What Is “Illegal DEI?” Key Takeaways for Employers in Light of Litigation and Guidance Issued by the Federal and State Governments
This alert will explore what the federal government may consider to be “illegal DEI” in light of legal challenges to President Trump’s multiple executive orders (EO’s) pertaining to diversity, equity, inclusion, and accessibility (DEI)1 and provide employers with some best practices with respect to DEI initiatives.
Legal Challenges to the DEI EOs
The enforceability and constitutionality of the DEI EO’s have been challenged in numerous federal lawsuits, including Nat’l Assoc. of Diversity Officers in Higher Ed., et al. v. Donald J. Trump, et al.2 On 21 February 2025, the United States District Court for the District of Maryland (the Court) issued a nationwide preliminary injunction (Order) enjoining the following directives in the DEI EO’s (1) canceling or freezing any awards, contracts, or obligations for government contractors engaging in illegal DEI; (2) requiring contractors to make certifications with respect to illegal DEI; and (3) bringing False Claims Act enforcement actions against federal contractors based on such certifications. The Court found that the DEI EOs failed to define “operative terms” such as “DEI,” “illegal DEI,” “illegal DEI policies,” or “illegal discrimination or preferences.”3 The Court also noted that the government was unable to clarify what type of actions constituted “illegal DEI” when asked direct questions and presented with hypotheticals during the hearing.4
Notably, the Order did not enjoin the US Attorney General from preparing a report containing recommendations for enforcing federal civil-rights laws, “encouraging the private sector to end illegal discrimination and preferences,” including DEI, and identifying up to nine potential civil compliance investigations per federal agency of publicly traded corporations, large nonprofit corporations or associations, or foundations with assets of US$500 million or more. Also, the Order did not apply to a number of agencies, including the Equal Employment Opportunity Commission (EEOC).
As anti-DEI efforts are a top enforcement priority for the Trump administration, the administration has appealed the Order to the Fourth Circuit Court of Appeals (Fourth Circuit) and filed a motion to stay the Order pending appeal, which was denied by the Court.
Valuable Resources for Defining Illegal DEI
In light of the federal government failing to define “illegal DEI” in the DEI EOs or related legal challenges, employers’ approaches to current DEI initiatives should be informed by current federal antidiscrimination law, communications from federal agencies thus far on this topic, and applicable state law guidance. While awaiting more tailored guidance from the federal government, private employers can glean some do’s and don’ts of DEI from the following resources, explained in more detail herein.
The memorandum issued by the US Office of Personnel Management (OPM) regarding the future of federal agencies’ DEI programs (Memo);5 and
Multi-state guidance issued by the Attorneys General of 15 states6 addressing DEI employment initiatives (the Multi-State Guidance).
The OPM Memo identifies certain DEI initiatives and practices that are no longer permitted in the federal agencies and in some cases, are considered illegal. For example, “diverse slate” hiring7 is included as an example of an “unlawful diversity requirement” that considers an applicant’s protected characteristic as part of the hiring process.8 The OPM Memo also directs agencies to reorganize and eliminate “Special Emphasis Programs” (SEPs) that promote DEI based on protected characteristics. SEPs were established to remove barriers to equal employment opportunity for traditionally underrepresented groups in the workforce,9 not unlike diversity internships and career development programs in the private sector. Further, the OPM Memo directs all agencies to disband employee resource groups (ERGs) that “advance employment opportunities based on protected characteristics,” and to ensure membership in ERGs is not restricted based on any protected characteristic.
The Multi-State Guidance takes the position that the DEI EOs do not prohibit lawful practices and policies that promote DEI in the private sector. As such, the Multi-State Guidance recommends that employers continue lawful DEI practices, including: prioritizing widescale recruitment efforts to attract a larger pool of applicants; setting standardized evaluation criteria to reduce the impact of biases on the interview process; ensuring equal access to all aspects of professional development; conducting training on topics such as unconscious bias, inclusive leadership, and disability awareness; and establishing working groups to participate in creating strategies that support more inclusive behaviors and practices.
