civil rights – Page 11

Wearable Technologies in the Workplace May Implicate Nondiscrimination Laws

The U.S. Equal Employment Opportunity Commission (EEOC) recently released a fact sheet that explains why employers need to be careful in using wearable technologies so they do not violate federal nondiscrimination laws.
Companies in the warehousing, package delivery, construction, manufacturing, and healthcare industries are most likely to rely on wearable technologies and be impacted by federal enforcement of nondiscrimination laws.

Quick Hits

An increasing number of employers are requiring workers to use wearables to track their movements and location for safety and productivity purposes.
A new fact sheet from the EEOC describes how the use of wearables in the workplace could violate federal nondiscrimination laws.
When relying on wearables, employers may need to make reasonable accommodations for workers with disabilities.

On December 19, 2024, the EEOC published “Wearables in the Workplace: Using Wearable Technologies Under Federal Employment Discrimination Laws” to help employers prevent legal challenges related to using wearables.
The EEOC fact sheet defines wearables as “digital devices embedded with sensors and worn on the body that may keep track of bodily movements, collect biometric information, and/or track location.” Wearables include GPS trackers, smart watches, smart rings, smart glasses, smart helmets, and proximity sensors. They may monitor eye movements, blood pressure, heart rate, body temperature, or physical location.
Collecting Medical Information
The fact sheet advises that using wearables to collect information about an employee’s physical or mental condition, or to conduct diagnostic testing, could constitute “medical examinations” under the Americans with Disabilities Act (ADA).
The fact sheet also advises that requiring workers to provide medical information in connection with using wearables could constitute “disability-related inquiries” under the ADA. The EEOC reminds employers that the ADA bars disability-related inquiries unless they are job-related and consistent with business necessity.
If an employer collects medical or disability-related data from wearable devices, the ADA requires the employer to store that data in separate medical files and treat it as confidential medical information.
The EEOC confirmed that an employer may violate federal nondiscrimination laws if it uses information collected from wearables to make decisions that have an adverse impact on protected classes. The EEOC’s examples include using wearables’ information to determine that an employee is pregnant and treat her differently because of the pregnancy, or to fire an employee with an elevated heartbeat that a heart condition causes.
Reasonable Accommodation Issues
The EEOC advised that employers may have to provide employees with the reasonable accommodation of excusing them from utilizing wearable devices. The EEOC posited that an employer might have to excuse workers whose religion prevented them from wearing the device, or make a reasonable accommodation based on pregnancy and/or disability.
Next Steps
Employers that rely on, or are considering using, wearable technologies may wish to review their policies and practices to ensure they comply with federal nondiscrimination laws, particularly the ADA’s requirement that collecting medical information and making disability-related inquiries must be job-related and consistent with business necessity.
Employers that use data from wearables in their employment-related decision-making may wish to examine whether their use adversely impacts individuals in protected groups.

California SB 923: New Trans-Inclusive Healthcare Requirements for Health Plans

Beginning in the first quarter of 2025, California healthcare service plans, health insurers, Medi-Cal managed care plans, and PACE organizations must ensure that staff who have direct enrollee contact receive evidence-based cultural competency training focused on transgender-inclusive healthcare. This requirement arises from Senate Bill No. 923 (SB 923), a law passed by the California legislature in 2022. Provider directories must also be updated by March 1, 2025, to identify which in-network providers have previously offered gender-affirming services.
SB 923 is part of a broader effort by the California legislature to require healthcare entities to improve access to culturally competent gender-affirming care for transgender, gender diverse, and intersex (TGI) individuals. This legislation builds on prior mandates requiring physicians and surgeons to complete continuing medical education (CME) courses addressing cultural and linguistic competency. The legislation expanded existing cultural competency training requirements to now require CME programs to address TGI-related health needs, thus laying a foundation for the broader system-wide changes that SB 923 compels.
While the statute sets “no later than March 1, 2025,” as the outer deadline for compliance, the California Department of Managed Health Care (DMHC) All Plan Letter (APL) 24-018 imposes an earlier deadline – February 14, 2025 – for all full-service (and certain specialized) healthcare service plans under DMHC jurisdiction to complete the required training.
Below we outline the key requirements, summarize the CME obligations already in effect, consider initial feedback from early implementation, and offer steps to help affected entities prepare for upcoming deadlines.

In Depth

NEW REQUIREMENTS FOR HEALTH PLANS, INSURERS, AND MEDI-CAL MANAGED CARE ENTITIES
SB 923 requires healthcare service plans, health insurers, Medi-Cal managed care plans, and PACE organizations to engage in workforce cultural competency training. Key training elements include:

Adopting inclusive communication techniques by using TGI-inclusive terminology and ensuring respectful, affirming interactions with TGI patients.
Addressing health disparities by explaining how family and community acceptance influence TGI patient health outcomes and integrating this understanding into care practices.
Conducting refresher course training whenever a complaint is filed and upheld against a staff member for failing to provide TGI-inclusive care and administering additional courses more frequently if needed.

