Our DEI Legal Developments Spotlight discusses key recent DEI-related developments affecting the private sector, as well as public sector developments that may signal how similar issues will be addressed in the private sector. This installment highlights developments regarding the following:
- Race- and sex-based initiatives, programs, and policies
- Religious accommodations, including vaccine-mandate exemptions
- LGBTQ+ rights and protections
- Disparate-impact liability
- National origin and citizenship discrimination, including alleged “anti-American” discrimination
- DEI-related funding conditions
- Restrictions on benefits for noncitizens
For links to our past timelines, see HERE. For our last edition of DEI Legal Developments Spotlight, see HERE.
KEY DEVELOPMENTS
May 26, 2026 (DOJ sues UCLA over alleged failure to address antisemitism): The U.S. Department of Justice (DOJ) sued the University of California, Los Angeles alleging that it failed to protect Jewish and Israeli students during a series of on-campus protests following Hamas’ October 2023 attack on Israel. The DOJ seeks an order requiring the university to repay federal grants received that period and to reform its antidiscrimination procedures to ensure complaints of discrimination and harassment against Jewish and Israeli students are properly investigated and addressed.
May 26, 2026 (EEOC resolves religious accommodation charges over flu vaccine policy): The EEOC secured a settlement from Northwestern Medical Group to resolve allegations under Title VII that it unlawfully denied its employees’ request for religious exemption from its flu vaccine policy and denied them the opportunity to earn an annual “vaccine incentive bonus.” Pursuant to a two-year agreement, Northwestern agreed to:
- Pay $325,000 in compensatory damages to the employees;
- Revise its policies on religious accommodation requests;
- Educate staff on their rights in the religious accommodation process;
- Train management on religious accommodation requests; and
- Report to the EEOC on denials of religious accommodation requests.
June 1, 2026 (D.C. Cir. finds transgender military ban likely unconstitutional): The D.C. Circuit issued a decision concluding that EO14183—which bans transgender individuals from serving in the military—likely violates the equal protection guarantee of the Fourteenth Amendment. The panel called the ban “both arbitrary and based on animus” but narrowed the district court’s preliminary injunction so that it bars only the exclusion of active-duty service members.
June 4, 2026 (EEOC issues National Enforcement Plan): The EEOC approved a new National Enforcement Plan for fiscal years 2025-2029, which replaces the Strategic Enforcement Plan for fiscal years 2024-2028. Highlighted priorities include:
- Remedying “DEI-related” race and sex discrimination
- Protecting workers from “anti-American” discrimination
- Defending what the EEOC describes as women’s rights to single-sex spaces and to express the binary nature of sex
- Protecting workers’ religious liberty rights to receive religious accommodations and to be free from religious discrimination, harassment, and retaliation
June 5, 2026 (MA federal court enjoins USDA funding conditions): In a text order, a Massachusetts federal court preliminarily enjoined the U.S. Department of Agriculture from enforcing funding conditions that require recipients to certify compliance with the administration’s antidiscrimination policies and not to use funds toward programs that “promote gender ideology,” “deprive women and girls of fair athletic opportunities[,]” or “allow illegal aliens to obtain taxpayer-funded benefits[.]” In a June 24 memo, the court explained that the conditions are likely unconstitutionally vague, not reasonably related to the government’s interest in the impacted programs, unduly coercive, and arbitrary and capricious.
June 8, 2026 (NYT editor joins EEOC’s “reverse” discrimination lawsuit): A former editor for the New York Times (NYT) intervened in the EEOC’s “reverse” discrimination lawsuit, alleging that his promotion denial “boldly and badly” violated Title VII, as clarified in the U.S. Supreme Court’s ruling in Ames v. Ohio Department of Youth Services. The former editor alleges that the NYT’s prioritization of hiring Black women to fill leadership roles left him with “no path for advancement” in violation of Title VII and New York state law.
