Wisconsin Court of Appeals Finds Taxpayer-Funded College Grant Program to Be Unconstitutional
On February 26, 2025, the Wisconsin Court of Appeals, District II, determined that a program that provided taxpayer-funded educational grants to financially needy students of specific racial, national origin, and ancestry groups was unconstitutional.
Quick Hits
On February 26, 2025, a Wisconsin appellate court ruled that a taxpayer-funded educational grant program for minority students is unconstitutional, citing the U.S. Supreme Court’s decision in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College (SFFA).
The court’s decision to halt the Minority Undergraduate Retention Program underscores the broader implications of the SFFA ruling, suggesting that race-based considerations in state-funded educational assistance programs may also violate the Equal Protection Clause of the U.S. Constitution.
Legal scholars and post-secondary institutions are closely monitoring the impact of the court’s decision and the federal government’s recent guidance, which indicates that the SFFA ruling could extend beyond university admissions to other areas, including employment-related decision-making.
Background
In April 2021, five Wisconsin taxpayers filed a lawsuit against the Higher Educational Aids Board (HEAB) and its executive secretary, Connie Hutchinson. HEAB and Hutchinson administer the Minority Undergraduate Retention Program, which was created by the Wisconsin legislature in 1985 to offer grants to certain undergraduate minority students. To be eligible for the grants, the students must be Black American, American Indian, Hispanic, or have ancestors who were formerly citizens of Laos, Vietnam, or Cambodia. In the case, Rabiebna v. Higher Educational Aids Board, the taxpayers claimed that the eligibility criteria (i.e., limiting eligibility to students of these specific racial or ethnic backgrounds) violated both the Equal Protection Clause of the U.S. Constitution and Article I of the Wisconsin Constitution.
The circuit court granted summary judgment in favor of the HEAB and Hutchinson. The taxpayers then appealed the decision. After the parties’ appellate briefs were filed, the Supreme Court of the United States issued its decision in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, 600 U.S. 181 (2023). In SFFA, the Supreme Court ruled that two universities violated the Equal Protection Clause of the U.S. Constitution by considering an applicant’s race as part of the applicant’s admissions processes. Therefore, both parties in the HEAB case submitted additional briefing to the appeals court articulating the impact of the SFFA case on its review of the Minority Undergraduate Retention Program in Wisconsin.
The Decision
After evaluating the Wisconsin statutory language and considering the parties’ arguments, the appeals court reversed the circuit court’s ruling, finding instead that the Minority Undergraduate Retention Program violates the law. Notably, the court relied heavily on the SFFA opinion to support its conclusion, citing to it more than one hundred times in its fifty-three-page decision. The court’s analysis also closely tracked the overarching legal framework provided by SFFA. As a result of this decision, the HEAB and Hutchinson are currently enjoined from further administering the grant program and distributing any funds from it.
Implications of the Decision
Some legal scholars initially interpreted the Supreme Court’s SFFA decision narrowly, arguing that it was limited to university admissions policies. However, the HEAB opinion signals that some courts are willing to utilize SFFA’s Equal Protection analysis in other contexts where race is a consideration, including state-funded educational assistance programs. Indeed, the Wisconsin appeals court, citing to SFFA, emphasized that no state has the authority under the Equal Protection Clause to use race as a factor in offering “educational opportunities.” (Emphasis in original.)
The HEAB decision also appears to align with the U.S. Department of Education’s “Dear Colleague” letter dated February 14, 2025, which explicitly states that the SFFA decision “applies more broadly” than just to university admissions decisions. Given this letter and the recent confirmation of Linda McMahon as the new secretary of education, post-secondary institutions may want to consider closely monitoring developments in the federal government’s interpretations of the law post-SFFA, and its subsequent enforcement actions.
Finally, it appears that the SFFA decision will have impacts beyond the realm of education. For example, there are already cases pending in various jurisdictions around the country that cite to the SFFA case to challenge an employer’s consideration of race in hiring or other employment decisions. Therefore, employers may also want to consider following these cases, along with litigation over the Trump administration’s executive orders regarding diversity, equity, and inclusion, to see whether and how the SFFA decision is implicated and whether courts will extend SFFA’s reasoning to cover employment-related decision-making.
