The DEI Fight Isn’t Over: New Legal Flashpoints

The Diversity, Equity, and Inclusion (DEI) legal landscape continues to shift and present new risks as DEI continues to be a focus for the federal government and ideologically aligned state Attorneys General. Most recently, late-March 2026 produced three fast-moving developments that signal continued—and in some areas intensified—scrutiny of DEI-adjacent initiatives for employers, federal contractors, and higher education institutions. 

Specifically, the White House issued a new executive order aimed at federal contracts, the Department of Justice is now investigating the admissions practices of several medical schools, the Florida Attorney General has taken aim at a long-standing DEI-related rule used by the National Football League, and the EEOC is warning employers to that DEI policies may create race and sex-based discrimination in employment.

Employers and other entities should be aware that these actions make clear that there is sustained interest in targeting DEI practices. Additionally, organizations that contract with the federal government, receive federal financial assistance, or operate in multiple jurisdictions, should understand that the practical risk is less about “DEI” labels and more about whether programs can be characterized as having the effect of providing benefits on the basis of race, color, national origin, or sex.

Executive Order 14398 Creates New Federal Contractor Obligations

On March 26, 2026, President Donald Trump issued Executive Order 14398, Addressing DEI Discrimination by Federal Contractors. The Order directs covered agencies to insert a new clause into covered federal contracts and contract-like instruments within 30 days of the date of the Order, with flow-down obligations at the subcontract level. The clause requires contractors to promise that they will not engage in any “racially discriminatory DEI activities.” The Order also requires contractors to provide requested information and access to records to assess compliance with the clause, and it authorizes contract remedies—including cancellation, termination, suspension, and potential ineligibility for future contracts as a result of non-compliance. The Order also requires prime contractors to report subcontractor non-compliance and take remedial actions as directed. 

A notable feature is the Order’s explicit linkage to the False Claims Act (FCA), which imposes civil and/or criminal liability on any person who knowingly submits a false claim for payment or who makes a false statement material to any claim for payment. The Attorney General is directed to prioritize FCA enforcement tied to violations of the clause. 

This is not this Administration’s first use of the FCA to enforce and heighten the consequences of its new DEI requirements for federal contractors. In January 2025, this administration published an Executive Order that requires agencies to include a term in every contract or grant award wherein the party to the contract or receiving the grant must certify that it does not operate programs promoting illegal DEI and that compliance with such laws is material to the government’s payment decisions under the FCA.  The FCA imposes liability on any person who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment” to the federal government. Accordingly, by making DEI compliance a material condition of the government’s payments to contractors, these Executive Orders  and related guidance create conditions in which a contractor’s invoice could be considered a false claim if the contractor is engaging in illegal DEI activity as it is defined by this administration. 

In April 2026, a coalition of higher‑education and minority trade associations filed suit in the U.S. District Court for the District of Maryland challenging the Order. The plaintiffs argue that the order is unconstitutional, asserting that it chills protected speech and association under the First Amendment, is overly broad in equating DEI initiatives with unlawful discrimination, and exceeds presidential authority under the Procurement Act. The suit asks the court to declare the Order unlawful and unconstitutional and to enjoin implementation of the Order. The court has not yet ruled on these issues

Medical School Admissions Probes Signal Intensified Title VI Enforcement

In late March 2026, DOJ opened Title VI compliance investigations into admissions practices at three medical schools. Public reporting indicates DOJ sought approximately seven years of admissions materials and applicant-level data and set an April 24 response deadline. Applicant-level data in this case includes information such as test scores, home ZIP codes, and disclosure of familial relationships to alumni or university donors. The administration also requested copies of internal messages and correspondences about DEI and admissions policies. Failure to comply may result in interruptions to essential federal funding, which can also impact medical testing and research being conducted at those medical schools. It is unclear at this time why these three schools were chosen. 

For recipients of federal financial assistance, the most salient point to take away is that Title VI prohibits discrimination on the basis of race, color, or national origin in federally assisted programs. In the post–Students for Fair Admissions landscape, where the Supreme Court ruled that race-conscious admissions programs violated the U.S. Constitution, agencies have signaled heightened interest in how “race-neutral” selection systems operate in practice. Race-neutral selection systems include whether criteria such as “diversity statements” or “overcoming obstacles” function as proxies or substitutes for protected characteristics, whether decision-making is individualized, and whether documentation supports the stated rationale for admission decisions. The U.S. Department of Justice’s memorandum to federal agencies titled “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination” explores some of these race-neutral criteria, such as proxies, in more detail. (Also, click here to read our analysis of this guidance.)

This recent action demonstrates that the federal government is not looking only at the DEI practices of undergraduate programs but is also focusing on graduate programs that, typically, make up a much smaller portion of higher ed enrollment.

