Corporate programs designed to boost diversity, equity, and inclusion are poised to encounter further legal threats this year after conservative forces successfully compelled several major companies like Walmart Inc., Ford Motor Co., and Lowe’s Cos. to scale back their initiatives.
The spike in employment discrimination lawsuits concerning workplace DEI efforts will further push federal courts to play a central role in resolving complex issues, including disputes concerning certain diversity practices like anti-bias training mandated by state law.
As the US Supreme Court’s 2023 decision outlawing the use of race in college admissions practices inspires more litigation over workplace diversity plans across several sectors, companies will continue to rethink how they approach DEI issues—especially those related to race and gender identity—and offer support to historically marginalized workers.
But while some companies retreated from their DEI pledges, Costco Wholesale Corp. recently declined to evaluate its diversity practices in response to a proposal from the National Center for Public Policy Research, a conservative think tank and shareholder of the retail giant.
At the same time, lawsuits will shape the courts’ development of legal standards for evaluating what workplace actions constitute “discrimination” in the context of DEI efforts, the parties’ burden of proof in such cases, and the limits of lawful diversity initiatives.
Below are three major themes for DEI litigation in 2025:
1. ‘Majority’ Bias Test
Employers may face a surge in discrimination claims from White workers, men, and other employees in the “majority” if the Supreme Court agrees to set a lower evidentiary burden for assessing what constitutes illegal bias against nonminority workers in the new year.
At issue is the “background circumstances” test that applies in certain bias cases under Title VII of the 1964 Civil Rights Act, which prohibits bias based on race, sex, and other categories. In addition to demonstrating initial bias—an essential proof requirement in all discrimination cases—a nonminority worker must also provide additional “background circumstances” or evidence to support their claim that the defendant discriminated against the majority group.
The Tenth, Eighth, Seventh, Sixth, and D.C. circuits have adopted this test. The Eleventh and Third circuits have rejected it.
Critics argue that the test imposes an unfair burden on plaintiffs based on their race, while supporters say it was developed in response to significant discrimination and societal power dynamics.
The case is Ames v. Ohio Department of Youth Services, U.S., No. 23-01039.
2. Legal Standing
Questions regarding who has the right to bring a case have also gained increased attention in DEI cases.
Legal standing is a critical threshold issue that must be resolved early in a case. The doctrine requires plaintiffs to show that the employer’s allegedly discriminatory policy or conduct being challenged caused or would likely inflict a recognizable harm that only judicial relief can redress.
Federal courts have dismissed or allowed cases to proceed on this ground. But there are pending rulings on this issue in notable cases, including a challenge to King & Spalding’s diversity mentorship program.
The Second Circuit Jan. 10 revived a challege to Pfizer Inc.‘s diversity fellowship program after a split three-judge panel affirmed dismissal due to lack of standing.
The majority initially found that the advocacy group Do No Harm failed to identify by name at least one member who allegedly was harmed. But the same majority ultimately withdrew its decision, saying that the burden for establishing standing at the dismissal stage is much lower than required to secure a summary judgment.
The dissenting judge maintained that Do No Harm lacked standing because the anonymous declarations submitted by two students failed to establish that either was ready to apply to the fellowship program to show imminent harm.
The court’s review comes amid uncertainty over advocacy groups’ ability to assert associational standing when suing on behalf of anonymous members with shared interests who haven’t applied to the program at issue to demonstrate injury.
Individual plaintiffs also face similar scrutiny.
The issue is before the Fifth Circuit in a White woman’s challenge to an Amazon.com Inc. grant program for minority business owners that she claims is discriminatory. A Texas federal judge tossed the suit due to her failure to apply.
The cases are , D. Md., No. 1:24-cv-01367 and Do No Harm v. Pfizer Inc., 2d Cir., No. 23-00015.
3. First Amendment Defense
Pending cases against Walt Disney Co. and some corporate CBS affiliates test the limits of entertainment and media industries’ First Amendment defense to escape employment bias claims.
Former “The Mandalorian” star Gina Carano accused Disney of firing her for voicing her social and political views in social media posts that the company deemed to be antisemitic and transphobic. In another case, a White heterosexual script coordinator and freelance scriptwriter who’s written episodes for CBS’s “Seal Team” television series claimed CBS Entertainment, CBS Studios, and Paramount Global unlawfully denied him career opportunities because of his race, sex, and sexual orientation.
Expressive entities have traditionally used the First Amendment defense to justify workplace decisions regarding artistic expression tied to protected characteristics like race, gender, and religion.
In that vein, the defendants denied any illegal conduct and argued that their actions were essential for maintaining control over their artistic and brand message, but that defense is now being put to the test.
Existing case law on the issue narrowly protects the artistic expression of expressive entities and will likely remain that way, legal scholars said. However, unique facts in litigation may influence how courts assess the scope of this defense, particularly in instances where plaintiffs invoke a state law that offers broader or distinctive protections than federal law, they said.
The cases are Carano v. Walt Disney, C.D. Cal., No. 2:24-cv-01009 and Beneker v. CBS Studios Inc., C.D. Cal., No. 2:24-cv-01659.