Executive Order to Close the Department of Education: What It Means for Your School
On March 20, 2025, President Donald J. Trump signed an Executive Order (“EO”) titled “Improving Education Outcomes by Empowering Parents, States, and Communities,” directing the Secretary of Education to undertake all necessary steps to facilitate the closure of the Department of Education (“Department”).
What the EO Says
Citing historically low reading and math scores, the EO asserts that the federal bureaucracy has not served students, teachers, or families effectively, and aims to return decision-making power to those closest to the educational process—“States and local communities.”
The EO mandates that existing services, programs, and benefits—such as student loans, Title I funding, and special education support—continue without interruption during this transition, though it provides no details for achieving this continuity. In addition, the EO targets “illegal discrimination” in DEI and so-called “gender ideology” programs, potentially impacting school funding and compliance.
Notably, the EO recognizes its own legal boundaries: the Department, established by Congress in 1979 under the Department of Education Organization Act, cannot be unilaterally eliminated by the President. Any bill to shut down the Department requires 60 votes in the Senate to overcome a filibuster—a challenging threshold given the current political landscape on Capitol Hill. And legal challenges are likely to be filed. These lawsuits could delay implementation or reshape the order’s trajectory.
What This Means for Your School and Next Steps to Consider
For local school districts and charter schools, this EO introduces a range of practical and strategic considerations. Federal funding currently constitutes about 14 percent of public school budgets, primarily through programs like Title I, which supports schools in low-income areas, and the Individuals with Disabilities Education Act (“IDEA”), which ensures resources for students with disabilities. While the order does not immediately terminate these funds, a successful closure of the Department could lead to their disruption or reallocation. Districts in distressed regions may face additional challenges in maintaining current levels of service without federal support. Charter schools may have to grapple with the potential loss of federal Charter School Program grants (“CSP”), which may constrain their ability to expand or sustain operations.
Additionally, the EO includes a mandate to terminate any program or activity receiving federal assistance that is deemed to engage in “illegal discrimination” under described terms like “diversity, equity, and inclusion” or programs promoting “gender ideology.” For districts and charter schools, this could mean increased scrutiny of existing DEI programs, staff training, or curriculum elements related to gender identity, potentially requiring adjustments to maintain eligibility for federal funding during the transition. Non-compliance could risk funding cuts or legal challenges from federal authorities, while compliance might spark local backlash or litigation from stakeholders who support such programs, placing schools in a delicate balancing act.
The order also raises questions about civil rights enforcement, currently managed by the Department’s Office of Civil Rights. If this function dissolves or transfers, it could lead to an increase in private civil litigation. Additionally, the Department’s management of a $1.6 trillion student loan portfolio may move to another federal entity, such as the Treasury Department. This could affect districts offering dual-enrollment programs or employing staff eligible for loan forgiveness under programs like Public Service Loan Forgiveness.
The broader implications of the policy shift represented by the EO may be significant. To prepare, it may be prudent for districts and charter schools to evaluate their dependence on federal programs like Title I, IDEA, and CSP grants. Engaging with your local ISD and with MDE to understand contingency plans may also be appropriate, as well as strengthening internal policies to address potential shifts in civil rights enforcement can help mitigate legal risks in an uncertain regulatory environment.
DEI-Related Executive Orders Move Forward After Fourth Circuit Grants Stay of Preliminary Injunction; Federal Agency Actions
On March 14, 2025, the Fourth Circuit Court of Appeals issued a stay of the U.S. District Court’s preliminary injunction, which will allow the Trump administration to continue enforcing the Executive Orders (EOs) related to Diversity, Equity and Inclusion (DEI) programs while the litigation continues.
The National Association of Diversity Officers in Higher Education filed a lawsuit in the U.S. District Court for the District of Maryland (Maryland District Court) challenging the constitutionality of the following EOs, arguing they are vague under the Fifth Amendment and violate the First Amendment’s Free Speech Clause:
Executive Order 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing.”
Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.”
Earlier, the Maryland District Court issued an injunction against three key provisions in the two Executive Orders, effectively blocking the federal government from enforcing: 1) the termination of equity-related grants or contracts by executive agencies, 2) a requirement for federal contractors and grantees to certify that they will not operate DEI programs that violate federal anti-discrimination laws and 3) the U.S. Attorney General’s authority to investigate and initiate civil compliance actions against private sector entities continuing DEI practices.
