THE DIE HAS BEEN CAST ON DEI: EEOC & DOJ Issue new Technical Assistance Documents Targeting “DEI-Related” Discrimination

By Lauren M. Drabic and Dylan C. Brown*

Backlash against Diversity, Equity, and Inclusion (DEI) programs has risen in recent years. The Trump administration has made restricting DEI a clear priority, issuing multiple Executive Orders and memoranda targeting DEI programs in the federal government and striving to limit DEI in the private sector. Yesterday, the Equal Employment Opportunity Commission (EEOC) and Department of Justice also weighed in on DEI, issuing two joint technical assistance documents aimed at educating employees and employers about unlawful discrimination related to DEI in the workplace.

The first document (available here), entitled “What to Do if You Experience Discrimination Related to DEI at Work,” is a one-page overview. It states, “DEI policies, programs, or practices may be unlawful if they involve an employer or other covered entity taking an employment action motivated—in whole or in part—by an employee’s race, sex, or another protected characteristic.” The document advises that DEI initiatives may lead to unlawful disparate treatment if an employer takes “an employment action motivated (in whole or in part) by” an individual’s protected class, including as to: “hiring, firing, promotion, demotion, compensation, fringe benefits, exclusion form training, exclusion from mentoring or sponsorship programs, exclusion from fellowships, [and] selection for interviews (including placement on candidate slates).” The guidance also advises that employers are prohibited from “limiting, segregating, and classifying" employees based on protected characteristics “in a way that affects their status or deprives them of employment opportunities,” and that, “[d]epending on the facts, DEI training may give rise to a colorable hostile work environment claim.” It emphasizes that “Title VII’s protections apply equally to all racial, ethnic, and national origin groups, as well as both sexes,” and urges affected employees to promptly contact the EEOC due to “strict time limits for filing a charge.”

The second document (available here), entitled “What You Should Know About DEI-Related Discrimination at Work,” is structured as a detailed question-and-answer guide that provides clarity on how DEI programs and initiatives might conflict with Title VII. Here, the EEOC states its position that there is “no such thing as ‘reverse ’discrimination,” and advises that the EEOC will apply “the same standard of proof” to all claims regardless of an individual’s race or other protected status. It further states that employers cannot defend discriminatory practices by citing business interests in diversity or client preferences, as Title VII explicitly rejects a “business necessity” defense to intentional discrimination. Additionally, it states that employers may violate Title VII by segregating employees during DEI training or restricting workplace opportunities based on protected traits. These ideas extend beyond employees to cover applicants, interns, apprentices, and participants in training programs.

Notably, these guidance documents do not create new laws. Rather, they serve as guidance about rights as they relate to DEI based on the current state of the law under Title VII, EEOC regulations, and Supreme Court precedent.

Does This Mean DEI Programs Are Now Illegal?

The short answer is no. As long as an employer’s DEI program complies with Title VII and other federal and state laws prohibiting discrimination, it remains lawful. As was the case before the issuance of these assistance documents and President Trump’s Executive Orders, employers cannot discriminate against applicants or employees based on their race, sex, national origin, age, disability, or other protected class – regardless of whether the employees are in the majority or minority of their protected class. This means that any DEI program or policy that has the purpose or effect of giving preferential treatment to employees in hiring, training, or other employment decisions is unlawful under Title VII. For example, DEI programs that require employers to meet certain hiring quotas or to consider an employee’s race, sex, or other membership in a protected class in employment decisions is unlawful. However, DEI policies that simply aim to expand opportunities to create a more diverse workforce, implement policies and procedures that apply equitably to all employees, and foster an environment of inclusion do not violate the law.

What Should Employers Do Now?

Many employers remain committed to DEI as part of their core values. Maintaining a DEI program may open employers to potential exposure for claims of discrimination by employees/applicants if they believe the policy resulted in adverse employment practices against them. However, such programs are not inherently unlawful, and there are steps that employers who wish to maintain these programs can take to decrease legal risk. For example, employers should ensure that their DEI programs do not have the purpose or effect of giving preferential treatment to candidates or employees who are members of acertain protected class when it comes to making employment decisions. Employers should also be mindful about focusing on all aspects of DEI, including emphasizing the importance of “equity” and “inclusion” in addition to “diversity.” As it relates to diversity, rather than aiming for diversity in and of itself as an end result, employers should focus on removing barriers and increasing opportunities for diverse candidates. In addition, employers should ensure any training, educational programming, resource groups, and other DEI-related activities are inclusive and not restricted to members of a certain group.

