Marubo Tribe Sues The New York Times Over Defamation
Marubo Tribe Sues The New York Times Over Defamation. The Marubo tribe, an Indigenous group living deep in Brazil’s Amazon rainforest, is taking on three major U.S. media outlets in a $540 million defamation lawsuit, accusing them of publishing false and degrading claims about their people. The Marubo live on the upper course of the […]
D.C. Federal Court Rules Termination of Democrat PCLOB Members Is Unlawful
On May 21, 2025, the U.S. District Court for the District of Columbia ruled that two Democrat members of the United States Privacy and Civil Liberties Oversight Board (“PCLOB”) were unlawfully terminated by President Trump.
The plaintiffs, Travis LeBlanc and Edward Felten, argued in their complaint against the PCLOB and others that the termination by the President of their positions on the PCLOB violated federal law and the U.S. Constitution. The court concluded that Congress intended to restrict the President’s power to remove PCLOB members, the restriction as applied to the plaintiffs is constitutional, and the plaintiffs’ required relief is appropriate. Accordingly, the court granted plaintiffs’ motion for summary judgment and denied the defendants’ cross-motion for summary judgment.
In reaching its conclusion, the court reasoned:
In response to the 9/11 Commission Report, Congress created an independent, multimember board of experts and tasked its members with the weighty job of overseeing the government’s counterterrorism actions and policies, and recommending changes to ensure that those actions and policies adequately protect privacy and civil liberties interests. And, as the Court has now concluded, that responsibility is incompatible with at-will removal by the President, because such unfettered authority would make the Board and its members beholden to the very authority it is supposed to oversee on behalf of Congress and the American people. To hold otherwise would be to bless the President’s obvious attempt to exercise power beyond that granted to him by the Constitution and shield the Executive Branch’s counterterrorism actions from independent oversight, public scrutiny, and bipartisan congressional insight regarding those actions. And, when the President contravenes a statutory scheme designed by Congress to ensure that these interests are adequately protected, it is specifically the “province and duty” of the independent Judiciary to “say what the law is.”
DOJ Civil Rights Fraud Initiative: FCA Enforcement Expanding Into Alleged Discrimination
On May 19, 2025, the U.S. Department of Justice (DOJ) announced a new Civil Rights Fraud Initiative that will leverage the federal False Claims Act (FCA) to investigate and litigate against universities, contractors, health care providers, and other entities that accept federal funds but allegedly violate federal civil rights laws.
The initiative will be led jointly by the DOJ Civil Division’s Fraud Section and the Civil Rights Division—with support from the Criminal Division, federal civil rights agencies, and state partners.
The initiative implements President Donald Trump’s Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (January 21, 2025), directing agencies to combat unlawful discrimination through the FCA, and complements Attorney General (AG) Bondi’s February 5 memorandum, “Ending Illegal DEI and DEIA Discrimination and Preferences.”
How DOJ Plans to Use the FCA to Combat Discrimination
DOJ signaled it will rely on the FCA’s “false certification” theory of liability: When a funding recipient expressly or implicitly certifies compliance with statutes such as Title VI or IX of the Civil Rights Act of 1964 (CRA) to obtain payment, any knowing violation that is “material” to the government’s decision to pay can trigger treble damages and statutory penalties under the FCA.
Deputy AG Todd Blanche issued a memorandum the same day (the “Blanche Memo”) underscoring that the FCA is implicated when a federal contractor or recipient of federal funds knowingly violates civil rights laws—including Titles IV, VI, and IX of the CRA—and falsely certifies compliance with those civil rights laws. The Blanche Memo, however, notes that liability does not attach to all diversity programs per se, but only when race, ethnicity, or national origin determines the allocation of benefits or burdens. This is significant because, even if an antidiscrimination false certification claim is assumed to meet the materiality standard, a diversity, equity, and inclusion (DEI) program should not be deemed improper if it does not “assign benefits or burdens on [the basis of] race, ethnicity or national origin.”
Enforcement Dynamics
Unlike many FCA matters, which often originate with whistleblowers (also known as qui tam relators) filing suit, we expect DOJ to initiate early cases itself, limiting defendants’ ability to oppose intervention or invoke typical qui tam defenses (e.g., first-to-file rule, public disclosure bar, and original source rule). DOJ nevertheless “strongly encourages” whistleblowers to come forward to report “instances of such discrimination”—a reminder that suspected violations may quickly morph into FCA investigations.
Courts will ultimately decide whether civil rights violations pass muster under the U.S. Supreme Court’s “rigorous” and “demanding” Escobar materiality standard.[1]
Key Takeaways
DOJ’s Civil Rights Fraud Initiative is poised to test the outer limits of the FCA. Whether courts embrace this expansion—or cabin it—is yet to be seen. In the meantime, entities receiving federal funds should assume heightened scrutiny and ramp up compliance efforts.
The Blanche Memo draws an uncertain line between “diversity” and “religion,” and even suggests that DOJ may apply the terms “race” or “racist” differently today than they were understood when Congress enacted the CRA. Courts, however, have yet to endorse the FCA as a generalized antidiscrimination vehicle, largely because the statute’s “rigorous” materiality standard remains a high hurdle. One district court observed that if the FCA is not an “’all-purpose antifraud statute,” it is “surely not an all-purpose antidiscrimination statute” either.[2]
When DOJ unveiled its Civil Rights Fraud Initiative, The New York Times predicted the program was “all but certain” to face immediate legal challenges. Even so, DOJ can bring FCA cases with relative ease and without many of the hurdles that slow private whistleblower suits: The government’s own complaints are immune from first-to-file and public disclosure bar defenses, and defendants cannot oppose DOJ intervention like they can in qui tam cases.
Implied certification cases are also unlikely to disappear. As we have advised previously, organizations that contract with—or receive funds from—the federal government should rigorously re-examine their contract terms and scrutinize DEI policies with counsel to ensure they would not be branded as “illegal DEI” under the FCA.
Importantly, DOJ’s new civil rights focus is one of several avenues through which the Trump administration can wield implied certification theories (e.g., compliance with cybersecurity requirements and Anti-Kickback Statute compliance, among others). Health care entities are squarely in the cross-hairs: We expect to see FCA investigations tied to Medicare and Medicaid reimbursement conditions, price-transparency obligations, and quality-of-care metrics—all areas where the administration argues that noncompliance fuels escalating federal costs. Because reining in health care spending enjoys strong bipartisan support, defendants should expect vigorous enforcement and limited political appetite to scale back those efforts.
Epstein Becker Green Staff Attorney Ann W. Parks contributed to the preparation of this blog post.
ENDNOTES
[1] See Universal Health Services, Inc. v. United States ex rel. Escobar et al., 579 U.S. 176, 194 (2016). And while the government’s decision to expressly identify a provision as a condition of payment is relevant, it is not automatically dispositive under Escobar.
[2] U.S. ex rel. Lee v. Northern Metropolitan Foundation for Healthcare Inc., 2021 WL 3774185 (E.D.N.Y. 2021).
How Will the EEOC’s Investigation of Anti-American Bias and Antisemitism Impact Organizations?
The U.S. Equal Employment Opportunity Commission (EEOC) has made numerous changes in 2025 with respect to both personnel and priorities. On January 21, 2025, Acting Chair Andrea Lucas announced that one of the priorities of the EEOC’s compliance, investigations, and litigation is protecting employees from religious bias and harassment, including widespread campus antisemitism. Then, on February 19, 2025, Lucas announced, “The EEOC is putting employers and other covered entities on notice: if you are part of the pipeline contributing to our immigration crisis or abusing our legal immigration system via illegal preferences against American workers, you must stop… The EEOC is here to protect all workers from unlawful national origin discrimination, including American workers.” It is common for the EEOC to announce priorities in its investigations. It is believed by the current administration that the shift in the EEOC’s focus will help deter illegal migration, abuse of legal immigration programs, and anti-American discrimination through increasing enforcement of antidiscrimination laws against employers that prefer non-American workers.