Federal agencies have taken actions to enforce the EOs. Below are examples of three federal agencies that have issued guidance and enforcement letters to public and private entities on ensuring they are compliant with removing DEI from its policies, practices and other programs.
Federal Agencies: Guidance and Enforcement Letters from the DOE, HHS and EEOC Guidance from The Department of Education
Guidance by federal agencies regarding DEI has been published since the signing of the EOs. In its initial Dear Colleague Letter issued on February 14, 2025, the Department of Education (DOE) advised educational institutions receiving federal funding to stop using race, color or national origin in decisions related to admissions, hiring, promotions, compensation, financial aid, scholarships, prizes, administrative support, discipline, housing, graduation ceremonies and all aspects of campus life.1 Additionally, the DOE advised that institutions are prohibited from using non-racial information (such as personal essays) as a proxy for race when making decisions.2 For example, the DOE asserts that using a students’ personal essays or other materials to determine a student’s race would constitute the misuse of non-racial information when used to make decisions about the student’s admission or status.3 To further clarify its guidance, the DOE shared a frequently-asked-questions (FAQs)4 document stating that “race cannot be used as a proxy for socioeconomic disadvantage.”5
The DOE emphasized that simply using terms like “diversity,” “equity” or “inclusion” is not enough to determine whether a program or policy violates federal law. The DOE’s Office for Civil Rights (OCR) will review additional materials for more subtle forms of discrimination. The DOE has stated that institutions failing to comply may face the potential loss of federal funding.6 The department has set up a new website where private individuals can report a school or school district for discriminatory practices.
On March 14, 2025, the DOE and the OCR published a press release that it has launched Title VI and Title IX investigations into 52 universities in 41 states in order to “reorient civil rights enforcement to ensure all students are protected from illegal discrimination.” The departments are looking into the universities’ race-based practices in their graduate and scholarship programs.
Pushback Against DOE’s Dear Colleague Letter
In response to the DOE’s Dear Colleague Letter, 14 state Attorneys General issued guidance7 on March 5, 2025 setting out their position that the EOs and the DOE’s guidance do not change current laws. These Attorneys General argued that the DOE misinterprets the SFFA ruling, and that while schools cannot use race as a factor in admissions, they can still evaluate applicants who discuss how race has influenced their lives—provided the mention of race ties back to “that student’s courage and determination.”8 In essence, these Attorneys General advise that schools cannot factor race into admissions decisions but may “consider the ways… race affected a particular student’s life.”9
HHS Investigates Alleged Discrimination in Medical School and Health Care Workforce Training Programs
On March 7, 2025, the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) announced it is investigating four medical schools and hospitals that may be operating programs for education, training, or scholarships that discriminate based on race, color, national origin or sex. These investigations align with President Trump’s Executive Order 14173. The stated focus is on ensuring that healthcare professionals and students are not excluded from opportunities based on these factors. OCR’s actions are intended to enforce the Trump Administration’s position that DEI Programs violate civil rights laws under Title VI of the Civil Rights Act of 1964 and Section 1557 of the Affordable Care Act.
EEOC Requesting DEI-Related Employment Practices of 20 National Law Firms
On March 17, 2025, based on publicly available information, Equal Employment Opportunity Commission (EEOC) Acting Chair Andrea Lucas sent letters to 20 law firms requesting each firm’s employment practices with respect to using DEI or other employment programs that would violate Title VII of the Civil Rights Act of 1964. These firms are asked to create spreadsheets with personal information of each applicant for its diversity internship, fellowship and scholarship programs. The data points include the name, race, sex and GPA of the applicants. If the applicants were selected for these programs, the EEOC asks for the applicants’ compensation during the program, whether they received a full-time associate attorney position, and whether they received additional funds. Additionally, the letters requested similar data in relation to the firm’s compensation and partnership decisions, and whether any DEI or diversity considerations (ex. participation in firm-sponsored or third-party affinity group) play a role in such decisions. The information requested dates as far back as 2015.
What Does This Mean for Organizations and Employers?
Given the rapidity with which new orders, guidance, and judicial decisions are being issued, it is important for organizations and employers to stay as current as possible on legal developments.
All organizations and employers, but particularly grant recipients and federal contractors, should consider reviewing any DEI-related documents, policies, programs, initiatives, affirmative action plans, etc. for potential issues. This may include going beyond the obvious, and evaluating scholarship programs, hiring policies and processes, onboarding and application documents, marketing materials, governing documents, trainings, compensation and performance materials, equity language, mission and vision statements, internship programs and website language.