Key Takeaways for Employers
The OPM Memo and Multi-State Guidance provide helpful guidance to private employers as they prepare for increased scrutiny and potential government investigations. Specifically, private employers should consider:
Suspending “diverse slate” hiring practices and focusing instead on widescale recruiting to attract a large pool of applicants.
Reviewing the purpose and impact of any employer-recognized ERGs and ensuring that such groups are inclusive and open to everyone.
Reorganizing or ending DEI internship and career development programs based on protected characteristics.
Conducting internal audits of DEI policies and procedures, especially as to recruitment and hiring.
Providing trainings on topics like unconscious bias and disability awareness.
Conclusion
As evidenced by the ever-changing DEI landscape, employers should keep in mind that various state law requirements and enforcement priorities under anti-discrimination laws may be in tension with the federal directives in the DEI EOs and US Department of Justice and EEOC enforcement priorities, which will increase uncertainty surrounding compliance. Employers should work with counsel to ensure hiring and retention practices and equal employment opportunity policies comply with applicable law in light of the updated enforcement guidance provided by the federal government to reduce the risk of government investigation while maintaining compliance with applicable law.
Footnotes
1 Specifically, the Trump Administration issued Executive Order 14151, Ending Radical and Wasteful Government DEI Programs and Preferences and Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (collectively, the DEI EOs).
2 Case No. 1:25-cv-00333-ABA (D. Md. Filed Feb. 3, 2025).
3Id. at *2.
4 Id. at *46.
5 Dated 5 February 2025, with the subject, “Further Guidance Regarding Ending DEIA Offices, Programs and Initiatives.”
6 Arizona, California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New York, Oregon, Rhode Island, and Vermont
7 As defined in the OPM Memo, “diverse slate” hiring is a hiring process through which diversity requirements are imposed on the composition of hiring panels, the composition of candidate pools, or both.
8 In doing so, the OPM Memo clarified that “to be unlawful, a protected characteristic does not need to be the sole or exclusive reason for an agency’s action.”
9 Special Emphasis Programs | U.S. Department of Commerce.
Working Mothers: Workplace Travel Requirements Do Not Automatically Amount to Indirect Discrimination
Ms Perkins (the Claimant) was employed as head of Enforcement Local Taxation in the Helmshore office of MH Ltd’s enforcement company (the Company). The Company restructured its enforcement services so that work in Darlington, Epping and Birmingham transferred to Helmshore.
As a consequence of this change, Ms Perkins was told that she would have to travel to these other offices, prompting her to raise a grievance against that requirement. The Company stated that such travel could be limited to one day per month, but if this was refused the options were (i) enforcement of the changes; (ii) fire and rehire under a new contract; or (iii) redundancy. Ms Perkins confirmed that if her employment were terminated, she would advance down the redundancy route.
Ultimately, Ms Perkins was dismissed by reason of redundancy. Ms Perkins claimed:
unfair dismissal – contending it was not a genuine redundancy; and
indirect sex discrimination – claiming the travel requirement placed women with childcare duties at a disadvantage.
The Employment Tribunal (ET)
The ET upheld both of Ms Perkins’s claims, accepting that:
unfair dismissal – the real reason for dismissal was Ms Perkins’s inability to meet the travel demands, not redundancy; and
indirect sex discrimination – the travel requirement created a disadvantage for women with childcare responsibilities, and it was not proportionate to require significant travel to achieve the legitimate aim of business efficacy and staff morale.
The Company appealed.
The Employment Appeal Tribunal (EAT)
On appeal, the Company was successful for the following reasons:
unfair dismissal – the ET allowed Ms Perkins to challenge redundancy as the reason for dismissal despite her earlier concession; and
indirect sex discrimination – the ET failed to sufficiently analyse whether the childcare disparity applied specifically to Grade 3 Managers and instead relied on the existence of a childcare disparity (that is, women are more likely to be primary carers). The EAT found that the travel requirement was proportionate to the Company’s business aims.