If EEOC nominee Florida Assistant U.S. Attorney Brittany Bull is confirmed by the Senate, the EEOC likely will be able to move forward with enforcement of these new priorities.
EEOC Enforcement Priorities under the New Administration
The EEOC is tasked with administration and enforcement of civil rights laws against workplace discrimination. Pursuant to Title VII of the Civil Rights Act of 1964, as amended, the EEOC is comprised of five commissioners, including a chair, all of whom are political nominees. There must be at least three commissioners to have a quorum.
When President Trump was elected, many of those watching the direction of the EEOC did not believe much would change soon in terms of (1) issuance of new guidance, (2) revocation of formerly issued EEOC guidance, and (3) enforcement priorities because, due to the commissioners’ staggered five-year terms, it was believed that the earliest the EEOC could have a Republican majority would be July 2026.
Things have changed, however, since two Democrat EEOC commissioners were fired in January 2025. This was followed by the April 23, 2025, Executive Order “Restoring Equality of Opportunity and Meritocracy,” which announced that the EEOC would look at all pending investigations and lawsuits, including those under Title VII of the Civil Rights Act of 1964, that rely on the theory of disparate-impact liability and would seek “to eliminate the use of disparate-impact liability.” If current commissioner nominee Brittany Bull is confirmed by the Senate, the EEOC will have a Republican majority and a proverbial “green light” on its new enforcement priorities.
These new enforcement priorities, as set forth (above) by Acting Chair Andrea Lucas, include protecting employees from religious bias and harassment, particularly widespread campus antisemitism, and protecting workers from anti-American harassment and discrimination through a shift in focus of Title VII’s prohibition against national origin discrimination.
Lucas’s promise to hold colleges and universities accountable for rising antisemitism is part of a broader goal of many in government to protect Jewish students and employees from discrimination based on religion. For example, on March 18, 2025, Indiana Senator Jim Banks introduced the No Tax Dollars for Encampments Act, requiring colleges and universities to disclose their policies for responding to demonstrations, riots, and strikes. If enacted, this bill would potentially withhold federal funding from universities that do not adequately disclose or comply with policies for addressing civil disturbances.
In addition, on May 19, 2024, the Department of Justice announced that it will use the False Claims Act to identify and investigate recipients of federal funds that it determines allow antisemitism to thrive and promote Diversity, Equity, and Inclusion (DEI) policies. Indeed, the EEOC’s new priorities also include rooting out what it refers to as DEI-based discrimination. Its updated website describes DEI-based discrimination as occurring when DEI initiatives, policies, programs, or practices involve an employer taking an employment action motivated in whole or in part by an applicant’s or employee’s race, sex, or other protected classification. This focus on DEI extends to the religious discrimination context, as a rising number of employees are claiming that being required to comply with DEI-based initiatives violates their religious beliefs.
Religious Bias and Antisemitism
One such pending case involving claimed religious bias connected with DEI is an amended lawsuit filed in Kansas federal court in January 2025, under the caption Sullivan v. United School District 512 (24-cv-2491). In Sullivan, the plaintiff teacher alleges that her employment at the defendant public school system involved her being required to make statements and teach lessons that violate her religious beliefs. Specifically, in 2021, the plaintiff objected, in writing, to the school district’s required DEI training sessions and incorporation of DEI principles into her lesson plans, stating that they were racist, anti-White, and anti-American. The plaintiff was later disciplined for using a student’s incorrect pronouns and allegedly engaging in gender identity discrimination. In addition to alleging violations of Sullivan’s constitutional rights of free speech and free exercise of religion, the Sullivan complaint alleges that defendants violated Title VII and its prohibition against retaliation against individuals who oppose harassment based on race and/or color. How the pending Sullivan case is decided may have an impact on the outcome of several other similar lawsuits alleging violations of Title VII based on religious discrimination and opposition to DEI practices.
Another recent case involving similar issues is Brown v. Alaska Airlines, which was filed in U.S. District Court, Western District of Washington in 2022 (22-cv-668). In Brown, the two plaintiff flight attendants filed suit against Alaska Airlines, alleging that they were discriminated against because of their Christian religion after their employment was terminated for posting comments on the Alaska Airlines internal website, which the airline deemed violated its antidiscrimination and antiharassment policies.
The Brown lawsuit alleged several violations of Title VII, including religious discrimination/ disparate treatment, failure to accommodate religious beliefs, hostile work environment, and retaliation. The district court in Washington ruled in favor of the defendants, finding that they were protecting other employees from hearing offensive ideas, and that the flight attendants’ comments were not protected by Title VII because not all Christians shared their views and that they merely reflected general ethical principles. The plaintiffs have appealed this decision to the U.S. Court of Appeals for the Ninth Circuit (24-3789), where the case is currently pending. A decision on this appeal may signal how courts will review certain Title VII claims.
In addition to such lawsuits, the EEOC has been involved in seeking information about antisemitism. For example, in April 2025, it was revealed that faculty members of Columbia University and Columbia-affiliated Barnard College received text messages from the EEOC asking them to complete a survey inquiring about whether they are Jewish or Israeli. It was reported that on April 15 Columbia had sent an email to its employees advising it had received a subpoena from the EEOC “in connection with an investigation into alleged harassment of Jewish employees at the University from October 7, 2023, to the present.” It is believed that this EEOC investigation at Columbia is ongoing.
Anti-American Discrimination
As noted above, the EEOC is also shifting the focus of its national origin discrimination enforcement to discrimination against Americans. In February 2025, coinciding with Lucas’s press release regarding protection of workers from anti-American discrimination, the EEOC announced a $1.4 million settlement of a lawsuit alleging national origin discrimination against American workers. EEOC v. LeoPalace Guam Corp. (D. Guam) (25-cv-00004). In that case, the Guam-based hotel LeoPalace Guam Corp. was alleged to have discriminated against non-Japanese employees, including many employees of American national origin, in terms of compensation and terms and conditions of employment. In addition to the monetary relief of more than $1.4 million, the settlement involved injunctive relief including compliance monitoring, training, and reinstatement of former employees.
Potential Concerns Going Forward
Employers should be aware of these new enforcement priorities articulated by the EEOC and be ready to defend against such allegations. While these changes reflect a difference of priority at the federal level, it does not impact prior court precedent on existing state and local laws addressing discrimination. These new enforcement priorities also do not alter the existing case law that private individuals may pursue to address liability under Title VII for organizations. What a new EEOC priority may impact going forward is the number of governmental investigations of organizations on addressing anti-American bias and antisemitism. To aide in this effort, employers should consult with counsel about revising policies and procedures to ensure that requests for religious-based accommodations are carefully evaluated and that all workers are subject to the same employment conditions regardless of national origin.
Minneapolis Anti-Discrimination Law Revised: Employment Decisions Based on Body Size, Criminal History to Be Barred
Takeaways
The amended Civil Rights Ordinance newly bars employers from discrimination based on “justice-impacted status,” housing status, and height and weight and applies beginning 08.01.25.
The new law also requires employers to provide religious accommodations and pregnancy-related accommodations.
Minneapolis employers should review and revise their policies and practices to ensure compliance.
The City of Minneapolis recently amended its Civil Rights Ordinance. Among other changes, the amended Ordinance significantly impacts employers by:
Expanding the scope of characteristics subject to its anti-discrimination provisions;
Broadening the types of accommodations employers must provide to employees; and
Revising the City’s process for receiving and resolving complaints under the Ordinance.
The new law will apply to any complaint or charge filed under the Ordinance on or after Aug. 1, 2025.
Expanded Scope of Protected Characteristics
The amended Ordinance prohibits employers from discriminating against an employee or job applicant on the basis of:
Justice-impacted status;
Housing status; or
Height and weight.
