Federal Government Challenges Minnesota Law Requiring Affirmative Action in State Government

On January 14, 2026, the United States filed a lawsuit against the State of Minnesota in federal district court, challenging the state's affirmative action requirements for civil service employment as violations of Title VII of the Civil Rights Act of 1964 (“Title VII”). This action comes almost a year after President Trump issued Executive Order 14173, which rescinded federal affirmative action requirements for federal government contractors and set up a potential conflict between federal requirements and certain state contracting requirements. The United States has designated this case as a matter of general public importance. This entitles the federal government to an expedited review by a three-judge panel at the district court with direct appeal to the United States Supreme Court—setting the path for a show-down on affirmative action in employment at the highest court.

Minnesota's Affirmative Action Framework

Minnesota law mandates a statewide affirmative action program for state civil service positions in order to “assure that positions in the executive branch of the civil service are equally accessible to all qualified persons, and to eliminate the effects of past and present discrimination, intended or unintended, on the basis of protected group status.” Members of protected classes include “females, persons with disabilities, and members of the following minorities: Black, Hispanic, Asian or Pacific Islander, and American Indian or Alaskan Native.” Sec. 43A.02 MN Statutes.

Under this program, the Commissioner of Minnesota Management and Budget must establish statewide affirmative action goals based on (1) “the percentage of members of each protected class in the recruiting area population who have the necessary skills,” and (2) “the availability for promotion or transfer of current employees who are members of protected classes.” Minnesota regulations require agency heads to establish numerical goals by protected group and, if underutilization is identified, establish goals and timetables for meeting them. When an agency does not meet its affirmative action hiring goals, it is required to “justify its nonaffirmative action hires." The Commissioner must audit each agency annually to determine compliance, and agencies failing to meet affirmative action requirements for two consecutive years must take proactive steps to improve compliance, including by following an active recruitment plan, implementing a coordinated retention plan, and developing “other innovative ways to promote awareness, acceptance, and appreciation for diversity and affirmative action.” Sec. 43A.191 MN Statutes.

Allegations in the Federal Complaint

The United States alleges violations of Section 703(a)(1) and (a)2 of Title VII, and advances two primary legal theories in its complaint. First, the government alleges that Minnesota engages in a pattern and practice of discrimination by making staffing and personnel decisions based on individuals' race, color, national origin, and sex; by employing race- and sex-based employment goals; and by requiring state agencies to justify and receive approval before hiring employees who are not members of a protected class. Second, the complaint alleges that Minnesota violates Title VII by classifying employees and prospective employees into discrete race- and sex-based groups and depriving those not in the designated protected groups of employment opportunities. The complaint further asserts that Minnesota identifies no prior or present discrimination to justify its race- and sex-conscious employment policies.

Broader Implications of the Lawsuit

While the recent lawsuit targets Minnesota's civil service affirmative action mandate and does not directly implicate private employer practices, government contractors operating in states with affirmative action requirements should take note of its potentially far-reaching consequences. Since the issuance of Executive Order 14173, contractors serving both federal and state governments have navigated significant uncertainty stemming from conflicting legal obligations at the state and federal levels. This challenge to Minnesota's civil service affirmative action framework likely represents the opening salvo in a broader federal campaign against state-level affirmative action laws amidst the Administration’s ongoing attack on diversity, equity and inclusion (“DEI”) programs. Government contractors in Minnesota and other states with similar requirements should monitor these developments closely and prepare for potential shifts in the compliance landscape. All employers should closely monitor what the outcome of this case may mean for their DEI programs. 

Companies should work closely with legal counsel to navigate this evolving area of law and ensure compliance with applicable legal requirements while managing potential risks. The Crowell & Moring Labor and Employment Group is available to advise employers with regard to these issues.