EXECUTIVE ORDERS & FEDERAL POLICY

Federal Enforcement Campaign Targets Corporate DEI as Legal Standards Remain Unchanged 

• Head of workplace rights agency urges white men to report discrimination 

• Exclusive: Corporate America faces DEI reckoning in 2026, EEOC chair says 

• Trump's campaign against corporate DEI faces high legal hurdles

• US Justice Department using fraud law to target companies on DEI, WSJ reports  

OVERVIEW

The Trump administration has launched a two-pronged enforcement campaign against corporate DEI programs, with the Equal Employment Opportunity Commission and the Department of Justice pursuing parallel but coordinated strategies to pressure employers to dismantle diversity initiatives. Despite this enforcement posture, the legal standards governing discrimination liability remain unchanged.

On December 18, 2025, EEOC Chair Andrea Lucas publicly urged white and male employees to file discrimination complaints if they believe they were disadvantaged by workplace DEI initiatives. In a video message circulated on social media, Lucas stated that individuals who experienced discrimination based on race or sex may have claims under federal civil rights law and encouraged them to contact the agency. Lucas confirmed that the EEOC would open investigations into corporate DEI practices where complaints allege unlawful employment decisions and stated that the agency is prepared to litigate such cases. The EEOC did not issue new regulations or revise existing guidance and did not announce changes to Title VII standards.

At the same time, the Department of Justice has initiated investigations into major U.S. corporations using the False Claims Act to examine whether representations related to DEI compliance made in connection with federal contracts, grants, or certifications were false or misleading. Employers across multiple sectors, including technology, telecommunications, defense, pharmaceuticals, and utilities, have received requests for documents and information concerning their diversity-related employment practices. The Department has not announced formal enforcement actions or adjudications arising from these inquiries.

Former EEOC Chair Jenny Yang has stated that a workplace program is not unlawful solely because an administration characterizes it as such. To establish a violation, enforcement agencies or private complainants must demonstrate that specific employment decisions, including hiring, promotion, or compensation, were denied because of race or sex, and that an employer preferred another individual on that basis. Courts have consistently required evidence linking a challenged program to an identifiable adverse employment action.

LEGAL INTERPRETATION

Enforcement actions by the Equal Employment Opportunity Commission and the Department of Justice do not alter the substantive legal standards governing workplace discrimination under federal law.

Under Title VII of the Civil Rights Act of 1964, employers are prohibited from making employment decisions based on race or sex, regardless of whether the affected individual belongs to a historically advantaged or disadvantaged group. Courts have consistently held that DEI programs are not unlawful per se. Liability depends on whether a specific employment action, such as hiring, promotion, compensation, or termination, was taken because of a protected characteristic. General corporate commitments to diversity or inclusion, standing alone, are insufficient to establish a Title VII violation.

The EEOC’s encouragement of discrimination complaints, including those brought by white or male employees, does not alter the evidentiary standards that govern employment discrimination claims. Complainants must still demonstrate that they suffered an adverse employment action and that race or sex was a motivating factor in that decision. This standard is distinct from the constitutional analysis applied to race-conscious admissions policies in higher education under Students for Fair Admissions v. Harvard. That decision addressed the use of race in university admissions under the Equal Protection Clause and Title VI, not the standards governing workplace discrimination under Title VII. In the employment context, courts continue to evaluate claims based on individualized employment decisions rather than the existence of diversity-related policies alone.

The Department of Justice’s use of the False Claims Act in connection with DEI-related investigations represents a procedural enforcement mechanism rather than a redefinition of discrimination law. The statute permits the government to pursue civil liability where false or misleading statements are made in connection with claims for federal funds. To establish liability, the government must show that a defendant knowingly submitted a false claim or certification that was material to payment. The statute does not independently define what constitutes unlawful discrimination, nor does it create new substantive prohibitions on workplace diversity initiatives.