“Justice-impacted status” refers to an employee’s or applicant’s prior criminal history, including conviction, arrest, or charging records, and probationary status. Employers must not base employment decisions on these histories unless the histories are reasonably related to the individual’s ability, fitness, or capacity to perform the job duties. To determine if a history is “reasonably related,” employers must consider:
Whether the individual was convicted;
The time elapsed since the offense or conviction;
The nature and gravity of the crime(s);
The individual’s age at the time of the offense;
The individual’s rehabilitation efforts; and
Whether the individual poses an unreasonable risk to property or to the safety and welfare of others.
The Ordinance carves out special exceptions for certain roles, including those involving children or law enforcement.
“Housing status” relates to whether a person has or lacks a fixed, regular, and adequate residence.
“Height and weight” refer to both perceived characteristics (tall/short, thin/fat) and objective measures, such as numerical scores, ratios, and metrics. The amended Ordinance permits an employer to raise an affirmative defense if an individual’s height or weight prevents them from performing the fundamental job duties of the position with or without accommodation.
The amended Ordinance also modifies definitions of preexisting protected characteristics. For example, it expands the definition of “race” to cover traits historically associated with race such as hair texture and hairstyles (including afros, braids, locks, and twists).
Finally, “familial status” includes individuals who care for individuals who cannot manage their own physical health, safety, or self-care or who are unable to receive, evaluate, or communicate their own healthcare decisions.
Additional Types of Accommodations
The amended Ordinance expands the types of accommodations an employer must provide its employees and applicants. Failing to provide these accommodations may constitute evidence of discrimination.
First, employers must provide employees with religious accommodations for sincerely held religious beliefs, unless doing so would impose an “undue hardship” on the employer. The Ordinance redefines “undue hardship” as a significant difficulty or expense for the employer, and this determination requires a case-by-case analysis.
Second, employers must reasonably accommodate pregnancy-related limitations. The Ordinance expressly forbids employers from requiring a pregnant employee to take a leave of absence for their pregnancy-related limitations if another reasonable accommodation would permit the employee to perform their job. However, as with religious accommodations, employers are not required to provide accommodations that cause an undue hardship.
Revised Complaint Procedures
The amended Ordinance updates how the Minneapolis Department of Civil Rights (MDCR) handles charges. Under the changes, when a complainant appeals a finding of no probable cause, the appeal goes to a panel of three individuals — one of whom must be a lawyer. The panel must review the record in the light most favorable to the MDCR’s no probable cause finding and can only overturn the decision if the panel find the ruling was “clearly erroneous.” The panel has 90 days to complete its review and issue findings.
The Ordinance also modifies when MDCR may dismiss charges. While the Department may dismiss charges that are untimely, it will no longer dismiss them based on a lack of evidence or in the interests of justice.
Take it Back – A Federal Court in Texas Vacates Portions of the EEOC’s Sexual Harassment Guidance
Recall that just last year, the EEOC updated its Enforcement Guidance on Harassment in the Workplace for the first time in 30 years. We blogged about it here. Earlier this year, President Trump issued Executive Order 14168 directing the EEOC to rescind portions of the guidance; however, the EEOC took no action because it lacked quorum. Now, in Texas, et al. v. Equal Employment Opportunity Commission, et al., a federal judge in the Northern District of Texas has taken action for the EEOC by vacating portions of the guidance.
The Opinion
In Fall 2024, the state of Texas and the Heritage Foundation challenged the definition of “sex” and the scope of sexual harassment set forth in the guidance, as it relates to sexual orientation and gender identity. The guidance provided, in relevant part, that sex-based harassment included “harassment based on sexual orientation or gender identity, including how that identity is expressed” and gave examples of harassment based on sexual orientation and gender identity. The guidance also provided that outing an individual or the denial of access to a bathroom or other sex-segregated facility is harassing conduct.
The Northern District of Texas disagreed. In the recent opinion, the court held that the guidance “contravenes Title VII’s plain text by expanding the scope of ‘sex’ beyond the biological binary: male and female” and took issue with the guidance’s instruction that “effectively requires employers to provide accommodations to all transgender employees to avoid the threat of litigation[.]” The court held that the Supreme Court’s opinion in Bostock does not cover the expansion of the definition set forth in the guidance and therefore “does not authorize the Guidance’s explanation of Title VII ‘sex’ to include new categories or classes.” The opinion states “the Guidance enters the forbidden realm of substance, moving beyond the plain text of Title VII or binding Supreme Court precedent to create a new unauthorized definition.” The court also pointed out that the guidance expanded an area that the Supreme Court explicitly refused to address in Bostock: “bathrooms, locker rooms, or anything else of the kind.” Ultimately, the court vacated certain portions of the guidance.
The EEOC’s Response
Earlier this week and in response to the order, the EEOC issued a press release indicating that while it cannot rescind or modify the guidance at this time (because there is no quorum), “to assist the public” “it has labeled and shaded the vacated portions.” The edited guidance may be found here.
So, What Do You Do?
While the Northern District of Texas believes the EEOC went too far, other districts and circuits, including the Eleventh Circuit, have held that intentionally and repeatedly misgendering someone could contribute to a hostile work environment. Some states, such as California and Colorado, also have state laws prohibiting discrimination based on sexual orientation and gender identity. So, where do we stand? In murky water.
While it looks like the Trump administration won’t be championing transgender and gender identity issues, mistreatment in the workplace based on these characteristics could still be an issue in court and under state law. The best practice is to stay vigilant. If employees are complaining about mistreatment of any kind, even mistreatment based on transgender or gender identity issues, address it. Train your workforce, investigate as soon as you hear of alleged misconduct, and ensure that you are not dismissing these complaints as no big deal. We don’t believe we’ve seen the end of this yet and will keep you updated.
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Disagreeing with the Supreme Court, the Ninth Circuit and Two District Courts Find APA Jurisdiction in Challenges to Federal Contract and Grant Terminations
One of the immediate priorities of the second Trump administration has been the termination of a slew of federal contracts and grants. This, predictably, has led to litigation, mostly filed in the U.S. District Courts, which as we have previously written, have authority to grant equitable relief. The government has been arguing that these cases belong in the U.S. Court of Federal Claims, where only monetary damages are available (and only upon meeting the high burden of establishing that the government acted in bad faith). On April 4, 2025, the Supreme Court issued an emergency stay of a District Court’s preliminary injunction in a case challenging grant terminations, with the five-justice majority suggesting that the termination case belonged in the Court of Federal Claims. But since then, two U.S. District Courts and the Ninth Circuit Court of Appeals have ruled—contrary to the Supreme Court’s emergency stay order—that there is indeed district court jurisdiction in cases challenging contract and grant terminations. As Judge Young of the District Court of Massachusetts stated, “…this Court, after careful reflection, finds itself in the somewhat awkward position of agreeing with the Supreme Court dissenters and considering itself bound by the still authoritative decision of the Court of Appeals of the First Circuit…” which ruled that the Tucker Act did not apply, and that the government’s actions were reviewable under the Administrative Procedures Act (“APA”).
Commonwealth of Massachusetts et al. v. Robert F. Kennedy, Jr. et al., Case No. 25-10814-WHY, U.S. District Court for the District of Massachusetts
On May 12, 2025, the U.S. District Court for the District of Massachusetts ruled that it—not the Court of Federal Claims—has subject matter jurisdiction over a lawsuit brought by a coalition of states challenging the withdrawal of funding opportunities and grant terminations by the National Institutes of Health based on perceived connections to diversity, equity, and inclusion and gender issues.
