20 States and District of Columbia Sue Over U.S. Department of Education Mass Layoff
On March 13, 2025, twenty states and the District of Columbia sued the Trump administration to stop its plans to cut the U.S. Department of Education’s workforce by roughly half. The case is in the U.S. District Court for the District of Massachusetts.
Quick Hits
Twenty states and the District of Columbia sued the Trump administration after the U.S. Department of Education announced a mass layoff to cut the department’s workforce roughly in half.
The states argue that the mass layoff nullifies the department’s mandated functions and violates the separation of powers doctrine.
The states are asking the court to preliminarily enjoin the layoffs.
The department announced the reduction in force (RIF) on March 11, 2025, to discharge approximately 1,378 employees, reducing the department’s workforce by roughly half. The plaintiffs allege constitutional, statutory, and regulatory violations, in addition to violations of established precedent. They argue that the reductions undermine the department’s ability to fulfill its statutory responsibilities. They also allege that reducing the department’s workforce by 50 percent violates the constitutional separation of powers and the Administrative Procedure Act (APA). The complaint seeks declaratory and injunctive relief, including an injunction to preliminarily and permanently enjoin the RIF.
The states claim the RIF is part of an unlawful attempt to dismantle the department and override the statutes that created and govern the department’s functions. The states argue that the Trump administration violated the separation of powers doctrine, the Take Care Clause, and the APA by acting contrary to the statutes that authorize and govern the department and by failing to provide any reasoned explanation or consider the consequences of their actions. They cite the president’s and the secretary of education’s public statements, and a department press release, as evidence of their intent to shut down the department.
The complaint details the impacts the RIF may have on offices and programs that administer and enforce federal laws and regulations related to education, civil rights, student aid, disability services, and funding for schools affected by federal property. The states claim the RIF will harm the states and their residents by depriving them of federal funding, guidance, technical assistance, oversight, accountability, data collection, research, and protection and enforcement of civil rights and privacy rights for students.
The lawsuit alleges the RIF usurps the U.S. Congress’s authority to create, abolish, or restructure executive agencies, and fails to take care that the laws governing the Department of Education’s functions be faithfully executed. The states claim the RIF is arbitrary and capricious and exceeds the secretary of education’s authority to reallocate functions within the department.
The case emphasizes the importance of the Department of Education’s role in providing funds for low-income children, students with disabilities, and enforcement of antidiscrimination laws in education.
The states involved are Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Oregon, Rhode Island, Vermont, Wisconsin, and Washington.
Next Steps
It is too soon to tell what the federal court will decide in this case. This lawsuit has the potential to set significant precedent with respect to separation of powers and the limits of executive authority in restructuring federal agencies. One possible outcome is legislative action by Congress to address or counteract the executive actions at issue.
If the RIF is not overturned, school districts and colleges may experience a delay in receiving federal funds for K-12 education, special education services, Pell Grants, and vocational rehabilitation services. They may experience a delay or decline in enforcement of civil rights laws and privacy laws pertaining to students.
Leah J. Shepherd co-authored this article
U.S. Department of Education’s ‘Dear Colleague’ Letter Prohibiting DEI and FAQs Document Challenged in Federal Court
On March 5, 2025, the National Education Association (NEA) and its New Hampshire affiliate (NEA-NH) sued the U.S. Department of Education, challenging a recently issued “Dear Colleague Letter” (DCL) that informed schools that they would lose federal funding if they continued their diversity, equity, and inclusion (DEI) programs.
The DCL was followed by frequently asked questions (FAQs) guidance, issued on February 28, 2025, by the department’s Office for Civil Rights (OCR) clarifying the department’s interpretation of the meaning of the Supreme Court of the United States’ 2023 decision in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College (SFFA), which struck down affirmative action in college admissions.
Quick Hits
On February 28, 2025, the U.S. Department of Education’s Office for Civil Rights issued FAQs articulating the “broad implications” of the Supreme Court’s 2023 SFFA decision, which held that certain race-conscious college admissions policies violated the Equal Protection Clause of the Fourteenth Amendment.
The FAQs explain “how OCR will interpret the [SFFA] ruling in its enforcement of Title VI of the Civil Rights Act of 1964 and its implementing regulations.”
Noting that the Education Department’s February 14, 2025, “Dear Colleague Letter” advised educational institutions to “ensure that their policies and actions compl[ied] with existing civil rights law” and to “cease all reliance on third-party contractors” and proxies to “circumvent prohibitions on the use of race,” the FAQs emphasize the broad scope of Title VI’s coverage, which applies to “any program or activity receiving Federal financial assistance from the Department of Education,” and that schools’ “responsibility not to discriminate against students applies to the conduct of everyone over whom the school exercises some control, whether through a contract or other arrangement.”
A lawsuit seeking to enjoin and vacate the FAQs and DCL was filed on March 5, 2025, alleging that in issuing the DCL, the Department of Education exceeded its statutory authority under Title VI, the Department of Education Organization Act (DEOA), and the General Education Provisions Act (GEPA), penalized protected speech on issues of race and DEI, and violated the Administrative Procedure Act.
The lawsuit alleges that the DCL threatens schools with a loss of federal funding if they continue DEI programs, infringes on constitutional rights, lacks clarity, and disrupts educational practices aligned with civil rights laws. The lawsuit, National Education Association and National Education Association-New Hampshire v. U.S. Department of Education, seeks declaratory and injunctive relief, including preliminarily and permanently restraining and enjoining the Department of Education from enforcing the DCL and asking the court to declare unlawful, vacate, and set aside the DCL, the “End DEI” portal, and the FAQs.
