IN THIS ISSUE

EXECUTIVE ORDERS & FEDERAL POLICY

State Department Replaces Foreign Service Exam With “Merit-Based” Model, Dropping DEI Elements

• US State Department revamps foreign service test for diplomats

OVERVIEW

On September 5, 2025, the State Department announced that it will replace the Foreign Service Officer Test (FSOT) with a new “merit-based” model that eliminates Diversity, Equity, and Inclusion (DEI) elements previously embedded in the exam. The new format removes the situational judgment section and personal narrative essays, while adding a logical reasoning component alongside revised job knowledge and English comprehension sections. The change applies retroactively, requiring all candidates—including those already in the clearance process or on the hiring register—to retake the exam in its new form, with the first administration scheduled for October 18–25, 2025.

In recent decades, the State Department used the FSOT—particularly the situational judgment and essay sections—to broaden access to candidates with nontraditional backgrounds and to measure qualities such as cross-cultural awareness, adaptability, and ethical reasoning. Officials now assert that the revised exam will prioritize competence and mission fidelity, while critics, including the American Foreign Service Association, warn that the abrupt shift undermines trust, narrows the candidate pool, and risks reducing diversity within the diplomatic corps.

LEGAL INTERPRETATION

The State Department’s retroactive requirement that all candidates retake the exam raises potential challenges under the Administrative Procedure Act (APA), which prohibits agency actions that are arbitrary, capricious, or lacking fair notice. Candidates who had already advanced under prior rules may argue that invalidating their progress denies due process protections.

The revised “merit-based” format may also invite scrutiny under Title VII of the Civil Rights Act if the elimination of situational judgment and essay components produces disparate impact on candidates from underrepresented communities. Even in the absence of discriminatory intent, courts have recognized that employment tests with exclusionary effects can violate federal civil rights law.

Finally, the Foreign Service Act of 1980 requires substantial participation of women and underrepresented communities in the diplomatic corps. Any exam structure that restricts access for these groups risks conflict with this statutory mandate, creating potential tension between executive policy directives and legislative requirements.

BRIDGE POV

The State Department’s decision to replace the Foreign Service exam with a “merit-based” model reflects the administration’s broader effort to remove DEI considerations from federal hiring. For global enterprises, the shift underscores how quickly long-standing workforce pipelines can be restructured under political directives.

While attempts to undermine the statutory protections of Title VII and the Foreign Service Act persist, those laws remain intact. Executives should recognize that qualities such as adaptability, cross-cultural awareness, and ethical reasoning remain both lawful and business-critical, even as federal policy pivots in the opposite direction.

ACTIONABLE STRATEGIES

1. Anchor Practices in Established Law: Ensure recruitment, promotion, and assessment models are firmly grounded in Title VII and other enduring civil rights protections. Reinforce that these laws remain intact and provide a clear foundation for inclusive workforce strategies.
    
2. Sustain Pathways for Underrepresented Candidates: Continue building lawful outreach, mentorship, and development programs that expand opportunity for candidates from underrepresented communities. Document business rationales to demonstrate both compliance and value creation.
    
3. Embed Cross-Cultural and Ethical Competencies: Integrate adaptability, cross-cultural awareness, and ethical reasoning into internal evaluation and leadership pipelines. Even as federal standards shift, these qualities remain lawful, essential, and directly tied to global business performance.

COURTS & LITIGATION

Appeals Court Reinstates Ousted FTC Commissioner, Rebuking Trump Administration’s Overreach

• Federal appeals court reinstates FTC member who was fired by Trump  

OVERVIEW

On September 6, 2025, the U.S. Court of Appeals for the D.C. Circuit ruled that the Trump administration unlawfully removed Commissioner Rebecca Slaughter from the Federal Trade Commission (FTC) in April, when the White House cited her DEI-related initiatives as evidence of “mismanagement.”

The court reinstated Slaughter to her post, holding that the FTC Act’s fixed terms protect commissioners from at-will dismissal absent cause. The decision restores a Democratic commissioner to the agency, rebalancing a Commission that had tilted Republican after her removal. It also marks the first appellate-level rebuke of the administration’s efforts to remove independent agency officials based on ideological disagreements.

LEGAL INTERPRETATION

The D.C. Circuit’s reinstatement of Commissioner Slaughter reinforces long-standing precedent under Humphrey’s Executor v. United States (1935), which held that Congress may insulate members of independent agencies like the FTC from removal except for cause. By ruling that Trump’s dismissal lacked the statutory justification required under the FTC Act, the court reaffirmed the constitutional limits on executive authority over independent commissions.

The decision is significant because it rejects the administration’s argument that policy disagreements or perceived mismanagement tied to DEI initiatives constitute “cause” for removal. If upheld, it will constrain efforts to reshape independent regulatory bodies through partisan removals, preserving structural checks on executive power.