The District Court noted that the Court of Federal Claims was established, and the Tucker Act was enacted, to allow contractors and grantees to pursue monetary claims against the United States. But not every claim against the government is cognizable under the Tucker Act, even if the remedy may involve the payment of money. The Court noted that “whether a claim is contractual in nature under the Tucker Act [and therefore belongs in the Court of Federal Claims] is based on a determination of the essence of the action,” which requires a court to examine the source of the rights underlying the claim and the type of relief sought or appropriate to redress the claim. Applying this “essence” test, the District Court found that the States are primarily challenging the allegedly unlawful policies and actions of public officials, not the terms of their terminated grants, and the relief sought—directing the expenditures of already-appropriated funds—is mainly injunctive, not compensatory.
The District Court extensively quoted Justice Jackson’s dissent in the Supreme Court’s order to explain why District Court review of terminations under an APA standard is appropriate, including that the government’s “robotic rollout of its new mass grant-termination policy means that grant recipients and reviewing courts are compelled to guess at the theory underlying the agency’s action. Moreover, the agency’s abruptness leaves one wondering whether any reasoned decision making has occurred with respect to these terminations at all. These are precisely the kinds of concerns that the APA’s bar on arbitrary-and-capricious agency decision making was meant to address.”
Community Legal Services in Palo Alto et al. v. HHS et al., Case No. 3:25-cv-02847-AMO
On May 14, 2025, the Ninth Circuit ruled that the district court has jurisdiction to hear challenges to agency actions terminating funding for legal representation of unaccompanied children, despite the government’s argument that such cases should be brought exclusively in the Court of Federal Claims under the Tucker Act. The plaintiffs in this case specifically alleged that the government violated the Trafficking Victims Protection Reauthorization Act (“TVPRA”) by withholding all congressionally authorized funding for direct legal representation of unaccompanied migrant children, thereby failing to “ensure, to the greatest extent practicable,” that unaccompanied children receive legal counsel as mandated by 8 U.S.C. § 1232(c)(5). The majority emphasized that the claims were rooted in statutory and regulatory violations, not contract disputes, noting, “To the greatest extent practicable does not mean to no extent at all.” The court further explained that the Tucker Act did not bar the plaintiffs’ APA claims, particularly since the plaintiffs, as the subcontractors on the program, have no direct contract with the government and thus could not sue under the Tucker Act. In dissent, Judge Callahan went further than arguing that the claims belonged in the Court of Federal Claims, and insisted that the plaintiffs’ claims are unreviewable, because the decision to terminate funding was “committed to agency discretion by law under 5 U.S.C. § 701(a)(2).” As Judge Callahan wrote, “Even if the district court had jurisdiction under the Administrative Procedure Act, the decision to terminate funding—or the decision of who to fund—is committed to agency discretion by law.” Notwithstanding the dissent, this decision underscores the judiciary’s increasing willingness to review agency actions that implicate statutory mandates, even when the government invokes arguments of unreviewability or exclusive jurisdiction elsewhere.
State of Colorado et al. v. HHS et al., Case No. 1:25-cv-00121-MSM-LDA
On May 16, 2025, the U.S. District Court for the District of Rhode Island reached the same conclusion, ruling that it has subject matter jurisdiction under the APA over a lawsuit brought by a coalition of States challenging the termination of public health grants by the Department of Health and Human Services (“HHS”). The Court rejected HHS’s argument that the States’ claims were contractual and fell under the exclusive jurisdiction of the Court of Federal Claims pursuant to the Tucker Act.
Applying the “essence” test, Judge Mary S. McElroy ruled that the District Court has jurisdiction because the essence of the case is not contractual, but rather centers on alleged violations of federal statutes, regulations, and constitutional principles. The judge distinguished between claims that arise from contract disputes—which would typically fall under the exclusive jurisdiction of the Court of Federal Claims via the Tucker Act—and claims seeking prospective, equitable relief for unlawful agency action under the APA. She emphasized that the States’ claims do not arise in any contract, but rather arise under the APA—particularly that statute’s provisions forbidding arbitrary and capricious action, action contrary to law, and action in excess of statutory authority and the Constitution’s Spending Clause and underlying separation of powers principles. The court found that the gravamen of the States’ allegations “does not turn on terms of a contract between the parties; it turns largely on federal statutes and regulations put in place by Congress and HHS.”
Judge McElroy further explained that the States are seeking relief that is prospective and equitable—namely, an injunction to halt the allegedly unlawful termination of federal funding—rather than money damages for breach of contract. She cited Supreme Court precedent, particularly Bowen v. Massachusetts, to support the distinction between actions for money damages (which fall under the Tucker Act) and actions for specific relief (which are reviewable under the APA in district court). The judge wrote, “Merely because their requested equitable relief would result in the disbursement of money is not a sufficient reason to characterize the relief as money damages.” She concluded that the case concerns the process and legality of HHS’s actions, not the enforcement of contractual obligations, and that district courts are the proper forum for reviewing such claims. This reasoning was reinforced by her observation that “the source of the States’ rights is based on federal law rather than on contract,” and that the States “have asked this Court to review and interpret the governing federal statute and regulations.” Thus, the District Court retained jurisdiction to adjudicate the States’ claims for injunctive and declaratory relief under the APA and the Constitution.
Conclusion
These recent decisions provide important guidance for parties seeking to challenge broad federal funding directives and contract and grant terminations, clarifying the circumstances under which such claims may proceed in district court rather than the Court of Federal Claims. As the Government continues to contest subject matter jurisdiction in ongoing litigation, further guidance from the Circuit Courts or the Supreme Court is likely. We will continue to monitor these developments and provide updates as the legal landscape evolves.
From Pride to Parity: Legal Insights for DEI Cultural Events [Podcast]
In this podcast, shareholders Nonnie Shivers (Phoenix) and Scott Kelly (Birmingham) discuss the complexities of participating in and/or sponsoring cultural events that celebrate diversity, equity, and inclusion (DEI) in light of the current administration’s scrutiny of such programs. Using Pride Month as a focal point, Scott and Nonnie—who co-chairs the firm’s Diversity, Equity, and Inclusion Compliance Practice Group—review the legalities and risks associated with these events. They also offer strategies for employers to balance celebration, education, and compliance while fostering an inclusive workplace.
Top 10 Labor, Employment, and OSHA Trends for 2025
As we approach midyear, the ArentFox Schiff Labor, Employment & OSHA team highlights some of the most pressing legal issues facing employers this year, including artificial intelligence (AI) regulation at the state level, reshaping of the National Labor Relations Board (NLRB), continuing expansion of state paid family and medical leave laws, challenges to diversity, equity, and inclusion (DEI) in the workplace, and changes to US Equal Employment Opportunity Commission (EEOC) guidance and enforcement.
1. History in the Making: The State of the NLRB Under the New Administration
Like most government agencies, the National Labor Relations Board (NLRB) has not escaped the Trump Administration’s efforts to reshape the federal government and replace officials in positions of power. Since assuming office, President Trump has discharged former NLRB General Counsel Jennifer Abruzzo and removed NLRB panel member Gwynne Wilcox.
While replacement of Abruzzo was expected, the president’s decision to remove Wilcox surprised many and introduced legal challenges, both at the NLRB and in court:
Removing Wilcox on January 27 left the NLRB with only two of its typical five members and without a quorum to decide the cases pending before it.
On March 6, a DC District Court ordered Wilcox’s temporary reinstatement based upon a 90-year-old US Supreme Court precedent, Humphrey’s Executor v. US — a case that prohibited then-president Franklin D. Roosevelt from removing members of independent agency panels.
Upon appeal, on March 28, a three-member panel of the DC Circuit stayed Wilcox’s reinstatement, removing her once more. The concurring judges agreed that the 2020 Supreme Court decision, Seila Law v. CFPB, narrowed the precedent set in Humphrey’s Executor, and empowered the president to fire members of independent, multi-member agency panels that wield “substantial executive power.”
On April 7, a full en banc panel reversed the DC Circuit decision by a 7-4 margin and ordered Wilcox back to work.