Organizations and employers may also want to review their workplace facility and pronoun usage policies. These policies and initiatives should apply equally to be lawful. In addition, organizations and employers may want to do department level reviews to ensure all DEI-related documents and materials are properly evaluated.
Finally, federal contractors do have a deadline by which to comply with Executive Order 14173. Thus, they likely will want to put additional resources to this task in the short-term. Other employers should begin evaluating these documents and be ready to show good faith efforts in case of questions from employees or governmental agencies.
[1] Craig Trainor, United States Department of Education (Feb. 14, 2025), https://www.ed.gov/media/document/dear-colleague-letter-sffa-v-harvard-109506.pdf.
[2] Id. at 3.
[3] Id. at 2.
[4] Press Release, U.S. Department of Education, U.S. Department of Education Releases Frequently Asked Questions on Dear Colleague Letter About Racial Preferencing (Mar. 1, 2025), https://www.ed.gov/about/news/press-release/us-department-of-education-releases-frequently-asked-questions-dear-colleague-letter-about-racial-preferencing.
[5] United States Department of Education (Feb. 28, 2025), https://www.ed.gov/media/document/frequently-asked-questions-about-racial-preferences-and-stereotypes-under-title-vi-of-civil-rights-act-109530.pdf.
[6] Craig Trainor at 4.
[7] The Attorneys General of Illinois, Massachusetts, New York, California, Connecticut, Delaware, Maine, Maryland, Minnesota, New Jersey, Nevada, Oregon, Rhode Island, Vermont, and the District of Columbia, Office of the New York State Attorney General (Mar. 5, 2025), https://ag.ny.gov/sites/default/files/publications/joint-guidance-re-school-programs-guidance-2025.pdf.
[8] Id. at 2 n.7.
[9] Id. at 2.
Federal Agencies Target Universities Amid Antisemitism Allegations
The federal government recently revoked all grants and contracts with Columbia University, citing “illegal protests” and antisemitism on campus. The U.S. Department of Education’s Office for Civil Rights also sent letters to sixty universities, warning them of potential enforcement actions if they do not sufficiently protect Jewish students from harassment and discrimination.
Quick Hits
The Trump administration recently withdrew all contracts and grants with Columbia University in response to the anti-Israel or pro-Palestinian protests and allegations of harassment against Jewish students that occurred there in 2024.
The Department of Education sent letters to alert sixty other universities that they could face enforcement actions if they fail to protect Jewish students from harassment and discrimination.
The federal government has a new Joint Task Force to Combat Anti-Semitism.
On March 7, 2025, the U.S. Department of Justice (DOJ), U.S. Department of Health and Human Services (HHS), U.S. Department of Education, and the U.S. General Services Administration (GSA) announced they were canceling $400 million worth of federal grants and contracts with Columbia University in New York City. The agencies, as part of the new Joint Task Force to Combat Anti-Semitism, cited “illegal protests” and “the school’s continued inaction in the face of persistent harassment of Jewish students.”
The Trump administration and its Joint Task Force to Combat Antisemitism are targeting colleges that have seen pro-Palestinian or anti-Israel protests on their campuses, protests that the administration is interpreting to be antisemitic and ‘illegal’ according to the recent letters and the prior EO.”
Many universities, including Columbia, experienced protests by students and staff in 2023 and 2024, following the October 7, 2023, Hamas attack against Israel and the subsequent ongoing war between Israel and Hamas.
On January 29, 2025, President Donald Trump released an executive order titled “Additional Measures to Combat Anti-Semitism.” The order directed federal agencies to report on complaints “against or involving institutions of higher education alleging civil-rights violations related to or arising from post-October 7, 2023, campus anti-Semitism.” It ordered agencies to identify all civil and criminal authorities or actions within their jurisdiction that might be used to curb antisemitism.
On March 3, 2025, the U.S. Equal Employment Opportunity Commission (EEOC) issued a statement indicating a new policy priority to combat antisemitism in higher education. EEOC Acting Chair Andrea Lucas said, “[U]niversities are workplaces, too, and large-scale employers. In addition to Jewish professors on campus, universities employ Jewish staff who work a variety of jobs, all of whom have the right not to be discriminated against or harassed on the basis of religion, national origin, or race.”
