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.
Workplace Strategies Watercooler 2025: DEI Under Scrutiny—Adapting to Increased Oversight and Policy Changes [Podcast]
In this installment of our Workplace Strategies Watercooler 2025 podcast series, three key members of our Diversity, Equity, and Inclusion (DEI) Compliance Practice Group—Simone Francis (St. Thomas/New York), Scott Kelly (Birmingham), and Nonnie Shivers (Phoenix)—address the status of DEI initiatives as they face unprecedented scrutiny. The speakers start by level setting about the status of equal employment opportunity laws, Title VII, Section 1981, and protected characteristics, while outlining strategies for adapting to increased DEI oversight and initiatives from the new administration. Nonnie (who co-chairs the firm’s DEI Compliance Practice Group) drills down on the guardrails organizations can put in place regarding resource and affinity groups in the workplace, in addition to the legal status of quotas and preferences. Simone shares perspectives on the importance of identifying the goals of resource groups when assessing their legality and utility for an organization, and whether organizations have used objective data in designing these programs. Scott probes the usefulness of data regarding the policies, design, and implementation of resource groups especially when ensuring the practices of these groups do not go far afield from the policies used to implement them. Finally, Scott stresses the importance of internal and external communications about these programs while assessing these resource programs.
2024 EEO-1 Component 1 Report Filing Now Open
Key Takeaways
The U.S. Equal Employment Opportunity Commission 2024 EEO-1 Component 1 Report filing opened on May 20, 2025, with a submission deadline of June 24, 2025, and no extensions being granted.
Employers must select a workforce snapshot from October 1, 2024, to December 31, 2024.
Filing is mandatory for private employers with 100 or more employees, federal contractors with 50 or more employees and certain affiliated private employers.
As anticipated, 2024 EEO-1 Component 1 Report filing officially opened May 20, 2025, on the EEO-1 Data Collection website. The EEOC has expressed that, as part of cost savings, the filing period for EEO-1 data will be shorter than in the past. Specifically, employers will have a deadline for submission of June 24, 2025. It is important to note that no extensions will be granted this year, making timely compliance essential.
In addition to the shorter time period for submission, there are additional changes to the 2024 EEO-1 reporting as discussed here.
Filing Requirements
The EEO-1 Report is a mandatory annual data collection that requires certain employers to submit demographic workforce data, including data by race/ethnicity, sex and job categories. The following entities are required to file:
Private employers with 100 or more employees;
Federal contractors with 50 or more employees; and
Private employers with fewer than 100 employees who are affiliated through centralized control or ownership with other entities, totaling 100 or more employees.
To complete their report, employers must select a workforce snapshot from any pay period between October 1, 2024, and December 31, 2024, for both full-time and part-time employees.
EEOC Acting Director Warns No ‘Diversity Exception’ to Title VII in Announcing EEO-1 Reporting Period Opening
On May 20, 2025, the U.S. Equal Employment Opportunity Commission (EEOC) opened the platform for employers to submit EEO-1 reports. In doing so, EEOC Acting Director Andrea Lucas warned employers not to use the data to take employment actions and reinforced earlier technical assistance that diversity, equity, or inclusion (DEI) practices that result in different treatment based on race, sex, or another protected characteristic can be unlawful discrimination.
Quick Hits
The EEOC has opened the 2024 EEO-1 Component 1 reporting period, emphasizing that employers must not use the reported demographic data to justify discriminatory employment practices based on race, sex, or other protected characteristics.
EEOC Acting Director Andrea Lucas warned employers that there is no “diversity exception” to Title VII of the Civil Rights Act, even if the data suggests employer policies may have a disparate impact on certain groups.
The warning potentially complicates employers’ evaluation of their compliance with equal opportunity and antidiscrimination laws and regulations.
Current EEOC regulations require private employers with one hundred or more employees, and federal contractors with fifty or more employees that meet certain criteria to submit annual EEO-1 Component 1 reports with demographic data on their employees, including race/ethnicity, sex, and EEO job categories.
The EEOC states EEO-1 data is used in a variety of ways, including enforcement, self-assessment by employers, and research. Some employers have thus looked at their EEO-1 data and potential employment disparities to gain insights into their workforce demographics and evaluate their compliance with equal opportunity and anti-discrimination laws and regulations, including Title VII of the Civil Rights Act of 1964.
However, in announcing the platform’s opening, EEOC Acting Director Lucas warned employers that their “obligations under [Title VII] not to take any employment actions based on, or motivated in whole or in part by, an employee’s race, sex, or other protected characteristics.”