Zashin & Rich will continue monitoring DEI developments and can assist employers with strategic guidance on moving forward with DEI questions or concerns.

*Lauren M. Drabic has years of experience representing employers in all areas of employment and labor law. She regularly defends employers against claims of discrimination and retaliation in federal and state court and before administrative agencies and advise employers, including on DEI policies. Dylan C. Brown represents public and private employers in all facets of labor and employment law. For assistance in navigating the evolving landscape surrounding DEI programs, compliance with Title VII, and anti-discrimination laws at both the federal and state levels, contact Lauren M. Drabic (lmd@zrlaw.com) or Dylan C. Brown (dcb@zrlaw.com) via email or by phone at 216.696.4441.

A Change of Course? FTC Requests Abeyance in Non-Compete Rule Appeals

By Ami J. Patel and Stephen S. Zashin*

As mentioned in our previous Alerts, the Federal Trade Commission issued a purported Rule banning employers from enforcing non-competes against “workers,” with limited exceptions. The Rule was set to go into effect on September 4, 2024. However, it faced immediate legal challenges. On August 14, 2024, the U.S. District Court for the Middle District of Florida granted a preliminary injunction blocking enforcement against a single employer. Shortly after, on August 20, 2024, the U.S. District Court for the Northern District of Texas set aside the Rule nationwide, holding that the FTC lacked statutory authority. The FTC appealed both rulings.

The FTC Rule’s next major legal challenge is coming from within the FTC itself. On January 20, 2025, President Trump appointed Andrew Ferguson as the new FTC Chairman. Ferguson, who previously voted against the Rule while serving as a commissioner, has consistently questioned the agency’s authority to implement such a sweeping restriction. Words have now become action, as on March 7, 2025, the FTC requested a 120-day abeyance in the Fifth and Eleventh Circuits to “reconsider its defense of the challenged rule.” And while the Eleventh Circuit has yet to act, on March 12, the Fifth Circuit granted the FTC’s motion.

The abeyance motions cite the change in administration and Ferguson’s view that “the Commission . . . basically needs to decide whether it’s a good idea [and] it’s in the public interest to continue defending this rule. . . . I’m going to be presenting at some point” to “my colleagues the decision about whether to continue defending this Rule.” The likely outcome of Ferguson’s decision is perhaps foreshadowed in his dissenting statement when the Rule was first adopted:

“Whatever the Final Rule’s wisdom as a matter of public policy, it is unlawful. Congress has not authorized us to issue it. The Constitution forbids it. And it violates the basic requirements of the Administrative Procedure Act.”

Although many anticipate the FTC will eventually retract the rule outright, employers should remain vigilant, as the legal landscape surrounding non-competes continues to evolve at the state-level. States such as California, North Dakota, Oklahoma, and Minnesota have enacted bans on non-compete agreements. In New York, a proposed ban was vetoed by Governor Kathy Hochul in December 2023, though revised legislation may be introduced in the future. Similarly, Ohio is considering a bipartisan bill, Senate Bill 11, introduced on January 22, 2025, aiming to prohibit employers from entering into non-compete agreements with workers. As legal uncertainty persists, employers should take the time now to review their restrictive covenants for compliance with state laws and ensure their agreements are narrowly tailored to protect their legitimate business interests.

Zashin & Rich will continue monitoring the FTC’s actions under this new administration and stands ready to assist employers with strategic guidance on the agency’s rule and evolving state-level non-compete laws.

*Ami J. Patel is Z&R’s Practice Leader for Trade Secrets/Non-competes. She works extensively in trade secret and restrictive covenant litigation. Stephen S. Zashin is Z&R’s Managing Partner and also has worked extensively representing clients in trade secret and restrictive covenant litigation. For more information on matters concerning the FTC Rule or non-compete agreements generally, contact Ami J. Patel (ajp@zrlaw.com) or Stephen S. Zashin (ssz@zrlaw.com) via email or by phone at 216.696.4441.

Ohio’s Senate Bill 11 is Aiming to Ban Non-Competes

By Ami J. Patel and Stephen S. Zashin*

Although the Federal Trade Commission’s proposed rule banning non-compete agreements remains stuck in political limbo, states have, in recent years, begun passing or strengthening laws which ban or restrict these clauses. Now Ohio may soon follow suit, as its Senate is considering a total ban on non-compete agreements.

