Cases & Developments

EducationCounsel published a comprehensive review of recent updates on (i) the Department of Justice issuing guidance on DEI programs; (ii) efforts by the Department of Education to invite states to apply for broad Every Student Succeeds Act (ESSA) waivers; and (iii) the Senate Appropriations Committee voted to approve the Bipartisan FY26 Education Funding Bill.

The Department of Justice (“DOJ” or the Department) released new guidance clarifying that entities receiving federal funding must comply with federal antidiscrimination laws, regardless of whether their policies are labeled as Diversity, Equity, and Inclusion (DEI) initiatives. The guidance emphasized that using protected characteristics such as race, sex, religion, or national origin to provide advantages or impose disadvantages are generally prohibited. The guidance provides a detailed, non-exhaustive list of policies and practices the DOJ considers unlawful. These include programs that grant preferential treatment based on protected characteristics, such as scholarships or internships reserved for a specific racial group based on “geographic targeting,” hiring or promotion practices that prioritize “underrepresented” candidates, and segregated facilities or resources. The guidance also targets facially neutral policies that function as proxies for protected characteristics; such, requiring job applicants to demonstrate “cultural competence, “lived experience,” or submit “diversity statements” in ways that advantage individuals based on race or sex. Similarly, recruitment efforts that target specific geographic areas or institutions for their demographic makeup are flagged as potentially unlawful. While the guidance generally prohibited sex-based separation, it includes a notable exception for sex-separated athletic competitions and intimate spaces, warning that allowing males, “including those self-identifying as women”, to access female-only restrooms, locker rooms, or teams may violate Title IX and create a hostile environment under Title VII. The guidance also criticized the use of protected characteristics in selection processes, such as “diverse slate” hiring mandates, contract awards based on race or sex, and program participation quotas tied to demographic categories. The Department also prohibits trainings that stereotype, exclude, or penalize participants based on protected traits; for instance, programs that frame “white privilege” or “toxic masculinity” as inherent characteristics are unlawful. The DOJ concludes by offering a set of recommended best practices aimed at minimizing legal risk: using neutral, merit-based selection criteria, avoiding demographic quotas, documenting legitimate rationales behind institutional decision making, analyzing facially neutral criteria for discriminatory effects, and using nondiscrimination clauses in contracts with third parties. The guidance further affirmed that individuals who refuse to participate in or object to potentially discriminatory programs are protected from retaliation. The DOJ urged all federal funding recipients to review and revise any discriminatory policies to avoid legal liability and loss of funding.