Courts have not endorsed a theory that the existence of a DEI program, without evidence of discriminatory employment outcomes or false statements tied to federal funding, constitutes a violation of either Title VII or the False Claims Act. As a result, while agencies may pursue investigations and request information, enforcement outcomes remain subject to longstanding legal standards, judicial review, and established burdens of proof.

BRIDGE POV

The current enforcement narrative rests on a false premise that expanded opportunity is evidence of exclusion. It is not.

What many of these claims reflect is not discrimination against white male workers, but the reality that the talent pool has changed. As access has widened, competition has increased. That shift can feel like a loss to those who once faced fewer competitors, but it is not on its face unlawful, and it is not evidence of bias.

This distinction matters because the law does not guarantee outcomes. It guarantees process. Federal civil rights law does not protect any group from competition. It protects individuals from being denied opportunity because of who they are.

This moment is less about dismantling lawful inclusion efforts and more about holding steady in the face of pressure to mischaracterize them. Expanding access to opportunity, recruiting from broader pipelines, and ensuring fair evaluation do not disadvantage anyone. They reflect how workplaces function when opportunity is not artificially constrained as well as a workforce that better mirrors the markets, customers, and communities organizations serve.

Conflating constitutional standards governing university admissions with the rules that apply to employment decisions only obscures that reality.

Institutions that understand this are not out of step with the law. They are aligned with it.

ACTIONABLE STRATEGIES

1.  Be precise about what the law protects: Ensure senior leaders and boards are aligned on a foundational point: civil rights law protects fair process, not fixed outcomes. A more competitive talent pool does not create liability.
   
   
2.  Reaffirm merit-based decision-making without narrowing opportunity: Continue to invest in broad recruitment, development, and advancement pipelines while maintaining job-related, consistent criteria for employment decisions. These approaches are complementary, not contradictory.
   
   
3. Support managers in explaining change: Equip leaders to communicate why workforces evolve over time and how opportunity differs from entitlement. Clear, consistent explanation reduces confusion and limits the space for misinterpretation.
   
   

See also: New DOJ Civil Division Memo Targets DEI Under Civil Rights Enforcement Priorities (Issue 17)

FEDERAL FUNDING & OVERSIGHT

NIH Restores Standard Grant Reviews Without DEI Criteria While Preserving Future Conditions 

• Trump administration agrees to drop anti-DEI criteria for stalled health research grants 
   

OVERVIEW

On December 29, 2025, the Trump administration agreed to temporarily restore the National Institutes of Health’s standard grant review process for approximately $783 million in previously frozen research funding, pursuant to a settlement filed in federal court in Massachusetts.

Under the agreement, NIH will evaluate grant applications submitted through September 29, 2025, using its traditional peer-review and scientific merit criteria, without considering applicants’ diversity, equity, and inclusion initiatives or vaccine-related policies. The settlement applies only to this defined group of previously submitted applications and allows the delayed review process to resume.

As reported in Issues 17 and 27, the dispute stems from litigation initiated in April 2025 by a coalition of seventeen states after NIH issued Notice NOT-OD-25-090. That notice required grant applicants to certify that they were not operating programs that “advance or promote DEI, DEIA, or discriminatory equity ideology in violation of Federal anti-discrimination law.” The states challenged the notice as exceeding agency authority and unlawfully conditioning access to congressionally appropriated research funds.

Both a federal district court and the U.S. Court of Appeals in Massachusetts initially sided with the states, ordering NIH to proceed with funding under its prior standards. In August 2025, however, the U.S. Supreme Court ruled that the trial court lacked authority to compel payment of the grants, particularly in light of a parallel decision involving the Department of Education. That ruling narrowed the scope of judicial relief while leaving unresolved the underlying legality of the NIH criteria.

The December settlement reflects this procedural posture. While it restores the standard review process for a specific set of frozen applications, it expressly preserves the administration’s ability to apply revised criteria, including anti-DEI conditions, to future NIH funding decisions. The broader legal questions surrounding the use of DEI-related certifications in federal research funding remain the subject of ongoing litigation.