Training must be provided to staff who directly interact with enrollees. This includes frontline personnel such as call center representatives, nurses, and other staff members who have contact with patients. Exempt from this training requirement are specialized healthcare service plans providing only dental or vision services and Medicare Advantage plans. Currently, SB 923 does not include any exemptions or opt-outs for staff or providers based on religious, moral, or rights of conscience objections grounds.
While SB 923’s statutory language sets an outer compliance deadline of no later than March 1, 2025, DMHC’s APL 24-018 specifies that all full-service healthcare service plans, regardless of size (and certain specialized plans other than dental or vision-only plans), must ensure that staff complete the required training by February 14, 2025. For health insurers regulated by the Department of Insurance or Medi-Cal managed care plans overseen by the Department of Health Care Services (DHCS), the statutory deadline remains March 1, 2025, unless their respective regulators issue further guidance.
In addition to initial training, DMHC’s APL requires that training be completed every two years thereafter, ensuring ongoing competency. Newly hired staff with direct enrollee contact must complete the training within 45 days of commencing employment. Health plans should also note that regulators may impose sanctions or penalties for noncompliance, reinforcing the importance of meeting these requirements.
UPDATED PROVIDER DIRECTORIES FOR GENDER-AFFIRMING SERVICES
By March 1, 2025, health plans, insurers, and Medi-Cal managed care plans must update their provider directories (as well as call center information) to identify which in-network providers have affirmed and previously provided gender-affirming services. These services might include hormone therapy, gender-confirming surgeries, gender-affirming gynecological care, or voice therapy.
ALREADY-IN-EFFECT CME REQUIREMENTS
Since 2006, curricula for CME courses in California have been required to include cultural and linguistic competency in the practice of medicine. Since 2022, CME course curricula also have been required to include the understanding of implicit bias. SB 923 amended the cultural competency portion of California’s Business and Professions Code Section 2190.1 to require that CME also include TGI health needs. The updated CME curricula should address:

Using correct names, pronouns, and gender-neutral language.
Avoiding assumptions about gender or sexual orientation.
Understanding the discrimination and barriers that TGI patients face, and how implicit bias may influence clinical decisions.
Implementing administrative changes, such as more inclusive intake forms, to create a welcoming care environment.

Cultural competency, including TGI-specific elements, and implicit bias training are not necessary for CME courses offered outside of California to California-licensed physicians and surgeons or as part of CME courses dedicated solely to research or other non-clinical issues lacking a direct patient care component.
IMPLEMENTATION STATUS OF SB 923 CME REQUIREMENTS
Since the TGI-focused CME requirements took effect in 2023, some larger health systems have begun integrating targeted training modules while smaller practices have struggled to find suitable specialized resources. According to the California Association of Health Plans, questions remain about how these training standards will align and be enforced across various health plans and delegated entities. Despite these uncertainties, incremental progress continues. As more healthcare organizations develop approved training resources and toolkits, accessibility and overall cultural competency likely will improve.
PRACTICAL STEPS FOR COMPLIANCE

For Healthcare Providers: Integrate the updated CME modules into existing physician education, revise administrative materials (intake forms, electronic medical records) to reflect inclusive language, and ensure all frontline staff are trained in respectful, TGI-inclusive communication.
For Health Plans and Insurers: Implement TGI-focused training as specified by DMHC: for full-service healthcare service plans, by February 14, 2025, and for other regulated entities, by the statutory deadline. Update provider directories to highlight gender-affirming providers by March 1, 2025, and establish effective complaint and grievance tracking to ensure accountability. With respect to ERISA-governed self-insured group health plans, SB 923 does not provide an express exception. However, ERISA typically preempts state laws that attempt to regulate employee benefit plans, although fully insured plans are generally subject to state insurance laws and would likely need to comply with SB 923. A plan that is not fully insured or regulated by the California DMHC would generally not need to comply. As of the publication date, we are unaware of any ERISA preemption challenges to SB 923. Some group health plan sponsors may wish to proceed with compliance and continue to watch for any updates.
For Medi-Cal Managed Care Plans and PACE Organizations: Follow guidance issued by regulators, such as the DHCS Policy Letter 24-03, to implement required training, keep provider directories current with gender-affirming providers, and report TGI-related complaints. In addition, remain alert for further instructions from regulators and prepare to incorporate the required standards.