The Bill as Introduced

Senate Bill 11 was introduced by Ohio Senators Louis W. Blessing, III (R) and William P. DeMore (D) on January 22, 2025. Its proposed language prohibits employers from requiring or enforcing any agreement that restricts or penalizes “workers” (defined broadly to include employees, independent contractors, interns, and volunteers) for seeking or accepting new employment or operating a business after their employment ends. This includes agreements that:

• Prevent workers from working for another employer for a specific period, within a certain geographic area, or in a role similar to their previous position.
• Require workers to pay lost profits, lost goodwill, or liquidated damages if they terminate the employment relationship.
• Impose a fee or cost—such as a replacement hire fee, retraining fee, or reimbursement for immigration or visa-related costs—when workers choose to leave.
• Demand reimbursement for expenses (e.g., training, orientation, or evaluation) that were intended to provide or improve the worker’s skills during employment.

Notably, Senate Bill 11 includes no exception related to the sale of a business.

Additionally, the proposed Bill voids any agreement entered into, modified, or extended on or after its effective date which requires a worker who primarily resides and does business in Ohio to adjudicate claims outside Ohio or deprives them of any of the State’s substantive legal protections. However, the Bill does provide an exception for this if, at the time of negotiation, the worker is independently represented by legal counsel (not chosen or paid by the employer) and the worker personally designates the venue or forum for any dispute or the governing law.

In terms of penalties, Senate Bill 11 permits workers or prospective workers to bring a civil action against an employer for any violation, with the possibility of recovering costs and reasonable attorney’s fees, actual damages, punitive damages up to five thousand dollars, and injunctive relief. A worker or prospective worker may also file a complaint with the attorney general or the director of commerce. If the attorney general or director investigates and determines that a violation likely occurred, the attorney general may bring an action on behalf of the worker or prospective worker, and if successful, the court must award the same remedies to the attorney general.

As of this Article’s writing, Senate Bill 11 has been referred to the Ohio Senate’s Judiciary Committee, where it will go through debate and amendment. The first hearing on the Bill is scheduled for February 12, 2025. Anyone looking to testify before the Committee in regard to the Bill should begin that process now.

What Now for Employers

If the Bill is enacted, Ohio will join the growing group of states that have effectively banned non-compete agreements, with Minnesota being the most recent to do so in 2023. The Bill’s current language is notably strict, lacking any salary thresholds and containing no provision for grandfathering existing agreements. Its prohibition on “enforcement” makes clear that any previously signed non-competes would be rendered unenforceable once the legislation takes effect.

While the Bill moves through the legislative process, employers should remain vigilant and start reviewing their existing agreements in preparation for what may be a sweeping overhaul of restrictive covenants in Ohio. If the Bill becomes law, any attempt to enforce a non-compete once it takes effect will result in significant legal and financial consequences. As a result, employers will likely need to invest substantial effort in devising new ways to protect their business interests, trade secrets, and client relationships without relying on non-compete restrictions. It is critical to consult legal counsel now to evaluate existing contracts, explore alternative protective measures, and develop contingency plans in anticipation of Senate Bill 11’s potential enactment.

Zashin & Rich will continue monitoring Senate Bill 11 as it progresses and stands ready to assist employers with strategic guidance and compliance.

*Ami Patel is Z&R’s Practice Leader for Trade Secrets/Non-competes. She works extensively in trade secret and restrictive covenant litigation. Stephen Zashin is Z&R’s Managing Partner and also has worked extensively representing clients in trade secret and restrictive covenant litigation. Ami and Stephen have brought numerous trade secret cases to verdict. For more information on matters concerning Senate Bill 11 or non-compete agreements generally, contact Ami J. Patel (ajp@zrlaw.com) or Stephen S. Zashin (ssz@zrlaw.com) via email or by phone at 216.696.4441.

Legislative Update: New Legal Requirements and Protections for Employers

By Ken Hurley*

In January 2025, Governor Mike DeWine signed more than two dozen bills into law. These bills spanned a wide array of topics, from changes to Ohio’s Public Records Law to updating penalties for certain criminal offenses. Of these newly enacted laws, employers may be particularly interested in two specific items.

The Paystub Protection Act

House Bill 106, dubbed the Paystub Protection Act, enacts Section 4113.14 of the Ohio Revised Code. The Act requires employers to provide its employees with a statement of the employee’s wages and deductions for each pay period. Those statements must include the employee’s name and address, the employer’s name, the total gross wages and net wages earned by the employee over that pay period, the amount and reason for each deduction from the employee’s wages, the dates of the pay period and payday, and, for hourly employees, the total number of hours worked during the pay period, the hourly wage for the employee, and any hours worked over 40 hours in a workweek. Violations of this act do not carry legal liability alone, but employers should nevertheless ensure that their payroll practices comply with the Act’s requirements.