June 9, 2026 (FCC defends “approach to DEI”): Federal Communications Commission (FCC) Chair Brendan Carr responded to congressional concerns that the FCC’s use of its transaction-review authority to pressure private companies to alter DEI policies exceeds its statutory authority. Among other things, Carr stated that reviewing companies’ transactions is necessary to determine compliance with the FCC’s EEO regulations and that the agency is simply “cutting through the red tape” after “years of inaction” that slowed broadband deployment.
June 9, 2026 (DOJ tells EEOC disparate-impact guidelines are unlawful): The DOJ’s Office of Legal Counsel (OLC) issued an opinion to the EEOC stating that the EEOC’s disparate-impact liability guidelines under Title VII are unconstitutional, pressure employers to engage in racial discrimination, and hold employers liable for unequal hiring and promotion outcomes without regard to discriminatory intent. The OLC asserted that Title VII’s disparate impact provision may constitutionally reach only practices reflecting “a significant likelihood” of intentional discrimination.
June 10, 2026 (lawsuit says contraception mandate unlawful): A for-profit healthcare company sued the government alleging that the Affordable Care Act’s no-cost contraception mandate violates the Religious Freedom Restoration Act by burdening the religious exercise of employers and individuals who object to contraception and “abortifacients.” The company seeks a permanent injunction against enforcement of the mandate.
June 11, 2026 (DOT final rule eliminates disparate-impact liability regs): The U.S. Department of Transportation (DOT) issued a final rule, eliminating disparate-impact liability from its Title VI regulations. The final rule states that the DOT’s “Title VI regulations prohibit only intentional discrimination, not conduct or activities that have a disparate impact” and that it “will not take action under Title VI premised on disparate-impact liability.”
June 12, 2026 (MD federal court dismisses LGBTQ+ lawsuit against EEOC): A Maryland federal court dismissed an LGBTQ+ advocacy group’s lawsuit challenging the EEOC’s refusal to investigate gender identity-based discrimination charges. The court found that, while the agency’s decision was “deeply troubling,” it constituted “a discretionary decision over which the court lacks authority to review.”
June 16, 2026 (DOJ to handle DOE civil rights complaints): The U.S. Department of Education (DOE) announced an agreement with the DOJ regarding federal civil rights complaints and compliance reviews of educational institutions. While the DOE will retain leadership and management of its offices, the DOJ’s Civil Rights Division will evaluate, investigate, and resolve civil rights complaints that the DOE had previously handled.
June 17, 2026 (EEOC resolves religious accommodation charges over vaccine mandate): The EEOC secured a $358,000 settlement with healthcare company Kaiser Permanente to resolve several Title VII religious discrimination charges alleging that the company denied employees religious accommodations from its vaccine mandate policy. Pursuant to the one-year agreement, the company has completed religious accommodations training, implemented religious accommodation request processes, and will be monitored by the EEOC for compliance.
June 18, 2026 (9th Cir. grants rehearing in religious employer hiring case): The Ninth Circuit agreed to rehear a case involving a Christian ministry’s practice of declining to hire applicants who do not share its religious beliefs about marriage and sexuality. The order vacates the panel’s prior ruling holding that the First Amendment’s church autonomy doctrine protects religious institutions from constitutional scrutiny. The dissenting judges expressed concerns that the decision has “relegated religious liberty to a second-class right” whenever judges decide that the right “simply isn’t worth it.”
June 24, 2026 (NYU obtains TRO against DOJ’s transgender records request): A New York federal court orally issued a temporary restraining order, halting enforcement of the DOJ’s subpoena seeking six years’ worth of medical records of transgender patients who received gender-affirming care as minors from the NYU Langone Health System (NYU). While the DOJ asserted the information was “necessary to further health oversight activities[,]” the court stated it “cannot conceive of a crime that would require the breadth of disclosure sought[.]”
- On September 18, 2026, the DOJ announced an agreement with NYU under which the hospital system agreed to pay $8.5 million and cease providing gender-affirming care to minors. In a similar agreement, the University of Pittsburgh Medical Center agreed to pay the DOJ $950,000 and end gender-affirming care for minors.
