Mitigate Risk. Lead with Clarity.

COURTS & LITIGATION  

Federal Judge Confirms Trump's Contractor DEI Order Prohibits Only Existing Illegal Discrimination

• Court Offers Clarity, Limiting Trump Executive Order and Administration’s Crusade Against Diversity, Equity, and Inclusion

On October 14, U.S. District Judge Adam Abelson rejected the administration's broad interpretation of Trump's March 2026 executive order restricting DEI activities by federal contractors. The court ruled that the order “only prohibits contractors from engaging in conduct that is already prohibited by federal law,” specifically intentional discrimination based on race or ethnicity.

The court affirmed that “there is absolutely DEI activity that falls comfortably within the confines of the law.” Teaching, research and publications addressing DEI or racial disparities are not prohibited by the order. The judge further indicated that pursuing False Claims Act liability against contractors for such lawful activities would exceed the order's authority and likely violate constitutional protections.

The ruling confirms that the executive order does not make previously lawful DEI activities illegal. Although the court declined to block the order and the litigation continues, federal contractors can continue lawful inclusion practices without treating the executive order as a new prohibition on DEI.

See also: State Alleges President’s DEI Rule for Contractors is Unclear and Illegal (Issue 71); Administration Seeks Dismissal of States’ Challenge to DEI Contracting Order (Issue 82)

COURTS & LITIGATION  

DOJ Opens Antitrust Investigation Into TV Networks Over Paused White House Pool Coverage

• Justice Department investigates TV networks, citing possible anti-trust violations 

• Justice Department investigating major TV networks over suspending pool coverage of Trump

• Judge extends order restoring White House access for POLITICO, CNN and MS NOW

OVERVIEW

On October 10, the Department of Justice (DOJ) launched an antitrust investigation into ABC, CBS, CNN, NBC and Fox News over their coordinated decision to temporarily suspend White House television pool coverage. The department is examining whether the networks' collective refusal to provide coverage constituted an unlawful group boycott. Civil investigative demands seeking internal communications and other records were sent to the networks on October 9.

The investigation follows Trump's September decision to revoke White House press credentials for journalists from CNN, MS NOW and Politico over reporting he considered unfavorable. In response, the five networks suspended their shared coverage for approximately four days, stating that no administration should restrict a news organization because it dislikes its reporting. The networks ordinarily operate a rotating pool that shares the responsibility and cost of recording presidential events and distributing footage to other news organizations. Coverage has since resumed.

The investigation has raised questions about the application of antitrust law to coordinated decisions involving press freedom. Legal experts have questioned whether the networks' temporary suspension can constitute an unlawful boycott when their regular pool operations also depend on cooperation among competitors. Press freedom organizations have criticized the investigation as a potential means of intimidating news organizations.

On October 13, U.S. District Judge Timothy Kelly issued a preliminary injunction maintaining White House access for the affected journalists while litigation proceeds. Kelly found that the revocation of credentials likely violated constitutional due process protections and constituted retaliation and viewpoint discrimination under the First Amendment.

LEGAL INTERPRETATION

Section 1 of the Sherman Act prohibits agreements among competitors that unreasonably restrain trade. While certain group boycotts are considered inherently anticompetitive, other coordinated conduct must be evaluated based on its purpose, structure and effects on competition. The existence of an agreement among competitors does not, by itself, establish an antitrust violation.

The central question is whether the networks' temporary suspension of pool coverage constituted an unlawful restraint of trade. Their longstanding cooperation in operating the White House press pool is relevant to understanding the arrangement, but does not automatically establish the legality of their decision to suspend coverage. DOJ would need to establish that the coordinated suspension violated the applicable antitrust standard, rather than merely demonstrate that the networks acted together.

BRIDGE POV

The question extends beyond the legality of the networks' decision to suspend coverage. It concerns the ability of independent organizations to act consistently with their principles when those decisions conflict with the priorities of an administration. Government agencies have legitimate enforcement responsibilities, but those powers must be exercised according to established legal standards.

Institutional independence requires more than a public commitment to values. It depends on the governance, decision-making processes and leadership discipline that allow organizations to explain and defend their actions under scrutiny. For companies across industries, the challenge is to preserve that independence while remaining accountable to the law.

ACTIONABLE STRATEGIES

1. Ground consequential decisions in established governance processes: Ensure decisions involving institutional principles, public positions or collective industry action are supported by documented business rationale, appropriate legal review and clear executive accountability.
   
