DEI Task Force Update (January 27, 2025)

Diversity  |  January 27, 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 January 20, President Trump issued an executive order titled “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” which defines “sex” as “an individual’s immutable biological classification as either male or female” and directs federal agencies to “enforce laws governing sex-based rights, protections, opportunities, and accommodations to protect men and women as biologically distinct sexes.” The order also directs federal agencies to ensure that funds awarded via federal grants do not promote “gender ideology,” a term it defines to include “the idea that there is a vast spectrum of genders that are disconnected from one’s sex” and that “replaces the biological category of sex with an ever-shifting concept of self-assessed gender identity.” More information on this executive order can be found in our January 21, 2025 client alert.

Also on January 20, President Trump issued an executive order titled “Ending Radical and Wasteful Government DEI Programs And Preferencing,” which directs the termination of all DEI programs, policies, and activities in the federal government, including for federal contractors and grantees, and directs the termination of “equity-related” grants or contracts. The order also directs agencies to create a list of all federal contractors who have provided DEI trainings to federal employees and federal grant recipients who received grants to “provide or advance DEI, DEIA, or ‘environmental justice’ programs, services, or activities since January 20, 2021.” More information on this executive order can be found in our January 21, 2025 client alert.

On January 21, President Trump issued an executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” The order rescinds several executive actions issued by prior administrations, including Executive Order 11246, which imposed affirmative action obligations on federal contractors in addition to non-discrimination requirements. Federal contracts and grants must now include (1) a clause requiring the recipient to agree that compliance “with applicable Federal anti-discrimination laws” is a “material” term of the contract or grant, and (2) a certification that the contractor or grant recipient “does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.” The order also directs agency heads to submit to the White House within 120 days recommendations for enforcing federal civil-rights laws and encouraging the private sector to end “illegal discrimination and preferences, including DEI.” Agencies must identify “up to nine” large companies or non-profits for “potential civil compliance investigations.” More information on this executive order can be found in our January 22, 2025 client alert.

Also on January 21, President Trump issued an Executive Order titled “Keeping Americans Safe in Aviation.” The order directs the Secretary of Transportation and the Federal Aviation Administrator to “immediately return to non-discriminatory” and “merit-based hiring.” The order rescinds any previous DEI initiatives by the Federal Aviation Administration “in favor of hiring, promoting, and otherwise treating employees on the basis of individual capacity, competence, achievement, and dedication.” The Secretary of Transportation and the Federal Aviation Administrator are instructed to review “past performance and performance standards of all individuals in critical safety positions” and to replace individuals who fall below those standards.

On January 21, President Trump named Commissioner Andrea R. Lucas as Acting Chair of the EEOC. Lucas, previously an attorney at Gibson Dunn, has served as an EEOC Commissioner since 2020. She is the EEOC’s only current Republican appointee. Upon her appointment, Acting Chair Lucas stated, “Consistent with the President’s Executive Orders and priorities, my priorities will include rooting out unlawful DEI-motivated race and sex discrimination; protecting American workers from anti-American national origin discrimination; defending the biological and binary reality of sex and related rights, including women’s rights to single‑sex spaces at work; protecting workers from religious bias and harassment, including antisemitism; and remedying other areas of recent under-enforcement.” In the past three years, Lucas has initiated 38 commissioner charges, more than any other commissioner.

On January 23, Texas Attorney General Ken Paxton and nine other State Attorneys General issued a letter to financial institutions including BlackRock, Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America, and Citigroup, warning that their DEI and ESG commitments could lead to enforcement actions if found to violate legal, contractual, or fiduciary obligations. The Attorneys General stated they would extend to each financial institution “an opportunity to avoid a lengthy enforcement action” by responding to thirty-five questions related to the institutions’ DEI and ESG efforts. The Attorneys General expressed concern that the institutions “appear to have embraced race- and sex-based quotas and to have made business and investment decisions based not on maximizing shareholder and asset value, but in the furtherance of political agendas.”