The DCL and FAQs
The DCL warned that the Department of Education’s interpretation of laws prohibiting racial preferences must be followed or recipients would risk funding. The Department of Education indicated its intention to begin enforcing within two weeks of the date of the DCL its interpretation of legal requirements for institutions under SFFA, Title VI of the Civil Rights Act of 1964, and the Equal Protection Clause of the U.S. Constitution.
The DCL read: “At its core, the test is simple: If an educational institution treats a person of one race differently than it treats another person because of that person’s race, the educational institution violates the law. Federal law thus prohibits covered entities from using race in decisions pertaining to admissions, hiring, promotion, compensation, financial aid, scholarships, prizes, administrative support, discipline, housing, graduation ceremonies, and all other aspects of student, academic, and campus life.”
At the two-week mark, the Department of Education instead issued FAQs, stating it would investigate allegations of race discrimination in all aspects of university life, though the SFFA decision was limited to consideration of race in admissions policies only.
The FAQs provide answers to fifteen questions regarding the use of race in various aspects of education, including admissions, financial aid, scholarships, hiring, training, discipline, housing, graduation ceremonies, and curricula. They provide additional context, explaining in FAQ 6 that “when there is a limited number or finite amount of educational benefits or resources—such as, inter alia, admissions spots in an incoming class, financial aid, scholarships, prizes, administrative support, or job opportunities—a school may not legally take account of a student’s race in distributing those benefits or resources, even if race is only being considered as a positive or plus factor, because to advantage members of one race in a competitive or zero-sum process is necessarily to disadvantage those of a different race.”
With respect to the use of proxies, such as income or zip codes, the DCL also explains the Education Department’s current view that even the use of non-racial proxies, such as eliminating standardized testing, is “unlawful” if the purpose is “to achieve a desired racial balance or to increase racial diversity.” This is one of the views that is challenged in the lawsuit brought by the NEA.
The FAQs appear to curtail a widely discussed (and debated) area since the SFFA decision—whether admissions essays should provide students the opportunity to reveal their race. Writing for the majority in the SFFA decision, Chief Justice Roberts wrote, “[N]othing in this opinion should be construed as prohibiting universities from considering an applicant’s discussion of how race affected his or her life, be it through discrimination, inspiration, or otherwise. But … universities may not simply establish through application essays or other means the regime we hold unlawful today.” (Internal citations omitted.)
With respect to the use of admissions essays, the Department of Education’s FAQs caution (in FAQ 10), “Schools that craft essay prompts in a way that require[s] applicants to disclose their race are illegally attempting to do indirectly what cannot be done directly, as are admissions policies that hold brief interviews in order to visually assess an applicant’s race.”
On this note, the DCL, analyzing and interpreting the SFFA decision, stated, “[A] school may not use students’ personal essays, writing samples, participation in extracurriculars, or other cues as a means of determining or predicting a student’s race and favoring or disfavoring such students.”
With respect to DEI programs, the FAQs explain (in FAQ 8) that programs that are educational and open to all are lawful, whereas programs that segregate attendees by race or ethnicity are not:
“Schools may not operate policies or programs under any name that treat students differently based on race, engage in racial stereotyping, or create hostile environments for students of particular races. For example, schools with programs focused on interests in particular cultures, heritages, and areas of the world would not in and of themselves violate Title VI, assuming they are open to all students regardless of race.” The FAQs caution that DEI programming may give rise to “hostile environments” and that such claims will be balanced against First Amendment rights. The FAQs further explain (in FAQ 9) that schools must respond to and investigate hostile environment complaints:
In determining whether a racially hostile environment exists, OCR will examine the facts and circumstances of each case, including the nature of the educational institution, the age of the students, and the relationships of the individuals involved. For example, an elementary school that sponsors programming that acts to shame students of a particular race or ethnicity, accuse them of being oppressors in a racial hierarchy, ascribe to them less value as contributors to class discussions because of their race, or deliberately assign them intrinsic guilt based on the actions of their presumed ancestors or relatives in other areas of the world could create a racially hostile environment. But similar themes in a class discussion at a university would be less likely to create a racially hostile environment. In all cases, the facts and circumstances of that discussion will dictate the answer to that inquiry.
FAQ 9 suggests that at the university level, “requiring students to participate in privilege walks, segregating them by race for presentations and discussions with guest speakers, … mandating courses, orientation programs, or trainings that are designed to emphasize and focus on racial stereotypes, and assigning them coursework that requires them to identify by race and then complete tasks differentiated by race—are all forms of school-on-student harassment that could create a hostile environment under Title VI.”
The implications of this interpretation of the SFFA decision are significant for educational institutions. According to the Department of Education, SFFA makes unlawful the use of racial preferences in admissions and other areas (such as campus life and student activities) under Title VI and the Equal Protection Clause. The department cautions that both public and private higher education institutions must ensure that their policies comply with the legal standards laid out by the department to avoid discrimination based on race, color, or national origin. The FAQs repeat OCR’s intention to enforce its interpretation of the SFFA ruling in its oversight of educational institutions that receive federal financial assistance.
On February 18, 2025, President Trump signed Executive Order (EO) 14215, stating that only the president and the attorney general can interpret the law for the executive branch. This suggests that institutions cannot rely upon judicial interpretations or the courts to correct the FAQs’ misinterpretations, if any, of the SFFA’s decision on racial preferences.
The Lawsuit
The lawsuit argues that the DCL “drastically disrupts Plaintiffs in their ability to provide education to students in accordance with professional requirements and best practices” because it “threaten[s] schools and colleges across the country with the loss of federal funding in a matter of days if they continue[] to pursue … ‘DEI programs.’” The plaintiffs argue that the DCL infringes on constitutional rights, lacks clarity, and disrupts educational practices aligned with civil rights laws. The plaintiffs state that the DCL threatens to cut federal funding for schools that continue DEI programs and argue that it is vague, infringes on constitutional rights such as academic freedom in higher education, freedom of speech, and freedom of association under the First Amendment, and disrupts educational practices.
