DEI Task Force Update (March 5, 2025)
Diversity | March 5, 2025
Gibson Dunn’s Workplace DEI Task Force aims to help our clients develop creative, practical, and lawful approaches to accomplish their DEI objectives following the Supreme Court’s decision in SFFA v. Harvard. Prior issues of our DEI Task Force Update can be found in our DEI Resource Center. Should you have questions about developments in this space or about your own DEI programs, please do not hesitate to reach out to any member of our DEI Task Force or the authors of this Update (listed below).
Key Developments:
On February 27, the Federal Communications Commission (FCC) opened an investigation into corporate diversity practices at Verizon. In a letter to Verizon’s CEO Hans Vestberg, FCC Chairman Brendan Carr wrote that he “expected” all companies regulated by the FCC “to end invidious forms of DEI discrimination,” and he was “concerned by the apparent lack of progress” at Verizon to end its DEI programs. In the letter, Carr cited to Verizon’s public facing materials that “show the company’s continued promotion of DEI,” including a company statement regarding its commitment to diversity. Carr also cited materials allegedly obtained by a whistleblower. In a similar letter to Comcast’s CEO, Brian Roberts, Carr wrote “[t]he FCC will be taking fresh action to ensure that every entity the FCC regulates complies with the civil rights protections enshrined in the Communications Act . . . including by shutting down any programs that promote invidious forms of DEI discrimination.”
On February 21, the United States District Court for the District of Maryland preliminarily enjoined enforcement of key aspects of EO 14151 (“Ending Radical and Wasteful Government DEI Programs and Preferencing”) and EO 14173 (“Ending Illegal Discrimination and Restoring Merit-Based Opportunity”). The case is Nat’l Ass’n of Diversity Officers in Higher Educ., et al., v. Donald J. Trump, et al., No. 1:25-cv-00333-ABA, Dkt. 44–45 (D. Md. 2025). Specifically, the court halted enforcement of EO 14173’s requirement that federal contractors and grant recipients certify they do not “operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws” and “agree that [their] compliance in all respects with all applicable federal anti-discrimination laws is material” for purposes of the False Claims Act. The court also enjoined the government from freezing or terminating existing “equity-related” contracts and grants under EO 14151. And while the court did not enjoin the Attorney General from “engaging in investigation” of DEI programs, it enjoined the enforcement provision of EO 14173, including the requirement that the Attorney General take “appropriate measures to encourage the private sector to end illegal discrimination and preferences.”
The injunction only applies to the ten agencies identified as defendants in this complaint, as well as “other persons who are in active concert or participation with Defendants.” On February 27, the plaintiffs filed a motion for clarification as to whether “other persons who are in active concert or participation with Defendants” extends to other non-defendant agencies. The government filed a motion to stay the ruling on February 27, which the court rejected on March 3. The government has also filed a notice of appeal with the Court of Appeals for the Fourth Circuit, and on March 4 filed a motion for stay pending appeal. For more information on this case, please see our February 24, 2025 client alert.
On February 14, America First Legal (AFL) sent a letter to Acting Secretary of Labor Vince Micone and Acting Director of the OFCCP Michael Schloss to “encourage” the U.S. Department of Labor to “immediately exercise” authority to “enforce nondiscrimination provisions of federal regulations” in light of EO 14173, which rescinded prior Executive Order 11246 and takes the position that “race- and sex-based employment practices” including those “under the guise of” DEI, “can violate the civil-rights laws of this Nation.” AFL’s letter states that Acting Secretary Micone has already directed the Department to “[c]ease and desist all investigative and enforcement activity” under the rescinded order, but urges the Department to “go further,” and enforce the “equal opportunity clause” contained in all federal government contracts. AFL urged the Department to use these equal opportunity clauses to initiate enforcement actions against contractors AFL has “identified” as engaged in “prohibited discrimination” based largely on the “contractors’ own public statements.” In an appendix and exhibits attached to the letter, AFL identifies Lyft, Mars, PricewaterhouseCoopers LLP, Twilio Inc., CBS Broadcasting, Meta Platforms, and Northwestern University as entities purportedly engaged in “prohibited discrimination.”