On January 10, following a four-day bench trial, the U.S. District Court for the Northern District of Texas held that American Airlines violated ERISA by allowing its investment manager, BlackRock, to invest its employees’ 401(k) Plan in environmental, social, and governance (“ESG”) objectives, which the court defined to include companies’ efforts to “promot[e] racial and gender diversity, equity, and inclusion (‘DEI’) programs and hiring practices.” The court made detailed findings of fact about Blackrock’s ESG-related initiatives, American’s corporate ESG goals, and the relationship between the two companies—which the court described as “incestuous,” noting that Blackrock was one of American’s largest investors and had “financed approximately $400 million of American’s corporate debt at a time when American was experiencing financing difficulties.” The court concluded that, due to American’s non-pecuniary interest in ESG and its relationship with BlackRock, the company “failed to loyally investigate BlackRock’s ESG investment activities” and ensure its employees’ 401(k) Plan was invested in a manner that furthered their best financial interests. However, because the court concluded that American acted “according to prevailing industry practices,” it found no violation of the fiduciary duty of prudence occurred. The court requested further briefing on damages and remedies.

Media Coverage and Commentary:

Below is a selection of recent media coverage and commentary on these issues:

  • The New York Times, “The Cheat Sheet on Trump’s First Week” (January 25): Sarah Kessler of The New York Times DealBook writes that “President Trump made it clear his attacks on diversity, equity and inclusion programs won’t be restricted to the federal government,” and that “[i]n general, legal experts consider policies that provide opportunities or benefits to a specific group based on race or gender to be vulnerable” to challenge by the new administration. “Executives are anxious to find out which agencies will conduct investigations and enforcement actions, and what they may do to make examples out of target companies,” said Jason Schwartz, the labor and employment co-chair at Gibson Dunn. According to Kessler, the biggest question in boardrooms is which companies will be the first targets. Schwartz said checking the list of “woke companies” on the website of America First Legal, a Trump-aligned group, might be “a good starting place for hints.” 
  • ABC News: ABC News anchor Linsey Davis interviews Gibson Dunn’s Jason Schwartz about the impact of President Trump’s executive orders. 
  • Bloomberg, “Companies Parse What Makes a DEI Program Illegal Under Trump” (January 23): Clara Hudson, Isabel Gottlieb, and Andrew Ramonas of Bloomberg write that President Trump’s recent executive order targeting DEI “will further galvanize corporate diversity rollbacks” and “accelerate shifts” in how companies address diversity, including by prompting “more businesses to shut down their diversity teams or fold them into other areas of their operations.” Bloomberg reports that these rollbacks had already started, stating that “[w]hile much of corporate America has steadfastly pursued diversity initiatives,” many businesses have altered or eliminated diversity initiatives following “mounting conservative attacks” and the Supreme Court’s SFFA They report that many companies had renamed or rebranded their programs, but that President Trump’s recent order “aims to blunt” that strategy by calling out any diversity program “whether specifically denominated ‘DEI’ or otherwise.” The authors quote Gibson Dunn’s Jason Schwartz, who recommends that companies consider whether they can broaden the eligibility requirements for their DEI initiatives while still meeting program objectives. Schwartz says that corporate “goals remain the same”—to attract “the best talent from the broadest, most robust diverse pipeline.” 
  • The Washington Post, “In first days, Trump deals ‘death blow’ to DEI and affirmative action” (January 23): Julian Mark, Taylor Telford, and Susan Svrluga of The Washington Post report on President Trump’s initial actions, which they describe as seeking to “eviscerate the surviving remnants of affirmative action” and put a “hard stop” to DEI initiatives in the federal government. They report on Trump’s actions in his first week in office, which include “order[ing] U.S.-run diversity offices to close and scores of their workers to [be] put on administrative leave,” and “suspend[ing] dozens of contracting programs aimed at minorities and women.” The article quotes the EEOC’s three Democratic members, who said that President Trump’s rescission of the 1965 executive order directing federal contractors to take “affirmative action” measures has removed “a source of protection” for “millions of Americans.” In reference to President Trump’s direction that the Attorney General and agency heads identify “nine potential civil compliance investigations” of large entities, including publicly traded corporations, large nonprofits, and universities with endowments over $1 billion, the article quotes Gibson Dunn’s Jason Schwartz, who describes the order as a direction to “find nine big whales and make examples of them.” The article also quotes Schwartz’s description of a provision in the order that may have been designed to create a basis for False Claims Act liability: “They are handing out sheriff’s badges to private citizens to sue about government contractor DEI programs,” Schwartz said. The article quotes Noah Feldman, a constitutional law professor at Harvard Law School, who says these actions indicate that President Trump is “testing the boundaries” of the Supreme Court’s affirmative action rulings and attempting to extend their reach from educational institutions into the private sector. According to Ricardo Mimbela, an ACLU spokesperson, the ACLU is “analyzing” the executive orders and assessing how to “protect people’s fundamental rights.”
  • CBS News, “Group of Attorneys General Urge Walmart to Reconsider Ending DEI Initiatives” (January 14): CBS News’s Christian Olaniran reports on the January 9 letter to Walmart CEO Doug McMillon, sent by thirteen Democratic state attorneys general, expressing “concern regarding Walmart’s recent decision to step away from its commitments to diversity, equity, and inclusion.” The letter highlighted the company’s recent decisions to “phase out supplier diversity programs, close down the Center for Racial Equality, end training for staff, and remove the words ‘diversity’ and ‘DEI’ from company documents and employee titles.” The letter acknowledged that corporations have faced “anti-DEI pressure,” but argued that the “decision to jettison DEI initiatives is not required by law” and that companies with diverse leadership “overperform” compared to those without. Olaniran’s reporting also referenced recent changes in DEI policies at other companies, including McDonald’s and Meta.
  • The Washington Post, “Target Becomes Latest Company to Roll Back DEI Programs” (January 24): Hannah Ziegler and Julian Mark of The Washington Post report on Target’s decision to scale back many of its DEI initiatives in the wake of “a tougher legal environment for those programs and new threats from the White House.” In a January 24 press release, the company stated that it intended to make several changes to its policies including, among other things, ending its three-year DEI goals, ceasing to participate in external diversity-focused surveys, ensuring its employee resource groups are open to all; and evolving its supplier diversity efforts. The company stated “[w]e remain focused on driving our business by creating a sense of belonging for our team, guests and communities through a commitment to inclusion.”