On April 9, Chief Justice Roberts, as circuit justice for the DC Circuit, reversed the April 7 decision and reinstated Wilcox’s removal pending full resolution of the appeal by the DC Circuit. Oral argument on the merits was scheduled for May 16.
The question at present is not if the Wilcox case will go to the Supreme Court, but when. The presumptive legal protections restricting President Trump’s removal powers are about to be put to the test. When Wilcox’s case makes its way to the Supreme Court, Humphrey’s Executor will be pinned against recent decisions, like Seila Law, which may result in a more expansive view of the president’s power. In the short-term, Chief Justice Roberts has once more neutered the NLRB; in the long term, the order implicates the scope of a president’s ability to control agency leadership as a matter of law.
As to the General Counsel (GC) position, on March 25, President Trump nominated Crystal Carey, a partner at management-side law firm Morgan Lewis & Bockius LLP, to serve as the new NLRB GC. Carey’s nomination follows rescissions by Acting GC William Cowen of more than 25 “guidance” memoranda previously issued by Abruzzo, suggesting an NLRB less likely to issue decisions unfavorable to employers, and more permissibility in the use of non-competition, confidentiality, and non-disparagement provisions in agreements with nonsupervisory employees.
2. Noncompete Landscape
In recent years, noncompetes have been the subject of significant attention at both the state and federal level. Perhaps most notably, in April 2024, the Federal Trade Commission (FTC) voted to adopt a final rule that would have essentially banned noncompete agreements for workers in the United States by prohibiting employers from entering into noncompete agreements with workers and rendering prior noncompetes unenforceable, except for a narrowly defined category of “senior executives.” The final rule was immediately challenged in multiple lawsuits. On August 20, 2024, on the eve of the effective date of the ban, the US District Court for the Northern District of Texas entered an injunction in one such lawsuit, holding that the FTC lacked statutory authority to create the rule and setting it aside on a nationwide basis.
With the new Administration, Andrew Ferguson replaced Lina Khan as FTC chair. Ferguson voted against the noncompete ban in April 2024 and has opted not to pursue the appeal of the Texas injunction. However, while he indicated that a ban was not the correct approach, Ferguson has also stated that the FTC will continue to exercise its enforcement power against employers who attempt to deploy overbroad noncompetes, particularly for low wage workers. To that end, Ferguson recently announced the formation of a Joint Labor Task Force which will “scrutinize non-compete agreements, deceptive job advertisements, wage-fixing schemes, unlawful coordination on DEI employment metrics, and much more.”
As it stands now, noncompetes continue to be governed by a patchwork of state legislation ranging from bans with very limited exceptions (in California, Oklahoma, North Dakota, and most recently, Minnesota), to restrictions on use with low wage workers (in, for example, Massachusetts, New Hampshire, and Illinois), to restrictions on how and when they may be presented to employees (in, for example, Colorado, Maine, Oregon and Washington). This approach presents challenges to employers who are dealing with an increasingly mobile workforce.
Employers should revisit their agreements to ensure maximum enforceability. In many instances, specific forms or addenda will be required to comply with the various state requirements. Employers should also consider either relying on other types of restrictive covenants or, at a minimum, using other restrictive covenants simultaneously with noncompetes, including non-disclosure, non-solicitation, or no hire provisions, as appropriate. Finally, to create a secondary guardrail for the protection of trade secrets and confidential information, employers should create effective trade secret protection protocols and engage in regular monitoring and auditing of their application.
3. AI and Employment Laws: What Employers Should Know
For employers, the AI landscape continues to evolve on both the federal and state level. On inauguration day, President Trump immediately rescinded President Biden’s 2023 Executive Order (EO) No. 14110 on AI, which had directed federal agencies to use regulatory and enforcement tools to address safety, privacy, and discrimination concerns related to AI. After Commissioner Lucas became acting chair of the US Equal Employment Opportunity Commission (EEOC), two AI-related documents were removed from the EEOC’s website: (1) the May 2023 technical assistance document on AI compliance issues under Title VII, which cautioned employers to assess AI tools for potential adverse impacts on any group protected by Title VII and (2) the May 2022 technical assistance document that warned of potential violations of the Americans with Disabilities Act through AI tools that impermissibly consider or screen for disabilities of applicants. Similarly, the US Department of Labor (DOL) noted on its website that its October 2024 Artificial Intelligence Best Practices guidance might be outdated or not reflective of current policies.
Despite these changes, employers may still be held liable for their use of AI tools in hiring or workplace decision-making when such use violates federal anti-discrimination laws. This is true even when a third-party vendor created the AI tool. As such, employers should monitor and audit their use of AI tools and review their agreements with vendors of AI tools to ensure issues of transparency and liability are addressed.
In contrast to the activity at the federal level, the states have begun to regulate AI in the employment context. Colorado, Illinois, and New York City have laws on the books that offer varying levels of protections against AI-related discrimination to applicants and/or employees. As we approach mid-year, at least 25 other states have already introduced legislation that would regulate the use of AI in the employment setting.
In these changing times, employers should remain vigilant and current on their compliance with applicable and emerging state laws regarding the use of AI. AI policies and use of AI tools should be routinely monitored and audited, with particular focus on transparency, privacy, and discrimination concerns. Human resources personnel and leadership should be trained on appropriate use of AI technologies in the workplace to avoid misuse and mitigate risk.
4. Continued Expansion of State Paid Family and Medical Leave Laws
The landscape of paid family and medical leave laws in the United States is rapidly evolving, with states increasingly adopting comprehensive benefits for employees. As these laws expand, they reflect a growing recognition of the importance of supporting workers during critical life events, such as personal medical issues, the birth or adoption of a child, and caring for family members. This shift not only enhances employee well-being but also promotes a more inclusive and supportive work environment. Legislation for paid family and medical leave has been proposed in multiple states, including Arizona, Iowa, Oklahoma, Tennessee, Pennsylvania, West Virginia, and North Carolina.
In alignment with the federal unpaid leave program, most states prioritize personal medical leave, followed by leave for caring for a new child or family member. While the Family and Medical Leave Act offers unpaid leave, many states are now mandating paid options, funded through taxes collected from employees and employers. While several states have already enacted paid family and medical leave legislation, others, such as Arizona, Iowa, Oklahoma, Tennessee, Pennsylvania, West Virginia, and North Carolina, have proposed similar measures.
Recent State Developments
Alaska, Missouri, and Nebraska: Beginning this year, Missouri (May 1), Alaska (July 1), and Nebraska (October 1) will require paid sick leave accrual of one hour for every 30 hours worked, with annual use caps of 40 hours for small employers and 56 hours for larger employers. All three states permit employers to satisfy obligations through compliant paid time off policies, and each contains industry or size-based nuances that warrant close review and continued monitoring for legislative amendments before the effective dates.
Georgia: Effective July 1, 2024, Georgia has doubled paid parental leave for educators and state employees to six weeks, extending eligibility to charter school employees.
New York: Effective January 1, 2025, New York required all private-sector employers to provide their employees 20 hours of paid prenatal leave each year, in addition to existing sick leave requirements.
Washington: Effective January 1, 2025, Washington expanded the circumstances under which employees can take paid sick leave and broadened the definition of family members for sick leave purposes.
Minnesota: Minnesota’s paid family and medical leave programs are scheduled to launch on January 1, 2026.
Employers, particularly those operating in multiple states, must stay informed about these evolving laws. It is crucial to review specific state requirements and monitor potential legislative amendments before implementation to ensure compliance.
5. Beat the Heat – An Employer’s Duty to Ensure a Workplace Safe From Heat-Related Hazards
As we approach the summer months, employers with employees who work outside or in higher temperatures should be aware of the Occupational Safety and Health Administration’s (OSHA) increasing focus over the past several years on heat-related injuries and illnesses.