LEGAL INTERPRETATION

The December 29, 2025 settlement restores NIH’s standard peer-review process for a defined set of grant applications but does not resolve the legality of NIH’s use of DEI-related criteria in federal research funding.

Federal agencies have discretion to set conditions for discretionary grants, subject to statutory limits and the Administrative Procedure Act. The litigation challenging NIH Notice NOT-OD-25-090 alleges that the agency exceeded that discretion by conditioning access to research funding on certifications unrelated to statutory program requirements or scientific merit.

While lower courts initially ordered NIH to proceed with funding under prior standards, the U.S. Supreme Court ruled in August 2025 that trial courts lacked authority to compel payment of the grants at issue. The Court did not rule on the merits of the NIH criteria themselves.

Under the settlement, NIH will evaluate applications submitted through September 29, 2025, without applying DEI or vaccine-related criteria, while preserving the ability to apply revised conditions to future funding decisions. The settlement applies only to this defined group of applications and does not address how revised criteria may be applied to grants submitted after that date.

BRIDGE POV

The NIH settlement offers near-term stability without resolving the broader question institutions are navigating: how federal funding decisions will be shaped going forward.

For research institutions, the immediate importance of this agreement is procedural, not political. It restores a familiar review process for grants already in the pipeline and allows critical scientific work to move forward after months of uncertainty. That matters for researchers, patients, and institutions alike.

At the same time, the settlement makes clear that this resolution is limited. It does not establish new rules, validate prior funding freezes, or settle the legality of applying DEI-related criteria to future research grants. Instead, it reflects an environment in which funding processes may change midstream, even when underlying legal questions remain unresolved.

Federal research funding is increasingly subject to shifting administrative standards that may evolve faster than the courts can provide clarity. Institutions that understand the difference between procedural relief and long-term certainty will be better positioned to navigate what comes next.

ACTIONABLE STRATEGIES

1. Separate immediate funding relief from long-term planning: Treat restored grant reviews as a resolution for a defined set of applications, not a signal that funding standards have stabilized. Continue planning for potential changes to eligibility criteria and certification requirements.
    
2. Document grant review and compliance processes carefully: Maintain clear records demonstrating how applications are evaluated under existing scientific and statutory standards. Process discipline remains critical in an environment of heightened scrutiny.
    
3. Engage leadership early on funding risk scenarios: Ensure presidents, boards, and research leadership understand where federal funding exposure exists and how procedural shifts could affect research portfolios, staffing, and institutional commitments.

See also: NIH Ordered To Restore Cancelled Grants Under Anti-DEI Certification Policy (Issue 17); Supreme Court Greenlights Cuts to DEI-Linked NIH Grants (Issue 27); Latino Health Leaders Launch Independent Research Hub After HHS DEI Program Cut (Issue 28)

COURTS & LITIGATION

Class-Action Lawsuit Alleges First Amendment Violations in Federal DEI Terminations   

• Trump's purge of federal workers with DEI-related jobs targeted in lawsuit 
  
  

OVERVIEW

On December 3, 2025, a group of former federal employees filed a class-action lawsuit in the U.S. District Court for the District of Columbia challenging the Trump administration’s termination of workers associated with diversity, equity, and inclusion functions across multiple federal agencies.

The lawsuit alleges that the administration’s DEI purge extended beyond the elimination of specific roles and instead targeted individual employees based on past or perceived association with DEI work, even when those employees were no longer performing DEI-related duties. According to the complaint, some plaintiffs had been reassigned to unrelated positions focused on human resources, public service delivery, or operational functions before receiving termination notices.

Plaintiffs contend that the administration used reduction-in-force and reorganization processes as a pretext to remove employees based on perceived ideological views, in violation of the First Amendment. The complaint alleges that employees were placed on administrative leave, terminated shortly thereafter, and denied transition assistance typically provided to other separated federal workers.