On February 28, the Department of Education published guidance entitled “Frequently Asked Questions About Racial Preferences and Stereotypes Under Title VI of the Civil Rights Act.” The guidance includes fifteen questions and answers addressing a range of issues relating to DEI initiatives in educational institutions. Among other things, the guidance notes that “a school’s responsibility not to discriminate against students applies to the conduct of everyone over whom the school exercises some control,” including third party contractors. It explains that Title VI extends to school procurement policies, including hiring substitute teachers, special education providers, and cafeteria services. It states that application essay prompts that “require applicants to disclose their race” are illegal. And it sets forth a “non-exhaustive list” of evidence that may raise an inference of discriminatory intent, including “(1) whether members of a particular race were treated differently than similarly situated students of other races; (2) the historical background or administrative history of the policy or decision; (3) whether there was a departure from normal procedures in making the policy or decision; (4) whether there was a pattern regarding policies or decisions towards members of a particular race; (5) statistics demonstrating a pattern of the policy or decision having a greater impact on members of a particular race; and (6) whether the school was aware of or could foresee the effect of the policy or decision on members of a particular race.” In response to another frequently asked question on whether Title VI permits schools to teach about race or DEI, the document says that the Department “enforces federal civil rights law consistent with the First Amendment,” and that federal statutes independently “prohibit the Department from exercising control over the content of school curricula.” But the document adds that schools are still prohibited from creating a “racially hostile environment” through the materials they teach, which depends on “the facts and circumstances” of individual cases. The guidance describes materials that characterize students of a certain group as “oppressors” or “deliberately assign[s] them intrinsic guilt based on the actions of their presumed ancestors” as potentially creating a hostile environment if those materials were used at an elementary school, but would be “less likely to create a racially hostile environment” “in a class discussion at a university.” The guidance also described “more extreme practices at a university,” including “privilege walks,” segregated “presentations and discussions with guest speakers,” and “mandating courses, orientation programs, or trainings that are designed to emphasize and focus on racial stereotypes” as “forms of school-on-student harassment that could create a hostile environment under Title VI.”
Media Coverage and Commentary:
Below is a selection of recent media coverage and commentary on these issues:
- Wall Street Journal, “Supreme Court Signals Minority Groups Get No Edge in Bias Suits” (February 26): Wall Street Journal’s Erin Mulvaney and Jess Bravin report on the Supreme Court’s recent oral argument in Ames v. Ohio Department of Youth Services, a case that could make it easier for plaintiffs to bring reverse-discrimination lawsuits. In that case, plaintiff Marlean Ames claims she was denied a promotion and demoted at the Ohio Department of Youth Services because she is heterosexual, while gay employees were promoted to the positions she sought. A federal appeals court in Cincinnati dismissed her lawsuit, finding that she had failed to prove the existence of “background circumstances” suggesting that the employer was hostile towards heterosexual employees, a test not typically applied in cases filed by plaintiffs from underrepresented groups. Federal appeals courts are divided on the question of whether this additional “background circumstances” showing is required in reverse-discrimination cases, with five courts imposing the test and three courts rejecting it. This case is part of a broader debate over reverse discrimination, fueled by growing challenges to DEI programs. In their article, Bravin and Mulvaney cited to research by Gibson Dunn to note that “[l]awsuits alleging that DEI programs discriminate against white people and other members of majority groups are mushrooming.” The authors note that Gibson Dunn’s survey found that 40 such cases were filed between October 2019 and the Supreme Court’s decision in SFFA v. Harvard, but that nearly 100 lawsuits have been filed since, with 60 in 2024 alone. Bravin and Mulvaney further cite legal experts who predict that a ruling in favor of Ames could lead to a further surge in similar claims, intensifying the debate over DEI initiatives in the workplace.
- Reuters, “JPMorgan CEO Jamie Dimon reaffirms DEI commitment despite industry shift, CNBC reports” (February 24): Reuters’ Niket Nishant reports that JPMorgan Chase CEO Jamie Dimon reaffirmed the bank’s commitment to DEI efforts, despite a growing trend of corporate retreat from such initiatives. Dimon confirmed that the bank will continue its outreach to Black, Hispanic, LGBT, veteran, and disabled communities. Nishant reports that, earlier this month, the bank said it expects “to be criticized by activists, politicians and other members of the public” concerning the positions it takes regarding DEI and other public policy issues.