Since 2022, OSHA has had a national emphasis program (NEP) in place as a part of which the agency has prioritized enforcement activities focused on indoor and outdoor heat-related hazards. Although that NEP expires this year, in 2024, OSHA introduced a new proposed rule that would establish a nationwide standard for addressing the hazards of excessive heat in the workplace. Specifically, that rule would require employers to develop a Heat Injury and Illness Prevention Plan to address heat-related hazards. The rule also set an “initial heat trigger” at a heat index of 80ºF, at which threshold employers must provide employees with water and break areas, and a “high heat trigger” at 90ºF, which would require employers to monitor for signs of heat illness and provide mandatory 15-minute breaks every two hours. Although the fate of OSHA’s proposed rule is unclear following the change in Administration, OSHA can continue to issue citations for heat-related hazards under the general duty clause of the Occupational Safety and Health Act.
OSHA state plans have also taken steps to address heat-related hazards. In 2024, California OSHA issued a new final rule addressing both indoor and outdoor workplaces with heat-related hazards that imposes safety requirements if employees are exposed to temperatures at 82ºF or higher, with additional elevated requirements where employees are exposed to temperatures at 87ºF or higher. Similarly, earlier this month, New Mexico OSHA issued a notice of proposed rulemaking for its own heat illness prevention rule.
Employers whose employees may be exposed to high temperatures this summer should take steps to ensure that they have measures in place to address the risks associated with heat.
6. Pay Transparency Momentum Continues
In 2024, the momentum for pay transparency legislation has continued to build across the United States. As more states enact these laws, with additional legislation anticipated this year, multistate employers face the complex challenge of aligning their job postings and promotional practices with a patchwork of state-specific requirements. Washington, DC, and Hawaii passed pay transparency legislation that went into effect in 2024. Additionally, Massachusetts, New Jersey, and Vermont passed legislation in 2024 which is expected to go into effect this year.
Pay transparency laws typically require employers to disclose the wages or wage range for a particular position to prospective and/or current employees. Challenges arise when a multistate employer is forced to comply with varying state pay transparency laws. Differences in each state’s legislation include who is covered, the timing and circumstances in which pay information must be disclosed, and the specific parties to whom this information must be shared. Because the application of these laws can differ greatly, states like Colorado have provided explicit guidance to address these ambiguities. For example, Colorado’s guidance clarifies that postings for remote positions, that can be performed anywhere, are subject to the requirements in Colorado’s pay transparency law, the Equal Pay for Equal Work Act, even if the posting explicitly excludes Colorado applicants.
Additionally, some states’ legislation may include wage reporting obligations for covered employers. For example, California and Massachusetts’ pay transparency laws include reporting requirements for certain employers with over 100 employees. Notably, in Massachusetts, the first round of EEO-1, EEO-3, and EEO-5 reporting was due on February 1.
The extent of liability that an employer may face for non-compliance can vary based on the jurisdiction. While some states like Massachusetts assert incremental fines against liable employers, California provides a private right of action for aggrieved parties. Employers should review both their external and internal facing job postings to ensure that they comply with these varying state and local laws. For additional details, please refer to our recent alert.
7. The Current State of DEI
Diversity, equity, and enclusion (DEI) initiatives are significantly scrutinized under the new Administration. Shortly after taking office, President Trump signed EO 14173, aimed at ending what the EO describes as “dangerous, demeaning, and immoral race- and sex-based preferences” under the guise of DEI. EO 14173 creates liability for DEI programs in several notable ways:
It directs the Attorney General to produce a report recommending enforcement strategies to end illegal discrimination and preferences, including DEI, in the private sector, including identifying potential civil investigation targets among publicly traded corporations, nonprofits, and other entities.
It also sets up federal contractors for potential liability under the False Claims Act by requiring them to certify that they do not “operate any programs promoting DEI” that violate federal anti-discrimination laws. A contractor that falsely certifies compliance can face significant penalties under an action brought by the government or a private individual in a qui tam lawsuit.
While there has been significant litigation challenging the EO, contractors with current, pending, or future contracts should expect to receive anti-DEI certifications in their federal contracts soon.
Beyond the EO, the Administration has made clear its intent to investigate and pursue enforcement against DEI in the private sector. The Attorney General issued a memorandum instructing the US Department of Justice (DOJ) to investigate, eliminate, and penalize illegal DEI programs. The EEOC’s Acting Chair also sent investigation letters to law firms seeking information about their DEI activities.
The Administration has produced some guidance to help employers identify what are considered unlawful DEI practices. The EEOC and DOJ released a joint guidance, and the EEOC released its own technical assistance document, stating that under Title VII, DEI programs may be unlawful if they involve employment actions motivated by a protected characteristic, and that customer preferences or the perceived operational benefits of a diverse workforce are not a defense to race- or sex-motivated decision making. The documents also assert that practices like limiting access to employee clubs or resource groups, or certain workplace programming and trainings, can run afoul of federal anti-discrimination laws.
Employers may be motivated to eliminate DEI-type practices altogether, but many remain lawful and important for ensuring equal employment opportunity. Instead of painting with a broad brush, all employers (and particularly federal contractors) should review their DEI programs and initiatives with counsel for compliance with anti-discrimination laws.
8. Immigration Policy Developments
Consistent with his campaign agenda, President Trump has significantly increased immigration investigation efforts since taking over the White House. Given the president’s explicit focus on immigration compliance and enforcement, employers across all industries should expect increased workplace enforcement actions, including US Immigration and Customs Enforcement (ICE) raids and unannounced immigration workplace investigations, and more frequent governmental I-9 audits. In addition, employers should be aware that the Employment Authorization Document (EAD) cards for foreign nationals here through numerous Temporary Protected Status and parole programs have been shortened or terminated, which means that employers shroud revise the expiration dates on their I-9’s and obtain new work authorization documents in a timely manner in order to continue to employ them. Further by increasing scrutiny on those seeking to enter the United States, President Trump has made international travel by foreign nationals riskier and paved the way to implement travel bans. In addition, he has started revoking visas from nationals from selection countries. Thus, employers should consult their immigration counsel to see if their employees’ EAD cards and/or work or travel authorization is impacted.
Unannounced Workplace Investigations and Raids
Employers should be aware that government officials may appear without notice at a workplace and demand access to personnel and business documents, including conducting private discussions with employees. Employers should prepare for such visits and equip the first point-of-contact at each entry with information about what to do.
Federal Form I-9
In response to President Trump’s heightened focus on immigration investigations, employers should organize their I-9 records by conducting a proactive internal I-9 audit to correct any and all deficiencies, to the extent feasible. Notably, employers who choose to proactively correct their I-9 records may take advantage of the “good faith compliance” defense under the Immigration Reform and Control Act of 1986. Such remedial efforts can be taken into consideration during a governmental audit or inspection, and the employer may receive credit for those corrections, thereby mitigating potential penalties.
9. Independent Contractor/Joint Employer Rules Under the New Administration
On May 1, the DOL announced through a Field Assistance Bulletin that it will no longer enforce and may rescind President Biden’s 2024 independent contractor rule. Instead, the DOL will evaluate whether an individual is an independent contractor or an employee under the Fair Labor Standards Act using the traditional “economic realities” test, with emphasis on the following significant factors:
The extent to which the services rendered are an integral part of the principal’s business.
The permanency of the relationship.
The amount of the alleged contractor’s investment in facilities and equipment.
The nature and degree of control by the principal.
The alleged contractor’s opportunities for profit and loss.
The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor
The 2024 Rule rescinded the first Trump Administration’s more lenient rules which made it easier for businesses to determine joint employer status and classify workers as independent contractors. For the purpose of private litigation, the Bulletin emphasized that the 2024 Rule remains in effect. However, while the DOL has not yet attempted to return to the first Trump Administration’s rules, it indicated that it is “currently reviewing and developing the appropriate standard.”