Implications for Flexible Working
This case highlights important considerations for employers regarding flexible working, such as:
Proportionality of Requirements. Employers should ensure that any workplace requirements, such as travel, are necessary and proportionate, especially when they may disadvantage certain groups.
Childcare Disparity. Tribunals may “judicially note” that women are more likely to face childcare challenges, but employers should assess how such disparities apply within their workforce.
Flexible Working Requests. Employers must engage in meaningful consultation before imposing rigid requirements.
Ben Crump Slams Trump’s Rollback of DEI Programs: A Threat to Equality
Ben Crump Slams Trump’s Rollback of DEI Programs: A Threat to Equality. NEW YORK – Civil rights attorney Ben Crump, known for his high-profile cases representing victims of police brutality and civil rights violations, has condemned the Trump administration’s recent decision to eliminate Diversity, Equity, and Inclusion (DEI) programs in federal agencies. This controversial move […]
FTC Calls for Public Feedback on Tech Censorship
The Federal Trade Commission (FTC or Commission) is asking members of the public to weigh in on whether tech platforms restricted or blocked their access because of content they posted on those platforms. The FTC issued a Request for Information (RFI) on February 20, 2025, to “better understand how technology platforms deny or degrade (such as by “demonetizing” and “shadow banning”) users’ access to services based on the content of the users’ speech or their affiliations, including activities that take place outside the platform” and how such actions may violate federal law. FTC Chairman Andrew Ferguson commented in the press release accompanying the RFI that “tech firms should not be bullying their users …This inquiry will help the FTC better understand how these firms may have violated the law by silencing and intimidating Americans for speaking their minds.”
In issuing the RFI, the Commission is following a long-held FTC tradition of carrying out investigative groundwork on an issue before it issues a potential regulatory rule, and the RFI is simply an initial investigation. But the inquiry raises questions about the scope of First Amendment rights of platforms and the reach of the FTC Act.
The RFI has thus far received over 1,000 comments. Stakeholders interested in submitting feedback have until May 21, 2025.
Warby Parker Settles Data Breach Case with OCR for $1.5M
Eyeglass manufacturer and retailer Warby Parker recently settled a 2018 data breach investigation by the Office for Civil Rights (OCR) for $1.5 million. According to OCR’s press release, Warby Parker self-reported that between September and November of 2018, unauthorized third parties had access to customer accounts following a credential stuffing attack. The names, mailing and email addresses, payment card information, and prescription information of 197,986 patients was compromised.
Following the OCR’s investigation, it alleged three violations of the HIPAA Security Rule, “including a failure to conduct an accurate and thorough risk analysis to identify the potential risks and vulnerabilities to ePHI in Warby Parker’s systems, a failure to implement security measures sufficient to reduce the risks and vulnerabilities to ePHI to a reasonable and appropriate level, and a failure to implement procedures to regularly review records of information system activity.” The settlement reiterates the importance of conducting an annual security risk assessment and implementing a risk management program.
What to Watch in Nevada’s 2025 Legislative Session: Key Employment-Related Bills
On February 3, 2025, the Nevada state legislature kicked off its latest legislative session, and state lawmakers are poised to consider several bills that could impact employers and employees, from last day pay provisions to paid leave and work restrictions for minors. Here is a recap from the first month in session.
Quick Hits
The Nevada state legislature commenced its latest legislative session on February 3, 2025.
State lawmakers are considering multiple bills that could impact employment law in the Nevada.
Employers may want to take note of these legislative developments, which, if passed and enacted, could result in significant changes to Chapters 608 and 613 of the Nevada Revised Statutes (NRS).
Here is a breakdown of some of the key bills in this legislative session.
SB 198: Changes to Last Day Pay Provisions
Senate Bill (SB) 198 would revise the last day pay provisions under NRS 608.030. Under existing law, employers are required to pay discharged employees their earned and unpaid wages immediately. Similarly, employees placed on nonworking status must be paid immediately, and those who resign or quit must be paid by their next regular payday or within seven days, whichever is earlier. Penalties for the failure to pay final wages and compensation do not attach for three days from the date the wages and compensation are due, which is commonly referred to as the “three day grace period.”
