Insights

On June 9, 2026, the U.S. Department of Justice (DOJ) issued a formal opinion concluding that the Equal Opportunity Employment Commission’s (EEOC) existing interpretations of Title VII of the Civil Rights Act of 1964 (Title VII) disparate-impact liability, including the Uniform Guidelines on Employee Selection Procedures (UGESP), are unconstitutional. According to the opinion, EEOC’s prior interpretations contemplate liability based on disproportionately adverse effects alone, without regard to an employer’s likely intent, rather than treating disparate impact as an evidentiary mechanism to “smoke out” intentional discrimination. DOJ found that this approach functions as a “qualified racial-proportionality mandate” that places “a racial thumb on the scales, often requiring employers to evaluate the racial outcomes of their policies, and to make decisions based on (because of) those racial outcomes.” The opinion fulfills one mandate of Executive Order 14281, which rejected disparate-impact liability insofar as it “creates a near insurmountable presumption that unlawful discrimination exists wherever there are any differences in outcomes among different [demographic groups].”

On March 26, 2026, President Trump issued an executive order (EO) titled Addressing DEI Discrimination by Federal Contractors. The EO declares diversity, equity, and inclusion (DEI) “activities” “unethical and often illegal,” and imposes new obligations on federal contractors and subcontractors related to DEI programming. Contractors that do business with the federal government — or that work as subcontractors for companies that do — should review the EO closely to determine the extent to which they are compliant with the new requirements.

On June 3rd, 2024, in a 2-1 ruling, the 11thCircuit U.S. Court of Appeals granted a preliminary injunction against Fearless Fund (“Fearless”), enjoining the Fearless Strivers Grant Contest, a privately-funded grant competition open only to businesses owned by black women.  In another victory for the American Alliance for Equal Rights (“Alliance”) and Edward Blum, the legal strategist behind the Supreme Court’s recent rulings against college race-based admissions, the 11thCircuit held that the Alliance had standing to sue on behalf of three pseudonymously named business owners who were “ready and able” to enter the Contest but “were excluded from the opportunity to compete . . . solely on account of the color of their skin.”  The Court determined that plaintiffs were likely to prevail in the lawsuit, finding that privately funded businesses like Fearless can violate 42 U.S.C. § 1981, originally enacted as Section 1 of the Civil Rights Act of 1866, through contract-based programs restricted to persons of color.