June 25, 2026 (VA seeks to remove disparate-impact liability regs): The U.S. Department of Veterans Affairs (VA) issued a proposed rule to amend its Title VI-implementing regulations that would eliminate disparate-impact liability; remove text prohibiting funding recipients from using criteria that effectively subjects individuals to discrimination based on race, color, or national origin; and rescind a provision that allows or requires funding recipients to consider race, color, or national origin to overcome unintentional disparate effects. The VA cited “serious and constitutional concerns with the legality” of the current regulations.
June 29, 2026 (WA federal court expands injunction against DEI-related funding conditions): A Washington federal court broadened an existing injunction barring federal agencies from conditioning municipalities’ grants on commitments not to promote DEI or “gender ideology.” While the government argued the agencies are authorized to administer grants and require compliance with grant conditions, the court found that the government failed to identify any statutory authority permitting the agencies to impose the conditions, and that “the challenged conditions bear no apparent relationship to the grant programs at issue.”
June 30, 2026 (EEOC alleges discrimination against non-Chinese workers): The EEOC sued 99 Ranch Market alleging it discriminated against non-Chinese workers based on national origin by failing to promote them, paying them less, scheduling them for fewer hours than Chinese workers, and terminating recently-hired non-Chinese managers at several locations following a leadership change.
June 30, 2026 (EEOC rescinds long-standing affirmative action guidance): The EEOC rescinded its decades-old affirmative action guidance documents relating to voluntary workplace affirmative action plans. The agency reasoned that the guidelines “ran afoul” of Title VII and contradicted U.S. Supreme Court case law developed in the time since the documents were issued. The EEOC also rescinded the Compliance Manual on Affirmative Action, stating it was “obsolete” in light of the document rescissions.
June 30, 2026 (EEOC alleges national origin discrimination against American workers): The EEOC sued a trio of cleaning services companies alleging that they unlawfully excluded non-Hispanic American workers from jobs in order to maintain a workforce of Latin American workers whom they could “intimidate and exploit” and would “tolerate unlawful working conditions[.]”
June 30, 2026 (USSC upholds state bans on transgender athletes in female sports): The U.S. Supreme Court ruled that state laws barring transgender athletes from female sports teams at public schools and colleges do not violate the Equal Protection Clause or Title IX. The ruling arose from a pair of Equal Protection and Title IX challenges to state laws that limited female sports team participation to biological females. The Court explained that it interpreted Title IX’s ban on sex discrimination in accordance with the definition of “sex” intended during the time of enactment, and that the Equal Protection Clause permits separate sports teams based on biological and inherent physical differences between males and females.
July 2, 2026 (DOL rescinds disparate-impact liability regs): The U.S. Department of Labor issued a final rule rescinding portions of its Title VI-implementing regulations that addressed disparate-impact liability for federal financial assistance recipients “to more closely align . . . with Title VI’s original public meaning, avoid constitutional concerns” and conform to the current administration’s executive orders. Among other things, the rule rescinds provisions that prohibited use of criteria and selection methods that effectively discriminated against individuals based on race, color, or national origin and required affirmative action in certain circumstances.
July 7, 2026 (11th Cir. affirms injunction against Florida law restricting educators’ speech): The Eleventh Circuit upheld a lower court’s preliminary injunction against a Florida law that restricted public state educators from discussing “certain viewpoints relating to race, color, sex, and national origin in various settings.” The panel reasoned that the “salary-for-speech rule” violated the First Amendment’s freedom of speech protections.
July 9, 2026 (DOJ settles NJ prep school admissions policy investigation): The DOJ announced an agreement with a Jersey City prep school to resolve an investigation into its admissions practices. The DOJ alleged that the school used a quota system that reserved seats for students in four categories: Black, White, Hispanic, and Other. After each category was filled with an equal number of students, the remaining seats were filled without regard to race or national origin. Pursuant to the settlement, the school agreed to end its race-based reservation of seats, cease providing preferences or benefits based on race or national origin, and adopt and train staff on a nondiscriminatory admissions policy.
