IN THIS ISSUE

EXECUTIVE ORDERS & FEDERAL POLICY

Administration’s “Academic Compact” Attempts to Link Federal Funding to Campus Policies; Newsom Pushes Back

• Trump offers top universities funds if they boost conservative ideas 

 

OVERVIEW
On October 3, 2025, the White House announced a new higher-education policy proposal titled the Academic Compact for Freedom and Fairness in Higher Education. The initiative directs the Departments of Education and Justice to develop mechanisms for conditioning federal research and student-aid funding on compliance with “core constitutional and academic-integrity standards.” Under the proposal, participating colleges and universities would be required to certify that campus policies “protect free expression, prohibit compelled speech or ideological training, and eliminate discriminatory preferential programs.”

 

The White House described the measure as a safeguard against “ideological coercion” and “political indoctrination” on campus. Draft implementation guidance obtained by several higher-education associations suggests that federal agencies may conduct audits of federally funded institutions to assess whether DEI offices, bias-response teams, or curricular requirements “restrict free inquiry or impose political orthodoxy.”

 

California Governor Gavin Newsom denounced the proposal as “an assault on academic freedom and state sovereignty,” declaring that California’s public universities would not alter their equity or inclusion programs. He announced plans to challenge the policy in court, arguing that it exceeds federal authority and violates First Amendment protections. Other state officials and higher-education groups have expressed concern that the proposal blurs the line between legitimate oversight and political control.

 

LEGAL INTERPRETATION

The Academic Compact for Freedom and Fairness in Higher Education raises significant constitutional and statutory questions related to conditional spending, free expression, and equal opportunity law. While framed as a policy proposal, it signals an intent to expand the federal government’s use of funding conditions to influence university governance and campus policy.

 

Under the Spending Clause of the U.S. Constitution, the federal government may attach conditions to the receipt of federal funds if those conditions are clearly stated, related to the purpose of the funding, and are not coercive—a framework articulated in South Dakota v. Dole (1987) and reaffirmed in NFIB v. Sebelius (2012). The Compact’s linkage of research and student-aid funding to institutional policies on expression, hiring, and curriculum would likely be assessed against these standards.

 

The proposal also intersects with the First Amendment, which prohibits government actions that condition public benefits on the adoption or suppression of particular viewpoints. Academic freedom, recognized by the Supreme Court as a core element of expressive liberty, could be implicated if funding eligibility were tied to institutional speech or curricular content.

 

In addition, civil rights statutes such as Title VI and Title VII permit certain voluntary diversity initiatives when narrowly tailored and nondiscriminatory. The Compact’s prohibition on any consideration of race or sex in university policy appears to extend beyond the Supreme Court’s 2023 Students for Fair Admissions v. Harvard decision, which limited but did not eliminate all diversity-related considerations.

 

Taken together, these legal frameworks highlight the complex boundaries between lawful federal oversight and institutional autonomy. California Governor Gavin Newsom’s stated intent to challenge the policy in court will likely test these boundaries, focusing on the limits of federal spending power and state authority over public universities.

 

BRIDGE POV
The Academic Compact underscores a defining question for higher education and, more broadly, for institutions that depend on federal funding: where does oversight end and ideological control begin? Conditioning access to research and student-aid resources on adherence to federally prescribed viewpoints risks transforming lawful accountability into political leverage.

 

This moment reinforces the importance of institutional clarity. Academic freedom and inclusive inquiry are not partisan positions but foundational elements of innovation, competitiveness, and trust. When those principles are constrained, the long-term cost is not merely legal — it is strategic. Institutions that yield to political pressure risk losing the very independence that fuels discovery and credibility.

 

Across sectors, the lesson is consistent: safeguard the integrity of mission, data, and decision-making. Transparency and compliance are essential, but so is the courage to affirm that inclusion and free inquiry are compatible, not contradictory, values.