There are still a number of lawsuits pending in federal courts challenging the 2024 Rule, but the DOL has sought to put the litigation on hold while it decides whether to reconsider or rescind the regulation.
While it is likely the new Trump Administration’s DOL will not defend the 2024 Rule, and considering Loper Bright Enterprises v. Raimondo (overturning the Chevron doctrine and holding that courts do not have to defer to an agency’s interpretation of the law), employers should remain cautious when analyzing joint employer status and classifying independent contractors, particularly in states which utilize the ABC Test.
10. Discrimination Trends
The discrimination landscape is undergoing significant changes as the Trump Administration issues EOs and guidance, while the Supreme Court continues its 2024-2025 term. Two key areas to watch are the evolving perspectives on gender identity discrimination and reverse discrimination.
Gender Identity
The Supreme Court has long held that discrimination based on sex stereotyping is impermissible under Title VII of the Civil Rights Act of 1964. This was established in the 1989 case of Price Waterhouse v. Hopkins, where the Court ruled that discrimination against an employee due to nonconformity to gender expectations constitutes sex discrimination. In 2020, the Court reaffirmed this stance in Bostock v. Clayton County, clarifying that discrimination against individuals for being homosexual or transgender inherently involves sex discrimination.
However, on January 20, President Trump issued an EO titled “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government.” This EO redefined sex as strictly biological, excluding gender identity from its definition. This move starkly contrasts with the Supreme Court’s precedents.
Following this EO, EEOC Acting Chair Andrea Lucas announced a shift in the agency’s focus, aiming to protect women from sex-based discrimination by reversing policies related to gender identity. Changes include disabling the agency’s “pronoun app,” removing non-binary gender markers from discrimination charge forms, and eliminating materials promoting gender ideology from EEOC resources. The EEOC has also sought to dismiss cases involving gender identity discrimination claims.
Despite these administrative changes, the precedents set by Price Waterhouse and Bostock remain valid law. The courts will need to navigate the tension between federal guidance and established Supreme Court rulings, which could lead to significant legal challenges and interpretations.
Reverse Discrimination
In five federal circuits, reverse discrimination claims — those brought by members of majority groups — require plaintiffs to meet a heightened pleading standard, under which plaintiffs must establish “background circumstances” demonstrating a pattern of discrimination against the majority group.
The Supreme Court recently heard arguments in Ames v. Ohio Department of Youth Services, a case involving a woman who claimed she was discriminated against for being heterosexual. Marlean Ames alleged she was denied a promotion and demoted in favor of her gay colleagues. The Sixth Circuit applied the heightened standard and ruled against Ames. The Supreme Court is now considering whether plaintiffs must prove such “background circumstances” to establish a prima facie case of discrimination under Title VII. If the Court determines no such proof is required, the legal landscape of reverse discrimination will shift, making it easier for individuals to bring such reverse discrimination claims.
In addition, the EEOC has announced policies to defend and protect members of majority groups. For instance, EEOC Acting Chair Andrea Lucas announced the EEOC will protect “American workers” from anti-American national origin discrimination. Lucas stated the EEOC “is putting employers and other covered entities on notice: … The EEOC is here to protect all workers from unlawful national origin discrimination, including American workers.”
Saisruthi Paspulati , Trevor M. Jorgensen , Ari Asher , Kimia Pourshadi , and Roxana Bokaei also contributed to this article.
From Pride to Parity: Legal Guardrails for Managing DEI Events and Celebrations
Organizing and conducting cultural celebrations, acknowledgements, and educational programs in the workplace present thornier issues today in light of the new administration’s policies, including the numerous executive orders (EO) pertaining to diversity, equity, and inclusion (DEI) that President Trump has signed since taking office. While cultural celebrations were previously thought to serve as an educational and morale-building tool in creating an inclusive, equal employment opportunity workplace, companies are now considering whether they must or should cancel these activities altogether or withdraw their sponsorships of these events. With Pride Month fast approaching, considerations and potential approaches for companies facing these issues may assist in deciding what fits within an organization’s compliance obligations and risk tolerance.
Quick Hits
Some companies are reconsidering and even cancelling cultural celebrations, acknowledgements, and activities, such as Pride Month activities, in response to increased scrutiny from the new administration.
Employers should be mindful of the EEOC’s technical assistance focused on DEI titled “What You Should Know About DEI-Related Discrimination at Work,” which previews the EEOC’s position on certain DEI initiatives and potential rights and claims under Title VII of the Civil Rights Act of 1964 related to DEI initiatives.
Employers considering cultural celebrations may also want to consider factors such as their budgets; economic uncertainty; which sponsorships and celebrations to choose and why; whether they will use federal funds to pay for these activities and the potential legal and contractual implications if they do; the takeaways and potential optics impacting the organization’s employees, customers, and stakeholders; and whether a visible partnership exposes the organization to consequences outside of the company’s current risk tolerance.
The Impact of EO 14173 for Pride Month and Beyond
EO 14173, which President Trump signed on January 21, 2025, has introduced significant changes for organizations doing business with or receiving money from the federal government. The order mandates that these organizations certify that they do not operate DEI programs that violate federal antidiscrimination laws. This certification is now a material term for purposes of the False Claims Act (FCA), adding a layer of complexity for businesses, especially in light of the U.S. Department of Justice’s (DOJ) May 19, 2025, announcement that it will create a new investigative unit for DEI/FCA investigation and enforcement.
With Pride Month quickly approaching in June, some employers are revisiting their engagement on LGBTQ+ issues in light of EO 14173 and other new DEI-related executive orders and related guidance from agencies like the U.S. Equal Employment Opportunity Commission (EEOC) and the DOJ. A recent study by Gravity Research found that two in five corporate executives are pulling back from Pride Month engagement in 2025 compared to previous years. The study revealed that six in ten executives cited President Trump’s policies regarding transgender people and DEI initiatives as the primary reason for this shift. Additionally, 40 percent of executives expressed concerns over potential criticism from customers, shareholder derivative actions, and disagreements over the content of such celebrations. Of course, with “unlawful DEI” undefined in the EOs or otherwise, whether celebrations or education fall within that undefined term remains to be seen and will be highly fact-specific.
Considerations for Lawful Celebrations and Education
The lack of clear guidance from the administration on what constitutes unlawful DEI practices has left many employers in a state of uncertainty. In fact, one of the most common questions employers are struggling with in light of these developments is whether employers should cancel their sponsorships of events like Pride parades. The answer is not straightforward, as it depends on various factors, including legal compliance and each employer’s risk tolerance.
Despite the changes brought by the new administration, employers may continue to acknowledge historical events and educate their workforces on protected characteristics. While celebrations and educational programs on identities and protected characteristics are still legal, employers may need to consider how to carefully manage and execute them.
One foundational step is ensuring that educational and cultural programming is not exclusionary. For instance, activities that divide groups by protected characteristics or only permit those with certain characteristics to participate would likely be exclusionary. Additional relevant guardrails for compliance that employers can choose to use to help them stay on the right side of the law and avoid enforcement crosshairs when adopting cultural celebrations include:
EEOC Technical Assistance: Employers should be mindful of whether they have aligned their programs with the EEOC’s technical assistance and other active guidance. Notably, on May 15, 2025, a federal court vacated portions of the EEOC’s workplace harassment guidance, specifically, guidance on harassment based on sexual orientation and gender identity. Employers should remain mindful of all applicable law, including state and local laws prohibiting discrimination and harassment on gender identity and sexual orientation.
Unlawful Segregation: Employers should consider whether their programs, celebrations, or employee groups segregate employees based on protected characteristics. For example, do certain activities group LGBTQ+ employees separately from non-LGBTQ employees? Are the events open in all respects to all individuals to participate? Are roles within groups or activities limited in any way?