LOOKING AHEAD
When SB 923 was initially debated, some stakeholders opposed the legislation based on religious liberty and rights of conscience grounds, arguing that SB 923’s training mandates amount to unconstitutional compelled speech. However, a recent decision by the US District Court for the Central District of California in Khatibi v. Hawkins suggests that courts may uphold SB 923 as a form of government speech. The case involved a challenge to the implicit bias training requirement because some CME lecturers felt that their First Amendment rights were being violated. The court observed that “[s]tate-mandated curriculum requirements for CME courses necessary for state licensure constitutes government speech because when physicians . . . choose to teach CME courses for credit, they ‘speak for the state.’” (Khatibi v. Hawkins, No. 2:23-cv-06195-MRA-E, 2024 WL 3802523 (May 2, 2024)). The matter is currently under appeal to the US Court of Appeals for the Ninth Circuit.
CONCLUSION
SB 923 represents continued efforts by California toward ensuring that TGI patients receive respectful, informed, and affirming healthcare. With CME requirements already in effect and a range of new mandates, including system-wide training for health plans, updated provider directories, complaint tracking, and eventual quality standards, entities face a multifaceted compliance landscape. DHCS Policy Letter 24-03 and DMHC APL 24-018 provide clarity and actionable guidance, and both reflect the recommendations issued by the Transgender, Gender Diverse, or Intersex Working Group convened under SB 923’s mandate. Formal regulations under SB 923 will be adopted by July 1, 2027, but as the February and March 2025 deadlines approach, stakeholders should proactively implement training, update administrative practices, maintain transparent patient engagement, and follow the newly issued DHCS and DMHC directives.

Fifth Circuit Vacates SEC’s Approval of Nasdaq’s Diversity Rules

On December 11, 2024, the US Court of Appeals for the Fifth Circuit ruled that the Securities and Exchange Commission (SEC) lacked statutory authority to approve Nasdaq’s board diversity rules. Subject to certain exceptions, the diversity rules required, among other things, that Nasdaq-listed companies publicly disclose the demographic makeup of their boards of directors, and that boards with five or more directors include at least two “diverse” directors.
Fifth Circuit’s Ruling in Alliance for Fair Board Recruitment v. SEC
In its majority opinion, the Fifth Circuit held that the Nasdaq diversity rules were unrelated to the purpose of the Securities Exchange Act of 1934 and, as such, the SEC had no authority to approve the diversity rules. The court reasoned that US Congress enacted the Exchange Act specifically to protect investors in securities by establishing a regulatory oversight regime. Thus, the authority granted to the SEC under the Exchange Act is limited to the prevention of fraud and misrepresentation or concealment of material financial risks, and to stabilize the market from speculation-driven instability.
The SEC argued that the Exchange Act was also intended to remove barriers to the open market and promote justice and equitable trade principles, but the court held that if Congress intended to grant the SEC authority to impose such demographic regulations, the Exchange Act would have stated so explicitly.[1]
Nasdaq’s Proposed Diversity Rule
Nasdaq filed its proposed diversity rules with the SEC on December 1, 2020, and the diversity rules were approved by the SEC on August 6, 2021. The diversity rules, subject to certain exceptions, required a Nasdaq-listed company with five or more directors to:

Establish a board with at least one director who self-identifies as female and one director who self-identifies as Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Hawaiian or Pacific Islander, two or more races or ethnicities, or as LGBTQ+.
Submit an explanation for its lack of compliance if a company’s board does not meet such requirements.
Submit public disclosures detailing the demographic composition of its board.

What Is Next?
In a December 12, 2024, statement, Jeff Thomas, Nasdaq’s Global Head of Listings, confirmed that Nasdaq will not seek to appeal the decision, and that companies seeking Nasdaq listing or listed on the Nasdaq stock markets will not need to comply with the diversity rules. However, the SEC may seek to appeal the Fifth Circuit’s decision to the US Supreme Court, though it remains unclear whether the Supreme Court would agree to consider the case. Congress could also consider amending the Exchange Act, enabling the imposition of board diversity requirements.
Takeaways
Absent a reversal by the Supreme Court or new legislation passed by Congress, Nasdaq-listed companies will no longer be required to adhere to the requirements of the diversity rules and may establish board compositions at their discretion. However, publicly held corporations should expect ongoing scrutiny related to their diversity, equity, and inclusion initiatives generally.

[1] Loper Bright Enterprises v. Raimondo, 603 US 369 (2024).
Maria Ortega Castro also contributed to this article.

Understanding President Trump’s Executive Orders on DEI: Implications for Federal Contractors

