In 2025, we published a series of timelines documenting key developments in the fast-shifting and polarizing DEI landscape. This DEI Legal Developments Spotlight continues where we left off in 2025 and captures the most impactful recent DEI-related legal updates, including a flurry of activity over at the U.S. Equal Employment Opportunity Commission (EEOC) following the restoration of agency quorum in October 2025.
For a quick recap of highlights from 2025 (and links to past timelines), see HERE.
KEY DEVELOPMENTS
November 17, 2025 (9th Cir. vacates win for transgender patients): The Ninth Circuit issued an opinion vacating a Washington court’s 2023 ruling in favor of a class of transgender patients who challenged Blue Cross Blue Shield of Illinois’ exclusion of gender-affirming care under their employer’s health plan as unlawful sex-based discrimination. Among other things, the panel stated that the lower court’s analysis was “undercut” by the U.S. Supreme Court’s U.S. v. Skrmetti decision, in which the justices held that a Tennessee law banning gender-affirming care for minors did not violate the Equal Protection Clause as sex-based discrimination.
November 17, 2025 (SBA “social disadvantage” presumption challenged): A start-up tech company and a student organization filed a lawsuit against the U.S. Small Business Administration (SBA) challenging a regulation that establishes a rebuttable presumption of “social disadvantage” for members of certain racial and ethnic groups. The plaintiffs state that—because they are white—they were denied benefits and opportunities based on the “unconstitutional presumption that someone’s race, and only their race, makes them socially disadvantaged.” The plaintiffs assert that the regulation violates the Equal Protection Clause based on racial classifications that fail to pass the U.S. Supreme Court’s strict scrutiny test and ask the court to hold unlawful and set aside the regulation.
The lawsuit follows the U.S. Department of Transportation’s issuance of an interim final rule that removed race- and sex-based presumptions from the definitions of “socially and economically disadvantaged individual” from two federal programs.
November 18, 2025 (EEOC acts to enforce subpoena against UPenn): The EEOC announced it filed an action to enforce a subpoena issued against the University of Pennsylvania following a 2023 charge alleging the university subjected faculty and staff to antisemitic harassment, failed to address complaints of harassment, failed to take effective measures to end the harassment, and allowed harassment to escalate. The subpoena seeks identification and contact information of witnesses to and victims of the harassment.
November 18, 2025 (EEOC agrees to permanently enjoin abortion-related accommodation requirements for Herzog Foundation): The EEOC and a Christian foundation agreed to end a Title VII lawsuit challenging the agency’s Pregnant Workers Fairness Act (PWFA) final rule, which requires employers to provide abortion-related accommodations. In an order granting the joint motion, the EEOC is permanently enjoined from enforcing the final rule against the foundation “in a manner that would require it to engage in or refrain from speech relating to abortion accommodations contrary to its sincere religious beliefs[.]” The agency also agreed to recognize the foundation as a religious organization.
This decision—which makes permanent an earlier preliminary injunction issued in the matter—aligns with EEOC Chair Andrea Lucas’ vocal opposition to the PWFA final rule’s interpretation of the phrase “pregnancy, childbirth, or related medical conditions”; and her stated intent to reconsider portions of the final rule once a quorum was restored.
November 19, 2025 (EEOC updates national origin discrimination materials): The EEOC announced updated materials reinforcing its commitment to “advancing robust enforcement and awareness around national origin discrimination and Anti-American bias,” and reaffirming EEOC Chair Lucas’ continued focus on ensuring that national origin discrimination protections are applied equally to all workers. These materials include:
- A newly-issued technical assistance document (Discrimination Against American Workers Is Against The Law) with examples of “anti-American discrimination,” and “common business reasons” that do not justify national origin discrimination; and
- An updated national origin discrimination landing page, which emphasizes that national origin discrimination can include “preferring foreign workers, including workers with a particular visa status, over American workers.”
For additional information, see HERE.
November 20, 2025 (EEOC acts to enforce “reverse” discrimination subpoena): The EEOC filed an action in federal court to enforce a subpoena against Northwestern Mutual, which seeks information about the firm’s DEI policies and practices related to its decision to deny a promotion to one of its compliance officers. The subpoena stems from a 2025 discrimination charge against the company, in which the employee alleged that—due to a DEI policy that provided additional opportunities to women and people of color—he was denied a promotion based on his sex, race, color, and national origin.