The lawsuit also alleges multiple violations of the Administrative Procedure Act that, in some respects, mirror the procedural challenges lodged against the Biden administration’s 2024 Title IX final rule. These include allegations that the DCL is arbitrary and capricious, as it lacks a reasoned explanation, fails to consider important aspects of the problem, and disregards material facts and reliance interests; is an abuse of discretion; represents a dramatic shift from prior Education Department guidance without acknowledging or explaining the change; is not in accordance with current law because it conflicts with Title VI and its implementing regulations, and violates the DEOA and GEPA by exercising control over curriculum and instructional materials; and is impermissibly vague and violates Fifth Amendment rights to due process. As an example of the latter, the lawsuit reads:
[As] an example, although the Letter asserts that “DEI programs” unlawfully “discriminate,” it fails to define what constitutes a “DEI program,” explain how such programs “preference” certain racial groups, or provide criteria for determining the circumstances under which educational programs that in any way address race might violate federal antidiscrimination law. As illustrated by the difficulties facing NEA, NEA-NH, and their Members, … the letter fails to provide adequate notice about what speech and programming regarding race, diversity, equity, or inclusion is prohibited under federal law. The ambiguity permeating the Letter’s discussion of DEI programs also invites arbitrary and selective enforcement against educational programs that advocate views on race inconsistent with those espoused by [the U.S. Department of Education].
The lawsuit also asserts that the DCL constitutes a final agency action subject to judicial review because it “marks the ‘consummation’ of the agency’s decisionmaking process, sets forth the agency’s conclusions that schools are acting unlawfully, and proscribes new substantive obligations ‘from which legal consequences will flow.’” It argues that the “End DEI” portal and the FAQs “reflect and incorporate this final agency action.”
Key Takeaways
The Department of Education is doubling down on its interpretation of SFFA, and EO 14215 significantly limits the odds that these interpretations will be internally challenged or adjusted. A lawsuit has been filed, and it remains to be seen whether the plaintiffs’ request for injunctive relief will be granted. State attorneys general and state regulators are also issuing their own guidance to higher education institutions and K–12 schools.
For now, schools may want to take note of the Department of Education’s interpretations and warning that the OCR will vigorously enforce the law and that noncompliance may result in an educational institution’s loss of federal funding.
South Carolina House and Senate Introduce Legislation on Diversity, Equity, and Inclusion
State legislators have introduced bills in the South Carolina House of Representatives and South Carolina Senate to amend Title 1, Chapter 1 of the South Carolina Code by adding sections addressing diversity, equity, and inclusion (DEI) for state offices or departments, including all political subdivisions, and institutions of higher learning and school districts.
House Bill 3927 (H. 3927), introduced on February 6, 2025, and Senate Bill 368 (S. 368), introduced on February 20, 2025, are both cited as the “Ending Illegal Discrimination and Restoring Merit-Based Opportunity Act” and use parallel language in seeking to amend the South Carolina Code.
Quick Hits
South Carolina state lawmakers introduced parallel bills in the state House and Senate that follow other recent executive and agency actions at the federal level and offer additional details not present in federal executive orders, such as definitions of “promoting DEI.”
Proposed amendments to the South Carolina Code would require certification of compliance to the General Assembly, as well as require the state auditor to conduct periodic compliance audits.
The bills include several carve-outs, including directly addressing First Amendment protections, which have been raised in several recent lawsuits challenging federal executive orders with similar content.
Defining DEI
On January 21, 2025, President Donald Trump signed Executive Order 14173 (EO 14173), with a nearly identical title as H. 3927 and S. 368—“Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” Unlike EO 14173, H. 3927 and S. 368 offer a definition of DEI at proposed Section 1-1-1910(A). Specifically, “promoting diversity, equity, and inclusion” is identified as “any attempt or effort to”:
(1) influence hiring or employment practices with respect to race, sex, color, ethnicity, gender, or sexual orientation other than through the use of color‑blind and sex‑neutral hiring processes in accordance with any applicable state and federal antidiscrimination laws;
(2) promote differential treatment of or providing special benefits to individuals on the basis of race, sex, color, ethnicity, gender, or sexual orientation;
(3) promote policies or procedures designed or implemented in reference to race, sex, color, ethnicity, gender, or sexual orientation for any purpose other than ensuring compliance with any applicable court order or state or federal law; or
(4) conduct trainings, programs, or activities designed or implemented in reference to race, sex, color, ethnicity, gender, or sexual orientation, other than trainings, programs, or activities developed for the sole purpose of ensuring compliance with any applicable court order or state or federal law.
Notably, both the terms “sex” and “gender” are used, as well as sexual orientation, and the list of characteristics in the definition does not include all categories from Title VII of the Civil Rights Act of 1964, as amended, nor does it address all groups protected in other parts of the South Carolina Code of Laws—such as under the South Carolina Human Affairs Law in Section 1-13-20. Three of the four definitional prongs also reference “applicable state and federal antidiscrimination laws”—these references presumably appear to serve both as a marker of prohibited DEI activities and as the sole allowable purpose for certain activities.