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: The docket does not yet reflect that PayPal has been served.
  • Do No Harm v. Pfizer, Inc., No. 23-15 (2nd Cir. 2022): On September 15, 2022, Do No Harm filed suit against Pfizer, alleging that Pfizer’s Breakthrough Fellowship Program unlawfully excludes white and Asian-American applicants on the basis of race in violation of federal and state laws. On December 16, 2022, the U.S. District Court for the Southern District of New York dismissed the case after finding Do No Harm lacked standing to seek a preliminary injunction when it “failed to identify a single injured member by name” who could demonstrate that they were willing and able to apply to the fellowship. On March 6, 2024, a panel of the Second Circuit upheld the dismissal. On March 20, 2024, Do No Harm filed a petition for rehearing.
    • Latest update: On January 10, 2025, the Second Circuit reversed the dismissal of Do No Harm’s lawsuit, concluding “that the district court applied the wrong standard in dismissing” Do No Harm’s case for lack of standing because “[t]he burden for establishing standing at the dismissal stage is lower” than that for a preliminary injunction. The Second Circuit remanded the case to the district court to assess standing “applying the standard applicable at the pleading stage.”
  • Hierholzer v. Guzman, No. 24-1187 (4th Cir. 2025): In January 2023, Marty Hierholzer alleged that the Small Business Administration (SBA) discriminated on the basis of race when it denied his application to SBA’s 8(a) program. Through the 8(a) program, the SBA provides financial assistance to small businesses owned by “socially and economically disadvantaged individuals.” SBA regulations provide a rebuttable presumption of social disadvantage to members of certain racial groups and an opportunity for members of other groups to establish social disadvantage and 8(a) eligibility. Hierholzer is of Scottish and German descent. The U.S. District Court for the Eastern District of Virginia held that Heirholzer’s claims were moot after a separate district court ruling out of Tennessee enjoined the SBA from using the rebuttable presumption standard. The court also found Hierholzer lacked standing because he did not allege 8(a) eligibility and did not sufficiently plead economic or social disadvantage. Heirholzer appealed to the Fourth Circuit.
    • Latest update: On January 3, 2025, the Fourth Circuit held that the district court erred in treating Hierholzer’s claims as moot because the decision enjoining the SBA’s rebuttable presumption “has not resulted in a final judgment.” However, the Court found Hierholzer lacked standing because, even if the presumption were enjoined, Hierholzer failed to plausibly allege that he could satisfy other race neutral eligibility requirements for the program.
  • Brooke Henderson, et al. v. Springfield R-12 School District, et al., No. 23-01374 (8th Cir. 2023): On August 18, 2021, two educators sued a Springfield, Missouri school district alleging that the district’s mandatory equity training violated their First Amendment rights. The educators claimed that the equity training constituted compelled speech, content and viewpoint discrimination, and an unconstitutional condition of employment. The at-issue Fall 2020 equity training included sessions on anti-bias, anti-racism, and white supremacy. On January 12, 2023, the district court granted the defendants’ motion for summary judgment. The plaintiffs appealed the decision to the U.S. Court of Appeals for the Eighth Circuit. Oral argument was held on February 15, 2024. Counsel for the plaintiffs argued that the training compelled educators to engage in political speech, while counsel for the defendants argued that the educators were not compelled because they did not face punishment. On September 13, 2024, a panel of the Eighth Circuit unanimously held that the plaintiffs’ fear of punishment was too speculative to constitute injury under the First Amendment and affirmed the decision below. On November 27, 2024, the Eighth Circuit granted a petition for rehearing en banc.
    • Latestupdate: On January 15, 2025, oral argument was held before the court en banc. Counsel for the plaintiffs argued that the equity training was compelled speech in violation of the First Amendment because silence was not an option—the training required the plaintiffs to take a stand or to face consequences in the form of being labelled unprofessional. Counsel for the defendants argued the plaintiffs would not face punishment if they stayed silent; the point of the training was merely to encourage discussion.
  • American Alliance for Equal Rights v. McDonald’s Corporation et al., No. 3:25-cv-00050 (M.D. Tenn. 2025): On January 12, 2025, the American Alliance for Equal Rights (AAER) filed a complaint against McDonald’s and International Scholarship & Tuition Services, Inc. (ISTS), alleging that they operate a college scholarship program that “discriminates against high-schoolers based on their ethnicity,” in violation of § 1981. AAER alleges that the HACER scholarship program, which ISTS administers on McDonald’s behalf, “is open only to Hispanics.” AAER claims that the program “flatly” bars non-Hispanic students from applying “based on their ethnic heritage” and is therefore unlawful. AAER seeks declaratory and injunctive relief barring consideration of race, ethnicity, ancestry, or nationality in consideration of scholarship applications, as well as a preliminary injunction to stop the program from closing the application window for current applicants on February 6, 2025. Gibson Dunn represents McDonald’s in this action.
    • Latest update: McDonald’s deadline for responding to the motion for preliminary injunction is February 3, 2025.