The new bill would expand the definition of compensation to include fringe benefits and increase penalties for noncompliance. Further, the bill would eliminate the “three day grace period.” Instead, employers would only have until 5:00 p.m. the day following the date wages and compensation are due to the employee. The bill would also increase the penalties to an amount equal to eight hours of work at 1.5 times the employee’s hourly wage for each day the payment is delayed, up to thirty days. The bill would also mandate that cannabis establishments comply with all federal and state labor laws, with violations resulting in license revocation.
AB 112: Sick Leave Policy Changes
Assembly Bill (AB) 112 would remove the exemption for employees covered by a collective bargaining agreement (CBA) from the provisions of NRS 608.01975. Under current law, employers are not required to allow employees covered by a CBA to use accrued sick leave for family medical needs. The bill would eliminate that exemption, making the requirement applicable to all employers, regardless of CBA coverage. However, the changes would not apply during the current term of any CBA entered into before October 1, 2025. Still, they would apply to any extensions, renewals, or new agreements made on or after that date.
AB 166: Work Hour Restrictions for Minors
AB 166 would extend the limitations on the number of hours workers under the age of sixteen are allowed to work to workers under the age of eighteen and reduce the number of allowable work hours from forty-eight hours in a week to forty hours in a week. The bill would maintain the daily limit of eight hours. Additionally, the bill would prohibit minors enrolled in school from working before 5:00 a.m. on school days and after 10:00 p.m. on nights preceding school days. Exceptions would remain for work as performers in motion pictures and work on farms.
AB 179: Extension of Paid Leave Statute
Nevada’s existing paid leave statute requires private employers with fifty or more employees in the state to provide at least 0.01923 hours of paid leave for each hour worked, but it does not apply to employers that provide such a paid leave policy “pursuant to a contract, policy, collective bargaining agreement or other agreement.” AB 179 would eliminate that exception to the statute. Further, the bill clarifies specific actions that would constitute unlawful “retaliation” under the statute against an employee who takes paid leave.
AB 255: Prohibiting Repayment Obligations in Employment Contracts
AB 255 would prohibit employers from requiring an employee or independent contractor to repay the employer any sums if the employee terminates employment before a specified period of time expires. This could include training expenses, relocation expenses, or sign-on bonuses with repayment obligations, which are tied to an employee or independent contractor satisfying a length of service first. AB 255 could be enforced by the labor commissioner or the attorney general, and would also create a private right of action.
SB 160: Realignment of Nevada Equal Rights Commission and Enhance Scope of Authority
SB 160 would remove the Nevada Equal Rights Commission (NERC) from the Department of Employment, Training and Rehabilitation, and move it to the Office of the Attorney General. It permits NERC to consider “historical data” related to the employer’s discriminatory practices. There is declarative language in this legislation about nondiscrimination being a public policy of the state, which could open the door to wrongful termination in violation of public policy claims based on discriminatory acts, which is not currently the law. The bill also details a penalties structure for employers that are deemed to have committed “willful” violations of the statute.
Important Update on U.S. Tariffs Impacting Ontario Businesses
The United States has announced the imposition of new tariffs on Canadian goods, effective immediately as of March 4, 2025. These tariffs include a 25% surcharge on a wide range of products imported from Canada. The products include but are not limited to: steel and aluminum products; automotive parts and vehicles; agricultural products such as dairy, beef, and pork; consumer goods like appliances, electronics, and apparel; raw materials and chemicals.
In response to the announcement, Ontario Premier Doug Ford stated on March 4, 2025, that Ontario would implement a reciprocal 25% surcharge on all energy exported by Ontario to the United States. He stated further that it was expected by the Ontario government that the tariffs would have a significant impact on multiple industries including, in particular, manufacturing.
