DEI Task Force Update (February 5, 2025)
Diversity | February 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 3, the Mayor and City Council of Baltimore, the National Association of Diversity Officers in Higher Education, the American Association of University Professors, and the Restaurant Opportunities Centers United filed a lawsuit in the District of Maryland challenging two recent anti-DEI executive orders. The complaint raises six constitutional claims, including claims alleging that the orders violate the First Amendment, Due Process Clause, Spending Clause, and separation of powers. The complaint asks for a declaratory judgment that Executive Order 14151 and Executive Order 14173 are unconstitutional, as well as a preliminary injunction enjoining enforcement of these executive orders. The case has been assigned to Judge Adam Abelson.
On January 28, the Acting Chair of the Equal Employment Opportunity Commission (EEOC), Andrea Lucas, announced through an EEOC press release that the “agency is returning to its mission of protecting women from sexual harassment and sex-based discrimination in the workplace by rolling back the Biden administration’s gender identity agenda.” The press release described the actions Lucas has taken to effectuate President Trump’s Executive Order 14168, including removing EEOC employees’ ability to display their pronouns on software applications, ending the use of the “X” gender marker in the EEOC intake process, and removing “materials promoting gender ideology” from the EEOC’s internal and external websites. Lucas also initiated a review of the Commission’s “Know Your Rights” poster, which covered employers must post in their workplaces. The EEOC has not yet rescinded its Enforcement Guidance on Harassment in the Workplace, because a majority vote of the EEOC Commissioners is required to rescind guidance documents. On the same day that these changes were announced, the White House terminated two of the three Democratic Commissioners—former EEOC chair Charlotte Burrows and former EEOC vice chair Jocelyn Samuels. Karla Gilbride, the general counsel for the EEOC, was also terminated. On February 4, President Trump named Andrew Rogers as the acting general counsel for the EEOC. Rogers was previously Chief Counsel and Chief of Staff to acting EEOC Chair Andrea Lucas. Prior to that, Rogers worked in the US Department of Labor’s Wage and Hour Division and in private practice.
On January 28, state financial officials from eighteen states sent a letter to Mark Uyeda, the Acting Chair of the Securities and Exchange Commission, and Vince Micone, the Acting Secretary of Labor, requesting that the Commission and Department of Labor develop rules and guidance prohibiting investment decisions based on ESG or DEI objectives as “inconsistent with fiduciary duties.” The letter discussed “an indisputable trend, among large asset managers, to prioritize political and social agendas over the financial security of hardworking Americans,” and advocated that “[r]etirement security should not be jeopardized in order to facilitate corporate virtue signaling and activist-driven initiatives.”
On January 27, nineteen state Attorneys General, led by Iowa Attorney General Brenna Bird, sent a letter to Costco CEO Ron Vachris, urging Costco to repeal its DEI policies. In the letter, the attorneys general identified recent changes in the DEI policies of other major corporations and noted that companies that have not rolled back their programs have been sued or investigated over their DEI initiatives. The letter instructed Costco to respond within 30 days, “either notify[ing]” the group “that Costco has repealed its DEI policies or explain[ing] why Costco has failed to do so.”
In a January 21 memorandum, the U.S. Office of Personnel Management (OPM) provided guidance to all federal agencies regarding implementation of President Trump’s executive orders including Executive Order 14151 and Executive Order 14148. The memorandum required each agency to send agency-wide notices to all employees informing them that the agencies’ DEI offices would be closed, and “asking employees if they know of any efforts to disguise these programs by using coded or imprecise language.” The memorandum, signed by Acting OPM Director Charles Ezell, stated that failing to report on disguised DEI programs could result in “adverse consequences.” Ezell also ordered all agencies to place their DEI staff on paid leave by 5:00 p.m. on January 22, to take down any outward facing media relating to federal DEI offices, to cancel all DEI-related training, and to terminate relationships with all DEI-related contractors. The memorandum also instructed each agency, by close of business on January 31, to submit a “written plan for executing a reduction-in-force action regarding the employees who work in a DEIA office” and a “list of all contract descriptions or personnel position descriptions that were changed since November 5, 2024 to obscure their connection to DEIA programs.”