The lawsuit further alleges that the terminations disproportionately affected women, employees of color, and LGBTQ+ workers, and that participation in employee resource groups, prior DEI assignments, or diversity-related initiatives was used as a basis for targeting. Plaintiffs assert that these actions violated federal civil service protections and anti-discrimination laws.

After pursuing administrative remedies through federal personnel and equal employment channels without resolution, the plaintiffs brought the case to federal court. They seek class certification, reinstatement, back pay, restoration of benefits, compensatory damages, and removal of termination references from their personnel records. The case remains pending.

LEGAL INTERPRETATION

The class-action lawsuit filed by former federal employees terminated during the Trump administration’s DEI purge raises constitutional, statutory, and civil service claims centered on whether employees were targeted based on past roles or perceived associations rather than job-related criteria.

The lawsuit arises from actions taken pursuant to Executive Orders 14151 and 14173, which directed federal agencies to terminate DEI-related activities and identify existing DEI programs. Plaintiffs allege that implementation of those directives extended beyond eliminating functions and instead resulted in personnel actions based on employees’ prior work or perceived viewpoints, including the use of reduction-in-force procedures tied to positions employees no longer held.

Under the First Amendment, federal employees retain protection against adverse employment actions taken in retaliation for speech or perceived ideological views where the conduct at issue is unrelated to official job duties. The plaintiffs allege that they were selected for termination based on perceived political or ideological alignment rather than lawful workforce restructuring.

The complaint also asserts violations of federal civil service laws governing reductions in force, which require merit-based procedures when eliminating positions. In addition, plaintiffs allege that the terminations had a disparate impact on protected groups in violation of federal anti-discrimination statutes. The court has not ruled on the merits of the claims.

BRIDGE POV

This case illuminates a basic distinction that ending programs is not the same thing as targeting people.

Governments and organizations change priorities all the time. They restructure. They redirect resources. That authority is real. What is not lawful is using those shifts as a proxy for removing individuals based on past work, perceived beliefs, or association with disfavored efforts.

The lawsuit alleges that the terminations were not aimed at job functions alone, but at workers perceived to support or advocate for legally protected groups, and that this targeting violated both anti-discrimination law and constitutional protections.

The complaint also highlights an inherent tension: while the administration has emphasized merit-based hiring and employment, the terminations at issue are alleged to have occurred without regard to individual performance or job requirements.

The claim is that nonpartisan public servants were removed based on assumptions about what they believe, not what their jobs required.

Policy change does not suspend constitutional protections or basic employment rules. Reorganization does not excuse retaliation. Workforce decisions framed as structural still have to be defensible as such.

Institutions that lose sight of this distinction invite potential litigation and undermine trust in the very systems they are trying to reshape.

ACTIONABLE STRATEGIES

1. Ensure personnel decisions are not based on perceived beliefs or advocacy: As policies and priorities change, confirm that workforce actions are grounded in current roles, responsibilities, and legitimate organizational needs, not assumptions about employees’ views, past assignments, or affiliations.
    
2. Apply restructuring tools consistently and transparently: Reduction-in-force and reorganization processes carry legal obligations. Use objective criteria, document decisions carefully, and avoid individualized targeting that can undermine the legitimacy of structural changes.
    
3. Protect viewpoint neutrality in the workplace: Reinforce that employees are not subject to discipline or termination based on political beliefs, associations, or prior advocacy unrelated to their current job duties. Clear boundaries here reduce both legal exposure and institutional distrust.

See also: Executive Orders #14151 and #14173 (Issue 1)

CIVIL RIGHTS 

Gender-Affirming Care Ban Sparks Class Action Complaint from Employees Against Trump Administration 

• Federal employees sue Trump administration over ban on gender-affirming
  care coverage 

OVERVIEW

On January 2, 2026, the Human Rights Campaign Foundation filed a class action complaint on behalf of federal employees challenging a Trump administration policy that eliminates most coverage for gender-affirming medical care under federal employee health insurance plans.