The Purpose and Potential Impact of the Tariffs
The U.S. government has stated that tariffs are intended to protect American industries and jobs over the long term. However, the immediate impact on businesses and customers will be significant. For Canadians, the tariffs are likely to increase the cost of exporting goods to the U.S., potentially leading to reduced demand for Canadian products, and increasing the overall price of goods for citizens. This could result in financial strain on businesses and may necessitate adjustments to the workforce.
Legal Considerations for Workforce Reduction
The imposition of tariffs will pose challenges for many businesses and the workforce. But as we saw with COVID-19, the fact that there are significant and sometimes societal level impacts on the economy, or a particular industry, will not automatically remove or lessen an employer’s obligations to their employees in Ontario. In this regard, some of the major legal considerations to keep in mind as you contemplate how to weather this storm and manage your workforce are as follows:
Compliance with Employment Standards: Ensure that any workforce reductions comply with Ontario’s Employment Standards Act, 2000 (ESA), including proper notice periods and severance pay requirements. There are options short of termination for temporary reductions in work, including layoffs, which may be available.
Human Rights Legislation: Be mindful of the Ontario Human Rights Code, ensuring that layoffs or terminations are not targeted towards any particular group of employees.
Collective Agreements: If your workforce is unionized, review your collective bargaining agreements to understand the rules and procedures for layoffs or terminations. Many collective agreements contain provisions which deal with temporary interruptions of work, voluntary leaves/layoffs, and notice and severance obligations.
Constructive Dismissal: Although there may be an avenue to lay off employees under the ESA, the common law in Ontario does not automatically allow an employer to layoff an employee. It is important to consider, and avoid, how your actions could be construed as a constructive dismissal which could lead to legal claims from employees.
Record Keeping: It is important that you maintain thorough documentation of the reasons for workforce reductions and the steps taken to comply with your legal obligations. This can be crucial in defending against potential legal claims.
It is recommended that you review your employment agreements, collective agreements, and policies, and formulate a plan now that will allow you to respond quickly to changing economic conditions over the coming weeks. As always, and prior to implementing major changes in your workplace, it is important that you obtain advice and comply with your legal obligations.
Unusual Combinations of Justices Denying Veterans’ Claim but Requiring Executive to Make Foreign Aid Payments to Contractors – SCOTUS Today
The U.S. Supreme Court resolved more textual battles today, one in a fully argued case, the other on procedural motions.
The combinations of Justices continue to defy stereotypes, and at least one of those combinations, led by the Chief Justice, constitutes a majority that is willing to stand up to presidential assertions of expansive powers.
Bufkin v. Collins involved the application by the Department of Veterans Affairs (VA) of the so-called “benefit of the doubt” rule, a kind of “tie goes to the runner” rule that “tips the scales in a veteran’s favor when evidence regarding any issue material to a service-related disability claim is in ‘approximate balance.’” 38 U. S. C. §5107(b).
The petitioners in the case are veterans who applied for disability benefits related to their service-connected post-traumatic stress disorder. The VA found no clear link between the claimed condition and the veterans’ military service. These adverse determinations were reviewed de novo by the Board of Veterans Appeals (the “Board”), which rendered final decisions on behalf of the VA denying the claims. The veterans then challenged these adverse determinations before the U.S. Court of Appeals for Veterans Claims (the “Veterans Court”). The Veterans Court is charged with reviewing legal issues de novo and factual issues for clear error. In doing so, the Veterans Court must “take due account” of the VA’s application of the benefit-of-the-doubt rule.
Here, the Veterans Court affirmed the VA’s adverse benefit determinations, finding that the Board’s approximate-balance determinations were not clearly erroneous. On further appeal, the U.S. Court of Appeals for the Federal Circuit rejected the veterans’ argument that the statutory command to “take due account” of the VA’s application of the benefit-of-the-doubt rule requires the Veterans Court to review the entire record de novo and decide for itself whether the evidence is in approximate balance.
