Key Updates in the Evolving DEI Legal Landscape

Summary

Diversity, equity, and inclusion (“DEI”) initiatives continue to be an area of focus for the federal government. Below are key federal developments in early 2026.

EEOC Withdraws 2024 Sexual Harassment Guidance

On January 22, the Equal Employment Opportunity Commission (“EEOC”) withdrew its “Enforcement Guidance on Harassment in the Workplace” (“Workplace Guidance”), which was originally issued in April 2024 under then-President Biden.[1] Our previous blog post about the Workplace Guidance is here. The Workplace Guidance included an instruction related to sexual orientation- and gender identity-based harassment, which the EEOC said at the time qualified as discrimination on the basis of sex in violation of Title VII pursuant to the Supreme Court’s 2020 ruling in Bostock v. Clayton County.[2] In May 2025, the EEOC removed that language pursuant to an order from a Texas District Court.[3] Because the five-member EEOC currently has two vacancies, the votes of two commissioners, EEOC Chair Andrea R. Lucas and Commissioner Brittany Panuccio, were sufficient to overturn the Workplace Guidance. The Commission stated that the Workplace Guidance constituted “unauthorized substantive rulemaking.”

Fourth Circuit Vacates Injunction Against DEI-Related Executive Orders

On February 6, the U.S. Court of Appeals for the Fourth Circuit vacated the District Court of Maryland’s preliminary injunction, granted in February 2025, that blocked portions of Executive Order 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” and Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.”[4] The injunction blocked three provisions of the Executive Orders: (1) the “Termination Provision” directing federal agencies to terminate all DEI offices, grants, contracts, and performance requirements; (2) the “Certification Provision” requiring contractors or grant recipients to certify compliance with federal anti-discrimination laws; and (3) the “Enforcement Threat Provision” tasking the heads of all agencies to prepare a report outlining measures to deter DEI initiatives that constitute illegal discrimination.[5] The appellate court held that the plaintiffs had no standing to bring claims about the Enforcement Threat Provision and were unlikely to succeed on the merits of their claims that the Termination and Certification Provisions were facially unconstitutional.[6] As a result of this decision, the federal government may now enforce the previously enjoined provisions.

EEOC Alleges Employer’s Women’s Networking Event Violated Title VII

On February 17, the EEOC filed a lawsuit in New Hampshire district court against an independent beverage distributor, alleging that a two-day networking trip for about 250 women in September 2025 violated Title VII by excluding male employees from the event.[7] According to the complaint, the employer privately invited women and covered lodging, meals, and other benefits for the attendees.[8] The EEOC seeks monetary and emotional distress damages on behalf of a class of male employees who were not invited. The employer has publicly disputed the allegations and stated it will defend the case in court.

DOJ Insight into “Illegal DEI” FCA Enforcement

On February 19, a Department of Justice (“DOJ”) official provided remarks at the Federal Bar Association’s 2026 Qui Tam Conference outlining the DOJ’s enforcement posture regarding its use of the federal False Claims Act (“FCA”) to combat “illegal DEI.” Deputy Assistant Attorney General Brenna Jenny stated that “companies that implemented programs and practices that pressured supervisors and management to make hiring and promotion decisions based on race and sex” are a priority for the DOJ’s enforcement actions. While Jenny clarified that it “is not investigating companies for having a DEI program,” she stated the DOJ will have strong cases under the FCA “where the pressure [on employment decisions] had its intended effect and resulted in decisions based on race or sex,” even if no DEI programs were formally in place. Jenny identified some higher-risk activities, such as having formal policies or informal pressure on employees to make decisions, executive development opportunities, or demographic goals based on race or sex.

EEOC Urges Fortune 500 Companies to Avoid Discrimination in DEI Initiatives

On February 26, EEOC Chair Andrea R. Lucas issued a letter to hundreds of large employers reminding them that Title VII anti-discrimination laws prohibit employment decisions based on race and sex, regardless of whether such initiatives are labeled “DEI” or similar terminology.[9] Lucas highlighted that the EEOC has regained a quorum and is prepared to use its full range of enforcement tools, including “systemic cases; pattern and practice lawsuits; and other large-scale litigation,”[10] to address what it characterizes as unlawful DEI-related discrimination. The letter also pointed to technical assistance documents, jointly issued by the DOJ and the EEOC, as resources for employers about DEI-related discrimination. Our prior memo on those documents is here. Although the letter states that receipt does not imply wrongdoing, it signals heightened federal scrutiny and encourages employers to reassess current or past DEI initiatives to ensure compliance with federal law.