The complaint challenges a directive issued by the Office of Personnel Management in August 2025 instructing insurance carriers that, beginning with the 2026 plan year, coverage would exclude “chemical and surgical modification of an individual’s sex traits through medical interventions.” The policy took effect on January 1, 2026.

According to the complaint, the exclusion applies broadly to transgender federal employees and their eligible dependents, with limited exceptions. Counseling related to gender dysphoria remains covered, and a narrow exception exists for individuals already mid-treatment in a surgical or hormonal regimen. Complainants allege that the exception process is unclear and difficult to access, particularly for enrollees required to change health plans.

The filing asserts that the coverage exclusion constitutes unlawful sex discrimination under federal employment law and seeks rescission of the policy, retroactive coverage for denied care, and other relief. The complaint was initiated through the federal equal employment process and may proceed to the Equal Employment Opportunity Commission and federal court if not resolved administratively.

LEGAL INTERPRETATION

The class action complaint challenges an Office of Personnel Management policy under federal employment discrimination law, alleging that the exclusion of coverage for gender-affirming medical care constitutes unlawful sex discrimination.

The complaint is brought under Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on sex. Under existing Supreme Court precedent, discrimination against an individual based on transgender status is treated as discrimination based on sex for purposes of federal employment law.

At this stage, the filing functions as a class-wide administrative discrimination complaint asserting that the categorical exclusion of certain medical treatments treats transgender employees and their dependents differently from other covered employees. No court or administrative body has ruled on the merits of the claims.

The policy was issued by the Office of Personnel Management as part of its administration of federal employee health insurance coverage. Whether the exclusion falls within permissible benefit design or violates federal employment discrimination protections has not been adjudicated.

BRIDGE POV

This case highlights how benefit design decisions can become civil rights questions when they draw lines that affect who can fully participate in the workforce.

For employers, health benefits are not abstract policy choices. They shape recruitment, retention, and the ability of employees and their families to access necessary care. When coverage changes are imposed broadly and without individualized assessment, they can have workforce consequences that extend well beyond cost or plan administration.

What is at issue here is not the administration of health plans in general, but whether a uniform exclusion operates differently for one group of employees than for others. That question is central to federal employment law and has implications for how institutions think about equity, access, and nondiscrimination in benefits design.

Workforce policies do not operate in isolation. Benefit decisions intersect with civil rights obligations, employee trust, and organizational credibility. Those intersections deserve careful attention, particularly when changes are implemented quickly and affect ongoing care.

ACTIONABLE STRATEGIES

1. Evaluate benefit changes through a nondiscrimination lens: When modifying health coverage or other core benefits, assess whether exclusions or limitations may affect certain employee groups differently and whether those effects raise employment law considerations.
   
   

2. Understand the workforce impact of uniform exclusions: Consider how categorical benefit changes may affect recruitment, retention, and employee wellbeing, especially for workers managing ongoing medical needs for themselves or their dependents.
   
   
3. Prepare leadership for benefits-related disputes: Ensure senior leaders and HR teams understand how benefits decisions can become the subject of discrimination complaints and are equipped to respond consistently, factually, and transparently.

Court Issues Second Preliminary Injunction Blocking Administration's Head Start Restrictions, Reinforcing Statutory Limits on Agency Enforcement

• Federal Judge Grants Second Preliminary Injunction Blocking Attacks on Head Start 

A federal judge has issued a second preliminary injunction blocking the Trump administration’s efforts to impose new restrictions on Head Start providers, again concluding that the challenged requirements exceed statutory authority. The ruling mirrors the reasoning of the earlier injunction discussed in Issue 43 and reinforces judicial skepticism toward the administration’s attempt to condition Head Start funding on requirements not authorized by Congress. The underlying dispute remains pending.

See also:  HHS Threatens Head Start Funding Over DEI Compliance, Escalating Federal Pressure on Early Childhood Programs (Issue 43)