On January 20, Reverend Al Sharpton called for a boycott on companies eliminating their DEI programs. During a Washington, D.C.-based ceremony celebrating Martin Luther King, Jr. Day, Sharpton, speaking on behalf of his National Action Network, announced the convening of a council that will “engage in a 90-day study of what companies have given up on DEI and what their margins of profit are” before selecting two companies to “specifically be targeted in the boycott.” Sharpton stated that he will be supporting companies that have “doubled down” on DEI, including leading a “buy-cott” rally at a New Jersey Costco location to show support for companies that are maintaining DEI programs.
Media Coverage and Commentary:
Below is a selection of recent media coverage and commentary on these issues:
- Bloomberg, “Costco Defended Its DEI Policies Now It Should Talk About Them” (February 3): Bloomberg Editorial’s Beth Kowitt reports on the response of Republican attorneys general to Costco’s shareholders rejecting a shareholder proposal that would have compelled reversal of the company’s DEI policies. Kowitt writes that Costco “did a powerful job of making a business case for why its DEI programs are important to the company,” but has failed to articulate what its DEI programs specifically entail, noting the lack of publicly available information on these programs. Kowitt recommends companies be more forthcoming about the details of their DEI initiatives, encouraging companies to “get granular” about what their DEI policies entail. She posits that companies that “vaguely allude to ‘doing DEI’” are much more likely to end up in the crosshairs of the Trump administration than those that make clear their policies comply with federal law. The article also quotes Jason Schwartz, co-chair of the Labor & Employment group at Gibson, Dunn & Crutcher LLP, who argues that, as a general matter, corporate America has not done “a good job at explaining itself and its programs,” and this failure has allowed opponents of DEI to “own[] the public dialogue about [DEI] without any nuance.”
- ModernRetail, “How the Trump Presidency Upended Retailers’ DEI Policy Playbooks” (January 30): Writing for ModernRetail, Mitchell Parton and Allison Smith discuss the rapid shift in corporate DEI initiatives in recent months. They report that in 2020, companies “quickly committed to [DEI] measures,” but that many large companies have rolled back those commitments. Parton and Smith say that many other companies are adjusting the language they use to describe their DEI programs to avoid scrutiny. The authors note that “executives are scrambling to gauge their exposure to legal risks tied to diversity policies.” The article quotes Jason Schwartz of Gibson Dunn, who says phones are “ringing off the hook” with companies who “want to take a fresh look” at their programs in light of President Trump’s recent actions.
- Law360, “Companies Risk White House Wrath By Keeping DEI Programs” (January 24): Law360’s Sarah Jarvis reports on President Trump’s executive orders in his first week in office targeting DEI programs. She notes that while “[m]any companies have retreated from their DEI commitments amid the pointed political landscape,” some major U.S. companies, including Costco, Apple, and Pinterest, “are staying the course with their existing DEI programs and policies.” The article quotes Jason Schwartz of Gibson Dunn, who says companies can take a range of approaches as they determine how to support a “robust pipeline of diverse talent,” but notes that the executive order involving federal contractors, in particular, creates a “massive expansion of potential liability.” Schwartz says that it is difficult to find the line between pursuing legally sound programs and avoiding unnecessary risk “because the law is in flux right now.”
- Bloomberg, “Trump Redefining ‘Sex’ Sets Up Clash Over High Court Protections” (January 23): Bloomberg’s Rebecca Klar and Khorri Atkinson report that President Trump’s day-one executive order requiring the federal government to recognize only two sexes will likely face legal challenges. In the executive order, President Trump called on the Attorney General to “immediately issue guidance to agencies to correct the misapplication of the Supreme Court’s decision in Bostock v. Clayton County,” in which the Supreme Court held that sex discrimination under Title VII included discrimination based on sexual orientation and gender identity. Klar and Atkinson report that “Bostock was the foundation for agency actions like the EEOC’s harassment guidance addressing gender identity protections.” David Lopez, a Rutgers Law School professor and former EEOC general counsel under President Obama, said appellate courts have consistently ruled “with the EEOC position” and that the new executive order is an attempt “to achieve through executive action” what the administration could not previously “achieve in court.” However, at least one federal court has concluded that Bostock does not apply to “workplace policies on bathrooms, dress codes, and locker rooms.” Klar and Atkinson write that they expect litigation over Bostock’s reach and whether it prevents the rollback of gender identity protections the executive order mandates.