Writing for a 7–2 majority affirming the Federal Circuit, Justice Thomas opined that the VA’s determination that the evidence regarding a service-related disability claim is in “approximate balance” is a predominantly factual determination reviewed only for clear error. According to Justice Thomas and the six Justices who joined him, “[r]eviewing a determination whether record evidence is approximately balanced is ‘about as factual sounding’ as any question gets.”
An interesting feature of the case is not just that the dissent is longer than the lengthy majority opinion but that it was written by Justice Jackson and joined by Justice Gorsuch. Jackson suggested, not without the force of considerable reason, that “[n]othing about the text, context, or drafting history” of the provision at issue “demonstrates that ‘take due account’ actually means ‘proceed as normal.’”
The Trump administration suffered a significant loss in Department of State v. AIDS Vaccine Advocacy Coalition, in which the Court voted 5–4—with the Chief Justice and Justice Barrett joining the Court’s three jurisprudential liberals—to deny the president’s emergency application to lift a lower court order to pay nearly $2 billion to contractors in foreign aid funds for already-completed work.
Though there is no substantial record in the case and the majority’s order is contained in a single paragraph, the outcome demonstrates that the Chief Justice is an institutionalist first and foremost and, as I have been suggesting recently, so is Justice Barrett. Together with the liberals, particularly Justice Kagan, there is a functional majority that is willing to exert judicial power over a president whose wide-ranging executive orders would greatly extend the power of his office.
A caveat: It ain’t over till it’s over. Litigation in this matter will continue in the lower courts, so the case could come back to the Court in the future. At that point, we’ll see whether the division among the Justices persists. Joined in dissent by Justices Thomas, Gorsuch, and Kavanaugh, Justice Alito vehemently posited the rhetorical question:
Does a single district-court judge who likely lacks jurisdiction have the unchecked power to compel the Government of the United States to pay out (and probably lose forever) 2 billion taxpayer dollars? The answer to that question should be an emphatic “No,” but a majority of this Court apparently thinks otherwise. I am stunned.
We are sure that Justice Alito will find his bearings. As he does, will the Court’s majority continue to stand up to the executive? We shall soon see.
Employment Law This Week – Workplace Law Shake-Up – DEI Challenges, NLRB Reversals, and EEOC Actions [Video, Podcast]
This week, we’re covering significant updates shaping workplace policies, including shifts in regulations and enforcement related to diversity, equity, and inclusion (DEI); evolving approaches to Equal Employment Opportunity Commission (EEOC) compliance; and recent changes in National Labor Relations Board (NLRB) guidance.
Anti-DEI Executive Orders Blocked, but Employers Scale Back
A Maryland district court temporarily blocked significant portions of two anti-DEI executive orders signed in the early days of President Trump’s administration. This story is still developing, and last week, the Trump administration appealed the district court’s decision to the U.S. Court of Appeals for the Fourth Circuit. Regardless of whether the executive orders survive, many federal contractors and private businesses are assessing and adjusting DEI policies, programming, and public statements.
EEOC Cracks Down on DEI and Gender Identity Policies
Acting EEOC Chair Andrea Lucas said in a recent statement that the agency will seek to root out “unlawful DEI-motivated race and sex discrimination.” Lucas noted that the EEOC will also target the Biden administration’s “gender identity agenda” as well as anti-American bias at private businesses.
NLRB Rescinds Biden-Era Guidance
Acting NLRB General Counsel William Cowan recently rescinded a group of Biden-era memos from former General Counsel Jennifer Abruzzo. With the firing of member Gwynne Wilcox in the first days of the Trump administration, the NLRB has no quorum and cannot currently issue decisions, but more reversals are likely coming.
When Should You Hire a Disability Attorney for Your Claim?