Specifically, Acting Director Lucas told employers that they may not use any potential race or sex disparities revealed in their employment data as a basis for implementing hiring or promotion policies that might give preferences to job candidates or employees based on sex, race, ethnicity, or other protected characteristics.
“Your company or organization may not use information about your employees’ race/ethnicity or sex—including demographic data you collect and report in EEO-1 Component 1 reports—to facilitate unlawful employment discrimination based on race, sex, or other protected characteristics in violation of Title VII,” Acting Director Lucas stated.
“There is no ‘diversity’ exception to Title VII’s requirements,” she added.
Disparate Impact
Acting Director Lucas pointed to President Donald Trump’s April 23, 2025, EO 14281, “Restoring Equality of Opportunity and Meritocracy,” which calls for an end to liability for unlawful discrimination based on disparate impact, under which employers may be held liable for neutral employment policies or practices that have a substantial adverse impact on a protected group, such as race or sex. Specifically, the EO directed federal agencies like the EEOC to deprioritize enforcement of disparate impact claims.
The acting director said that under her leadership, the EEOC will follow and enforce the EEOC and will prioritize remedying intentional discrimination claims. She reiterated that employers may not use information collected as part of an EEO-1 report to treat employees differently based on any protected characteristic.
“[T]he fact that a neutral employment policy or practice has an unequal outcome on employees of a particular race or sex—that is, has a ‘disparate impact’ based on race or sex—does not justify your company or organization treating any of your employees differently based on their race or sex. As noted above, you must not use the information collected and reported in your organization’s EEO-1 Component 1 report to justify treating employees differently based on their race, sex, or other protected characteristic.”
Next Steps
The EEOC announced that the 2024 EEO-1 Component 1 data collection filing platform is now open until June 24, 2025, at 11:00 p.m. (EDT), which the EEOC will not extend, and the platform will close. This means covered employees will need to promptly prepare and file their reports by the deadline to maintain compliance.
The EEOC acting director’s warnings are in line with recent EEOC guidance issued under her leadership and policy directives from the Trump administration. Since taking office in January 2025, President Trump has issued a series of EOs, which are facing numerous legal challenges, seeking to eliminate unlawful DEI programs in employment and revoking federal contractors’ affirmative action program mandates, largely stripping authority from the Office of Federal Contract Compliance Programs (OFCCP).
At the same time, the EEOC acting director’s warnings to employers could complicate employers’ efforts to maintain antidiscrimination compliance and evaluate potential risk for unlawful discrimination claims.
2025 Enforcement Trends: Risk Analysis Failures at the Center of HHS’s Multimillion-Dollar HIPAA Penalties
In the first five months of 2025, the U.S. Department of Health and Human Services’ (HHS) Office for Civil Rights (OCR) announced it had entered into ten Health Insurance Portability and Accountability Act (HIPAA) resolution agreements reflecting the settlement of alleged HIPAA violations stemming from data breaches reported to OCR. These settlements span both the Biden and Trump administrations and involve a wide range of covered entities and business associates, from small physician groups to larger hospital authorities and IT service providers. Despite the diversity of organizations and underlying incidents, however, OCR’s enforcement focuses appear strikingly consistent. Each announcement indicates the resolution agreement was intended to cure defects in basic HIPAA Security Rule compliance, with a common emphasis on each organization’s failure to conduct a thorough risk analysis consistent with the HIPAA Security Rule.
Quick Hits
The HIPAA Security Rule requires HIPAA-covered entities and business associates to complete a comprehensive risk analysis, aimed at identifying potential risks and vulnerabilities to the electronic Protected Health Information in their possession.
Since January 1, 2025, the U.S. Department of Health and Human Services’ Office for Civil Rights has announced ten resolution agreements with HIPAA-covered entities and business associates that have highlighted the relevant organization’s failure to adhere to the HIPAA Security Rule’s risk analysis requirements.
Penalties for these violations included civil monetary penalties from $25,000 to $3,000,000, and often included requirements to implement a corrective action plan mandating the completion of a risk analysis.