   
2. Evaluate legal risks before coordinating with competitors: Review joint industry initiatives, collective responses and information-sharing arrangements with antitrust counsel to distinguish permissible collaboration from conduct that could restrict competition.
   
   
3. Prepare to defend institutional decisions under scrutiny: Establish clear protocols for responding to regulatory inquiries, including preserving relevant records, coordinating legal and communications teams and maintaining consistency between stated principles and organizational actions.

See also: ABC Sues FCC Over Early Broadcast License Review, Alleging First Amendment Retaliation (Issue 64); News Outlets Sue Trump Administration Over Revoked White House Access (Issue 83)

WORKFORCE & EMPLOYMENT 

California Enacts Three Laws Regulating AI in the Workplace

• Three New California AI Statutes: What Employers Should Know

OVERVIEW

On September 30, California Governor Gavin Newsom signed three laws regulating employers' use of artificial intelligence (AI) in workplace decisions, layoffs and employee monitoring. All three take effect in 2027.

• SB 947 (No Robo Bosses Act), effective July 1, 2027, prohibits employers from relying solely on automated decision systems to discipline or terminate employees. When an employer primarily relies on an automated system's output, a human reviewer must independently corroborate the decision. Employees must receive written notice and may request information about the personal data used. The law also prohibits using automated systems to infer an employee's protected status and bars retaliation against employees exercising their rights.

• SB 951, effective January 1, 2027, requires employers to identify technology-related job displacement in notices issued under California's WARN Act when covered layoffs, relocations or terminations result substantially from AI or automation. Notices must identify affected positions, the functions being automated and the technology involved. The state will publish summaries and quarterly reports on technology-related job losses.

• AB 1883, effective January 1, 2027, prohibits public and private employers from using AI-enabled surveillance to recognize or predict employees' emotional states or collect neural data, subject to a safety exception. Violations may result in civil penalties of up to $500 per violation.

LEGAL INTERPRETATION

California's new laws establish specific requirements for workplace AI in the absence of comprehensive federal legislation governing its use in employment. Existing federal anti-discrimination laws, including Title VII and the Americans with Disabilities Act, continue to apply to AI-assisted employment decisions. California's measures go further by imposing explicit requirements for human oversight, employee notification, technology-related layoffs and certain forms of surveillance.

SB 947 distinguishes between decisions made solely by automated systems, which are prohibited, and decisions primarily based on automated outputs, which require independent human corroboration. A manager's approval alone may not satisfy the requirement without an independent basis for the decision. SB 951 adds disclosure obligations when AI or automation causes a covered workforce reduction in whole or in substantial part, while AB 1883 prohibits specified AI-enabled surveillance practices rather than workplace monitoring generally.

Several statutory boundaries remain unresolved, including what constitutes primary reliance on an automated system, when technology substantially contributes to a workforce reduction and the scope of AB 1883's safety exception.

Together, these laws impose requirements on particular employment practices, not a general prohibition on workplace AI. Compliance depends on how the technology is used, the decisions it informs and the employer's obligations under each statute.

BRIDGE POV

California is moving ahead with workplace AI regulation while the federal framework remains fragmented. But compliance with individual laws should not be the extent of an organization's AI strategy. As companies increasingly rely on AI to inform decisions about their people, they must ensure that the systems they deploy are transparent, accountable and capable of identifying and addressing potential bias.

The challenge is not simply keeping humans involved in decisions. It is ensuring they have the knowledge, authority and organizational support to exercise meaningful judgment. That requires embedding inclusion into how AI systems are evaluated, deployed and governed, recognizing that different employees may experience the same technology differently. Without those capabilities, human oversight risks becoming a procedural requirement rather than an effective safeguard.

ACTIONABLE STRATEGIES

1. Assess workplace AI against the new California requirements: Inventory automated tools used in disciplinary decisions, workforce planning and employee monitoring, including third-party systems, and identify where additional oversight, disclosures or restrictions may be required.
   
   
2. Establish meaningful human oversight: Ensure employees responsible for reviewing AI-assisted decisions understand the systems' limitations, can independently evaluate their outputs and have the authority to challenge or override recommendations.
   
   
3. Embed inclusion into AI governance: Establish cross-functional accountability across HR, DEI, legal, technology and risk teams to assess potential bias, monitor workforce impacts and ensure AI practices align with organizational policies and legal obligations.

See also: Workday’s AI Hiring Tools and Discrimination Liability (Issue 70); A Stanford Study Finds AI Hiring Tools Increase Racial Bias (Issue 71); Meta Faces Lawsuit Alleging AI Tools Targeted Employees on Protected Leave for Layoffs (Issue 74)