- Litigation Daily, “With DEI Rollbacks, Employment Lawyers See Potential for Targeting Corporate Commitment to Equality” (January 23): Writing for Litigation Daily, Charles Toutant discusses how companies’ changes to DEI initiatives may be used against them in court. He reports that the National Institute for Workers’ Rights circulated a memorandum in October 2024 stating that a company’s choice to roll back DEI initiatives could be used against it in a discrimination case. Jason Solomon, director of the National Institute for Workers’ Rights, said that an employee bringing a discrimination lawsuit could use these roll backs as evidence that their employer failed to “use reasonable care” to prevent discrimination. Toutant reports that plaintiff-side employment lawyers believe that discovery into a company’s decisions about DEI programs would be “fair game” in a discrimination lawsuit. Conversely, Jason Schwartz of Gibson Dunn described the concern as “overblown.” Schwartz said that it was a “real stretch” to argue that a revision to DEI policies was evidence of animus or discriminatory intent, noting that he has “no doubt that plaintiffs’ lawyers will make that argument,” but that the argument is not “very compelling.” Schwartz concluded, “[t]here are lots of legitimate concerns that people are raising about the rollback of programs, and obviously they think it needs to be done in a thoughtful way. But the fact that it could evidence discrimination—I’m pretty skeptical [of that].”
Case Updates:
Below is a list of updates in new and pending cases:
1. Employment discrimination and related claims:
- Paul Fowler v. Emory University, No. 1:24-cv-05353 (N.D. Ga. 2024): On November 21, 2024, a former Emory University employee sued the university, alleging that the Vice Provost for Career and Professional Development discriminated against white employees in investigations, discipline, hiring, and promotions. The plaintiff asserts employment discrimination claims arising from “unlawful race, gender, and age discrimination and retaliation” in violation of Title VII, the Age Discrimination in Employment Act, and Section 1981.
- Latest update: On January 21, 2025, Emory University answered the complaint, denying allegations that it engaged in employment discrimination.
2. Board of director or stockholder actions:
- City of Riviera Beach Police Pension Fund v. Target, Corp., et al., No. 2:25-cv-00085 (M.D. Fla.): Institutional investor City of Riviera Beach Police Pension Fund sued Target and certain Target officers on behalf of a class of stockholders, alleging that defendants have defrauded investors by issuing false and misleading statements concerning conduct undertaken to further Target’s ESG and DEI initiatives, causing the company’s stock price to be artificially inflated. The lawsuit brings claims under Sections 10(b), 14(a), and 20(a) of the Securities Exchange Act of 1934
- Latest update: The docket does not indicate that Target has been served yet.
- Craig v. Target Corp., No. 2:23-cv-00599-JLB-KCD (M.D. Fl. 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, in which it asserted 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.
- Latest update: On January 21, 2025, plaintiffs filed a Response to Target’s Status Update and a Motion to Lift the Stay. Plaintiffs assert that Target “misrepresent[ed] the dialogue between the parties,” and they 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.”
3. Actions against educational institutions:
- Chu, et al. v. Rosa, No. 1:24-cv-75 (N.D.N.Y. 2024): On January 17, 2024, a coalition of education groups sued Betty Rosa, Commissioner of Education for the State of New York, alleging that the state’s free summer program discriminates based on race and ethnicity in violation of the Equal Protection Clause of the Fourteenth Amendment. The Science and Technology Entry Program (STEP) permits students who are Black, Hispanic, Native American, and Alaskan Native to apply regardless of their family income level, but all other students, including Asian and white students, must demonstrate “economically disadvantaged status.” On April 19, 2024, Rosa moved to dismiss the amended complaint for lack of subject-matter jurisdiction, arguing that neither the organizational plaintiffs (groups of parents) nor the named plaintiff, also a parent, have suffered any personal or individual injury, and that the plaintiffs cannot sue for alleged violations of members’ rights as prospective STEP applicants. Plaintiffs opposed the motion, arguing that the plaintiffs do not need to apply for the STEP program as a prerequisite for standing because their “injury is the inability to compete on an equal footing,” not whether they can secure a spot in the STEP program. On April 5, 2024, Plaintiffs filed an amended complaint, adding further details regarding organization members and their interests and including that certain students “meet[] the residency and academic requirements” for the program and are “ready and willing to apply.” Rosa moved to dismiss the amended complaint, but the court denied the motion on November 22, 2024. The court ordered Rosa to answer the complaint no later than December 6, 2024, later extending this deadline to January 21, 2025.