July 9, 2026 (CA federal court blocks DEI-related funding conditions): A California federal court issued a preliminary injunction blocking the government from imposing grant funding conditions—related to immigration, DEI, and antidiscrimination—on several California and Oregon municipalities. The court explained that the conditions “have nothing to do with or contradict the Congressional purpose” of the impacted grant programs; are ambiguous and more than just “unpredictable” without meaningful compliance guidance; and that the executive orders under which the conditions were implemented sought to “comprehensively override” the understanding of federal antidiscrimination law.
July 20, 2026 (EEOC resolves religious and disability accommodation charges over COVID-19 vaccine policy): The EEOC and an Idaho-based research company reached a $5 million settlement to resolve allegations that the company denied 100+ employees religious and/or disability accommodations to its COVID-19 vaccine policy. Under a three-year agreement, the company must provide back pay and compensatory damages to the aggrieved employees and train HR personnel on religious- and disability-based accommodation request policies.
July 21, 2026 (EEOC seeks to rescind EEO reporting requirements): The EEOC issued a proposed rule to rescind a series of demographic reporting requirements, including:
- EEO-1 for private employers with 100+ employees
- EEO-2 for apprenticeship programs
- EEO-3 for unions
- EEO-4 for state and local governments
- EEO-5 for public schools
- EEO-6 for institutions of higher education
The agency determined that the data reports—which summarize aggregate data on employees’ race and sex—are inconsistent with EEO law, may raise constitutional concerns, and collect data that is not necessary to enforce antidiscrimination statutes.
July 23, 2026 (EEOC and UPenn resolve subpoena dispute over Jewish employees’ information): The EEOC and University of Pennsylvania agreed to resolve a battle over the agency’s enforcement of a subpoena seeking the identity of witnesses to and victims of antisemitic harassment and contact information of employees associated with the university’s Jewish organizations. Under the agreement, the EEOC agreed not to enforce the subpoena in exchange for the institution’s promise not to pursue vacatur of a lower court decision that found the request to be lawful if it did not reveal employees’ affiliations with specific organizations.
July 24, 2026 (IL federal court enjoins in-state tuition benefits for unauthorized immigrants): An Illinois federal court issued an injunction barring the State of Illinois from enforcing a set of state laws that provided unauthorized immigrants with in-state tuition benefits and scholarships not equally available to U.S. Citizens who are not Illinois residents. The court found that the state laws are preempted by federal law prohibiting preferential treatment of unauthorized immigrants in higher education benefits, and thus, violated the U.S. Constitution’s Supremacy Clause. The government filed similar lawsuits against New Jersey, New York, Vermont, and Connecticut.
July 28, 2026 (TX federal court strikes down “race-conscious” contracting program): A Texas federal court struck down parts of Houston’s Minority, Women and Small Business Enterprise Program, ruling that the “race-conscious” public contracting program violated the Fourteenth Amendment’s Equal Protection Clause by preferring minority groups, including Black and Hispanic business owners. The court permanently enjoined the race-based aspects of the program, noting that the city failed to show the program remediated “specific, identified instances of past discrimination” or identify “any specific constitutional or statutory violations” related to the program.
August 3, 2026 (DOJ settles citizenship discrimination investigation): OpenAI agreed to pay $3.2 million to settle the DOJ’s allegations that the company engaged in citizenship-status discrimination against U.S. workers by favoring workers with temporary employment visas in violation of the Immigration and Nationality Act. Among other things, the DOJ alleged that the company discouraged U.S. workers from applying to certain positions by making the application process more burdensome than it was for workers with temporary employment visas.