 

ACTIONABLE STRATEGIES

1. Affirm Institutional Autonomy in Policy and Practice: Reiterate commitments to academic freedom, equity, and evidence-based inquiry as core organizational principles. Clear articulation of mission and governance standards helps insulate institutions from shifting political demands.
    
2. Audit Federal Funding Dependencies: Conduct a comprehensive review of research, aid, and programmatic funding streams to understand exposure to potential conditional spending requirements. Mapping these dependencies enables proactive scenario planning.
    
3. Strengthen Legal and Compliance Alignment: Engage legal counsel and compliance teams to evaluate existing policies for consistency with both constitutional protections and evolving federal guidance. Prepare documentation and training that clarify where compliance ends and compelled conformity begins.

WORKFORCE & EMPLOYMENT

EEOC Abandons Disparate Impact Enforcement

• EEOC ends investigations into disparate impact claims 

 

OVERVIEW

On September 15, 2025, the Equal Employment Opportunity Commission (EEOC) rescinded all policies and guidance related to disparate impact —the framework allowing employees to challenge neutral practices that disproportionately affect protected groups. 

 

On October 1, 2025, the agency announced that it will no longer pursue cases based solely on statistical disparities, shifting its enforcement focus to intentional discrimination. This marks a major break from more than five decades of precedent under Griggs v. Duke Power Co. (1971), which established disparate impact as a valid basis for liability under Title VII of the Civil Rights Act.

 

Civil rights organizations and employment law experts have described the change as one of the most consequential reversals in federal employment policy, noting that it dismantles a primary mechanism for addressing systemic discrimination in hiring, pay, and promotion.

 

As previously covered in Issue 10, on April 23, 2025, President Trump signed Executive Order 14281, titled “Restoring Equality of Opportunity and Meritocracy.” That order directed federal agencies to eliminate the use of disparate impact liability in anti-discrimination enforcement to the maximum extent permitted by law, providing the foundation for this shift.

 

LEGAL INTERPRETATION

The EEOC’s rescission of all disparate impact guidance and enforcement represents a fundamental change in how the agency interprets and enforces Title VII of the Civil Rights Act of 1964. For more than fifty years, the EEOC has relied on the disparate impact framework established in Griggs v. Duke Power Co. (1971), which held that employment practices neutral on their face could still violate Title VII if they disproportionately excluded individuals based on race, color, sex, or national origin and were not job-related or consistent with business necessity.

 

By formally abandoning this theory, the Commission has limited its enforcement authority to cases involving disparate treatment—that is, intentional acts of discrimination. The decision does not change the statutory language of Title VII, but it withdraws the agency’s administrative and litigation support for claims based on statistical disparities, effectively removing a key mechanism for identifying systemic bias.

 

Courts may continue to recognize disparate impact liability because it remains embedded in Supreme Court precedent and the text of Title VII. However, absent EEOC enforcement or interpretive guidance, such cases are likely to become rarer and more difficult to pursue, shifting the burden of systemic discrimination enforcement to private plaintiffs and state agencies.
 

BRIDGE POV
The EEOC’s decision to end disparate impact enforcement reshapes the federal approach to workplace equity. It signals a transition from systemic review to individualized claims, reducing regulatory scrutiny of aggregate outcomes but increasing exposure to reputational and private-litigation risk.

 

This development underscores a critical distinction: legal compliance and equitable practice are not synonymous. While federal enforcement may narrow, the market, workforce, and investor expectations for fair opportunity remain high. Leaders who rely solely on regulatory thresholds risk falling behind public and stakeholder standards.

 

Organizations now face a dual responsibility — to ensure that employment decisions are demonstrably job-related and defensible under law, and to continue advancing inclusion through transparent, data-informed practices that sustain trust and performance.

 

ACTIONABLE STRATEGIES

1. Reassess Employment Criteria and Validation Practices: Review hiring, promotion, and compensation systems to confirm that all selection tools and criteria are demonstrably job-related and consistently applied. Maintain documentation supporting business necessity and fairness.
    
