Category Archives: Diversity, Equity, and Inclusion (DEI)

California Adopts New Employment Al Regulations Effective October 1, 2025

by Arsen Kourinian, Ruth Zadikany, and Remy N. Merritt

Left to right: Arsen Kourinian, Ruth Zadikany, and Remy N. Merritt (photos courtesy of Mayer Brown)

The California Civil Rights Council (CRC) recently announced that it has finalized regulations that clarify how California’s anti-discrimination laws apply to the use of artificial intelligence (Al) and automated decision systems (ADSs) in employment decision-making (the “Regulations”). The Regulations provide that the use of an ADS (including Al) in making employment decisions can violate California law if such tools discriminate against employees or applicants — either directly or due to disparate impact — on the basis of protected characteristics (including race, age, religious creed, national origin, gender, and disability).

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DOJ Defines “Illegal DEI,” Warns Recipients of Federal Funds to Take Notice

by Adam S. Hickey, Marcia E. Goodman, Ruth Zadikany, and Hiral D. Mehta

Left to right: Adam S. Hickey, Marcia E. Goodman, Ruth Zadikany, and Hiral D. Mehta (photos courtesy of Mayer Brown)

On July 29, 2025, U.S. Attorney General Pam Bondi issued Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination (the “Guidance”). Following the creation of the Civil Rights Fraud  Initiative by the Department of Justice (“DOJ”), and joint guidance issued by DOJ and the U.S. Equal Employment Opportunity Commission (“EEOC”) on “unlawful DEI-related discrimination“, the Guidance is the most tangible guidance released to date on what the administration views as “illegal DEI” and a likely roadmap for DOJ’s False Claims Act (“FCA”) investigations under the Civil Rights Fraud Initiative.

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DOJ Civil Division Prioritizes Illegal DEI

by Jennifer Loeb, Austin Evers, Grace Bruce, and Young Park

From left to right: Jennifer Loeb, Austin Evers, Grace Bruce, and Young Park (photos courtesy of Freshfields Bruckhaus Deringer LLP)

Combatting “illegal” Diversity, Equity and Inclusion (DEI) remains a “Day One” priority in Washington. President Trump issued executive orders on DEI on his first day in office. Attorney General Bondi likewise issued her own memos on her first day at the Department of Justice. And now, the new head of the Department of Justice’s Civil Division has followed suit and issued his own memo on his first day, marking DEI-related topics as two of the Division’s top five priorities. This is yet another indicator that the administration appears to be shifting into the enforcement phase of its DEI reset. Health care and life sciences companies have particular reason to take note.

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Supreme Court Rejects Heightened Test for “Reverse Discrimination” Claims Under Title VII

by Matthew M. Yelovich, Jennifer Kennedy Park, Christopher R. Kavanaugh, and Ethan Singer

From left to right: Matthew M. Yelovich, Jennifer Kennedy Park, Christopher R. Kavanaugh, and Ethan Singer (photos courtesy of Cleary Gottlieb Steen & Hamilton LLP)

On June 5, 2025, the Supreme Court unanimously ruled in Ames v. Ohio Department of Youth Services that plaintiffs who belong to a majority group do not face a heightened burden to establish a disparate treatment claim under Title VII of the Civil Rights Act of 1964 (“Title VII”). The Court’s holding resolves a significant circuit split and affirms that Title VII’s protections apply equally to all individuals. This decision arrives as the Trump Administration has launched significant new initiatives to bring Title VII and civil rights investigations and claims against employers with diversity, equity, and inclusion (“DEI”) programs that the Administration views as unlawful. In light of this decision and the various DEI-related Executive Orders, employers should consider the following:

  • Employers should continue to carefully scrutinize human resource related programs that consider demographic characteristics in any way.
  • Employers should review their whistleblower programs, policies, and practices to ensure they are robust around discrimination-related issues.
  • Notably, the Ames decision considered a disparate treatment claim, and the Administration has ordered the Equal Employment Opportunity Commission (“EEOC”) and other agencies to cease pursuing disparate impact investigations and claims.[1]

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Supreme Court Upholds Expansive Reading of Wire Fraud Statute

by David A. Last, Rahul Mukhi, Joon H. Kim, Matthew M. Yelovich, and Michael Cronin

From left to right: David A. Last, Rahul Mukhi, Joon H. Kim, Matthew M. Yelovich, and Michael Cronin (photos courtesy of Cleary Gottlieb Steen & Hamilton LLP)

On May 22, 2025, the Supreme Court unanimously upheld the wire fraud conviction of a government contractor in Kousisis v. United States, rejecting the argument that federal wire fraud requires proof of economic loss to the victim. In so holding, the Court endorsed the “fraudulent inducement” theory of wire fraud, marking a victory for federal prosecutors after several recent decisions that narrowed the scope of federal fraud statutes. This decision takes on added significance given the current administration’s renewed emphasis on False Claims Act (“FCA”) enforcement, as companies now face heightened exposure under both criminal fraud and civil FCA theories for false representations to government agencies, even absent demonstrable financial harm.