Voluntary Participation: Employers should examine their celebrations and educational programs to verify participation is voluntary—excluding, of course, the need to conduct legally required training on harassment, discrimination, and equal employment opportunity compliance.
Accommodation Requests: Employers may need to be prepared to manage employees’ requests for accommodations based on religious beliefs and robustly consider all concerns and intersecting rights as they may arise.
Equitable Recognition: In recognizing different characteristics, cultures, and holidays, employers can strive for fairness and equity and generally ensure that their DEI initiatives are balanced and inclusive.
Risk Management and Privileged Assessments
When deciding whether to sponsor events like Pride parades, companies may want to consider conducting a return on investment (ROI) analysis. One factor to consider is the impact of economic uncertainty on the company’s budget and the optics of participation. Federal contractors and recipients of federal funds—which are facing tight scrutiny under the Trump administration—may want to be particularly cautious and may wish to avoid using federal funds for these celebrations.
In this respect, ongoing, privileged assessments may help employers analyze the data they have on hand that may be relevant to these analyses. Assessments typically evaluate risk tolerance, ROI, and compliance with evolving laws and administrative approaches. In particular, employers can closely assess their own celebrations and educational programs and their sponsorships of cultural events to see if they align with both the company’s lawful DEI initiatives and legal antidiscrimination requirements, but also achieve the desired ROI.
Looking Ahead
As the administration’s approach to DEI continues to evolve, companies would benefit from staying informed and adaptable. The upcoming strategic enforcement plan from the attorney general, which is expected on or after May 21, 2025, may provide further guidance on these and other DEI issues. While the current environment presents challenges for DEI celebrations and education, careful planning, legal compliance, and ongoing assessments can help organizations navigate these complexities successfully.
EEOC’s Abortion Accommodation Provision in PWFA Rule Vacated
On May 21, 2025, a federal judge for the U.S. District Court for the Western District of Louisiana vacated a portion of the Biden-era U.S. Equal Employment Opportunity Commission (EEOC) implementing the Pregnant Workers Fairness Act (PWFA) to require employers to reasonably accommodate employees who choose to have an abortion.
Quick Hits
The U.S. District Court for the Western District of Louisiana vacated the EEOC’s final rule interpreting the PWFA to require elective abortion-related accommodations and removing abortion from the definition of a pregnancy-related medical condition.
The ruling tracks a prior preliminary injunction ruling that found the EEOC exceeded its authority and evidence of congressional intent for the PWFA to apply to elective abortion lacking.
U.S. District Judge David Joseph, a Trump appointee, found that the EEOC exceeded its statutory authority by including the “abortion accommodation mandate” in the April 2024 final rule and violated the “major questions doctrine,” which requires clear congressional authorization for agency actions of significant economic and political importance.
The court granted summary judgment in favor of the plaintiffs, vacating the “abortion accommodation mandate” and sent the rule back to the EEOC to revise it and any implementing regulations or guidance, accordingly.
“[T]he record before the Court clearly establishes that the EEOC has exceeded its statutory authority to implement the PWFA and, in doing so, both unlawfully expropriated the authority of Congress and encroached upon the sovereignty of the Plaintiff States under basic principles of federalism,” Judge Joseph said in the decision.
The ruling comes in consolidated litigation filed by the states of Louisiana and Mississippi and a group of four Catholic organizations led by the United States Conference of Catholic Bishops, challenging the EEOC’s interpretation of the PWFA’s requirement to reasonably accommodate employees for “related medical conditions” to pregnancy as to include “termination of pregnancy, including via miscarriage, stillbirth, or abortion.” (Emphasis added.)
Both Louisiana and Mississippi passed abortion bans following the 2022 ruling from the Supreme Court of the United States in Dobbs v. Jackson Women’s Health Organization, in which the Court overturned Roe v. Wade and held that the U.S. Constitution does not provide a right to abortion.
In June 2024, Judge Joseph issued a preliminary injunction delaying enforcement of the “abortion accommodation mandate” as it applied to certain employers in Louisiana and Mississippi. Judge Joseph kept that preliminary injunction in place until the final dismissal of the matters by the court.
The latest ruling vacates the mandate for reasons that largely track the findings in the preliminary injunction order. In that order, the judge found that the “abortion accommodation mandate” exceeded the EEOC’s authority under the Administrative Procedure Act (APA) and principles of statutory construction and was not clearly authorized by Congress.
That ruling noted that it must be presumed that Congress’s decision not to include explicit references to elective abortion in the PWFA was intentional. The preliminary injunction ruling pointed out that while the PWFA cross-references Title VII of the Civil Rights Act of 1964, the statute fails to incorporate Title VII’s protections for employees who choose to have abortions.
Further, the preliminary injunction found that the “abortion accommodation mandate” implicated the “major questions doctrine,” and that the EEOC cannot point to clear language in the PWFA that would empower it to make such a rule, which likely would have been addressed by Congress had it intended to do so given the highly contentious political nature of the issue.
The Louisiana district court ruling is the latest blow to the Biden-era EEOC. The ruling comes less than one week after the U.S. District Court for the Northern District of U.S. District Court for the Norther District of Texas vacated portions of the EEOC’s workplace harassment guidance regarding harassment based on sexual orientation and gender identity. Employers should note, however, that the April 2024 enforcement guidance has not been officially rescinded because the EEOC currently lacks a quorum.
Next Steps
Since it is unlikely that the current EEOC will appeal the ruling given the prior statements of EEOC Acting Director Andrea Lucas, this decision presumably means that employers are not required to follow the PWFA’s requirement to provide accommodations for purely elective abortions that are not necessary to treat medical conditions related to pregnancy. While the court vacated the need to accommodate elective abortions under the PWFA, it noted that terminations of pregnancy or abortions stemming from the underlying treatment of medical conditions related to pregnancy are not affected by the order. Employers must continue to provide accommodations for such terminations or abortions to the extent required by the PWFA. Employers should remember that the decision to have or not an abortion remains protected by Title VII.
OCR Reaches Settlement with Small Radiology Provider Over HIPAA Violations Stemming from Breach
On May 15, 2025, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) announced a settlement with Vision Upright MRI, a small California-based radiology provider, over alleged violations of the HIPAA Security and Breach Notification Rules. The enforcement action stems from a breach involving unauthorized access to a medical imaging server that exposed the protected health information (“PHI”) of over 21,000 individuals.
OCR initiated its investigation after receiving notification that Vision Upright MRI had experienced a breach involving its Picture Archiving and Communication System (“PACS”) server. The server, which stored and managed radiology images, had been accessed by an unauthorized third party.
OCR’s investigation revealed several key compliance failures:
Vision Upright MRI had had not conducted a HIPAA risk analysis, as required by the Security Rule.
Vision Upright MRI also failed to provide timely breach notifications to affected individuals, HHS, and the media, violating the Breach Notification Rule.
To resolve the investigation, Vision Upright MRI agreed to:
Pay a $5,000 monetary settlement to OCR.
Implement a corrective action plan that includes two years of OCR monitoring.
Take remedial steps to improve its HIPAA compliance posture.
Under the corrective action plan, Vision Upright MRI must:
Provide the required breach notifications to affected individuals, HHS, and the media.
Submit a comprehensive risk analysis covering all systems and locations containing ePHI.
Develop and implement a risk management plan to mitigate identified security vulnerabilities.
Create and maintain updated written HIPAA policies and procedures.
Provide HIPAA training to all workforce members with access to ePHI.
OCR Acting Director Anthony Archeval emphasized that HIPAA compliance obligations extend to entities of all sizes, and noted that small providers must conduct “accurate and thorough risk analyses to identify potential risks and vulnerabilities to protected health information and secure them.”
This latest settlement reinforces OCR’s continued focus on cybersecurity risks in healthcare and the need for all regulated entities, regardless of size, to maintain robust privacy and security programs.