Disabled individuals in New Jersey with no or limited capacity to work face physical, emotional, and economic hardships. Social Security disability benefits provide vital financial aid for disabled Americans to live independently on their own terms. Many claimants with valid claims face the despair of a denial due to incomplete applications or insufficient medical documentation. […]
District Court Enjoins DEI Executive Orders
On February 21, 2025, a U.S. District Court judge blocked portions of Trump Administration executive orders focused on diversity, equity, and inclusion programming (“DEI”). The preliminary injunction issued in National Association of Diversity Officers in Higher Education et al. v. Trump et al., Dkt. No. 1:25-cv-00333 (D. Md. Feb. 21, 2025) applies narrowly to specific aspects of the orders, but may have further impact not only to institutions of higher education that receive federal funds, but also the private sector. On February 25, an additional lawsuit was filed challenging the Department of Education’s February 14 Dear Colleague Letter (“DCL”), which may lead to further court action to block the administration’s attempts to ban DEI programming.
The executive orders subject to the February 21 preliminary injunction were issued on January 20 and 21, 2025. These executive orders required that:
all executive agencies terminate “equity-related grants or contracts” (the “Termination Provision”);
all executive agencies require federal contractors or grantees to certify that they do not operate illegal programs promoting DEI and agree that they are in compliance with “all applicable Federal anti-discrimination laws” (the “Certification Provision”); and
directed the Attorney General to take “appropriate measures to encourage the private sector to end illegal discrimination and preferences” including by identifying “potential civil compliance investigations” to deter illegal DEI programs (the “Enforcement Provision”).
By focusing on federal contractors and grantees and private sector entities, the executive orders would have allowed executive agencies to withdraw federal funding and potentially subject federal contractors and grantees and private sector entities to False Claims Act liability. Notably, the executive orders did not state criteria to evaluate the legality of a given DEI program.
In National Association of Diversity Officers in Higher Education et al. v. Trump et al., the plaintiffs, including the National Association of Diversity Officers in Higher Education (NADOHE) and the American Association of University Professors (AAUP), sued to block the enforcement of these executive order provisions, alleging that the executive orders’ lack of definitions for illegal DEI rendered them unconstitutionally vague, and that the executive orders amounted to speech restrictions based on content and viewpoint that violated the First Amendment. The plaintiffs further argued that the executive branch does not have the authority to place conditions – including the Certification Provision – on government spending that had been authorized by Congress.
The U.S. District Court for the District of Maryland found that the plaintiffs had cognizable claims that were likely meritorious, and issued a nationwide preliminary injunction preventing the executive orders from being enforced while the litigation is pending. The preliminary injunction applies nationwide, as follows:
The administration may not pause, freeze, impede, block, cancel or terminate its obligations or awards under current contracts, or change the terms of current obligations due to DEI programming as contemplated in the Termination Provision;
The administration may not require any grantee or contractor sign “certification” or other representation regarding its DEI programs as contemplated in the Certification Provision; or
The administration may not bring enforcement action based on allegedly illegal DEI programs as contemplated in the Enforcement Provision.
What does this mean for institutions of higher education?
Institutions of higher education who receive federal funds through grants or contracts should be aware that under the terms of the preliminary injunction, their DEI programming cannot be the reason for the federal government or their granting agencies to terminate those grants or contracts.
Further, pursuant to the court’s findings, the federal government may not require institutions of higher education who receive federal funds through grants or contracts to make certifications or representations regarding their DEI programming as a condition of receiving such grants or contracts.
Institutions of higher education should also be aware that additional challenges have been mounted to the Department of Education’s February 14 DCL, which asserts that DEI programming is unlawful discrimination in violation of Title VI, and should pay close attention to developments in that matter.
As the federal government’s interpretation of discrimination law changes, colleges and universities are referring to and relying upon state law, written regulations, and court precedent for guidance. Institutions seeking assistance with reviewing their institutional policies or programs, complying with requests for certification for their federal grants or contracts, or clarifying their obligations under federal or state discrimination law, should reach out to their Hunton lawyer for guidance.
Supreme Court Update: Lackey v. Stinnie (No. 23-621)
In Lackey v. Stinnie (No. 23-621), the Supreme Court addressed a question that had divided the circuits: If a plaintiff sues under Section 1983 and obtains a preliminary injunction, but subsequent events moot the suit before the district court can make that temporary relief permanent, is the plaintiff a “prevailing party” entitled to attorney’s fees under Section 1988(b)? Rejecting the approach favored by most lower courts, a 7-2 Supreme Court held that they are not.