On January 21, 2025, President Trump signed two Executive Orders (“EOs”) taking aim at diversity, equity, and inclusion (“DEI”) within federal agencies and the federal contractor workforce: Ending Illegal Discrimination And Restoring Merit-Based Opportunity and Ending Radical and Wasteful Government DEI Programs and Preferencing. Accordingly, federal contractors must now re-familiarize themselves with the Trump administration’s view on workplace DEI initiatives. These EOs represent a sharp contrast in the new administration’s expectations regarding workplace DEI compared to the Biden administration.
The Trump administration regards DEI initiatives as suspect based on the belief that these initiatives involve lowering applicable professional standards and discrimination against those viewed as capable of advancing based on merit. As the President articulated in the EO titled “Ending Illegal Discrimination and Restoring Merit Based Opportunity,” DEI is “a pernicious identity-based spoils system.” President Trump stated in his inaugural address that he intends to “forge a society that is colorblind and merit-based.” In furtherance of this objective, the President revoked EO 11246, which for more than six decades has prohibited federal contractors from making employment decisions on the basis of race, color, religion, sex, or national origin. While racial discrimination in hiring remains illegal under the Title VII of the Civil Rights Act of 1964, the Trump administration also ordered the Civil Rights Division of the Department of Justice to immediately freeze much of its activity, including not pursuing any new discrimination cases.
What Do Contractors Need to Know About President Trump’s EO “Ending Illegal Discrimination and Restoring Merit-Based Opportunity”?
In this second presidential term, the Trump administration demonstrates greater awareness and sophistication in leveraging existing legal frameworks to enforce its view of DEI initiatives and principles. Accordingly, contractors should expect heightened government scrutiny and legal challenges as the Trump administration seeks to demonstrate its ability to force contractors to align with its viewpoint that explicit efforts to achieve workplace diversity constitute unacceptable racial discrimination.

Agreement Regarding to Materiality Under the False Claims Act: One of the biggest takeaways for federal contractors is that this EO requires the head of each agency to include a contract term in which the contractor agrees that its “compliance in all respects with all applicable Federal anti-discrimination laws” is material to the government’s payment decisions for purposes of the False Claims Act (“FCA”) (section 3729(b)(4) of title 31).
Certification: The EO also requires an award recipient to certify that it does not operate any programs “promoting DEI that violate any applicable Federal anti-discrimination laws.” This certification, if viewed as false by the Trump administration’s Justice Department, could become the basis for an allegation of an FCA violation.
Expected Government Investigations: The EO directs the Attorney General to identify “up to nine potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets of 500 million dollars or more, state and local bar and medical associations, and institutions of higher education with endowments over one billion dollars.” This demonstrates the Trump administration’s willingness to invest government resources into challenging the DEI programs of large organizations.
Expected Litigation: The EO directs the Attorney General to report on ways in which the private sector can be encouraged “to end illegal DEI discrimination and preferences and comply with all federal civil-rights laws” and to identify opportunities for the Trump administration to engage in lawsuits.

What Do Contractors Need to Know About President Trump’s EO “Ending Radical and Wasteful Government DEI Programs and Preferencing”?
While this executive order is directed to federal agencies, it demonstrates the sweeping nature of the Trump administration’s efforts to eradicate DEI principles from the workplace.

Termination of DEI Programs: The EO mandates the termination of all DEI programs within federal agencies. This includes any initiatives, training, or policies that are specifically designed to promote DEI within the federal workforce, which the EO describes as “radical and wasteful.” Relatedly, the Trump administration issued a memo directing all federal agencies to place any DEI professionals within their ranks on paid leave as of January 22, 2025. The Trump administration also provided agency heads with a directive warning of “adverse consequences” for anyone who fails to report any of their colleagues (to a specified email address created for this this purpose) who try to circumvent orders to immediately cease DEI-related activities.
Prohibition of Preferences Based on Identity: Consistent with EO 11246 (which the President revoked), the new Trump EO explicitly prohibits federal agencies from giving preferential treatment to individuals based on race, color, religion, sex, or national origin in hiring, promotion, or any other employment decisions.
Review and Rescission of Existing Policies: Federal agencies are required to conduct a comprehensive review of their existing policies, programs, and practices to identify any that are inconsistent with the new directive. Any policies or programs that are found to be in violation of the order must be rescinded or modified to comply with the new guidelines. This includes reviewing training materials, hiring practices, and any other initiatives that may have been implemented to promote DEI within the agency.

What Should Contractors Do to Comply with the New EOs?

Contractors should conduct a privileged review of their existing DEI programs to identify any potentially problematic features such as race- or gender-based quotas, or to consider adding a mission statement to clarify that the contractor’s diversity efforts seek to identify and cultivate all existing talent and do not have the effect of lowering any applicable standards or commitment to excellence.
Contractors should also consider a privileged review of their documented merit-based criteria for hiring, promotions, and other employment actions. This may involve updating job descriptions, performance evaluation processes, and training programs to focus on skills, experience, and performance.
Contractors should consider developing consistent guidance for employees, as they may have questions about the organization’s continued commitment to diversity and inclusion, and whether such a commitment is lawful, or where to go if they have concerns.

We will continue to closely monitor the implementation of these executive orders and will report on any new developments.

What’s Next for OFCCP? Agency Issues First Statement After President Trump’s Revocation of EO 11246

On January 23, 2025, the Office of Federal Compliance Programs (OFCCP) sent out its first official agency communication since the issuance of President Trump’s Executive Order (the “Trump Order”) revoking Executive Order 11246 . The message served to inform contractors of the import of Trump Order, but also that some OFCCP obligations remain.
OFCCP’s message referenced the revocation of EO 11246, noting that, per the Trump Order, “[f]or 90 days from the date of this order, Federal contractors may continue to comply with the regulatory scheme in effect on January 20, 2025,” with OFCCP adding emphasis to the word “may.”
The message also confirmed that per the Trump Order, OFCCP will immediately cease:

Promoting “diversity”.
Holding Federal contractors and subcontractors responsible for taking “affirmative action”; and
Allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.