- CNN, “Target is getting hit from all sides on DEI” (February 21): CNN’s Nathaniel Meyersohn reports that Target faces a lawsuit filed by Florida Attorney General James Uthmeier and America First Legal, alleging that the company concealed the financial risks of its DEI initiatives, including its 2023 Pride Month merchandise collection. The lawsuit follows Target’s decision to scale back its DEI policies in response to conservative activist pressure and backlash against its Pride-themed products, particularly “tuck-friendly” swimsuits for transgender customers. Gibson Dunn partner Jason Schwartz commented on the “new and growing trend of using securities lawsuits to attack corporate DEI programs” by “challenging whether risk disclosures were adequate.” Although these lawsuits are difficult to prove, according to Schwartz, “[t]his kind of public-private partnership with state attorneys general will likely pave the way for others to follow.” Meanwhile, Meyersohn reports, Target also has been subjected to “fierce . . . blowback from DEI supporters” and has seen decreased foot traffic in its stores.
Case Updates:
Below is a list of updates in new and pending cases:
1. Contracting claims under Section 1981, the U.S. Constitution, and other statutes:
- Desai v. PayPal, No. 1:25-cv-00033-AT (S.D.N.Y. 2025): On January 2, 2025, Andav Capital and its founder Nisha Desai sued PayPal, alleging that PayPal unlawfully discriminates by administering its investment program for minority-owned businesses in a way that favors Black and Latino applicants. Desai, an Asian-American woman, alleges PayPal violated Section 1981, Title VI, and New York state anti-discrimination law by failing to fully consider her funding application and announcing first-round investments only in companies with “at least one general partner who was black or Latino.” She seeks a declaratory judgment that the investment program is unlawful, an injunction barring PayPal from “knowing or considering race or ethnicity” in administering the program, and damages.
- Latest update: On February 21, the court granted a motion to extend the time to file an answer. PayPal is represented by Gibson Dunn in this matter.
- Kleinschmit v. University of Illinois Chicago, No. 1:25-cv-01400 (N.D. Ill. 2025): On February 10, 2025, a former professor at the University of Illinois Chicago sued the university, alleging that it unlawfully discriminated against white male faculty candidates and discriminated and retaliated against the plaintiff by firing him after he objected to the school’s “racial hiring programs.” The plaintiff raises claims under Sections 1981 and 1983.
- Latest update: The docket does not yet reflect that the defendants have been served.
- Landscape Consultants of Texas, Inc. et al. v. City of Houston, Texas et al., No. 4:23-cv-03516-DH (S.D. Tex. 2023): White-owned landscaping companies challenged the City of Houston’s government contracting set-aside program for “minority business enterprises” under the Fourteenth Amendment and Section 1981. On November 29, 2024, plaintiffs and defendant Midtown Management District filed cross-motions for summary judgment. Midtown Management argued that the plaintiffs failed to show the unconstitutionality of the programs. The City of Houston filed its own motion for summary judgment on November 30, contending that the plaintiffs lack standing and that the programs satisfy the requirements of the Equal Protection Clause.
- Latest update: On February 11, 2025, the court denied all motions for summary judgment in a single page order. Trial is scheduled to commence April 21, 2025.
- Strickland et al. v. United States Department of Agriculture et a.l, No. 2:24-cv-00060-Z (N.D. Tex. 2024): On March 3, 2024, plaintiff farm owners sued the USDA over the administration of financial relief programs that allegedly allocated funds based on race or sex. The plaintiffs alleged that only a limited class of socially disadvantaged farmers, including certain races and women, qualify for funds under these programs. On June 7, 2024, the court granted in part the plaintiff’s motion for a preliminary injunction. The court enjoined the defendants from making payment decisions based directly on race or sex. However, the court allowed defendants to continue to apply their method of appropriating money, if done without regard to the race or sex of the relief recipient.
- Latest update: On February 10, 2025, the parties requested a 30-day stay of proceedings to discuss a resolution following the USDA’s determination to “no longer employ the race- and sex-based ‘socially disadvantaged’ designation” in light of recent Executive Orders. The court granted the request on February 11, 2025.