The case began in Virginia, where state law required courts to suspend the license of any driver who had failed to pay “any fine, costs, forfeitures, restitution, or penalty lawfully assessed against him.” Such suspensions remain in effect until the driver paid the amount due in full or entered into a payment plan approved by a court. In 2016, a group of drivers whose licenses were suspended under this provision and alleged that they could not pay the fines required to reinstate their license sued the Commissioner of the Virginia Department of Motor Vehicles in federal court under Section 1983. The drivers alleged that the law violated the due process and equal protection clauses because it did not provide them with adequate notice before their licenses were suspended, and it applied even to people who were financially unable to pay the fines. The drivers sought declaratory relief, preliminary and permanent injunctive relief, and attorney’s fees under 42 U.S.C. § 1988(b).
In December 2018, the District Court entered a preliminary injunction against the law, holding (among other things) that the drivers were likely to prevail on the merits. Although Virginia could have appealed the preliminary injunction, it didn’t, so the case moved toward a full trial on the merits. In April 2019, a few months before trial was scheduled to begin, Virginia moved to stay the suit, arguing that it would soon become moot because the Virginia General Assembly was likely to pass a law eliminating the fines in an upcoming legislative session. The District Court entered the stay, and the next year, the General Assembly repealed the law and reinstated any licenses that had been suspended under it. Given that legislative change, the parties agreed the case was moot and stipulated to a dismissal, but the drivers asserted they were “prevailing parties” entitled to recover their attorney’s fees under Section 1988(b). The District Court refused to award fees, concluding that a party who obtains just a preliminary injunction (with no final relief) is not a prevailing party under Section 1988(b). Relying on circuit precedent, a Fourth Circuit panel affirmed, but the en banc Fourth Circuit then took up the case and overruled its precedent. In doing so, it joined the majority of the other courts of appeals in holding that a plaintiff who obtains “concrete, irreversible relief” on the merits of their claim via a preliminary injunction can be a prevailing party if the suit then becomes moot before a final judgment. Because the lower courts had divided on how to apply Section 1988(b)’s prevailing-party standard to cases like this one, the Court granted cert.
A 7-2 Court reversed the Fourth Circuit in an opinion written by Chief Justice Roberts. The Chief began by reciting the familiar “American Rule,” which provides that a prevailing party is generally not entitled to recover their attorney’s fees unless a statute expressly authorizes the court to award them. Section 1988(b) obviously is such a statute, as it provides that a “court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee as part of the costs.” But the statute doesn’t define when someone is a “prevailing party.” So Roberts looked to legal dictionaries, which generally define the term as looking at who prevailed at “the end of the suit . . . when the matter is finally set at rest.” A preliminary injunction, by contrast, requires a party to show only that they are “likely to succeed on the merits,” meaning that a party who obtains a preliminary injunction may nonetheless go on to lose the suit on the merits. Preliminary injunctions are thus at most a “transient victory.” And that transient victory does not become any more final when some “external event” (like the legislature changing the law) makes it impossible to obtain enduring, court-ordered relief. In short, because a preliminary injunction does not conclusively resolve a case, a party obtaining a preliminary injunction, without more, is not a prevailing party entitled to recover fees.
Justice Jackson, joined by Justice Sotomayor, dissented. She emphasized that Section 1988(b) was enacted precisely because Congress wished to depart from the American Rule in civil rights litigation. Under both the plain language and the Court’s precedent, she concluded that securing a preliminary injunction is enough for a plaintiff to qualify as a prevailing party so long as the preliminary injunction is never reversed by a final ruling on the merits. She also objected to the significant practical consequences of the majority’s approach: It is hardly unique for civil-rights cases to be mooted out either by settlement or legislative action, and depriving successful litigants of attorney’s fees in those cases may deter the filing of meritorious suits, deter settlements, and reward gamesmanship from defendants.