Importantly, OFCCP noted that requirements under Section 503 of the Rehabilitation Act, 29 U.S.C. 793, and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), 38 U.S.C. 4212, are “enforced by OFCCP, are statutory and remain in effect.” (emphasis in original). Accordingly, federal government contractors are still required to comply with their affirmative action and other OFCCP obligations as they pertain to protected veterans and individuals with disabilities.
OFCCP also promised that “[a]dditional information regarding OFCCP’s current activities will be forthcoming in the upcoming weeks,” and that any questions should be submitted to the OFCCP Customer Service Helpdesk.

OFCCP Makes First Public Statement Following Revocation of Executive Order 11246

Late in the day on January 23, 2025, the Office of Federal Compliance Programs (OFCCP) sent out its first official agency communication since President Trump’s historic Executive Order “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” revoked Executive Order 11246 (Equal Employment Opportunity).
In an email to stakeholders, OFCCP acknowledged the revocation of EO 11246, noting contractors may continue to comply with the regulatory scheme in place prior to the signing of the EO for 90 days. The message also reiterated the order from the White House that the Agency
shall immediately cease:

Promoting ‘diversity’
Holding Federal contractors and subcontractors responsible for taking ‘affirmative action’”’; and
Allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.

The communication confirmed, as has been reported, that requirements under Section 503 of the Rehabilitation Act, 29 U.S.C. 793, and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), 38 U.S.C. 4212, which are statutory, “remain in effect,” noting both statutes are “enforced by OFCCP.”
While the government contractor community is anxiously awaiting further details on the implications of the executive order on their current and future obligations, OFCCP’s notice provided only a simple statement that
Additional information regarding OFCCP’s current activities will be forthcoming in the upcoming weeks.

The communication directed questions to be submitted to the OFCCP Customer Service Helpdesk.

What Employers and Nonprofits Should Know About Trump’s Executive Order Banning Diversity Preferences

Following his inauguration on January 20, President Trump signed a slew of executive orders, including a handful related to Diversity, Equity, and Inclusion (DEI) initiatives.

On January 21, President Trump signed an executive order (EO) entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (DEI EO), which aims to end DEI preferences in both the public and the private sectors, including nonprofits. Section 4 of the DEI EO tasks all federal agency heads with “encouraging” private sector companies to end DEI preferences, in part by threatening legal action against them.
Executive orders[1] are directives from the President and have the force of law. Because they are not legislation, they do not require approval from Congress, and Congress cannot directly overturn them, though it does have ways to affect their implementation. And, affected parties can challenge executive orders in court.
The DEI EO, taken together with the US Supreme Court’s ruling in Students for Fair Admissions v. President and Fellows of Harvard College, which found that Harvard University’s and the University of North Carolina’s race-based admissions systems violated the equal protection clause of the 14th amendment, may portend an end to private sector and nonprofit DEI programming and initiatives as we have come to know them. Even if the DEI EO is successfully challenged, employers in the public and private sectors should be prepared for increased scrutiny of any DEI initiatives and programming.
An Overview of the Executive Order
The DEI EO begins with the premise that longstanding civil rights laws designed to protect against discrimination have been used by institutions to adopt “dangerous, demeaning, and immoral race- and sex-based preferences under the guise of so-called ‘diversity, equity, and inclusion’ (DEI) or ‘diversity, equity, inclusion, and accessibility’ (DEIA)” which could violate those laws. According to the executive order, these actions “diminis[h] the importance of individual merit, aptitude, hard work, and determination when selecting people for jobs and services…”
The executive order mandates the following at the federal government level:

The termination of all “discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements” in any executive department or agency.
The revocation of five executive orders from 1965, 1994, 2011, 2014 and 2016[2] focused on equal employment opportunities and promotion of diversity for the federal government and federal contractors.
That the Office of Federal Contract Compliance Programs (OFCCP) within the US Department of Labor immediately cease (1) promoting diversity, (2) holding federal contractors or subcontractors responsible for affirmative action, and (3) allowing workforce balancing based on race, color, sex, sexual preference, religion, or national origin.

The executive order also provides the following with respect to private sector employers:

The heads of all federal agencies must take action to advance in the private sector “the policy of individual initiative, excellence, and hard work.”
Most notably, within 120 days, the US Attorney General, in consultation with the heads of relevant agencies and in coordination with the Director of the Office of Management and Budget (OMB), must submit a report containing “recommendations for enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI.” The report should contain a proposed strategic enforcement plan identifying: “(1) key sectors of concern within each agency’s jurisdiction; (2) the most egregious and discriminatory DEI practitioners in each sector of concern; (3) a plan of specific steps or measures to deter DEI “programs or principles” (whether specifically denominated “DEI” or otherwise) that constitute illegal discrimination or preferences.
As part of this plan, each agency is required to identify up to nine potential civil compliance investigations of:

Publicly traded corporations.
Large nonprofit corporations or associations.
Foundations with assets of $500 million or more.
State and local bar and medical associations.
Institutions of higher education with endowments over $1 billion.