Although the Supreme Court has issued an administrative stay pending appeal, the D.C. Circuit’s ruling signals strong judicial skepticism toward attempts to expand presidential removal power beyond established statutory boundaries.

BRIDGE POV

The D.C. Circuit’s decision to reinstate Commissioner Slaughter underscores the enduring independence of regulatory bodies, even amid heightened political pressure. For corporate leaders, the ruling is a reminder that agencies such as the FTC operate under statutory protections that insulate commissioners from partisan removal. 
 

While the Supreme Court stay creates short-term uncertainty, the appellate rebuke signals judicial resistance to executive overreach and highlights the continued role of independent agencies in shaping competition, consumer protection, and workplace standards.

Executives should expect agency enforcement priorities to remain durable—even when targeted for ideological reasons.

ACTIONABLE STRATEGIES

1. Factor in Regulatory Continuity: Plan for stability in agency oversight, even amid political turnover. Independent commissions remain empowered to enforce statutory mandates, making regulatory compliance a consistent expectation regardless of shifting administrations.
    
2. Scenario Plan Around Enforcement Priorities: Monitor how restored leadership influences agency agendas, particularly in areas such as antitrust, consumer protection, and workplace inclusion. Build readiness for potential shifts in investigations or enforcement focus.
    
3. Reinforce Governance Resilience: Communicate internally and externally that regulatory frameworks are not subject to unilateral political change. Position your organization to align with statutory obligations and agency guidance, which remain the controlling force despite ideological disputes.

EDUCATION & ADMISSIONS

HBCUs Thrive as Elite Colleges Falter Under DEI Backlash

• In a Trump era, Black students flock to HBCUs, ‘where their history isn’t being erased’, says Spelman College president

OVERVIEW

Dr. Beverly Daniel Tatum, former president of Spelman College, has observed a marked shift in student preferences as DEI programs face political backlash. Many Black students are leaving elite universities perceived as compromised by federal funding freezes and ideological pressure, instead enrolling in historically Black colleges and universities (HBCUs) that provide cultural affirmation and community.

While HBCUs are experiencing record enrollment and renewed visibility, Tatum cautions that they continue to struggle with limited resources and financial hardship. The contrast is stark: as institutions that scale back DEI lose student interest and face reputational risk, HBCUs are navigating both heightened demand and persistent underinvestment.

LEGAL INTERPRETATION

Dr. Tatum’s reflections underscore a widening legal paradox. Title VI of the Civil Rights Act prohibits discrimination in federally funded institutions, yet the administration has increasingly wielded Title VI to pressure elite universities into dismantling DEI infrastructure under threat of funding loss. This approach reorients the statute from a safeguard against discrimination into a tool for restricting equity initiatives—an interpretation that diverges from its long-standing purpose.

By contrast, HBCUs—founded to provide access in the face of systemic exclusion—are experiencing record enrollment while remaining relatively insulated. Because their missions are rooted in institutional identity rather than discretionary DEI “programming,” they have not triggered the same scrutiny, despite serving underrepresented populations.

Whether the administration’s reinterpretation of Title VI can withstand judicial review remains unresolved. Future litigation will determine if the administration’s enforcement posture is a lawful extension of federal authority—or an unlawful distortion of civil rights law.

BRIDGE POV

The contrast between elite universities retreating under political pressure and HBCUs rising in visibility highlights a profound shift in higher education. For executives, the signal is twofold: first, enforcement actions tied to Title VI are reshaping how mainstream institutions approach equity, constraining programs once considered best practice. Second, HBCUs—despite chronic underinvestment—are emerging as critical sources of talent, innovation, and leadership development.

This divergence matters for business strategy. As elite institutions scale back equity commitments, the graduates they produce may have less exposure to cross-cultural competencies and inclusive leadership training. At the same time, HBCUs are expanding their role as engines of upward mobility and talent formation, even while navigating limited resources. 

For companies committed to long-term competitiveness, investing in partnerships that reinforce equity across the higher education ecosystem is both a compliance safeguard and a business imperative.

ACTIONABLE STRATEGIES

1. Strengthen Partnerships with HBCUs: Deepen recruiting pipelines, research collaborations, and leadership programs with HBCUs. These institutions are gaining enrollment momentum and can serve as resilient partners for accessing diverse, high-performing talent.
    
2. Assess Exposure to Title VI Enforcement: Review any university partnerships or sponsorships for compliance risk. Institutions scaling back DEI under federal pressure may shift their programming or admissions approaches in ways that affect talent pipelines and reputational alignment.
    
3. Reinforce Internal Equity Practices: Maintain robust inclusion strategies within your organization, grounded in Title VI and Title VII compliance. Where external partners face volatility, internal consistency in inclusion practices signals stability to employees, investors, and stakeholders.