November 25, 2025 (EEOC settles “anti-American” lawsuit): The EEOC settled a national origin discrimination lawsuit against a farming operation that allegedly discriminated against American workers by providing “foreign workers with preferential job assignments which were less strenuous, and had more work hours, higher pay, and higher bonuses.” Under a three-year consent decree, the company agreed to pay $150,000; revise and disseminate its anti-discrimination policy; and annually train managers and employees on discrimination and retaliation to prevent unlawful conduct in the future.
December 3, 2025 (FTC approves deal after AT&T disavows DEI initiatives): The Federal Communications Commissions (FCC) approved AT&T’s $1 billion deal just days after the company informed the FCC of its commitment to end DEI policies and programs. In a letter to FCC Chairman Brendan Carr, the company stated that:
- It “does not and will not have any roles focused on DEI”;
- Its “hiring, training, and career development opportunities are not and will not be based on or limited by race, gender, or other protected characteristics”;
- It does not “and will not use hiring quotas based on race, sex, sexual orientation, or any other protected characteristic”; and
- It “removed training related to [DEI] as well as any references to it from [its] internal and external messaging and will ensure that future training is consistent with guidance released by the [EEOC] addressing training that could facilitate discrimination in the workplace.”
This development follows the FCC’s prior approval of major deals involving both Verizon and T-Mobile after each company submitted similar commitments to end DEI-related practices and to ensure compliance with federal anti-discrimination laws (see May 16 entry HERE).
December 4, 2025 (EEOC solicits claims in $21 million Columbia settlement): Following the EEOC’s landmark $21 million settlement with Columbia University to resolve allegations of civil rights violations (see July 23 entry HERE), the agency announced the opening of the claims process and encouraged current and former Columbia employees who experienced harassment based on their Jewish faith, Jewish ancestry, and/or Israeli national origin to participate.
December 10, 2025 (FL AG sues Starbucks over DEI policies): Florida Attorney General James Uthmeier filed a lawsuit accusing Starbucks Corp. of violating state civil rights through its DEI policies by:
- Establishing racial quotas and goals for hiring;
- Paying employees differently based on race;
- Tying executive compensation to participation in race-based mentorship programs and race-based employee retention rates; and
- Excluding people of “disfavored races” from networking and mentorship opportunities.
The complaint emphasizes the “longstanding position of the EEOC and the U.S. Supreme Court that so-called ‘reverse’ discrimination (against a nonminority group) is still discrimination[,]” and that any decision motivated even in part by race is unlawful discrimination.
December 10, 2025 (DOJ erases disparate impact liability from Title VI regulations): Pursuant to EO14281, which seeks to eliminate disparate impact liability under federal civil rights laws (see HERE), the U.S. Department of Justice (DOJ) issued a final rule, which—effective immediately—rescinds regulations under Title VI that prohibit conduct having a disparate impact. Title VI prohibits discrimination based on race, color, or national origin in any program or activity that receives federal funding. While the DOJ will not be pursuing disparate impact liability under Title VI, federal funding recipients and government contractors remain bound by state anti-discrimination laws that include liability for disparate impact.
December 17, 2025 (EEOC video solicits “reverse” discrimination complaints): In a video posted to X, EEOC Chair Lucas encouraged white males to come forward and file “reverse” discrimination complaints. In the accompanying caption, Lucas asks:
“Are you a white male who has experienced discrimination at work based on your race or sex? You may have a claim to recover money under federal civil rights laws. Contact the @USEEOC as soon as possible. The EEOC is committed to identifying, attacking, and eliminating ALL race and sex discrimination — including against white male employees and applicants.”
This video marks a significant shift in federal civil rights enforcement messaging and underscores the EEOC’s focus on targeting “illegal DEI” and “unlawful preferences.”
December 19, 2025 (EEOC warns of “DEI reckoning in 2026”): In an interview with Reuters—entitled “Corporate America faces DEI reckoning in 2026”—EEOC Chair Lucas warned that agency inquiries will “intensify in 2026,” with federal inquiries into corporate diversity programs already underway. Among the targets are “companies that factor race, sex or other protected characteristics into employment decisions”; companies that deploy initiatives “to create, cater to or advertise to any race or gender-based group, including employee resource groups”; and any other race- or sex-based programs or actions. Lucas’ stated goal is to “shift to a conservative view of civil rights,” a vision which entails:
- “‘[A]ttacking’ all forms of race discrimination, including DEI”;
- “‘[A]ttacking widespread’ religious liberty issues like antisemitism and Covid-19 vaccine mandates”;
- “‘[P]ushing back’ on gender identity and focusing on women’s sex-based rights”; and
- Focusing on “national origin discrimination” to protect “all American workers.”