Prohibitions
H. 3927 and S. 368 propose at Section 1-1-1910(B) that “every office, division, or other unit by any name of every office or department of this State, and all of its political subdivisions, including all institutions of higher learning and school districts” be prohibited from:
(1) establishing or maintaining an office or division or other unit by any name whose purpose, in whole or in part, is the promotion of diversity, equity, and inclusion;
(2) hiring or assigning an employee or contracting with a third party to promote diversity, equity, and inclusion;
(3) compelling, requiring, inducing, or soliciting any person to provide a diversity, equity, and inclusion statement or give preferential consideration to any person based on the provision of a diversity, equity, and inclusion statement;
(4) giving preference on the basis of race, sex, color, ethnicity, gender, or sexual orientation to an applicant for employment, an employee, or a participant in any function of the office or department; or
(5) requiring as a condition of enrolling at an institution or performing any institution function any person to participate in diversity, equity, and inclusion training, which:
(a) includes a training, program, or activity designed or implemented in reference to race, sex, color, ethnicity, gender, or sexual orientation; and
(b) does not include a training, program, or activity for the sole purpose of ensuring compliance with any applicable court order or state or federal law.
Proposed Section 1-1-1910(C) would require the adoption of policies and procedures to discipline or dismiss employees or contractors who violate the prohibitions above.
Limitations
H. 3927 and S. 368 specifically note that institutions of higher education or an employee of an institution of higher education are not limited or prohibited, “for purposes of applying for a grant or complying with the terms of accreditation by an accrediting agency,” from providing a statement that highlights the institutions’ work in supporting “first-generation college students,” “low-income students,” or “underserved student populations.” Institutions are also not prohibited from certifying compliance with state or federal anti-discrimination laws.
The bills further address exemptions for institutions of higher learning for academic course instruction, scholarly research or creative work, activities of recognized student organizations, guest speakers or performers on short-term engagements, activities enhancing student academic achievement or postgraduate outcomes not based on race, sex, color, ethnicity, gender, or sexual orientation, and data collection.
Section 4 of H. 3927 and S. 368 explain that lawful state and private-sector employment and contracting preferences are not prohibited for veterans of the U.S. Armed Forces or those protected by the Randolph-Sheppard Act, nor is there any intent to prevent First Amendment of the U.S. Constitution protected speech. The direct carve-out of not seeking to chill First Amendment protected speech is noteworthy as it appears to be designed to avoid First Amendment challenges, which has been included in current lawsuits challenging EO 14173, as well as being one of the bases on which a preliminary injunction of EO 14173 was granted on February 21, 2025.
Certification, Testimony, and Audits
H. 3927 and S. 368 also propose to require certifications, elicit testimony before the General Assembly of certifying officials, and have the state auditor conduct compliance audits.
Proposed Section 1-1-1910(F)(1) prohibits “spending any money appropriated or authorized to the office or department until the governing board or chief executive officers, as applicable, submits to the General Assembly a report certifying compliance with this section during the preceding fiscal year,” while the certifying official may be “required to testify at a public hearing of the committee regarding compliance” pursuant to proposed Section 1-1-1910(F)(2). If enacted, this provision would most certainly place greater pressure on certifying officials.
The state auditor would also be tasked under proposed Sections 1-1-1910(F)(3) and (4) with conducting periodic compliance audits “as to whether the money has been expended in violation of this section.” If violations are found, the audited department or office would have 180 days to cure the violation or risk the state auditor notifying the State Fiscal Accountability Authority—which could potentially lead to the state treasurer withholding future distributions until the alleged violations are cured.
Finally, before any agency, office, division, or other unit contracts with a subcontractor for a state-paid project, the applicable subcontractor or grant recipient would also be required to certify that it does not operate any prohibited DEI programs. This requirement in proposed Section 1-1-1920 has the potential to require certifications across the business community in South Carolina and beyond the state, including potentially having certifications connected to state payments applying to nongovernmental private employers.
Next Steps
Currently, both bills have been referred to committee—H. 3927 referred to the Committee on Education and Public Works on February 6, 2025, and S. 368 referred to the Committee on Judiciary on February 20, 2025. On March 5, 2025, the South Carolina Revenue and Fiscal Affairs Office issued a Statement of Estimated Fiscal Impact related to H. 3927 explaining the fiscal impact of the bill and resources and funds that may be needed to carry out the bill’s objectives.
Republicans hold supermajorities in both the South Carolina Senate and House of Representatives, and the South Carolina governor is also a Republican. This could have an impact on how the proposed bills move through the process and, if passed as written, could have important impacts on South Carolina employers and businesses involved with state work. These bills may also be important for employers in other states as they could further signal a more extensive wave of state-based legislation addressing diversity, equity, and inclusion programs.
District Court Enjoins DEI Executive Orders
On February 21, 2025, a U.S. District Court judge blocked portions of Trump Administration executive orders focused on diversity, equity, and inclusion programming (“DEI”). The preliminary injunction issued in National Association of Diversity Officers in Higher Education et al. v. Trump et al., Dkt. No. 1:25-cv-00333 (D. Md. Feb. 21, 2025) applies narrowly to specific aspects of the orders, but may have further impact not only to institutions of higher education that receive federal funds, but also the private sector. On February 25, an additional lawsuit was filed challenging the Department of Education’s February 14 Dear Colleague Letter (“DCL”), which may lead to further court action to block the administration’s attempts to ban DEI programming.
The executive orders subject to the February 21 preliminary injunction were issued on January 20 and 21, 2025. These executive orders required that:
all executive agencies terminate “equity-related grants or contracts” (the “Termination Provision”);
all executive agencies require federal contractors or grantees to certify that they do not operate illegal programs promoting DEI and agree that they are in compliance with “all applicable Federal anti-discrimination laws” (the “Certification Provision”); and
directed the Attorney General to take “appropriate measures to encourage the private sector to end illegal discrimination and preferences” including by identifying “potential civil compliance investigations” to deter illegal DEI programs (the “Enforcement Provision”).