2. Sustain Voluntary Equity Monitoring: Even without EEOC oversight, continue tracking workforce outcomes by race, gender, and other demographics. Use this data to identify potential barriers and to strengthen internal accountability rather than external reporting alone. 
    
3. Communicate Standards of Fairness and Integrity: Reinforce internally that the organization’s commitment to equitable opportunity extends beyond compliance. Clear messaging from leadership helps preserve culture and credibility amid changing federal enforcement priorities.

 

See also: Trump Issued an Executive Order on Disparate Impact Liability - Issue 10 

COURTS & LITIGATION

Second Circuit Flags Risk in Implicit-Bias Training — Opens Door to “Anti-DEI” Claims

• Implicit Bias Training Ruling Gives Anti-DEI Plaintiffs Foothold 

 

OVERVIEW

On September 25, 2025, the U.S. Court of Appeals for the Second Circuit in Chislett v. New York City Department of Education agreed to allow a hostile work environment claim to proceed to trial based on allegations by a former school executive that mandatory implicit-bias training constituted racial harassment.

 

The plaintiff, Leslie Chislett, claimed that training instructors repeatedly used terms such as “white supremacy,” “toxic,” and “privileged” to describe white culture, and that complaints to supervisors were dismissed. The court found that a jury could reasonably determine that such training and subsequent conduct contributed to a hostile environment under Title VII.

 

While the court rejected Chislett's claims of discriminatory demotion and constructive discharge, it held that her hostile work environment claim could proceed to a jury.  The ruling clarifies that DEI programs are subject to the same anti-discrimination standards as any other workplace practice. The decision is one of the first appellate opinions to signal potential legal exposure for employers if diversity initiatives are perceived to stereotype or marginalize employees based on race.

 

LEGAL INTERPRETATION

The Second Circuit’s decision in Chislett v. New York City Department of Education expands the context in which workplace training can be examined under federal anti-discrimination law. The court noted that the conduct of implicit bias trainings is not per se racist but that by applying the framework of Title VII of the Civil Rights Act of 1964, a jury could determine whether the alleged conduct was “severe or pervasive” enough to alter the conditions of employment.

 

The ruling reaffirms that hostile-environment protections apply to all employees and that diversity or bias-awareness programs are subject to the same legal scrutiny as any other workplace practice when they involve race-based or identity-based characterizations.

 

The decision underscores the importance of designing and delivering training programs that advance inclusion without attributing blame or bias to any demographic group, and of addressing employee concerns promptly and objectively when they arise.

 

BRIDGE POV
The Second Circuit’s decision reflects the evolving landscape of workplace law, where the intent behind diversity programs does not exempt them from established anti-discrimination standards. This case is a reminder that inclusion efforts must be grounded in fairness, balance, and respect for all employees.

 

Training that explores bias can strengthen culture when it invites understanding rather than assigning blame. The credibility of DEI work depends on ensuring that every participant—regardless of identity—feels respected and included in the conversation. Clarity of purpose, precise language, and accountability in facilitation are essential to maintaining that trust.

 

When well designed, inclusion programs reinforce—not undermine—legal compliance and organizational integrity. The goal remains unchanged: equip teams to work effectively across differences while ensuring the inclusion of all employees.
 

ACTIONABLE STRATEGIES

1. Review Training Content and Delivery: Conduct a legal and cultural audit of existing DEI and bias-awareness programs. Ensure examples, terminology, and facilitation methods promote learning without stereotyping or assigning group-based blame.
    
2. Establish Clear Feedback and Response Channels: Create documented procedures for employees to raise concerns about training or conduct, and require prompt, neutral review by HR or legal teams to prevent escalation into claims.
    
3. Align DEI Practices With Employment Law Standards: Collaborate with counsel to confirm that training, metrics, and communications comply with Title VII and state laws. Reinforce that the organization’s inclusion strategy is rooted in equity, respect, and legal accountability.