Lucas warns that any program that involves taking action motivated by race, sex, or any other protected characteristic is unlawful.
December 28, 2025 (DOJ investigates federal funding recipients under FCA): According to a Wall Street Journal article, the DOJ is using the False Claims Act (FCA) to aggressively investigate and pursue government contractors and grant recipients with DEI programs. Among other things, the DOJ is examining—not just the policies—but also how the programs are implemented and how benefits or burdens are allocated. The DOJ is demanding documents and information about the programs related to hiring and promotion decisions.
This action is taken pursuant to EO14173, which requires federal contractors and subcontractors to certify compliance with federal anti-discrimination laws for FCA purposes (see HERE), and follows up on DOJ guidance outlining “unlawful discrimination” for federal funding recipients (see July 29 entry HERE).
January 6, 2026 (9th Cir. OKs Christian org’s anti-gay hiring policy): The Ninth Circuit ruled that Christian ministry Union Gospel can lawfully refuse to employ people based on their sexual orientation, explaining that the First Amendment’s church autonomy doctrine allows religious institutions to prefer candidates who share their beliefs about marriage and sexuality. The panel emphasized that Union Gospel may not discriminate on any other ground, and that the decision is “limited to religious organizations like Union Gospel[.]”
January 14, 2026 (EEOC rescinds voting procedure that required public meetings): In the EEOC’s first public meeting with a full quorum, the agency voted 2-1 to rescind voting procedures that gave commissioners the right to call for public discussion on proposed policy changes and set a timeline for commissioners to review documents before a vote. The rescission authorizes EEOC Chair Lucas to set public meeting agenda and dates and decide issues to be voted on without a public meeting.
January 16, 2026 (NJ DCR issues guidance on language discrimination): The New Jersey Division on Civil Rights issued guidance clarifying that while language itself is not a protected characteristic, language discrimination can violate the New Jersey Law Against Discrimination (LAD) when it is tied to one or more protected characteristics under the LAD, including national origin, ancestry, nationality, race, religion, and disability. The guidance provides several examples illustrating the links between language and specific protected characteristics and discusses how language discrimination can constitute disparate treatment discrimination, disparate impact discrimination, or bias-based harassment.
Days later on January 20, 2026, Congress introduced HR7223 aimed to “improve access to Federal services by individuals with limited English proficiency” to ensure individuals with limited English proficiency can “meaningfully access” federal programs and activities.
These developments come shortly after the issuance of EO14224—which designated English as the official language of the U.S.—and the DOJ’s implementing guidance, which rescinded “all prior guidance to recipients of funding regarding Title VI’s prohibition against national origin discrimination affecting limited English proficient persons,” and initiated plans to phase out language access services for individuals with limited English proficiency (see July 14 entry HERE).
January 19, 2026 (FL and TX AGs issue anti-DEI opinion letters): The Attorneys General of Florida and Texas separately issued formal opinions asserting that certain DEI and affirmative action measures in the public and private sectors constitute unlawful race-based discrimination under federal and state law.
- In his official opinion, Florida Attorney General James Uthmeier states that any laws requiring race-based state action are presumptively unconstitutional under the Equal Protection Clause and the state constitution. These include statutes requiring state agencies to adopt affirmative action plans, including race-based hiring goals; provisions establishing race-based preferences in government contracting; and laws requiring or encouraging race-based quotas for representation on boards, councils, and similar governmental entities. Attorney General Uthmeier states that his office will not defend or enforce any laws mandating race-based discrimination.
- In his official opinion, Texas Attorney General Ken Paxton similarly states that race- and sex-based DEI frameworks violate the Equal Protection Clause and the state constitution. Public sector initiatives include state programs extending race- and sex-based quotas and preferences; state laws authorizing preferences for minority- and women-owned businesses in public contracting; statutes requiring consideration of race and sex in governmental appointments; and programs that consider race or sex in funding or development initiatives.
Private sector initiatives include quotas, opportunities, or benefits tied to race or sex, including “hiring and promotion processes, compensation packages, internal groups and training programs, external commercial relationships, as well as governance structure and public goals.” Attorney General Paxton states that public sector race- and sex-based preferences are unconstitutional, and private sector DEI practices may trigger liability under Title VII, Section 1981, Texas Commission on Human Rights Act, and federal and state securities laws.