August 6, 2026 (DOJ accuses Duke Law of discriminatory admissions practices): The DOJ issued a letter to Duke Law accusing it of violating Title VI and U.S. Supreme Court precedent by discriminating against white and Asian students in favor of Black and Hispanic students to increase racial diversity. In addition to statistical evidence, the DOJ cites internal documents and communications emphasizing the law school’s focus on DEI and efforts to increase student body diversity. The DOJ seeks to enter a voluntary agreement to ensure the law school’s admissions practices are brought into compliance.
August 12, 2026 (FTC asked to investigate allegedly anticompetitive DEI fellowship): Anti-DEI advocacy organization Americans for Equal Opportunity (AEO) filed a complaint with the Federal Trade Commission asking the agency to investigate Sponsors for Educational Opportunity (SEO) for anticompetitive practices. Among other things, AEO alleges that the SEO Law Fellowship facilitates collusion among competing law firms on DEI metrics and that the fellowship is falsely advertised as a race-neutral program.
August 13, 2026 (MA federal court dismisses Harvard antisemitism lawsuit): A Massachusetts federal court dismissed the government’s lawsuit against Harvard over claims that it failed to address on-campus antisemitism, ruling that the government failed to show ongoing civil rights violations. While the government cited three alleged incidents of antisemitism, the court noted the incidents occurred more than one academic year before the case was filed and found them “too isolated and episodic” to support a claim of ongoing noncompliance.
August 14, 2026 (RI federal court vacates DEI funding conditions): A Rhode Island federal court granted summary judgment to a coalition of 22 nonprofit groups challenging the U.S. Department of Housing and Urban Development’s grant conditions requiring recipients to certify compliance with anti-DEI executive orders. The court ruled that the government failed to provide a “satisfactory explanation” for the new conditions that sought to restrict funding to help domestic violence and sexual abuse survivors and those experiencing homelessness. While the government argued that the conditions were imposed to align with the executive orders, the court stated that “mere compliance” does not satisfy a showing of “reasoned decision making.” The court vacated the conditions but stopped short of issuing a permanent injunction.
August 14, 2026 (MA federal court invalidates HHS rule excluding gender-affirming care from essential health benefits ): A Massachusetts federal court granted a coalition of 21 states partial summary judgment ruling that the U.S. Department of Health and Human Services (HHS) violated the Administrative Procedure Act (APA) in issuing an Affordable Care Act rule barring insurers from covering gender-medical procedures as “essential health benefits.” The court explained that the HHS failed to submit a report to Congress certifying that the scope of the prohibition as an “essential health benefit” was equal to that of a typical employer plan.
August 20, 2026 (DOJ settles False Claims Act-violation allegations): The DOJ announced a settlement with federal contractor Deloitte to resolve allegations of False Claims Act violations. The DOJ alleged that the company falsely certified compliance with federal antidiscrimination laws while taking race or sex into account when making hiring, promotion, and staffing decisions. Without admitting liability, Deloitte agreed to pay $21.5 million with $4.3 million to settle a whistleblower lawsuit filed by anti-DEI activist group American Alliance for Equal Rights.
August 26, 2026 (EEOC releases updated Strategic Plan): The EEOC announced an updated Strategic Plan for Fiscal Years 2026-2030, which takes effect immediately. Highlights include strategic application of law enforcement authorities, outreach and training, and aligning resources and operations to prioritize focuses set forth in the National Enforcement Plan, including:
- Certain DEI employment practices
- Religious accommodation
- Anti-American discrimination
- Protecting vulnerable workers
- Systemic harassment
- Pregnant Workers Fairness Act compliance
September 8, 2026 (ABA eliminates law school DEI requirement): The American Bar Association (ABA) officially eliminated its DEI requirement for law schools amidst pressure from the DOE that the organization be stripped of its role as the recognized accreditor of law schools. ABA Council Chair Melissa Hart stated that it was a “pragmatic” decision intended to preserve a national system of law school accreditation.