2. Employment discrimination and related claims:
- Diemert v. City of Seattle, et al., No. 2:22-cv-01640 (W.D. Wash. 2022): On November 16, 2022, the plaintiff, a white male, sued his former employer, the City of Seattle. The plaintiff alleged that the City’s diversity initiatives, which allegedly included mandatory diversity trainings involving critical race theory and encouraging participation in “race-based affinity groups, caucuses, and employee resource groups,” amounted to racial discrimination in violation of Title VII and the Fourteenth Amendment. The plaintiff also alleged that he had been subjected to a hostile work environment. On August 16, 2024, the City filed a motion for summary judgment, arguing that the plaintiff had “resigned voluntarily because he had already moved to Texas and did not wish to return to in-person work.” The City further argued that while it required employees to complete two diversity activities per year, it did not penalize employees who did not fulfill the requirement. On September 7, 2024, the plaintiff filed his opposition to the motion for summary judgment, arguing that he experienced discrimination that the City failed to remediate.
- Latest update: On February 10, 2025, the court granted the City’s motion for summary judgment, holding that a reasonable juror could not find the City’s diversity initiatives created a hostile work environment or that the plaintiff experienced discrimination or retaliation. On February 24, 2025, the plaintiff filed a notice of appeal to the Ninth Circuit.
- EEOC v. Battleground Restaurants, No. 1:24-cv-00792 (M.D.N.C. 2024): On September 25, 2024, the U.S. Equal Employment Opportunity Commission (EEOC) filed a lawsuit against a sports bar chain, Battleground Restaurants, in federal district court in North Carolina. The lawsuit alleges that the chain refused to hire men for its front-of-house positions, such as server or bartender jobs, in violation of Title VII. On November 25, 2024, Battleground Restaurants moved to dismiss or strike an improperly named defendant. Battleground Restaurants argued that the EEOC’s pattern or practice claims are “insufficiently pled, conclusory, and not plausible on their face,” and that the EEOC failed to conduct a “reasonable investigation” or give “adequate notice” to Battleground Restaurants.
- Latest update: On February 24, 2025, the court denied the defendant’s motion to dismiss, finding the EEOC complied with notice requirements, plausibly alleged a pattern or practice of disparate sex discrimination, and can properly include Battleground Restaurants as a defendant.
3. Challenges to statutes, agency rules, and regulatory decisions:
- Chicago Women in Trades v. President Donald J. Trump, et al., No. 1:25-cv-02005 (N.D. Ill. 2025): On February 26, 2025, Chicago Women in Trades (CWIT), a non-profit organization, sued President Trump, challenging Executive Order 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” and Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” CWIT alleges that, because of the orders, its federal grant funding was frozen and although the funding was restored following a temporary restraining order issued in another proceeding, “CWIT’s grants remain under threat of termination.” CWIT claims that these executive orders violate principles of separation of powers, the First and Fifth Amendments, and the Spending Clause of the U.S. Constitution.
- Latest update: The docket does not yet reflect that the defendants have been served.
- Do No Harm v. Edwards, No. 5:24-cv-16-JE-MLH (W.D. La. 2024): On January 4, 2024, Do No Harm sued then-Governor Edwards of Louisiana over a 2018 law requiring a certain number of “minority appointee[s]” to be appointed to the State Board of Medical Examiners. Do No Harm brought the challenge under the Equal Protection Clause and requested a permanent injunction. On February 28, 2024, Governor Edwards answered the complaint, denying all allegations including allegations related to Do No Harm’s standing. On December 20, 2024, Governor Jeff Landry—who replaced Governor Edwards—moved to dismiss for lack of subject matter jurisdiction. He contended that, because he signed a declaration indicating that he does not intend to enforce the challenged law, the plaintiff’s claims are moot. Governor Landry also argued that the suit is barred by sovereign immunity. On January 10, 2025, Do No Harm filed an opposition to the motion to dismiss, asserting that Governor Landry’s declaration did not moot the case because the statute remains on the books and a “future governor will be bound to enforce the racially discriminatory aspects of [the law] regardless of Governor Landry’s declaration.” On January 30, 2025, Do No Harm filed a motion for summary judgment, arguing: (1) Do No Harm has organizational standing, (2) the claim is not moot because all future governors are bound to enforce the law, and (3) the law does not satisfy strict scrutiny.