In addition, within 120 days, the Attorney General and the US Secretary of Education must jointly issue guidance to all state and local educational agencies that receive federal funds, as well as all institutions of higher education that receive federal grants or participate in the federal student loan assistance program regarding the measures and practices required to comply with the principles set forth in the Supreme Court’s Students for Fair Admissions decision.

What Should Private Sector Employers (Including Nonprofits) Do Now?
The executive order raises significant questions regarding private sector use of DEI preferences and even calls into question the ability of a company to sustain or encourage an internal culture that celebrates or seeks out diversity. Because the executive order does not define “illegal discrimination or preferences,” it can be difficult to determine whether a specific practice is likely to be the target of negative government attention.
Notably, nothing in the executive order suggests that employers may not take action to seek out a diverse candidate pool, so long as ultimate hiring decisions are based on qualifications alone and do not involve illegal preferences. Therefore, to lower the risk of enforcement action by the federal government, private sector employers (including nonprofit organizations) may choose to recruit across a broader spectrum and prioritize seeking out a wide range of diverse characteristics, rather than just focusing on protected characteristics like race or sex.
At a minimum, employers who fall into one or more of the five categories to be scrutinized for potential civil compliance investigations may wish to assess their risk-tolerance and consider whether suspending affirmative action plans or DEI initiatives is in line with their company’s priorities. But, even for employers who are not the target of civil compliance investigations, these executive orders may embolden employees and applicants who feel they have been mistreated as a result of diversity initiatives to bring private claims of discrimination against their employers.
What Should Government Contractors Do Now?
Significantly, the DEI EO’s revocation of Executive Order 11246, first issued in 1965 (one year after President Johnson signed the Civil Rights Act of 1964) (EO 11246) reflects a sea change in the affirmative action obligations of government contractors. Under EO 11246, federal contractors were required to analyze workforce data and engage in good faith efforts to provide equal employment opportunities for women and minorities, but they were not required to apply quotas or preferences for those groups. President Trump’s revocation of this longstanding requirement potentially eliminates entirely the requirements that government contractors develop and certify annually their affirmative action plans.
The DEI EO permits federal contractors to operate under current rules for 90 days while they await further guidance from the government on new requirements. We anticipate that private plaintiffs will be exploring their options in terms of legal remedies in response to the revocation.
Potential Implications for Nonprofits Beyond Employment Matters
DEI principles are integral, and in some cases central, to the mission of many nonprofits. The DEI EO is drafted broadly and could encompass programmatic activities in addition to employment-related or contractual matters. As a result, while some organizations may be more risk averse and may elect to change or terminate certain programs, other organizations may decide to stay the course and continue to pursue programs that could draw the attention of the Administration, Attorney General, or relevant agencies. The decision will depend in part on the organization’s specific priorities and level of risk aversion. If an organization ultimately seeks to terminate programs or make fundamental changes to their mission, there may be other legal impediments that could arise under the federal tax law and state nonprofit laws, particularly those that apply to charitable organizations.

[1] (1) Initial Rescissions Of Harmful Executive Orders And Actions; (2) Ending Radical And Wasteful Government DEI Programs And Preferencing; (3) Reforming The Federal Hiring Process And Restoring Merit To Government Service

[2] (1) Executive Order 11246 of September 24, 1965 (Equal Employment Opportunity), (2) Executive Order 12898 of February 11, 1994 (Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations); (3) Executive Order 13583 of August 18, 2011 (Establishing a Coordinated Government-wide Initiative to Promote Diversity and Inclusion in the Federal Workforce); (4) Executive Order 13672 of July 21, 2014 (Further Amendments to Executive Order 11478, Equal Employment Opportunity in the Federal Government, and Executive Order 11246, Equal Employment Opportunity); and (5) The Presidential Memorandum of October 5, 2016 (Promoting Diversity and Inclusion in the National Security Workforce).
Additional Authors: Lauren C. Schaefer and Brian D. Schneider

What to Do if Your Government Contract Is Terminated per the New DEI Executive Order

On January 21, 2025, President Donald Trump issued an executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” The executive order’s stated purpose is to end “illegal” diversity, equity, and inclusion (DEI) efforts.
Among other things, the executive order directs the director of the Office of Management and Budget to “[t]erminate all ‘diversity,’ ‘equity,’ ‘equitable decision-making,’ ‘equitable deployment of financial and technical assistance,’ ‘advancing equity,’ and the like mandates, requirements, programs, or activities, as appropriate.”
Anecdotally, we have already seen this directive be interpreted by multiple contracting agencies as mandating the immediate termination or descoping of any federal contract that includes a DEI provision or requirement — or even just the mention of “DEI” in the scope of work. While this may seem unfair to federal contractors who are simply performing in accordance with the government’s own requirements, this appears to be a new reality that they must face.
Depending on the specifics of the situation, contractors may be able seek agency reconsideration of its termination decision, convince the agency to alter the scope of the subject contract (rather than terminate the contract altogether), recover costs resulting from the termination of the contract, and/or challenge the propriety of the termination.