It is no secret that data breaches have many possible root causes, and this reality is reflected in the resolution agreements announced by HHS in the early months of 2025. Indeed, the nature of the underlying data breaches that prompted HHS’s inquiry into each affected entity’s HIPAA compliance posture varied meaningfully. Several involved ransomware attacks that infiltrated healthcare systems and affected patient data, as was seen in the resolution agreements HHS entered into with a New York neurology practice and a public hospital in Guam. Others were triggered by phishing schemes, such as a California health network where dozens of employee email accounts were compromised, exposing nearly 200,000 individuals’ records. There was also an incident of electronic Protected Health Information (ePHI) being left unsecured on internet-facing servers. In each instance, however, OCR’s investigation revealed that the affected organization had not met a fundamental HIPAA Security Rule requirement: conducting an enterprise-wide risk analysis. Accordingly, in each resolution, the regulator identified the entity’s failure to assess and address vulnerabilities in their systems in this manner as a major compliance gap.
The HIPAA Security Rule requires organizations to “[i]mplement policies and procedures to prevent, detect, contain, and correct security violations.” One of the methodologies required for meeting this standard involves completing a “risk analysis,” or an “accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of electronic protected health information held by the [organization].” The penalties assessed by OCR in 2025 for failing to do this are significant. The monetary fines announced in conjunction with the resolution agreements ranged from as little as $25,000 at the low end to as much as $3 million for a national medical supplier that did not conduct a “compliant risk analysis” and subsequently suffered a major data breach after a phishing incident. Other financial penalties fell in between, with midsized providers and service companies typically agreeing to five- or six-figure fines. Beyond the dollar amounts, however, resolution agreements also included detailed corrective action plans, often requiring several years of close regulatory monitoring and mandating steps like the completion of fulsome risk analyses, implementation of risk management plans, completion of staff training, and regular updates to security policies, all with ongoing HHS involvement and oversight.
These recent OCR actions underscore that performing a HIPAA risk analysis is not an optional or “check-the-box” exercise for covered entities or business associates, but rather is a critical compliance step regulators are focusing on and actively enforcing against. OCR has made risk analyses a focal point of its enforcement initiatives in 2025, signaling to the industry that no organization is too large or too small to be held accountable for this basic requirement. The message for covered entities and business associates is clear: a comprehensive risk analysis is one of the simplest and most effective tools to protect against data breaches, and failing to complete one can directly lead to regulatory scrutiny and meaningful financial consequences.
In light of this enforcement focus, healthcare organizations and companies that provide services to healthcare organizations will be well served to proactively prioritize regular risk analyses and security improvements. Ensuring that all ePHI is accounted for and safeguarded—before an incident happens—is not only a straightforward compliance task, but also a central enforcement focus.
Launch of the Civil Rights Fraud Initiative
Shortly after taking office, President Trump signed the executive order titled, Ending Illegal Discrimination and Restoring Merit-Based Opportunity. As discussed previously, that order, among other things, directed the Attorney General to identify (a) means “to encourage the private sector to end illegal discrimination and preferences, including DEI,” (b) litigation and potential regulatory action that can be taken, and (c) no more than nine civil investigations that can be initiated into public companies, “large non-profit corporations, . . . foundations with” more than 500 million in assets, medication associations, and other entities.
Following that executive order, Attorney General Bondi released a memo titled, Ending Illegal DEI and DEIA Discrimination and Preferences. Citing the Supreme Court’s decision in Students for Fair Admissions, Inc. v. President & Fellows of Harvard Coll., the Attorney General noted that DEI and DEIA policies “violate the text and spirit of our longstanding Federal civil-rights laws.” She directed the Civil Rights Division of the Department of Justice (DOJ) to “investigate, eliminate, and penalize illegal DEI and DEIA preferences, mandates, policies, programs, and activities in the private sector.” Bondi noted that the DOJ is focused on “programs, initiatives, or policies that discriminate, exclude, or divide individuals based on race or sex.” Conversely, Bondi clarified that federal civil rights laws do “not prohibit educational, cultural, or historical observances . . . that celebrate diversity, recognize historical contributions, and promote awareness without engaging in exclusion or discrimination.”
The federal government has taken a number of steps to implement these directives. For example, the Federal Communications Commission and the U.S. Department of Health and Human Services Office for Civil Rights have initiated multiple DEI-related investigations. Similarly, various federal agencies have taken steps to remove DEI mandates from contracts. The federal government has also cancelled certain contracts in response to President Trump’s executive order.
On May 19, the DOJ took another step to effectuate the current administration’s DEI-related directives. Specifically, Deputy Attorney General Todd Blanche released a memo detailing the DOJ’s Civil Rights Fraud Initiative (Initiative). In the memo, Blanche echoed the DOJ’s commitment “to enforcing federal civil rights laws and ensuring equal protection under the law.” Blanche cautioned that several companies are still using “racist policies and preferences” that are “camouflaged with cosmetic changes that disguise their discriminatory nature.”
