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.
EEOC Opens EEO-1 Data Collection Portal With Reporting Changes
The Equal Employment Opportunity Commission (“EEOC”) has opened the 2024 EEO-1 data-collection cycle and set Tuesday, June 24, 2025, as the filing deadline for submissions. According to the EEOC, this year’s reporting window is shorter than in prior cycles as part of its “efforts to identify continued cost savings for the American public.” In its announcement about the opening of the portal, the EEOC made clear that the collection period will not be extended.
Relatedly, and as a follow-up to our previous post, the Office of Management and Budget (“OMB”) has approved the EEOC’s requested change to the EEO-1 report, eliminating the option allowing employers to voluntarily report employees who self-identify as “non-binary.” Employers now only have the option to report employees as male or female.
In connection with the opening of the portal, Acting EEOC Chair Andrea Lucas issued a public statement reminding employers of 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.” She cautioned companies not to “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.” Emphasizing that “Title VII’s protections apply equally to all workers, regardless of their race or sex,” Acting Chair Lucas addressed DEI programs, stating that “[d]ifferent treatment based on race, sex, or another protected characteristic can be unlawful discrimination, no matter which employees or applicants are harmed. There is no ‘diversity’ exception to Title VII’s requirements.”
She also referenced the Trump Administration’s recent Executive Order “direct[ing] all agencies to … de-emphasize ‘disparate impact’ enforcement.” Acting Chair Lucas confirmed that the EEOC “will fully and robustly comply with this and all Executive Orders,” and “will prioritize remedying intentional discrimination claims.” She also warned employers that “under existing law, the 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.”
In light of these developments, employers should promptly gather the workforce data necessary to complete their 2024 reports, verify that their contact information is current in the portal, and monitor emails for further instructions. Early preparation will help ensure timely compliance within the shortened filing window.
Justice Department Launches Initiative Targeting Contractors’ and Grantees’ DEI Programs, Anti-Semitism, and Transgender Policies
On May 19, 2025, Deputy Attorney General Todd Blanche issued a memorandum (the “Memorandum”) establishing the Department of Justice’s “Civil Rights Fraud Initiative” (the “Initiative”). The program “will utilize the False Claims Act to investigate and, as appropriate, pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws,” led by a team of attorneys from the DOJ’s Civil Rights Division and Civil Division’s Fraud Section who will “aggressively pursue this work together,” while consulting with the DOJ’s Criminal Division and other federal agencies.
Describing the False Claims Act (“FCA”) as the “the Justice Department’s primary weapon against government fraud, waste, and abuse,” the Memorandum states that the FCA is “implicated when a federal contractor or recipient of federal funds knowingly violates civil rights laws—including but not limited to Title IV, Title VI, and Title IX, of the Civil Rights Act of 1964—and falsely certifies compliance with such laws.”
The Initiative builds on President Trump’s “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” Executive Order (the “Order”). The Order, among other things, requires federal agencies to include two provisions in every federal contract or grant award:
(A) A term requiring the contractual counterparty or grant recipient to agree that its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions for purposes of [the FCA]; and
(B) A term requiring such counterparty or recipient to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.
The Administration has been issuing contract modifications incorporating these provisions which, as we discussed in a prior post, create significant risks for contractors. The Memorandum makes clear that the Justice Department is focused on relying on these provisions to pursue federal contractors and other recipients of federal funds that violate civil rights laws and provides instructive examples of the practices and entities that the Initiative will target.
For example, the Memorandum calls out universities, stating that “[c]olleges and universities cannot accept federal funds while discriminating against their students,” and that “a university that accepts federal funds could violate the False Claims Act when 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.”
The Memorandum also states that the FCA is “implicated whenever federal-funding recipients or contractors certify compliance with civil rights laws 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.” With respect to DEI programs, the Memorandum signals that the Justice Department will be looking for programs that are “camouflaged with cosmetic changes that disguise their discriminatory nature.”
Finally, the Memorandum seeks the assistance of the public in this effort, “strongly encourag[ing]” qui tam claims, in which individuals file FCA claims on behalf of the government “and, if successful, shar[e] in any monetary recovery.” The Justice Department also “encourages anyone with knowledge of discrimination by federal-funding recipients to report that information to the appropriate federal authorities so that the Department may consider the information and take any appropriate action.”