On March 10, the Department of Education sent letters to sixty universities across the country, warning of potential enforcement actions if they don’t protect Jewish students from harassment and discrimination.
Title VII of the Civil Rights Act of 1964 prohibits workplace harassment and discrimination based on religion and national origin, which includes having Jewish ancestry.
Federal Law on Protests
Under the First Amendment of the U.S. Constitution, individuals have the right to peacefully protest in public spaces. Protesting violates the law if it becomes violent, incites immediate violence, or lacks a permit required for the space.
In 2024, although many protesters were peaceful, some campus protests led to violence and property damage, which resulted in arrests.
Next Steps
Universities and colleges may wish to inventory all federal contracts and grants they currently have to better understand their scope. They may wish to carefully document their policies and practices intended to prevent harassment and discrimination based on religion and national origin. They can update their employee handbooks and employee training to specifically prohibit anti-Jewish harassment and discrimination in the workplace.
The EEOC has released a poster that explains workers’ rights if they experience antisemitism at work.
Significant Workforce Reductions at the U.S. Department of Education and Their Potential Implications
On March 11, 2025, the U.S. Department of Education announced that it would initiate a reduction in force (RIF), affecting nearly 50 percent of its workforce. Staff are being placed on administrative leave starting March 21, 2025, with an expectation that the entire workforce will be reduced from 4,133 workers to roughly 2,183. The RIF is part of President Donald Trump’s Workforce Optimization Initiative.
Quick Hits
The Department of Education announced a RIF for nearly 50 percent of its workforce.
Impacted staff will be placed on administrative leave starting March 21, 2025.
Affected employees will receive full pay and benefits until June 9, 2025.
Employees are not expected to work during the deferred resignation, voluntary buyout, or RIF periods.
The impact of the RIF on the overall operations and responsibilities of the department is unclear and potentially far-reaching.
The Department of Education was established in 1979 with the primary responsibility for administering federal elementary, secondary, and postsecondary education programs. The RIF will impact employees across all divisions within the department, including those in formula funding, student loans, Pell Grants, funding for special needs students, and competitive grantmaking.
The department has pledged to fulfill its obligations under all statutory programs despite an anticipated 50 percent reduction in personnel by early June 2025. It is not known how the RIF will affect the department’s overall operations and responsibilities including compliance with the Clery Act, Title IX of the Education Amendments of 1972, Campus SaVE, and other student safety measures such as the Bipartisan Safer Communities Act and the Emergency Management for Higher Education grant program.
The RIF impact is similarly unclear with regard to the Office of Safe and Drug-Free Schools, the Readiness and Emergency Management for Schools Technical Assistance Center, the Family Policy Compliance Office—which oversees student and parental privacy rights and protections under the Family Educational Rights and Privacy Act (FERPA)—and the Protection of Pupil Rights Amendment (PPRA), which allows parents to limit collection of student data, including data about religious practices or beliefs, political affiliation, and the student’s or family members’ mental or psychological problems. The department has committed to continue all statutory programs that fall under its purview, such as formula funding, student loans, Pell Grants, funding for special needs students, and competitive grantmaking.
The RIF is the result of several directives issued by President Trump during the first week of his administration. According to a March 11, 2025, press release, the department will place 1,550 impacted staff on administrative leave beginning March 21, 2025, providing them with full pay and benefits until June 9, 2025, and severance pay or retirement benefits ranging from $10,000 to $25,000 based on their length of service. Earlier rounds offered voluntary separation options under the federal government’s Voluntary Separation Incentive Payment (VSIP) and Voluntary Early Retirement Authority (VERA) programs. These programs are authorized by the Office of Personnel Management (OPM) and the Office of Management and Budget (OMB) and allow agencies to offer lump-sum payments or early retirement to employees who are in surplus positions or have skills that are no longer needed in the workforce. The programs are intended to minimize or avoid involuntary separations through the use of RIFs.