To achieve the current administration’s DEI-related goals, Blanche explained that the DOJ would vigorously use the False Claims Act (FCA) “against those who defraud the United States by taking its money while knowingly violating civil rights laws.” Among other things, Blanche explained that the treble damage and substantial penalties available under the FCA will be helpful tools in this enforcement initiative.
Blanche provided several examples of situations that could trigger FCA liability. Those include:
A university receiving federal funding while permitting antisemitism, failing to “protect Jewish students,” allowing “men to intrude into women’s bathrooms,” or requiring “women to compete against men in” sports; and
Recipients of federal funding or government contractors certifying compliance with federal civil rights laws while using “racist preferences, mandates, policies, programs, and activities.”
The Initiative will be led by the Fraud Section and the Civil Rights Division. In addition, an Assistant United States Attorney from each U.S. Attorney’s Office will be tasked to support the Initiative. The Initiative will also meet and share information with the Criminal Division, other federal agencies, state attorneys general, and local law enforcement. Blanche “strongly” encouraged private parties to file FCA lawsuits to address civil rights fraud and also asked that “anyone with knowledge of discrimination by federal-funding recipients” report that information to the federal government.
The Civil Division reported that it recovered more than $2.9 billion in fiscal year 2024 for FCA-related settlements and judgments. If the Initiative is successful in using the FCA, companies should expect a significant increase in the risks stemming from their DEI-related efforts. So, companies (especially those who receive federal funding or otherwise work with the federal government) should ensure they have taken the necessary reviews of their DEI-related initiatives. All signs indicate that this will not be the last action taken by the federal government in this sector. It is thus essential that companies remain abreast of developments in this area, including guidance from the federal government concerning what constitutes illegal DEI programs and policies.
EEOC Opens 2024 EEO-1 Reporting Platform With Hard Filing Deadline on June 24, 2025
On May 20, 2025, the U.S. Equal Employment Opportunity Commission (EEOC) opened the 2024 EEO-1 Component 1 data collection filing platform with a hard deadline for all filings of 11:00 p.m. (EDT) on June 24, 2025.
Quick Hits
The 2024 EEO-1 data collection is set to open on May 20, 2025, and close at 11:00 p.m. (EDT) on June 24, 2025.
The EEOC said the collection period will not extend beyond the deadline.
There is a new instruction booklet for reporting for the 2024 cycle that removes the option to report employees as nonbinary.
Hard Deadline
The EEOC said there will be a “shorter collection period” for employers to file their 2024 reports, stating that the period will not extend beyond the “Published Due Date” deadline on June 24, 2025. The EEOC said that once the deadline “passes, no additional 2024 EEO-1 Component 1 report(s) will be accepted.”
Additionally, the EEOC said that all communications this filing cycle will be handled electronically, and no notifications will be sent via postal mail.
Unlawful Discrimination
In a separate statement, EEOC Acting Chair Andrea Lucas reminded employers of their obligations under Title VII of the Civil Rights Act of 1964 “not to take any employment actions based on, or motivated in whole or in part by, an employee’s race, sex, or other protected characteristics.” (Emphasis in original). The warning aligns with the Trump administration’s policy focus on eliminating diversity, equity, and inclusion (DEI) programs and its deemphasis of disparate impact liability.
Changes to Reporting
On May 12, 2025, the Office of Management and Budget (OMB) approved the EEOC’s 2024 EEO-1 Instruction Booklet, which included some key changes to reporting procedures. The new booklet eliminates the option to report nonbinary employees, allowing “only binary options (i.e., male or female) for reporting employee counts.”
Further, despite the rescission of Executive Order 11246, which mandated affirmative action programs in federal contracting, the new instruction booklet states that federal contractors with fifty or more employees are still required to file EEO-1 reports for the 2024 cycle.
Next Steps
EEOC regulations require that certain private employers with one hundred or more employees and federal contractors with fifty or more employees annually report the number of individuals they employ, broken down by job category and by sex and race or ethnicity. The data is collected electronically through the web-based “EEO-1 Component 1 Online Filing System (OFS).”
The EEOC has published a webpage with resources for employers, including frequently asked questions (FAQs), the 2024 instruction booklet, a user guide, and other resources.
Employers with EEO-1 reporting obligations may want to promptly begin preparing and submitting EEO-1 filings with particular consideration of the hard filing deadline.