Minneapolis Expands Workplace Civil Rights Protections and Reasonable Accommodation Obligations
On May 1, 2025, Minneapolis, Minnesota’s city council passed several amendments to its civil rights ordinance (the “Ordinance”), which prohibits discriminatory practices in employment, among other areas. With regard to employment, the amendments add new protected classes, expand the definition of race, familial status, and disability, and increase protections for pregnant workers and religious observance.
New Protected Classes in Employment
Justice-Impacted Status: One of the most notable amendments is the addition of “justice-impacted status” as a protected class in employment. This is defined to mean the state of having a criminal record or history, including any arrest, charge, conviction, period of incarceration, or past or current probationary status. Employers will be required to ensure that any adverse employment decisions based on justice-impacted status are reasonably related to the job’s requirements and consider factors such as the nature of the crime, whether the employee was convicted, age of the employee at the time of the crime, time elapsed, evidence of rehabilitation, and any unreasonable risk to property or to the safety of specific individuals or the general public. Employers will further be precluded from making an adverse employment decision based on a not-currently-pending arrest not resulting in a conviction. However, actions taken when permitted by, and made in accordance with state or federal law, regulation, rule or government contract (such as related to positions in law enforcement or that involve working with children) do not constitute violations of law.
Housing Status: The amendments also add housing status as a protected class. The amendments define “housing status” as those who may or may not have “a fixed, regular, and adequate nighttime residence,” and provide that, except as required or authorized by federal or state law, regulation, rule or government contract, it is unlawful for an employer to refuse to hire or terminate an applicant or employee based on their housing status unless such action is because of a legitimate business justification not otherwise prohibited by law.
Height and Weight: The amendments also prohibit discrimination based on body height, weight, or size. This category encompasses, but is not limited to, both actual numerical measurement (including ratios or other metrics measuring the body in whole or in part) and the impression of a person as tall or short and/or fat or thin regardless of their numerical measurement. An affirmative defense is available to employers if an individual’s height or weight: (i) prevents them from performing the essential functions of their job and there is no reasonable accommodation available without placing an undue hardship on the employer; (ii) fundamentally alters the essential nature of the entity’s programs or services; or (iii) poses a direct threat to the health and/or safety of the individual or others. The protections also do not apply to an employment action where such action is required by federal, state, or local law or regulation.
Expanded Definitions
Race: The amendments broaden the definition of race under the Ordinance to include traits historically associated with race or perceived to be associated with race, such as skin color, certain physical features, hair texture, and protective hairstyles (such as afros, braids, locks and twists).
Familial status: The amendments also expand the definition of familial status (which is an existing protected category under the Ordinance) to now include not only having legal status or custody over one or more minors as a parent or legal guardian, but residing with and caring for individual(s) who lack the ability to meet essential requirements for physical health, safety, or self-care because of an “inability to receive and evaluate information or make or communicate decisions.”
Disability: The amendments broaden the definition of disability (also an existing protected category under the Ordinance and currently defined as a physical, sensory or mental impairment limiting one or more major life activities, having a record of such an impairment, or being perceived as having such an impairment) to now include impairments that are episodic or in remission and that would materially limit a major life activity of the individual when active. The amendments also codify that employers must initiate an “informal interactive process” with a qualified employee to determine an appropriate reasonable accommodation related to either disability or pregnancy-related limitations (discussed further below).
Pregnancy-Related Protections
The amendments will now require employers to engage in an informal interactive process and provide appropriate reasonable accommodations for the “known pregnancy-related conditions” of a qualified employee. “Known pregnancy-related limitation” is defined as “any physical or mental condition related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions that the employee or employee’s representative has communicated to the employer whether or not such condition meets the definition of disability” under the Ordinance. Employers shall not be required to provide an accommodation that imposes an undue hardship. Employers shall not be permitted to require a pregnant employee to take leave if another reasonable accommodation can be provided, nor can an employer take adverse action against an employee for requesting or receiving a pregnancy-related accommodation.
Religious Observance
The amendments will now require employers to accommodate employees’ “known sincerely held religious beliefs or practices” unless doing so imposes an undue hardship.
Key Takeaways These amendments will apply to any complaint or charge filed under the Ordinance on or after August 1, 2025 unless superseded by subsequent amendments. Minneapolis employers are advised to review their policies and practices to ensure compliance with the new amendments.