2. 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 alleges 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. On May 3, 2024, Governor Gianforte moved to dismiss the complaint for lack of subject matter jurisdiction, arguing that Do No Harm lacks standing because Member A has not applied for or been denied any position. Gianforte also argued that the plaintiff’s pre-enforcement challenge was not ripe because his administration does not interpret the statute as a quota. On May 24, 2024, Do No Harm filed an amended complaint, describing additional Members B, C, and D, who are each “qualified, ready, willing, and able to be appointed” to the board. On June 7, Gianforte moved to dismiss the amended complaint, arguing again that the pseudonymous members lacked standing and that the case still was not ripe because the statute imposed only reporting requirements regarding diversity, so it posed no threat to the new members.
    • Latest update: On January 10, 2025, 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.
  • 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 against the law. 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.
    • Latest update: 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.”
  • Simon et al. v. Kay Ivey, et al. 25-cv-00067 (N.D. Al. 2025)On January 14, 2025 three professors and three students within the University of Alabama system and the Alabama NAACP filed a complaint against Alabama Governor Kay Ivey and the University of Alabama Board of Trustees, alleging that Alabama Senate Bill 129, which bans DEI programs at state agencies, local boards of education, and public universities, violates the First and Fourteenth Amendments. The Alabama NAACP alleges that the law “censor[s] dissenting viewpoints” by limiting the teaching of and prohibiting the funding of student groups and school offices associated with “divisive concepts.” SB 129 covers several “divisive topics,” including that race, gender, or identity makes one “inherently superior or inferior,” that moral character is determined by race, color, religion, sex, ethnicity, or national origin, and “that fault, blame, or bias should be assigned to members of a race, color, religion, sex, ethnicity, or national origin, on the basis of race, color, religion, sex, ethnicity.” The plaintiffs allege that SB 129’s limitations constitute viewpoint discrimination in violation of the First Amendment, undercut their right to freedom of association, are void for vagueness, and violate the Equal Protection Clause by intentionally discriminating against Black people, “specifically Black students and Black educators, who are more likely to benefit from discussions on these topics.” Plaintiffs request that the law be declared unconstitutional and both preliminarily and permanently enjoined.
    • Latest update: The docket does not yet reflect that the defendants have been served.
  • National Association of Scholars v. Granholm, No. 25-cv-00077 (W.D. Tex. 2025): On January 16, 2025, the National Association of Scholars—a group of professors, faculty, and researchers at colleges and universities across the United States—sued the United States Department of Energy, alleging that the Department’s Office of Science unlawfully requires research grant applicants to show how they would “promote diversity, equity, and inclusion in research projects” through its Promoting Inclusive and Equitable Research plan. The Association alleges that requiring grant applicants to show how they would promote DEI in their projects violates applicants’ First Amendment rights by requiring them to express ideas with which they disagree, that the Department lacked statutory authority to adopt the plan, and that the plan violates the procedural requirements of the Administrative Procedure Act. The Association seeks declaratory and injunctive relief.
    • Latest update: The docket does not yet reflect that the defendants have been served.