By focusing on federal contractors and grantees and private sector entities, the executive orders would have allowed executive agencies to withdraw federal funding and potentially subject federal contractors and grantees and private sector entities to False Claims Act liability. Notably, the executive orders did not state criteria to evaluate the legality of a given DEI program.
In National Association of Diversity Officers in Higher Education et al. v. Trump et al., the plaintiffs, including the National Association of Diversity Officers in Higher Education (NADOHE) and the American Association of University Professors (AAUP), sued to block the enforcement of these executive order provisions, alleging that the executive orders’ lack of definitions for illegal DEI rendered them unconstitutionally vague, and that the executive orders amounted to speech restrictions based on content and viewpoint that violated the First Amendment. The plaintiffs further argued that the executive branch does not have the authority to place conditions – including the Certification Provision – on government spending that had been authorized by Congress.
The U.S. District Court for the District of Maryland found that the plaintiffs had cognizable claims that were likely meritorious, and issued a nationwide preliminary injunction preventing the executive orders from being enforced while the litigation is pending. The preliminary injunction applies nationwide, as follows:
The administration may not pause, freeze, impede, block, cancel or terminate its obligations or awards under current contracts, or change the terms of current obligations due to DEI programming as contemplated in the Termination Provision;
The administration may not require any grantee or contractor sign “certification” or other representation regarding its DEI programs as contemplated in the Certification Provision; or
The administration may not bring enforcement action based on allegedly illegal DEI programs as contemplated in the Enforcement Provision.
What does this mean for institutions of higher education?
Institutions of higher education who receive federal funds through grants or contracts should be aware that under the terms of the preliminary injunction, their DEI programming cannot be the reason for the federal government or their granting agencies to terminate those grants or contracts.
Further, pursuant to the court’s findings, the federal government may not require institutions of higher education who receive federal funds through grants or contracts to make certifications or representations regarding their DEI programming as a condition of receiving such grants or contracts.
Institutions of higher education should also be aware that additional challenges have been mounted to the Department of Education’s February 14 DCL, which asserts that DEI programming is unlawful discrimination in violation of Title VI, and should pay close attention to developments in that matter.
As the federal government’s interpretation of discrimination law changes, colleges and universities are referring to and relying upon state law, written regulations, and court precedent for guidance. Institutions seeking assistance with reviewing their institutional policies or programs, complying with requests for certification for their federal grants or contracts, or clarifying their obligations under federal or state discrimination law, should reach out to their Hunton lawyer for guidance.
Iowa Governor Signs Law Making State the First to Remove Gender Identity Protections From Civil Rights Code
On February 28, 2025, Iowa Governor Kim Reynolds signed legislation making the state the first to remove antidiscrimination protections for gender identity from its civil rights code.
Quick Hits
Iowa Governor Reynolds signed a bill into law that removes “gender identity” as a protected class under the state’s civil rights code.
The law further defines gender as binary, requires birth certificates to indicate sex, and restricts teaching about “gender theory” from kindergarten through sixth grade.
The enactment further amends the law to specifically state that “separate accommodations are not inherently unequal.”
Senate File (SF) 418, which takes effect on July 1, 2025, removes “gender identity” as a protected class in the Iowa Civil Rights Act, which prohibits discrimination in employment, wages, public accommodations, housing, education, and credit practices. The new law makes it more difficult for transgender individuals to bring claims alleging discrimination or harassment in state court. Furthermore, the amended law states that “separate accommodations are not inherently unequal.”
The governor’s signature came one day after state lawmakers approved the legislation on February 27, 2025. The legislation was fast-tracked through the state legislature, passing both the Iowa House and Senate in less than a week after it was introduced on February 24, 2025.
“It is common sense to acknowledge the obvious biological differences between men and women. In fact, it is necessary to secure genuine equal protection for women and girls,” Governor Reynolds said in a statement.
In recent years, Iowa has enacted laws that prevent doctors from administering gender-affirming care to individuals under the age of eighteen, ban transgender students from using school bathrooms that do not correspond with their sex at birth, and prohibit transgender students from participating in girls’ high school sports and women’s college athletics.
SF 418 makes several other key changes to Iowa state law regarding sex and gender, rejecting the idea of gender identity as separate from biological sex. Specifically, the law defines “sex” in statutes as “the state of being either male or female as observed or clinically verified at birth” and defines “female” and “male” based on reproductive systems that produce ova and sperm, respectively. The law further asserts that the term “gender” should be considered synonymous with sex and not “gender identity, experienced gender, gender expression, or gender role.”
The law also requires birth certificates to include a designation of the sex of the person, and it removes a provision allowing for a new birth certificate to be established based on a notarized affidavit by a licensed physician stating that the person’s sex designation has changed due to surgery or other treatment.
Additionally, the bill impacts school curricula, prohibiting schools from providing any program, curriculum, test, survey, questionnaire, promotion, or instruction related to “gender theory” or sexual orientation to students in kindergarten through sixth grade.
Next Steps
Iowa is now the first state to remove protections for gender identity from its civil rights code. The Iowa law comes amid a new push at the federal level since President Trump took office to define “sex” as binary and immutable, including with EO 14168, “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government.”
The administration has further sought to limit the Supreme Court of the United States’ holding in Bostock v. Clayton County, Georgia, in which the Court held that the firing of an employee because of the employee’s sexual orientation or gender identity constituted unlawful sex discrimination under Title VII of the Civil Rights Act of 1964.
Amid the changes in federal guidance and state law, employers should remember that Bostock remains good law and states, “The answer is clear. An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.” (Emphasis added.)
Should Law Schools Be Teaching California Corporate Law?