The department offered VSIP and VERA opportunities to its employees between January 28 and March 7, 2025, allowing employees to retain all pay and benefits regardless of their daily workload and to be exempted from in-person work requirements (and working) until September 30, 2025, or earlier if they chose to accelerate their resignation. According to frequently asked questions (FAQs) guidance regarding the RIF, employees are not expected to work during the deferred resignation period. They are allowed to get a second job in the private sector and are even encouraged to do so. The FAQs read in part, “We encourage you to find a job in the private sector as soon as you would like to do so. The way to greater American prosperity is encouraging people to move from lower productivity jobs in the public sector to higher productivity jobs in the private sector.” Additionally, the FAQs state that employees are welcome to take an extended vacation while on administrative leave, reading, “You are most welcome to stay at home and relax or to travel to your dream destination. Whatever you would like.” According to its March 11, 2025, press release, nearly 600 of the department’s employees accepted voluntary resignation opportunities and retirement, including:
259 employees who accepted the Deferred Resignation Program
313 employees who accepted the Voluntary Separation Incentive Payment
The employees affected by the RIF come from various departments and units, including those involved in policy-making, senior career executives, and other positions identified for reduction.
The remaining employees impacted by the RIF will be notified by March 18, 2025, and will be placed on administrative leave until their separation date. The department has committed to provide counseling, information, and assistance on their rights and benefits, as well as resources for finding alternative employment or training opportunities.
Key Takeaways
The RIF impact on the department’s ability to deliver on statutory programs, including formula funding, student loans, Pell Grants, special needs student funding, and competitive grantmaking are areas to watch. How the elimination and reorganization of divisions within the department affect services to students, parents, educators, and taxpayers, and other outcomes and challenges will be evaluated and a comprehensive report including the results of the president’s Workforce Optimization Initiative is scheduled to be submitted to the White House on October 8, 2025. This will include workforce reductions, hiring ratios, and large-scale RIFs across various agencies.
In addition, on March 13, 2025, twenty states and the District of Columbia sued the Department of Education and its officials for implementing the RIF. 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 half violates separation of powers and the Administrative Procedure Act (APA). The plaintiffs allege that the RIF is part of an unlawful attempt to dismantle the department and override statutes that create and govern the department’s functions. The complaint seeks declaratory and injunctive relief against the actions taken by the department and its leadership, including an injunction preliminarily and permanently enjoining the defendants from implementing the president’s directive, including the reduction in force.
China Remains Top Source of Patent Cooperation Treaty (PCT) Applications in 2024
According to data released by the World Intellectual Property Organization (WIPO) on March 17, 2025, China remained the top source of PCT applications in 2024. Reversing a slight decrease in Chinese-originated PCT filings in 2023, China’s PCT filings increased to 70,160 applications up almost 1% on 2023. The United States follows China with 54,087 applications in 2024 – the third consecutive decline.
International patent applications by origin.
Huawei Technologies was the top PCT filer in 2024, with 6,600 published applications, followed by Samsung Electronics (Republic of Korea, 4,640 applications), Qualcomm (US, 3,848), LG Electronics (Republic of Korea, 2,083) and Contemporary Amperex Technology (China, 1,993). Other top Chinese filers include BOE Technology Group Co., Ltd., ranked sixth with 1,959 applications and Beijing Xiaomi Mobile Software Co., Ltd., ranked eighth with 1,889 applications.
Top PCT applicants
China’s education institutions also placed highly. Top Chinese universities include Tsinghua University, ranked third among educational institutions with 188 applications and Zhejiang University ranked fourth among educational institutions with 175 applications.
Top PCT applicants by educational institution
The full data set is available here.
ICE Enforcement Actions on Campus
Among the many changes imposed by the new Trump administration, colleges and universities can add one more possible scenario to their list; federal agents appearing on campus to conduct immigration enforcement activities. On January 21, the U.S. Department of Homeland Security (“DHS”) rescinded Biden-era guidance designating colleges and universities as “protected areas” for purposes of immigration enforcement and have conducted at least one arrest on university property.
Immigration enforcement is generally governmental agency activity conducted by the U.S. Immigrations and Customs Enforcement (“ICE”), and their actions may include surveillance, interviews, searches, unexpected visits, identify and arrest actions, and arrests. While immigration activities were limited on or near colleges campuses and other protected areas – such as schools, medical centers, and social services centers – by the previous administration, they are no longer constrained to avoid enforcement in certain areas[1] under the current administration. Thus, university counsel and campus law enforcement should be prepared for these activities to occur on campus.