Legislation Updates:

  • On January 23, Congressman Tom Tiffany (R-WI) introduced the Fairness, Anti-Discrimination and Individual Rights Act (H.R. 711), referred to as the “FAIR Act.” If enacted, the bill would prohibit intentional discrimination or preferential treatment on the basis of race, color, or national origin by the federal government or its agents with respect to “[any] Federal contract or subcontract[,] federal employment[,] or any other federally conducted program or activity.” In addition, the bill would prohibit the federal government from encouraging or requiring “preference” on the basis of race, color, or national origin. It defines “preference” to include any advantage such as “a quota, set-aside, numerical goal, timetable, or other numerical objective.” The bill’s prohibitions extend to state and private entities that receive federal aid, including educational institutions that receive federal funding. The bill also calls for an audit of all federal agencies and departments within six months of its enactment to ensure compliance, and it creates a private right of action for individuals who believe they were discriminated against.

The following Gibson Dunn attorneys assisted in preparing this client update: Jason Schwartz, Mylan Denerstein, Blaine Evanson, Molly Senger, Zakiyyah Salim-Williams, Zoë Klein, Cate McCaffrey, Jenna Voronov, Emma Eisendrath, Felicia Reyes, Allonna Nordhavn, Janice Jiang, Laura Wang, Maya Jeyendran, Kristen Durkan, Ashley Wilson, Lauren Meyer, Kameron Mitchell, Chelsea Clayton, Albert Le, Emma Wexler, Heather Skrabak, and Godard Solomon.

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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