It has been my experience that corporate law attorneys at national law firms tend to have a great deal of knowledge about and experience with Delaware corporate law. The reason for this is that Delaware has historically been the state in which most publicly traded companies are incorporated. Even when the client is not a Delaware corporation, courts in other states will look to Delaware precedents do the strong reputation of the Court of Chancery. Only a handful of publicly traded corporations are incorporated in California. Nonetheless, as a California lawyer I am often surprised at the lack of familiarity that many large law firms, including those with a significant presence in California, have with California corporate law.
A forthcoming paper by UCLA Professor Andrew Verstein argues “A teacher who stresses Delaware law in their teaching prepares their students for large, public company work, but ignores the laws applicable to the great mass of corporate practice”. Importantly, Professor Verstein backs up his claim with data. In fact, his paper is based on a database of 100 million entity formations for all U.S. states dating back to the nation’s beginning. Based on these data, Professor Verstein reaches the unexpected conclusion that Delaware is not first in incorporations. According to Professor Verstein, leadership belongs to California:
Yet, California has recently grown from a strong player to the very top state for corporate formations.
He also notes:
California has more than doubled its per-person rate of corporate formation during a period in which Delaware barely budged.
Nonetheless, it cannot be gainsaid that Delaware has the lion’s share of publicly traded corporations whilst California has only a handful – primarily regulated entities such as utilities and banks.
California’s General Corporation Law differs significantly from the corporate laws of Delaware, Nevada and the Model Business Corporation Act. If Professor Verstein’s analysis is correct, laws schools may be doing a disservice to their students by focusing on Delaware’s General Corporation Law.
Trump Administration’s Title IX Changes Revert Regulations Back to 2020, and Further Changes Are Possible
On January 31, the U.S. Department of Education (“DOE”) confirmed that, effective immediately and applicable to all open Title IX investigations, it will enforce the first Trump administration’s 2020 Title IX regulations (“the 2020 Rule”).[1]
This comes as no surprise to higher educational institutions, many of whom have been preparing to apply the 2020 rule since January 9, 2025, when a federal district court vacated the Biden-era Title IX regulations in Tennessee v. Cardona, and others of whom never stopped applying the 2020 rule due to a wide-ranging injunction issued by a Kansas U.S. District Court in 2024.[2] However, when viewed in context with other executive orders, the January 31 DCL both clarifies and raises questions as to how those rules apply going forward.
First, the January 31 DCL clarifies that educational institutions are expected to implement the 2020 rule immediately, including for cases that are ongoing. Immediate implementation means that institutions should look at any processes that are currently under way under their 2024 rule, and ensure that the process has not deprived the parties of any rights that they would have had under the 2020 rule.
The January 31 DCL is not explicit as to how DOE defines sex under Title IX, but it seems likely that this definition does not include gender identity. The January 31 DCL as issued initially stated that reading “sex” to include gender identity, sex stereotypes, and sexual orientation was inconsistent with Title IX. However, the DOE issued a revised version of the DCL on February 4 which removed this language. Educational institutions should note that the Kentucky U.S. District Court held in Tennessee vs. Cardona that the definition of “sex” under Title IX did not include gender identity, and the administration is not appealing this decision. They should also be aware that the administration, through a January 20 executive order, has directed all executive agencies including the DOE to interpret “sex” as “an individual’s immutable biological classification as either male or female,” not inclusive of gender identity. What remains to be seen is whether state laws that do protect gender identity will be seen as conflicting with Title IX, or whether institutions in those states will be able to protect discrimination based on biological sex under Title IX, and gender identity under state law.
What does the January 31st DCL mean for higher educational institutions?
Most institutions should have little difficulty turning back to their 2020 policies, but as they do, they should also consider any developments in state law or other regulations, including those requiring protections based on gender identity. Institutions should be mindful that more clarification and guidance is likely forthcoming from the DOE within the coming weeks.
One aspect of the 2024 policies that institutions may wish to keep in place are requirements to accommodate and prohibit discrimination on the basis of pregnancy and related conditions. While the specific requirements of the 2024 rule are no longer in place, courts have long read Title IX as prohibiting discrimination based on pregnancy and related conditions, and the 2024 regulations provided a comprehensive way to prevent such discrimination. The DOE has not issued any guidance on this subject, and does not seem poised to do so.
[1] 85 Fed. Reg. 30026 (2020).
[2] Tennessee v. Cardona, No. CV 2:24-072-DCR, 2025 WL 63795 (E.D. Ky. Jan. 9, 2025), as amended (Jan. 10, 2025)(Finding that the DOE exceeded its statutory authority by redefining “on the basis of sex” inconsistently with what the court found is Title IX’s express language and purpose: to combat discrimination against women, and based on the Spending Clause and First Amendment principles of vagueness and overbreadth, the 2024 Rule is arbitrary and capricious, and constitutionally infirm); See 89 Fed. Reg. 33474 (2024).
Florida Enacts Immigration-Related Laws Expanding Law Enforcement, Restricting In-State Tuition, and Increasing Criminal Penalties
On February 13, 2025, Florida Governor Ron DeSantis signed into law Senate Bill (SB) 2-C and Senate Bill (SB) 4-C, immigration-related legislation that addresses a variety of matters, including in-state tuition benefits, new criminal penalties, and law enforcement structure and funding.
Quick Hits
Under recently enacted state legislation, undocumented immigrants in Florida will no longer be eligible for in-state tuition benefits at public colleges and universities.
Any undocumented immigrant convicted of a capital felony will face the death penalty.
A new State Board of Immigration Enforcement will be created, and more than $298 million will be allocated to law enforcement for immigration-targeted hiring and training, including bonuses to officers who cooperate in federal enforcement activities.
In-State Tuition Benefits
Under newly enacted SB 2-C, undocumented immigrants living in Florida will no longer be eligible for the in-state tuition rate at Florida’s public colleges and universities. Starting on July 1, 2025, students will be reevaluated for tuition eligibility.