September 9, 2026 (DOJ/DOE accuses Berkeley Law of discriminatory admissions practices): The DOJ and DOE sent a letter to University of California, Berkeley School of Law accusing it of violating Title VI and U.S. Supreme Court precedent by favoring Black applicants over white and Asian applicants in prior admission cycles. In addition to outlining statistics, the letter noted that Dean Erwin Chemerinsky publicly defended affirmative action, and attributed to him statements that the workaround is to replace “explicit use of race” with “proxies for race[,]” describing how to hide the practice, and pledging to “commit perjury to protect it.”
September 10, 2026 (DOJ settles False Claims Act-violation allegations): Federal contractor Accenture LLP agreed to pay $25 million to settle the DOJ’s allegations that its hiring and promotion decisions discriminated against workers based on race or sex. The DOJ alleged that the company violated the False Claims Act by certifying compliance with federal antidiscrimination requirements while seeking to hire and promote minorities and women in the workforce.
September 11, 2026 (9th Cir. upholds religious accommodation vaccine-related verdict): The Ninth Circuit upheld a $7.8 million Title VII verdict in favor of six former San Francisco public rail employees who were terminated after their requests for religious exemptions from the agency’s COVID-19 vaccine mandate were denied. The panel agreed with the lower court that the transit system failed to show that the employees could not be accommodated without “undue hardship,” and noted that even if it did, that would not mean that less effective preventive measures were “per se unreasonable.”
September 17, 2026 (FL AG settles Starbucks DEI lawsuit): Florida Attorney General James Uthmeier announced a settlement with Starbucks to resolve a December 2025 lawsuit alleging violations of the Florida Civil Rights Act through race- and sex-based goals, quotas, and preferences. Without admitting liability, Starbucks agreed to comply with the state law, cease participation in organizations that require members to increase the racial diversity of their board of directors, submit annual compliance certifications for four years, and pay $1 million to the state for enforcement costs and expenses.
September 17, 2026 (MA federal court vacates DOE’s DEI-related grant terminations): A Massachusetts federal court vacated a DOE directive requiring the review and termination of more than $600 million in federal education grants involving DEI-related programming. The court found that the directive was arbitrary and capricious and contrary to federal law, noting that the DOE failed to define prohibited “DEI,” reversed its prior policies without adequate explanation or consideration of reliance interests, failed to follow notice-and-comment procedures, and terminated grants based on DEI-related objectives that federal education statutes required or promoted.
September 18, 2026 (FAR Council proposes debarment as penalty for noncompliance with DEI certification clause): The Federal Acquisition Regulatory Council proposed a rule that would make noncompliance with the government’s DEI-related antidiscrimination clause grounds for government-wide suspension or debarment of federal contractors. If finalized, the rule would add suspension or debarment to existing potential consequences for noncompliance, which already include contract cancellation or termination and potential False Claims Act liability.
September 21, 2026 (RI federal court vacates noncitizen benefit restrictions): A Rhode Island federal court vacated a series of government notices that sought to reinterpret the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) to subject federally-funded programs—including education, workforce, and housing programs; and health and family-planning services—to immigration-status restrictions and verification requirements. The court ruled that the agencies violated the APA by making substantive changes to long-standing interpretations of PRWORA without engaging in required notice-and-comment rulemaking.
EMPLOYER TAKEAWAYS
As heightened scrutiny of DEI practices continues, employers can ensure compliance with federal, state, and local antidiscrimination laws by taking the following steps:
- Conduct a DEI legal risk audit to ensure all employees are afforded equal opportunities;
- Schedule training for Executives, Board Members, and Managers on DEI Legal Issues to keep your team up-to-date on the DEI legal landscape; and
- Stay tuned for forthcoming installments of our DEI Legal Developments Spotlight.
If you have any questions related to any developments or their impact on your organization, or would like to conduct an audit of your organization’s efforts to ensure all employees and applicants are afforded equal opportunity in the workplace, please reach out to the NFC Attorney with whom you typically work or call us at 973.665.9100 or 619.292.0515.