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DOJ Announces Civil Rights Fraud Initiative: Department Will Seek To Use The False Claims Act To Enforce Civil Rights Laws Against Universities And Government Contractors

by Debo P. Adegbile, Christopher Babbitt, Brian Boynton, Lisa Brown, Kevin Lamb, and Brenda E. Lee

Photos of authors

Top left to right: Debo P. Adegibile, Christopher Babbitt, Brian Boynton, Lisa Brown, Kevin Lamb, Brenda E. Lee (photos courtesy of Wilmer Cutler Pickering Hale and Dorr LLP)

On May 19, 2025, Deputy Attorney General Todd Blanche announced a new Civil Rights Fraud Initiative within the Department of Justice to “utilize the False Claims Act to investigate and, as appropriate, pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws.” 

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Recalibrating Compliance Programs Under Trump 2.0

by Adam Siegel, Eric Bruce, Daniel Cendan, and Emmeline Chen

Photos of the authors

Left to right: Adam Siegel, Eric Bruce, Daniel Cendan, and Emmeline Chen (photos courtesy of authors)

Nearly two months into his second presidential term, President Trump and his Administration have engaged in a flurry of activity, issuing over 80 executive orders (EOs), 20 memoranda, and a dozen proclamations, as well as making personnel adjustments and redeploying various federal resources.  Together with his Cabinet members, President Trump has sought to swiftly roll out policy initiatives, many of which reflect a significant change in course from the United States’ prior approaches and create uncertainty and new risks across multiple sectors.  

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President Trump and Attorney General Bondi Announce Significant Shift in FCPA and Other Corporate Enforcement Priorities

by Kimberly A. Parker, Matt Jones, Jay Holtmeier, Erin G.H. Sloane, Christopher Cestaro, Brenda E. Lee, Aaron M. Zebley and Emily L. Stark

Photos of authors.

Top left to right: Kimberly Parker, Matt Jones, Jay Holtmeier, and Erin Sloane. Bottom left to right: Christopher Cestaro, Brenda Lee, Aaron Zebley, and Emily Stark. (Photos courtesy of Wilmer Cutler Pickering Hale and Dorr LLP).

Soon after being sworn in, President Trump issued Executive Orders identifying top administration priorities: combating illegal immigration, drug cartels, and unlawful DEI practices. Taking a similar tack, on her first day in office, February 5, 2025, Attorney General Pamela Bondi instructed the US Department of Justice (“DOJ” or “Department”) to redirect its enforcement efforts from certain corporate crimes so that it could devote greater attention to the priorities outlined by the President. Across fourteen memoranda that promised more guidance to follow, Attorney General Bondi detailed changes that could transform the corporate enforcement landscape. This included a direction to the Foreign Corrupt Practices Act (“FCPA”) Unit of the DOJ to “prioritize investigations related to foreign bribery that facilitates the criminal operations of Cartels and TCOs,” or transnational criminal organizations, and to “shift focus away from investigations and cases that do not involve such a connection.”[1]

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Executive Order Seeks to Impose False Claims Act Liability for Federal Contractors’ DEI Programs

by David W. Ogden, Christopher E. Babbitt, Matthew D. Benedetto, Davina Pujari, Karin Dryhurst, Kevin Lamb and Carrie M. Montgomery

Photos of the authors

Top left to right: David W. Ogden, Christopher E. Babbitt, Matthew D. Benedetto, Davina Pujari. Bottom left to right: Karin Dryhurst, Kevin Lamb, Carrie M. Montgomery. (Photos courtesy of authors)

On January 21, 2025, President Trump issued an executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the Order), which seeks to eliminate diversity, equity, and inclusion (DEI) policies and programs across the the federal government and within private industries that do business with the federal government.[1] Part of a broader suite of DEI-related executive actions,[2] the Order reverses federal contracting requirements—dating back nearly 60 years—that obligated federal contractors and subcontractors to implement affirmative action programs, and it imposes new requirements targeted at organizations with DEI programs.[3] This alert summarizes the Order’s application to federal contractors and grant recipients, including its potentially significant implications under the False Claims Act (FCA).

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District Court Rules BlackRock’s Inclusion as 401(k) Investment Manager Breaches Company’s ERISA Duty of Loyalty

by Martin Lipton, David A. Katz, and Elina Tetelbaum

Photos of the authors

Left to Right: Martin Lipton, David A. Katz and Elina Tetelbaum. (Photos Courtesy of Watchell, Lipton, Rosen & Katz)

The District Court for the Northern District of Texas recently ruled that a company breached its fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”) for permitting BlackRock’s inclusion as an investment manager of its employees’ retirement assets in a 401(k) Plan. After a four-day bench trial, the Court found that the company failed to “loyally act solely in the retirement plan’s best financial interests by allowing their corporate interests, as well as BlackRock’s ESG interests, to influence management of the plan.”   

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