State-level Pressure on DEI Recruitment and Hiring Policies: Florida’s Rooney Rule Challenge

On March 25, 2026, Florida Attorney General James Uthmeier sent a letter to NFL Commissioner Roger Goodell asserting that the NFL’s “Rooney Rule” and related initiatives violate Florida law. The Rooney Rule is a long-standing NFL policy requiring teams to interview at least two external minority candidates for certain positions, including head coach, general manager position, and coordinator positions. It also requires that at least one minority candidate must be interviewed for senior level positions. Instituted in 2003, the Rooney Rule has typically been understood to be a lawful DEI effort due to its focus on recruiting and developing diverse candidate pools rather than hiring.

However, the March 2026 letter demonstrates that the Rooney Rule is coming under new fire. The letter demands confirmation by May 1, 2026, that the NFL will stop enforcing the Rooney Rule (and variants) as applied to Florida teams, and warns that failure to do so may result in a civil rights enforcement action. Although the dispute arises in professional sports, it previews arguments that can surface in other industries when a DEI initiative that was previously understood to be lawful can be framed as mandating interview pools by race/sex, restricting eligibility to protected classes, or creating training and advancement pipelines limited to defined demographic categories.

Additional DEI-Related Federal Government Actions

The federal government has recently pursued a series of high‑profile enforcement actions and investigations challenging DEI initiatives in both the public and private sectors. These efforts include lawsuits brought by the DOJ against state and local governments and related entities, such as the States of Illinois, Minnesota, and Rhode Island and the Minneapolis Public Schools, alleging that collective bargaining provisions, affirmative‑action requirements, demographic disclosure mandates, and race‑limited public benefit programs constitute unlawful race‑based discrimination. In addition, the Department of Housing and Urban Development has opened an investigation into the City of Boston’s housing policies to assess whether its racial equity initiatives violate the rights of white residents. 

The EEOC has also been actively pursuing challenges to “illegal DEI” and seeking white men to file complaints.  Specifically, in December 2025, the EEOC Chair posted a video of herself on social media asking “Are you a white male who has experienced discrimination at work based on your race or sex? You may have a claim to recover money under federal civil rights laws. Contact the EEOC as soon as possible. Time limits are typically strict for filing a claim.” 

Since then, in February, the EEOC filed a subpoena enforcement action against NIKE, Inc., asking for a court order requiring them to produce information relating to allegations that the company discriminated against white workers, including as a result of NIKE’s DEI programs and objectives.  The EEOC also filed suit against Coca‑Cola Beverages Northeast, Inc., alleging the company violated Title VII by unlawfully excluding male employees from an employer‑sponsored networking event in 2024, thereby denying men equal access to employment benefits on the basis of sex. 

Also in February, the EEOC Chair sent a letter to the CEOs, General Counsel, and Board chairs of 500 of the largest employers in the United States, reminding them of their Title VII obligations relating to DEI initiatives.  Since then, the EEOC announced a $500,000 settlement with Planned Parenthood to resolve claims that it racially discriminated against and harassed white employees through its DEI practices. 

Collectively, these matters signal increased federal willingness to use litigation and investigative tools to test the legality of DEI‑related policies under existing civil rights laws.

What This Means for Employers and Federal Funding Recipients: Recommended Actions to Reduce Risk Now

Across all these developments, the common thread is increased scrutiny of the mechanics of DEI-adjacent programs, including eligibility criteria, selection tools, documentation, contracting flow-downs, and data governance. Employers and institutions that focus on neutral, job-related or program-related criteria, maintain disciplined documentation, and ensure open access to opportunities are better positioned to reduce risk while preserving lawful inclusion efforts. Accordingly, employers, federal contractors, and other entities with DEI programs should consider taking the following actions to reduce risk of non-compliance:

1. Audit DEI-adjacent programs (mentoring, recruiting, leadership development, internships, Employee Resource Groups, scholarships, vendor preferences) and identify any eligibility or access restrictions tied to race or ethnicity.
2. Strengthen data governance and response readiness (document retention, lawful sharing protocols, and internal ownership) for potential civil rights inquiries requesting multi-year applicant/participant datasets.
3. For federal contractors, update prime and subcontract templates to address flow-down clauses, record-access expectations, and subcontractor reporting/escalation pathways.
4. For federal contractors, audit payment, certification, and compliance statements with FCA exposure in mind, including how internal systems capture and substantiate compliance representations.
5. For federal funding recipients in the education space, review admissions/selection and pipeline programs to ensure decision-making is grounded in documented, individualized, neutral criteria.

For questions regarding DEI compliance and its implications for your organization, feel free to reach out to your Womble Bond Dickinson attorney, the authors of this Insight, or another member of our Labor and Employment Practice Team. We will continue to monitor employment law developments and provide updates as warranted, so make sure you are signed up for the Womble Bond Dickinson newsletter.