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DEI Changes from the Start: Key Executive Orders Signed on Trump’s First Day

On January 20, 2025, Donald J. Trump was sworn in as the 47th President of the United States. Fulfilling one of his major campaign promises, he issued a series of executive orders on his first day in office. Two of these orders represent a significant shift regarding gender and diversity, equity, and inclusion (DEI) initiatives.
One order declares that the federal government only recognizes two immutable sexes: male and female. This Order, entitled, “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” rejects “gender identity” as a basis for policy decisions and emphasizes that sex is a fixed biological characteristic. It directs federal agencies to use clear, sex-based language in all official documents and communications, and seeks to ensure that facilities and programs meant for one sex are not accessed based on gender identity. Specifically, the Order requires government-issued identification documents, including passports, visas, and Global Entry cards, to reflect the holder’s sex assigned at birth. The Order also calls for revisions to policies concerning women’s spaces, healthcare, and legal protections, aiming to uphold sex-based rights.
Another order, entitled, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” aims to end what President Trump deems “discriminatory” DEI initiatives implemented by the Biden administration. In this Order, federal agencies are mandated to terminate these initiatives, including terminating DEI-related positions, training, and programs, under whatever name they appear (including in relation to “environmental justice”). Federal agencies are directed to revise employment practices to focus solely on merit, performance, and skills, without considering DEI factors. The aim of this Order is to ensure equal treatment for all Americans, reducing federal spending on what the Order labels “wasteful” and “discriminatory” policies.
President Trump also issued an order that reverses several executive orders from the Biden administration. The Order highlights a commitment to undoing practices deemed to have harmed the nation, particularly focusing on issues of DEI, border control, and climate-related regulations. The Order asserts that these policies from the Biden administration created divisiveness, inflated costs, and strained public resources. Among the revoked prior orders are:

Executive Order 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government;
Executive Order 13988, Preventing and Combatting Discrimination on the Basis of Gender Identity or Sexual Orientation;
Executive Order 14091, Further Advancing Racial Equity and Support for Underserved Communities Through the Federal Government; and
Executive Order 14069, Advancing Economy, Efficiency, and Effectiveness in Federal Contracting by Promoting Pay Equity and Transparency.

Additionally, this Order creates a broad review process, wherein the Domestic Policy Council and National Economic Council have been tasked with reviewing federal actions from the Biden administration to determine which additional policies should be rescinded or amended to “increase American prosperity.”
Yesterday’s wave of executive orders marks just the beginning of what is expected to be a series of significant policy shifts under President Trump’s administration. As these changes unfold, they will likely have widespread impacts on everything from federal regulations to national security. With more orders likely on the horizon, it is crucial to stay informed and to prepare to accommodate the evolving policy landscape.

Trump Administration Revokes EO 11246, Prohibits ‘Illegal’ DEI: What the EO Ending Illegal Discrimination and Restoring Merit-Based Opportunity Means for Employers

Takeaways

The EO does not change existing law, but it signals the Administration’s focus on targeting organizations that violate existing anti-discrimination laws in their employment practices.
For federal contractors, it eliminates affirmative action plan obligations regarding race and gender (as had been required by EO 11246) and enforcement activity by the OFCCP regarding race or gender affirmative action plans.
For all employers, the EO signals increased investigation and enforcement activities relating to DEI programs that utilize discriminatory preferences.

Supreme Court Hears Discrimination Case Involving Retiree Benefits

The Supreme Court of the United States recently heard oral arguments in a case that could broadly impact employers’ retiree benefits and liability under the Americans with Disabilities Act (ADA). The court will decide whether retirees can sue for disability discrimination because of changes to retiree benefit plans.

Quick Hits

The Supreme Court heard arguments in a lawsuit over whether retirees can sue their former employers for disability discrimination involving benefit plans.
Lower courts are divided on the issue.
The Supreme Court is likely to rule in this case before its current term ends in late June 2025.