Heightened Criminal Penalties
SB 2-C and SB 4-C provide for several new criminal penalties, including a provision in SB 4-C requiring courts to impose the death penalty for any undocumented immigrant “who is convicted or adjudicated guilty of a capital felony”—such as first-degree murder—in Florida. This provision is expected to be challenged in court.
SB 4-C also makes it a first-degree misdemeanor for undocumented immigrants who are eighteen years of age or older to “knowingly” enter or attempt to enter Florida. SB 2-C and SB 4-C enhance the penalties of all misdemeanor crimes committed by undocumented immigrants.
Under SB 2-C, undocumented immigrants who vote or aid noncitizens in voting can be charged with a third-degree felony.
Creation of the State Board of Immigration Enforcement
Senate Bill 2-C creates a State Board of Immigration Enforcement. The State Board of Immigration Enforcement will coordinate with and assist the federal government and state law enforcement agencies in enforcing “federal immigration laws and other matters related to the enforcement of federal immigration laws.”
The State Board of Immigration Enforcement will be composed of the governor and a cabinet to be appointed.
More Than $298 Million Allocated to Immigration-Focused Law Enforcement
SB 2-C allocates more than $298 million for state law enforcement agencies to carry out the state’s immigration objectives. The allocation includes funding for the hiring of fifty new law enforcement officers, a $1,000 bonus incentive program for immigration enforcement officers, and training grants.
Governor DeSantis’s signing of both bills continues his immigration objectives and follows Senate Bill 1718, which he signed into law in May 2023.
NLRB Acting GC: Student-Athletes Are Not Employees
On February 18, 2025, National Labor Relations Board Acting General Counsel William Cowen rescinded a September 2021 memorandum in which former Board General Counsel Jennifer Abruzzo declared college athletes should be considered employees under the National Labor Relations Act. This was one of many memoranda he rescinded that had been issued by his Biden-administration predecessor.
Acting General Counsel Cowen’s withdrawal of the memorandum is the latest in a series of defeats for pro-employee advocates who had hoped to designate collegiate student-athletes as “employees” under the Act.
The first was the December 2024 withdrawal of an unfair labor practice charge filed by the National College Players Association (NCPA) against the NCAA, the Pac-12 Conference, and a private university in the Los Angeles area. The NCPA’s executive director stated the charge had been withdrawn considering the rise of “name, image, and likeness” (NIL) payments to players, as well as the shift in attitude on the subject under the new Trump Administration.
The second blow to proponents of the concept that student-athletes be deemed “employees” was the January 2025 decision by Service Employees International Union (SEIU), Local 560 to withdraw its petition to represent an Ivy League university’s men’s basketball players. In February 2024, a Regional Director for the Board took the historic step of determining that the university’s men’s basketball players should be considered employees under the Act. The case was filed in September 2023 after all 15 members of the men’s basketball team signed a petition to join Local 560 of the SEIU. At the time, the Regional Director determined the university’s level of control over the players was sufficient to qualify the players as employees under Section 2(3) of the Act. The Board found that traditional “team” activities, including the university’s ability to control the players’ academic schedules and the team’s regimented schedules for home and away games, weighed heavily in favor of an employment relationship. With the petition withdrawn for now, the university’s basketball players will remain non-unionized.
Given these developments, the window for student-athletes being deemed employees under the Act appears to be closed for the time being. With the uncertainty surrounding NIL and other issues around collegiate athletics, this area of law will need to be monitored for additional developments. In the interim, private collegiate institutions should be aware that they may face charges or petitions filed with the Board. Such filings must be treated seriously in light of the Regional Director decision discussed above.
Jackson Lewis’ Education and Collegiate Sports Group is available to assist universities, conferences, and other stakeholders in dealing with matters before the Board or otherwise involving the appropriate classification of student-athletes.
February 14 Dear Colleague Letter Signals Enforcement focus on Race-based preferences, DEI
On February 14, 2025, the U.S. Department of Education’s Office for Civil Rights (OCR) issued a Dear Colleague Letter (DCL) which, for the first time, previewed how the Education Department under the second Trump administration will scrutinize race-based preferences and DEI initiatives in K-12 and higher education.
As many college administrators have been expecting, the DCL reflects the administration’s view that any preferential treatment based on race is discriminatory. This includes some facially neutral efforts to increase on-campus racial diversity and some DEI-specific training and programming.
The DCL provides the following key insights:
The administration will seek to expand the prohibition on race-based preferences in admissions by broadly interpreting the Supreme Court’s decision in Students for Fair Admissions v. Harvard to apply to other areas of college and university operations including financial aid, hiring, training, and programming.
The administration views race-based segregation, including in dormitories, graduation ceremonies, and facilities as drawing unlawful race-based designations, even if it is voluntary.
The administration specifically listed programming that includes explicit race-consciousness, including “under the banner of DEI,” as an example of race-based discrimination, which it referred to as “toxic[]” and “indoctrinat[ion.]”
The DCL states that “DEI programs” that “teach students that certain racial groups bear unique moral burdens that others do not” are discriminatory and “stigmatize students who belong to particular racial groups.” It is unclear how the administration plan to regulate curriculum that it views as discriminatory in this way, and, if so, whether that regulation will apply to higher education.
The DCL closes by directing educational institutions to: (1) ensure that their policies and actions comply with existing civil rights law; (2) cease all efforts to circumvent prohibitions on the use of race by relying on proxies or other indirect means to accomplish such ends; and (3) cease all reliance on third-party contractors, clearinghouses, or aggregators that are being used by institutions in an effort to circumvent prohibited uses of race.