- Latest update: On January 21, 2025, Rosa answered the amended complaint, denying allegations of discrimination. She asserted that the plaintiffs lack standing and that the amended complaint failed to state a claim.
4. Challenges to statutes, agency rules, and regulatory decisions:
- Do No Harm v. Gianforte, No. 6:24-cv-00024-BMM-KLD (D. Mont. 2024): On March 12, 2024, Do No Harm filed a complaint on behalf of “Member A,” a white female dermatologist in Montana, alleging that a Montana law requiring the governor to “take positive action to attain gender balance and proportional representation of minorities resident in Montana to the greatest extent possible” when making appointments to the twelve-member Medical Board violates the Equal Protection Clause. Do No Harm alleged that since ten seats are currently held by six women and four men, Montana law requires that the remaining two seats be filled by men, which would preclude Member A from holding the seat. Following Governor Gianforte’s motion to dismiss Magistrate Judge De Soto recommended that the case be dismissed for lack of subject matter jurisdiction. Magistrate Judge De Soto found Do No Harm lacked standing because it did not allege “facts demonstrating that at least one Member is both ‘able and ready’ to apply for a Board seat in the reasonably foreseeable future.” For the same reasons, the Magistrate Judge found the case unripe.
- Latest update: On January 24, 2025, Do No Harm objected to the Magistrate Judge’s findings and recommendations. Do No Harm argues that it has associational standing and that the case is ripe because the organization adequately pleaded “concrete factual allegations regarding the ability and readiness of its members” to apply for board membership, and that its injuries are definite and concrete.
- 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: Do No Harm served defendants on January 30, 2025. Their answer is due February 20, 2025.
- American Alliance for Equal Rights v. Walz, No. 24-cv-1748-PJS-JFD (D. Minn. 2024): On May 15, 2024, AAER filed a complaint against Minnesota Governor Tim Walz, challenging a state law that requires Governor Walz to ensure that five members of the Minnesota Board of Social Work are from a “community of color” or “an underrepresented community.” The fifteen-member Board, comprised of ten professionally licensed social workers and five public member positions, has three currently open seats and will have an additional six open seats in January 2025. AAER claimed that two of its white female members are “qualified, ready, willing and able to be appointed to the board,” but that they will not be given equal consideration. AAER seeks a permanent injunction and a declaration that the law violates the Equal Protection Clause of the Fourteenth Amendment. On January 3, 2025, AAER filed an amended complaint to reflect the fact that they no longer rely on one of their original white female members.
- Latest update: On January 17, 2025, Governor Walz answered the amended complaint, denying the allegations of unlawful discrimination and asserting that the plaintiffs lack standing and failed to state a claim upon which relief can be granted.
- American Alliance For Equal Rights v. Bennett, No. 1:25-cv-00669 (N.D. Ill. 2025): On January 21, 2025, AAER sued the Attorney General of Illinois, the Director of the Illinois Department of Human Rights, and the Secretary of State of Illinois. AAER alleges that an Illinois law requiring “qualifying nonprofits to gather and publicize” certain demographic data online compels organizations to engage in unlawful discrimination. They assert that “[b]y forcing charities to publicize the demographics of their senior leadership, the law pushes them to hire candidates based on race.” AAER also alleges the law violates the First Amendment by compelling organizations “to speak about a host of controversial demographic issues.” AAER seeks a permanent injunction and declaratory relief.
- Latest update: AAER served defendants on January 24, 2025. Their answer is due February 14, 2025.
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, [email protected])
Katherine V.A. Smith – Partner & Co-Chair, Labor & Employment Group
Los Angeles (+1 213-229-7107, [email protected])
Mylan L. Denerstein – Partner & Co-Chair, Public Policy Group
New York (+1 212-351-3850, [email protected])
Zakiyyah T. Salim-Williams – Partner & Chief Diversity Officer
Washington, D.C. (+1 202-955-8503, [email protected])
Molly T. Senger – Partner, Labor & Employment Group
Washington, D.C. (+1 202-955-8571, [email protected])
Blaine H. Evanson – Partner, Appellate & Constitutional Law Group
Orange County (+1 949-451-3805, [email protected])
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