DOJ Civil Rights Fraud Initiative Signals Expansive Enforcement Threat for Employers Receiving Federal Funds
On May 19, 2025, the U.S. Department of Justice (DOJ) launched its Civil Rights Fraud Initiative. This is a coordinated enforcement effort aimed at using the False Claims Act (FCA) to investigate and, where appropriate, litigate civil rights violations committed by recipients of federal funds. This effort, announced through both a press release and a memorandum from the deputy attorney general, reflects a significant escalation in the federal government’s posture toward civil rights compliance and underscores expanding legal exposure for employers, contractors, and institutions operating under federal contracts or grants.
Quick Hits
The DOJ’s new Civil Rights Fraud Initiative treats violations of civil rights laws by federal fund recipients including contractors and grantees as potential fraud under the False Claims Act, exposing employers to treble damages and whistleblower lawsuits.
Executive Order (EO) 14173 requires contractors and grantees to certify compliance with antidiscrimination laws; the DOJ now warns that diversity, equity, and inclusion (DEI) policies granting benefits or burdens based on race or sex may render such certifications false and legally actionable.
The DOJ is explicitly inviting whistleblowers and third parties to report discriminatory practices and bring qui tam actions under the FCA, significantly expanding the enforcement risk for employers with federal funding.
Pursuing Civil Rights Violations as Fraud
The DOJ’s memorandum makes clear that civil rights noncompliance may now be treated as a form of fraud. Specifically, the initiative is aimed at those who “defraud the United States by taking its money while knowingly violating civil rights laws.” The DOJ identifies the False Claims Act, 31 U.S.C. § 3729 et seq., as its “primary weapon against government fraud, waste, and abuse,” noting that FCA liability includes treble damages and significant penalties.
Federal funding recipients, including contractors and universities, may be liable under the FCA when they certify compliance with laws such as Title IV, Title VI, or Title IX of the Civil Rights Act of 1964, while “knowingly engaging in racist preferences, mandates, policies, programs, and activities—including through diversity, equity, and inclusion (DEI) programs that assign benefits or burdens on race, ethnicity, or national origin.”
The DOJ draws a direct line from civil rights violations to material falsehoods in government certifications. For example, the memo warns that a university could face FCA liability if it “encourages antisemitism, refuses to protect Jewish students, allows men to intrude into women’s bathrooms, or requires women to compete against men in athletic competitions.”
EO 14173 Certification Adds to FCA Exposure
The memorandum explicitly cites EO 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, which President Trump issued on January 21, 2025. The order requires that recipients of federal funds certify that they do not maintain illegal discriminatory practices and affirms that such certifications are material to receiving payment.
The DOJ reiterates the EO’s rationale that “racist policies ‘violate the text and spirit of our long-standing Federal civil-rights laws.’” The memorandum goes further, warning that “many corporations and schools continue to adhere to racist policies and preferences—albeit camouflaged with cosmetic changes that disguise their discriminatory nature.” This language signals potential scrutiny not only of the substance of policies but also of their perceived intent and effect.
The combination of EO 14173’s certification requirement and the DOJ’s enforcement authority under the FCA creates a potent legal framework through which DEI-related practices may be investigated and, if deemed unlawful, penalized as fraud.
Whistleblower Litigation Encouraged
Perhaps most notable for employers is the DOJ’s clear encouragement of private enforcement. The memo cites the U.S. Congress’s delegation of authority to private parties under 31 U.S.C. § 3730 to bring qui tam suits, and the DOJ “strongly encourages these lawsuits.” In addition, the DOJ encourages anyone with knowledge of potential civil rights violations to report the information to federal authorities. This signals that the government views whistleblower litigation as an integral enforcement mechanism under this initiative.
Coordinated Federal Effort
The Civil Rights Fraud Initiative will be co-led by DOJ’s Civil Fraud Section and Civil Rights Division and supported by all 93 U.S. attorney’s offices. The initiative also includes coordination with the Criminal Division and federal agencies such as the U.S. Department of Education, the U.S. Department of Labor, and U.S. Department of Health and Human Services. The memo outlines plans for regular inter-agency meetings and joint enforcement actions, as well as partnerships with state attorneys general and local law enforcement.
Implications for Employers
This initiative creates a new legal landscape for any organization receiving federal funds. What were once internal compliance matters or employment policy debates may now create exposure to allegations of fraud. The DOJ’s expansive framing, including its reference to “camouflaged” DEI programs and undefined “racist preferences,” raises significant uncertainty for employers attempting to maintain legally compliant DEI initiatives. Certifications made under EO 14173 may create risk of civil or criminal FCA actions by the government or a whistleblower.