The DCL also promises that more guidance is forthcoming in a matter of weeks. Please stay tuned and call your Hunton lawyer with any concerns related to compliance with federal law or interpretation of Department of Education guidance.
The Boundaries of Chapter 93A
The scope of Chapter 93A is not unlimited, as the Appeals Court of Massachusetts recently confirmed in Beaudoin v. Massachusetts School of Law at Andover, Inc. The case involved a law student who was disenrolled from the school for not obtaining a COVID-19 vaccination, contrary to what he alleged were the school’s representations. He brought claims for breach of contract, promissory estoppel, breach of the implied covenant of good faith and fair dealing, negligent misrepresentation, Chapter 93A, and unjust enrichment. The trial court dismissed the complaint under Mass. R. Civ. P. 12(b)(6) for failure to state a claim.
The Appeals Court affirmed the dismissal of the Chapter 93A claim, noting that (i) Chapter 93A, Section 2 prohibits unlawful acts and practices occurring “in the conduct of any trade or commerce” and (ii) although charitable corporations “are not immune” from Chapter 93A’s reach, in most cases, a charitable corporate’s activities in furtherance of its core mission will not be engaged in “trade or commerce” under Section 2. This decision relies on the Supreme Judicial Court’s oft-quoted decision in Linkage Corporation v. Boston Univ. Trustees (1997) and the First Circuit’s Squeri v. Mount Ida Coll. (2020). As the law student’s Chapter 93A claims focused on the alleged unfair and deceptive recruiting of students to enroll at the school, the claims arose from the nonprofit law school’s provision of education to students and, as such, the challenged acts and practices did not fall into “the conduct of any trade or commerce.” The Appeals Court, however, reversed the Trial Court’s dismissal of various common law claims.
This case demonstrates that plaintiffs and defendants alike must always consider whether challenged conduct under Chapter 93A fits the definitions required to trigger coverage and whether adding a Chapter 93A count is appropriate or will cause initial dispositive motion practice.
Trump Administration Says Title IX Does Not Apply to NIL Pay, Rescinds Recent Guidance
On February 12, 2025, the U.S. Department of Education under the Trump administration rescinded recent guidance that name, image, and likeness (NIL) payments to college athletes implicate the gender equal opportunity requirements of Title IX of the Education Amendments of 1972.
Quick Hits
The Department of Education has rescinded recent guidance that had warned NCAA schools that NIL payments could trigger the equal opportunity obligations of Title IX.
This announcement indicated that the department interprets Title IX as not applying to how revenue-generating athletics programs allocate compensation among their athletes.
On February 12, 2025, the U.S. Department of Education’s Office for Civil Rights (OCR) announced that it had rescinded the nine-page Title IX guidance on NIL payments previously issued on January 16, 2025, in the final days of the Biden administration.
“The NIL guidance, rammed through by the Biden Administration in its final days, is overly burdensome, profoundly unfair, and goes well beyond what agency guidance is intended to achieve,” Acting Assistant Secretary for Civil Rights Craig Trainor said in a statement.“Without a credible legal justification, the Biden Administration claimed that NIL agreements between schools and student athletes are akin to financial aid and must, therefore, be proportionately distributed between male and female athletes under Title IX.”
“Enacted over 50 years ago, Title IX says nothing about how revenue-generating athletics programs should allocate compensation among student athletes,” Assistant Secretary Trainor’s statement continued. “The claim that Title IX forces schools and colleges to distribute student-athlete revenues proportionately based on gender equity considerations is sweeping and would require clear legal authority to support it. That does not exist. Accordingly, the Biden NIL guidance is rescinded.”
The move comes as the National Collegiate Athletic Association (NCAA) and major college sports conferences have agreed to pay nearly $2.8 billion in back pay to former athletes as part of a proposed settlement to end NIL litigation and to establish a revenue-sharing framework to share more than $20 million annually with athletes.
The rescinded Biden-era guidance had warned NCAA schools that NIL compensation provided by a school, even if provided by private third parties, would be considered by the department as “athletic financial assistance,” which must be distributed in a nondiscriminatory manner under Title IX. The guidance had assumed that “the receipt of financial assistance does not transform students, including student-athletes, into employees,” but it opened the possibility to reevaluate that position.
The Education Department announcement also follows the NCAA’s announcement that it is banning transgender athletes from competing in women’s sports to align with President Trump’s recent executive order (EO), EO 14201, titled “Keeping Men Out of Women’s Sports.” That order directed the Secretary of Education to “take all appropriate action to affirmatively protect all-female athletic opportunities and all-female locker rooms and thereby provide the equal opportunity guaranteed by Title IX.”
Next Steps
The Department of Education’s announcement will have significant implications for NCAA schools, which have been adjusting to the quick evolution of college athletics in recent years. Changes have included the removal of restrictions on athletes earning NIL pay, loosening restrictions on athlete transfers, and the potential for revenue-sharing between schools and their athletes. Such changes have raised concerns under Title IX, particularly with potential disparities in NIL pay between athletes in men’s and women’s sports.
While the prior guidance had interpreted NIL pay as subject to Title IX, the Department of Education under the Trump administration appears to interpret NIL payments, and even potentially revenue-sharing, as outside of the typical athletic financial assistance governed by Title IX. This could open the door for more payments to athletes in the sports that tend to generate the most revenue, typically college football and men’s basketball.
The announcement further signals more potential changes by the Trump administration with the enforcement of Title IX.
However, the rescission of the prior Title IX guidance may not be the end of the road. While some are praising the decision, others continue to argue that inequitable distribution of the settlement funds between men’s and women’s sports will violate Title IX. This could result in legal challenges as schools evaluate how best to distribute the payments.