- Latest update: On February 20, 2025, Governor Landry filed an opposition to the motion for summary judgment, asserting again this his declaration mooted Do No Harm’s claims, and that the suit is barred by sovereign immunity because Governor Landry “lacks a sufficient enforcement connection by reason of his vow to withhold enforcement.”
- Do No Harm v. Cunningham, No. 25-cv-00287 (D. Minn. 2025): On January 24, 2025, Do No Harm sued Brooke Cunningham, Commissioner of the Minnesota Department of Health, challenging a state law that requires the Commissioner to consider race in appointing members to the Minnesota Health Equity Advisory and Leadership Council. Do No Harm alleges that state law requiring that the board include representatives from either “African American and African heritage communities,” “Asian American and Pacific Islander communities,” “Latina/o/x communities,” and “American Indian communities and Tribal governments and nations,” violates the Fourteenth Amendment. Plaintiffs seek a permanent injunction and declaratory relief.
- Latest update: On February 20, 2025, Cunningham answered the complaint, denying all allegations related to the violation of the plaintiff’s constitutional rights. She asserted five affirmative defenses: (1) the complaint fails to state a claim; (2) the plaintiff lacks standing; (3) the claims are unripe, (4) the plaintiff has suffered no harm or damages as a result of the Defendant, and (5) the claims are barred by sovereign immunity.
- Doe 1 v. Office of the Director of Nat’l Intel., No. 1:25-cv-00300 (E.D. Va. 2025): On February 17, eleven unnamed employees of the Office of the Director of National Intelligence and the Central Intelligence Agency sued their employers after they were put on administrative leave from their DEI-related positions. They assert that the decision to put and leave them on administrative leave violates the Administrative Leave Act, the Administrative Procedure Act, and the First and Fifth Amendments of the U.S. Constitution. On February 17, plaintiffs moved for a temporary restraining order on February 17. The court then entered an administrative stay to allow additional briefing on the motion. On February 24, plaintiffs filed an amended complaint adding eight new unnamed plaintiffs to the case.
- Latest update: The court held a hearing on plaintiffs’ motion for a temporary restraining order on February 27. That same day, the court denied the motion in a single page order and lifted the administrative stay.
- Nat’l Urban League et al., v. President Donald J. Trump, et al., No. 1:25-cv-00471 (D.D.C. 2025): On February 19, the National Urban League, the National Fair Housing Alliance, and the AIDS Foundation of Chicago filed a complaint against the Trump Administration, alleging that the President’s recent Executive Orders targeting DEI (EO 14151, EO 14168, and EO 14173) infringe on the organizations’ rights to free speech and due process by penalizing them for “expressing viewpoints in support of DEIA and transgender people.” The organizations allege that orders are “extraordinarily vague” because they “equate banned ‘DEIA’ with any equity-related work,” which could include work authorized by civil rights law. The plaintiffs allege that the Executive Orders attempt to “chill and censor their speech,” as well as “intimidate, threaten, and ultimately stop Plaintiffs from performing services central to their missions.” The complaint also alleges that the Executive Orders have a clear discriminatory purpose: “to malign the targeted communities,” including people of color, LGBTQ people, and people with disabilities. Plaintiffs seek declaratory relief and a permanent injunction barring enforcement and implementation, including a court order that all agency-wide directives implementing the Executive Orders be permanently rescinded. Plaintiffs filed a motion for a preliminary injunction on February 28.
- Latest update: Defendants’ opposition to the preliminary injunction order is due March 12.
- San Francisco AIDS Foundation et al. v. Donald J. Trump et al., No. 3:25-cv-01824 (N.D. Cal. 2025): On February 20, several LGBTQ+ groups filed suit against President Trump, Attorney General Pam Bondi, and several other government agencies and actors, challenging the President’s recent Executive Orders targeting DEI (EO 14151, EO 14168, and EO 14173). The complaint alleges that these EOs are unconstitutional on several grounds, including the Equal Protection Clause of the Fifth Amendment, the Due Process Clause of the Fifth Amendment, and the Free Speech Clause of the First Amendment. It also argues the EOs are ultra vires and exceed the authority of the presidency. Plaintiffs seek preliminary and permanent injunctive relief.