On January 13, 2025, the Supreme Court heard oral arguments in Stanley v. City of Sanford, Florida, in which a retired firefighter alleged disability discrimination based on the city’s decision to shorten the duration of health benefits for disabled retirees.
Specifically, the court was tasked with answering the question, “Under the Americans with Disabilities Act, does a former employee, who was qualified to perform her job and who earned post-employment benefits while employed, lose her right to sue over discrimination with respect to those benefits solely because she no longer holds her job?”
Background on the Case
The firefighter served for about fifteen years until she was diagnosed with Parkinson’s disease. She became unable to perform essential job functions and retired in 2018 at the age of forty-seven. When she joined the fire department, employees who retired for disability reasons were eligible to receive employer-paid health insurance until age sixty-five. But the city changed the plan in 2003, so that employees who retired for disability reasons (with less than twenty-five years of service) were eligible for employer-paid health insurance for only twenty-four months after their retirement date.
The U.S. Court of Appeals for the Eleventh Circuit upheld the city’s decision to scale back the retiree health benefit to conserve funds. The firefighter appealed to the Supreme Court.
Supreme Court Hearing
Before the Supreme Court, Deepak Gupta, the attorney for the firefighter, argued that former employees can sue under the ADA for discrimination that occurred against them as qualified individuals while still employed. He also said former employees can legally challenge post-employment discrimination. He noted that an illegal policy occurs at three points: when the policy is adopted, when a person is subject to the policy, and when a person experiences the material effects of the policy.
Gupta argued the city discriminated because it reduced the benefit only for individuals who retired early due to a disability, not those without a disability who completed twenty-five years of service before retirement. He said the plaintiff would have served at least twenty-five years if she had not become disabled.
Frederick Liu, assistant to the solicitor general of the United States, argued the firefighter was a qualified individual with a disability before she retired, and therefore she is entitled to ADA protections. He said this case is a disparate treatment claim, similar to claims of race discrimination and sex discrimination in post-retirement benefits that the court has heard in the past.
Jessica Connor, the attorney for the city, argued that the ADA’s language uses present tense to apply to individuals who can perform a job that they currently hold or desire. Connor argued that the city never discriminated against the firefighter while she was a qualified individual who could perform the essential functions of the job. Connor said the city’s policy only applied to individuals who were permanently and completely unable to perform the essential functions of the job, rendering them outside the protections of the ADA.
Connor noted that Florida law permits governmental employers to change retirement policies before the rights under them vest.
In rebuttal, Gupta said the city’s position “creates perverse incentives for employers to hide discrimination until after retirement.”
Next Steps
It’s unclear when the Supreme Court will issue a ruling in this case, but it is likely to do so before its current term ends in late June 2025. The court’s ruling could resolve the split in the circuit courts.
If the court rules in favor of the city, then employers would be reassured that they probably won’t be held liable for disability discrimination when they make cuts to retiree benefits.
If the court rules in favor of the firefighter, then employers may wish to carefully document their decision-making and nondiscriminatory reasons for reducing retiree benefits. They may wish to consider whether potential benefit changes would impact retirees with disabilities differently than retirees without disabilities.
This case deals with a governmental plan, which means a different result could occur in a case involving a private-sector plan governed by the Employee Retirement Income Security Act (ERISA).

President Trump Eliminates Affirmative Action and Anti-Discrimination Requirements on Federal Contractors (US)

Among the barrage of executive orders signed by President Trump upon assuming office was an order revoking a longstanding Executive Order that placed affirmative action requirements on federal government contractors. On January 21, 2025, President Trump signed an Executive Order entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” revoking Executive Order 11246 based on the President’s position that it perpetuated “illegal discrimination in the Federal Government.”
Executive Order 11246 – signed by President Lyndon B. Johnson in 1965 – prohibited federal contractors from discriminating in employment decisions on a wide range of protected characteristics, including race, color, religion, sex, sexual orientation, gender identity, and national origin. EO11246 specifically applied to employers, including construction contractors and subcontractors, with contracts valued in excess of $10,000 with the federal government business in one year. Additionally, EO11246 required government contractors to take affirmative action to ensure that equal opportunity was provided in all aspects of employment and prohibited retaliation against job applicants and employees for asking about, discussing, or sharing pay information.
President Trump’s January 21 order directs the federal contracting process be “streamlined to enhance speed and efficiency, reduce costs, and require Federal contractors and subcontractors to comply with our civil-rights laws.” Specifically, the Order directs the Office of Federal Contracting Compliance Programs (OFCCP) within the U.S. Department of Labor, which was tasked with enforcing EO11246, to immediately cease the following actions: promoting “diversity;” holding federal contractors and subcontractors responsible for taking “affirmative action;” and allowing or encouraging federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin. Additionally, contracting agencies now must include in all federal contracts a term requiring that contractors certify that they do not “operate any programs promoting [diversity, equity, and inclusion] DEI that violate any applicable Federal anti-discrimination laws.”
Employers impacted by this new Order have 90 days from January 21, 2025, to comply with the new regulatory scheme. Although the Order removes significant obligations from federal contractors, they may still be required to adhere to similar requirements under other federal laws. For example, contractors are still required to comply with obligations related to individuals with disabilities and protected veterans under Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act, and all employers, including federal contractors and subcontractors, must continue to adhere to additional reporting requirements, if applicable under law, such as filing EEO-1 and VETS-4212 reports.