University counsel and campus law enforcement must know – and advise their campus communities – that federal law prohibits interfering with ICE campus related activity and operations. Universities and officers must comply with requests and inquiries related to criminal matters and certain legally authorized court issued process and warrants, and individuals and/or institutions cannot delay, obstruct, impede, or otherwise actively interfere with federal immigration enforcement operations. Any conduct that negatively impacts ICE operations that amounts to obstruction is illegal, and could expose college and university staff and employees, including faculty and students to federal legal liability.
However, state law also applies to the aforementioned government activity. In Massachusetts, for example, campus law enforcement are prohibited from detaining an individual based on civil immigration process or solely on ICE or a designee’s request. Other states may have other laws that apply to campus law enforcement’s interaction with ICE: for advice specific to your state, contact your Hunton lawyer.
University counsel and campus law enforcement may be exposed to DHS and ICE’s enforcement actions on campus in various circumstances. ICE agents may appear with a court-issued judicial search warrant, administrative warrant, or in an investigative capacity with or without a warrant or advance notice. Immigration officers may also continue to be present on campus for regulatory enforcement site visits or to attempt to meet students who are on F-1, J-1, or other similar visas. In addition, many universities and colleges sponsor employees for H-1B visas and permanent residence. Because USCIS still conducts site visits to H-1B sponsors, school officials need to be aware that these may increase and they should be prepared for such visits.
Hunton labor and immigration attorneys offer advice, counsel and training to campus law enforcement, staff and counsel to know their rights and obligations, and help prepare them for the possibility of government action. Please call your Hunton lawyer to learn more.
[1] Enforcement at or near houses of worship is still limited by court order.
New York Attorney General Reaches $650,000 Settlement with Student Social Networking App Developer Over Privacy Violations
On March 7, 2025, New York Attorney (“NY AG”) General Letitia James announced a $650,000 settlement with Saturn Technologies Inc. (“Saturn”), the developer of the Saturn App, a social networking app geared towards high school students and built around customized school calendars.
In its action against Saturn, the NY AG alleged that the company promised at various times between 2018 and August 2023 to verify users’ school email credentials to ensure (1) that the Saturn App did not allow non-students to join and (2) only users from the same school could interact with each other on the app. The NY AG alleged that, in contrast to these promises, Saturn stopped authenticating high school email credentials in 2021, thereby permitting users from different high schools to message each other and allowing “unverified” non-students to join with almost complete access to all Saturn App features. The NY AG alleged that these practices violated New York Executive Law § 63(12), which prohibits engaging in repeated fraudulent acts in the carrying on, conducting, or transaction of business. The NY AG also alleged that Saturn engaged in deceptive trade practices, violating both New York General Business Law § 349 and Section 5 of the FTC Act.
The AG’s investigation also determined that Saturn:
Did not screen out new users based on birth date to determine they were high-school aged until August 2023, and continues to not screen out fraudulent users based on location.
Copied users’ contact books (with names, personal phone numbers, and other contact information) and continued using the information even when users updated their settings to deny the Saturn App access to their contacts.
Implemented a “friendship verification” process with security vulnerabilities, which enabled unverified users to continue to access certain personal information of verified Saturn App users.
Promoted the Saturn App through other high school students (“Student Ambassadors”) without disclosing that those students received compensation for completing assigned marketing tasks.
Failed to keep sufficient records regarding data privacy, data permissions, user verification, and user privacy.
Under the terms of the settlement, Saturn must pay $650,000 in penalties and costs, provide users under the age of 18 with enhanced privacy options (including hiding social media links from non-friends for all new users under the age of 18 by default), document all changes related to user privacy policies and procedures, submit its user interface for NY AG approval, and develop a marketing training program.
The settlement agreement also requires Saturn to:
Notify users regarding app verification changes and provide them with options to modify privacy settings.
Prompt all users under 18 to review their privacy settings every six months.
Refrain from making future claims about user safety or verification unless the company has a reasonable basis for making the claim based on competent and reliable scientific evidence.
Limit the information about non-Saturn App-users that can be entered into the App by Saturn App users (i.e., the non-Saturn App user’s class enrollment or event attendance).
Allow teachers to block student names, initials or other personal identifiers from appearing in the Saturn App’s class schedule feature.
Delete retained copies of the phone contact books of certain users.
Hide the personal information of current users under 18 until Saturn Technologies obtains informed consent to the new Saturn App terms.
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.