workplace

This edition's highlighted risk factor from the EEOC's Chart of Risk Factors for Harassment and Responsive Strategies is "Coarsened Social Discourse Outside the Workplace," referring to "[i]ncreasingly heated discussion of current events occurring outside the workplace," which "may make harassment inside the workplace more likely or perceived as more acceptable." To address this dynamic, the EEOC encourages employers to "[p]roactively identify" current events that may be ripe for discussion and take the opportunity to remind employees of standards for acceptable workplace conduct. 
 
In today's domestic and international political climate, the separation between personal and professional discourse is often blurred. Conversation among colleagues, friends, and strangers — such as via social media — about political issues often spills over into the workplace, and it is important for employers to be mindful of how such conversations may escalate and present harassment risks in the workplace. To mitigate these risks, the EEOC advises that organizations consider implementing the following strategies:

  • Proactively identify current events — global, national, and local — that are likely to be discussed in the workplace
  • Remind the workforce of the types of conduct that are unacceptable in the workplace

In addition, employers should also consider the following protective measures given the current prevalence of this risk factor: 

  • Ensuring leadership teams are situationally aware of hot topics and assessing potential risks 
  • Reviewing existing anti-harassment policies and trainings to assess whether they cover conduct that can result in coarsened discourse in the workplace 
  • Distributing top-down communication reminding employees of the organization's policies regarding respect and professionalism and the avoidance of coarsened or harassing discourse 
  • For workplaces that may stream local or national news coverage in shared spaces, avoiding potentially polarizing news programs 
  • Reminding employees of resources and support (e.g., Employee Assistance Programs) available to them as they navigate challenging topics in their professional lives 

U.K. Financial Conduct Authority Announced It Will Not Introduce New Diversity and Inclusion Regulations

On March 12, 2025, the U.K. Financial Conduct Authority (U.K. FCA) announced that it would not introduce new diversity and inclusion regulations, making this decision "in light of the broad range of feedback received, expected legislative developments and to avoid additional burdens on firms." Since September 2023, the U.K. FCA and Prudential Regulation Authority were jointly considering a rule that would require companies to collect and report certain data related to diversity and set DEI targets. Per a letter from Nikhil Rathi, the U.K. FCA's Chief Executive, the financial regulator continues to support voluntary reporting initiatives.

In the same announcement, the U.K. FCA retreated from its controversial proposal to disclose more of its investigations to the public. Currently, the U.K. FCA only announces investigations in "exceptional circumstances" and will continue to apply that test for disclosures. In November 2024, the U.K. FCA began to consider publicizing more investigations by applying a softer "public interest" test in order to increase transparency. The proposal was met with strong criticism that the specter of investigations would significantly harm regulated companies, even if the U.K. FCA did not pursue enforcement, and decrease the competitiveness of U.K. companies. 

U.K. FCA-regulated companies that may have been anticipating new DEI implementation and reporting requirements no longer need to prepare for such a scenario. Companies that voluntarily disclose such data and would also be subject to U.S. regulations should review their compliance with the new U.S. E.O.s and guidance related to DEI. Related to general investigations, companies can take comfort in the U.K. FCA's decision to maintain its "exceptions circumstances" test. 

Around the Office

Editors: Ann Sultan, Katherine E. Pappas, Alejandra Montenegro Almonte

Authors: Maame Esi Austin, Alexandra Beaulieu, Katie Cantone-Hardy, Nicole Gökçebay, Elissa B. Harwood, Therese J. Kuester, Aditi Patil, Jesse Schwab

Contributors: Nate Lankford, Alex L. Sarria


The information contained in this communication is not intended as legal advice or as an opinion on specific facts. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. For more information, please contact one of the senders or your existing Miller & Chevalier lawyer contact. The invitation to contact the firm and its lawyers is not to be construed as a solicitation for legal work. Any new lawyer-client relationship will be confirmed in writing.

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Alejandra Montenegro Almonte
Maame Esi Austin
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Nicole Gökçebay
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Therese J. Kuester
Nate Lankford
Katherine E. Pappas
Aditi Patil
Alejandro (Alex) L. Sarria
Jesse Schwab
Ann Sultan

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