- Latest update: On March 3, plaintiffs filed a motion for preliminary injunction.
4. Board of director or stockholder actions:
- Craig v. Target Corp., No. 2:23-cv-00599-JLB-KCD (M.D. Fla. 2023): America First Legal sued Target and certain Target officers on behalf of a shareholder, claiming the board falsely represented that it monitored social and political risk, when instead it allegedly focused only on risks associated with not achieving ESG and DEI goals. The plaintiffs allege that Target’s statements violated Sections 10(b) and 14(a) of the Securities Exchange Act of 1934 and that Target’s May 2023 Pride Month campaign triggered customer backlash and a boycott that depressed Target’s stock price. On December 4, 2024, the district court denied defendant’s motion to dismiss, concluding that the plaintiffs sufficiently pleaded both their Section 10(b) and Section 14(b) claims. On January 6, 2025, the court entered a stay pending mediation between the parties. On January 17, 2025, Target filed a status update regarding the parties’ proposed mediation, asserting that plaintiffs “would only provide dates of availability to mediate if [Target] agreed to do so on a class-wide basis.” In its filing, Target argued that the case is not a class action, the Private Securities Litigation Reform Act prohibits plaintiffs from “purporting to act on behalf of a hypothetical class,” and the law requires “shareholders who file a class action complaint to provide notice to other shareholders” which plaintiffs have not done. Target asked the court to “direct Plaintiffs to provide their availability to mediate” on an individual basis. On January 21, 2025, plaintiffs filed a Response to Target’s Status Update and a Motion to Lift the Stay. Plaintiffs asserted that Target “misrepresent[ed] the dialogue between the parties,” and moved to lift the stay to “enable Plaintiffs to pursue, among other things, (1) amending the complaint to add class allegations; and (2) determining the lead plaintiff under 15 U.S.C. § 78u-4(a)(3).” Plaintiffs asked the court to reopen the action, lift the stay, and cancel the mediation conference. On January 31, 2025, Target filed an opposition to plaintiffs’ motion to lift the stay, asserting that plaintiffs failed to “satisfy the applicable good cause standard for canceling a court-ordered mediation.”
- Latest update: On February 11, 2025, the court denied the motion to lift the stay, stating that it “will entertain briefing on Plaintiffs’ request to amend their Complaint before ruling on whether to lift the stay.”
- State Board of Administration of Florida v. Target, No. 2:25-cv-00135 (M.D. Fla. 2025): On February 20, 2025 the State Board of Administration of Florida sued Target and certain Target officers on behalf of a class of Target stockholders, claiming the Target board of directors represented that it monitored social and political risk, when instead it allegedly focused only on risks associated with not achieving ESG and DEI goals. The plaintiff alleges that Target’s statements violated Sections 10(b),14(a), and 20(a) of the Securities Exchange Act of 1934 and that Target’s May 2023 Pride Month campaign triggered customer backlash and a boycott that depressed Target’s stock price. This suit relates to, and arises out of the same operative facts as, Craig v. Target Corp., No. 2:23-cv-00599-JLB-KCD (M.D. Fla. 2023).
- Latest update: As of this update, the defendant has not yet been served.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s Labor and Employment practice group, or the following practice leaders and authors:
Jason C. Schwartz – Partner & Co-Chair, Labor & Employment Group
Washington, D.C. (+1 202-955-8242, jschwartz@gibsondunn.com)
Katherine V.A. Smith – Partner & Co-Chair, Labor & Employment Group
Los Angeles (+1 213-229-7107, ksmith@gibsondunn.com)
Mylan L. Denerstein – Partner & Co-Chair, Public Policy Group
New York (+1 212-351-3850, mdenerstein@gibsondunn.com)
Zakiyyah T. Salim-Williams – Partner & Chief Diversity Officer
Washington, D.C. (+1 202-955-8503, zswilliams@gibsondunn.com)
Molly T. Senger – Partner, Labor & Employment Group
Washington, D.C. (+1 202-955-8571, msenger@gibsondunn.com)
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