January 22, 2026 (EEOC resolution allows agency approval in litigation): The EEOC voted 2-1 to approve a resolution that authorizes the agency to approve or disapprove nearly all new and intervening litigation. Except in limited circumstances, the Commission will vote on recommendations submitted by the General Counsel, including cases that:
- The General Counsel expects to involve a major expenditure of agency resources (e.g., all systemic cases, all pattern-or-practice cases, all cases involving 15+ individuals);
- Involve issues on which the Commission or General Counsel has taken a position contrary to precedent in the Circuit in which the case will be filed;
- Involve areas of the law that are not settled or are likely to generate public controversy; and
- All other cases, except those to enforce any recordkeeping and reporting requirements established and maintained by the Commission; or cases to enforce any consent decree, settlement, or other resolution of litigation.
January 22, 2026 (EEOC rescinds 2024 workplace harassment guidance): The EEOC voted 2-1 to fully rescind its 2024 Enforcement Guidance on Harassment in the Workplace. While the guidance addressed several issues that EEOC Chair Lucas opposed—including discrimination based on sexual orientation and gender identity—it also included new positions on harassment based on “race” and “color,” and pregnancy and childbirth.
On January 6, 2026, former EEOC and U.S. Department of Labor officials issued a statement criticizing the then-impending rescission as “part of this administration’s broader effort to weaken enforcement of federal employment anti-discrimination laws and, simultaneously, to diminish public understanding that federal law firmly prohibits harassment based on sexual orientation and gender identity,” and noted that the guidance also provided “concrete, practical information” on preventing and addressing harassment based on race, color, sex, national origin, religion, age, disability, and genetic information.
As the former officials note, the rescission does not change the underlying law, including binding U.S. Supreme Court precedent. The rescission also does not impact state or local civil rights laws that prohibit workplace harassment, and employers must continue complying with all applicable laws to ensure their workplaces are free from unlawful discrimination.
January 30, 2026 (FTC letter targets Mansfield Certification participation): The Federal Trade Commission (FTC) issued letters to 42 law firms warning that their participation in the “DEI-based Mansfield Certification program”—which requires firms to consider talent pools of at least 30% of members from “underrepresented” groups for certain opportunities—could constitute anticompetitive collusion, including “unlawful coordination on DEI metrics.”
The letter states that law firms participate in “knowledge-sharing calls” with other participants to discuss ideas to meet the 30% benchmark and overcome labor market challenges, which may violate antitrust laws by distorting or suppressing competition for labor. While the letter “is not intended to suggest that [recipients] have engaged in illegal conduct[,]” it reminds recipients of their “responsibility to comply with all requirements of federal law, including Section 1 of the Sherman Act and Section 5 of the FTC Act.”
February 4, 2026 (EEOC settles “reverse” discrimination lawsuit): The EEOC settled a sex discrimination lawsuit against two North Carolina-based corporations (d/b/a Kickback Jack’s restaurants) that allegedly “systematically refused or failed to hire male applicants for non-managerial front-of-house positions” and had “no legitimate business justification for failing to hire males in these positions[.]” The three-year consent decree enjoins the companies from discriminating against qualified male applicants or “steering applicants into positions on the basis of sex,” and requires the companies to:
- Pay $1.1 million to a class of male applicants;
- Adopt policies prohibiting sex-based discrimination;
- Revise its hiring procedures to ensure hiring decisions are made without consideration of sex;
- Offer interviews to any qualified applicant for an open position;
- Include images of male servers in any promotional materials depicting front-of-house employees;
- Annually train all employees involved in the hiring process on Title VII’s prohibitions against sex discrimination; and
- Submit periodic reports to the EEOC regarding its hiring practices.
February 4, 2026 (EEOC acts to enforce “reverse” discrimination subpoena): The EEOC filed an action in federal court to compel NIKE, Inc. to produce information related to allegations that the company—through its DEI initiatives—may have engaged in “a pattern or practice of disparate treatment against white employees, applicants and training program participants in hiring, promotion, demotion, or separation decisions, including selection for layoffs; internship programs; and mentoring, leadership development and other career development programs.” Information sought includes criteria used in selecting employees for layoffs; information related to the company’s tracking and use of worker race and ethnicity data; and information about programs that allegedly provided race-restricted career opportunities.
Employer Takeaways
As courts and agencies continue to weigh in on what is permissible, what is required, and what is prohibited with respect to DEI initiatives, employers must carefully consider the potential impact of these developments on their organizations. Employers should ensure compliance with federal, state, and local anti-discrimination 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.