The Uniform Public Expression Protection Act

Senate Bill 237, also known as the Uniform Public Expression Protection Act, enacts Chapter 2747 of the Ohio Revised Code. The new Chapter provides immunity from lawsuits based on a person’s constitutionally protected speech, assembly, association, and press on matters of public concern. Public employers should take special note of these new protections, as the law also applies to communications made in legislative, executive, or administrative proceedings. The extent of these protections is not yet known, and the outer limits of these protections will likely be the subject of litigation in the coming years. Employers may be able to invoke these protections in certain actions to receive an early dismissal of cases against them. While these protections do not apply to every claim asserted against an employer, the Act provides necessary safeguards against the abuse of the legal process.

*Ken Hurley represents public and private employers in all facets of labor and employment law. If you have questions about these changes to Ohio law or any employment or labor law questions, please contact Ken at kjh@zrlaw.com or (614) 224-4411.

DEAD ON ARRIVAL: Federal Affirmative Actions Plans Ended

By Scott DeHart and Ken Hurley*

With the stroke of a pen, President Trump demolished a sixty-year cornerstone of federal anti-discrimination law that required federal government contractors to prepare and adhere to affirmative action plans.

The Executive Order titled “ENDING ILLEGAL DISCRIMINATION AND RESTORING MERIT-BASED OPPORTUNITY” was signed by the President on the evening of his first full day in office, Tuesday, January 21st. Among other changes, the EO formally revokes “Executive Order 11246 (Equal Employment Opportunity)” which was signed by President Lyndon B. Johnson on September 24,1965. EO 11246 has long prohibited federal contractors and federally assisted construction contractors and sub contractors, who do over $10,000 in Government business per year, from discriminating in employment decisions on the basis of race, color, religion, sex, gender identity or national origin. EO 11246 also imposed the requirement on such contractors to take affirmative action to ensure that equal opportunity is provided in all aspects of their employment. President Barack Obama in 2014 amended that order via Executive Order 13672, which added “sexual orientation or gender identity” to the list of protected classes.

The Office of Federal Contract Compliance Programs (OFCCP), an agency within the United States Department of Labor (DOL), has been the federal entity primarily responsible for ensuring that employers comply with EO 11246. OFCCP also enforces Section 503 of the Rehabilitation Act of 1973, which provides disability protections for federal workers, and the Vietnam Era Veterans Readjustment Assistance Act of 1974. OFCCP has promulgated and enforced its detailed regulations, requiring federal contractors to prepare and follow annual “affirmative action plans.” The revocation of EO 11246 substantially curtails the authority and the scope of responsibilities of the OFCCP.

“The [OFCCP]……shall immediately cease: Promoting ‘diversity’; holding Federal contractors and subcontractors responsible for taking ‘affirmative action’; and allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin,” Trump’s order reads.

Sweeping changes to federal-level affirmative action and DEI programs were widely anticipated after Trump’s electoral victory in November 2024. During the first Trump administration (2017-2021), many had predicted the demise of OFCCP and the downfall of EO11246. However, OFCCP remained active during Trump’s presidency, instituting new types of audits and issuing new Directives and regulations that were widely seen as contractor-friendly. Many of these efforts were predictably rescinded at the outset of the Biden administration. This time, President Trump has taken more immediate and decisive action, essentially obliterating the OFCCP. Trump’s order came just a day after he rescinded multiple Biden-era executive orders, including several others pertaining to diversity and affirmative action.

The impact of Trump’s rescission of EO 11246 (and subsequent EOs that modified and expanded it) is enormous. President Trump has given contractors 90 days to continue their compliance with the existing regulatory scheme, but the recission of EO 11246 all-but certainly marks the end of mandatory “affirmative action plans” for federal government contractors (for at least the next four years). President Trump’s EO also requires each federal government contractor “to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”

President Trump’s Executive Order may present a lose-lose decision for government contractors. While his Order effectively renders a contractor’s affirmative action plan or DEI policy unlawful, Ohio law still requires contractors to develop affirmative action plans. Section 153.59 of the Ohio Revised Code prohibits the Department of Development from expending capital funds appropriated by the General Assembly unless the project to receive those funds develops an affirmative action plan. Specifically, the statute requires contractors to develop “an affirmative action program for the employment and effective utilization of disadvantaged persons whose disadvantage may arise from cultural, racial, or ethnic background, or other similar cause, including, but not limited to, race,religion, sex, disability or military status as defined in section 4112.01 of the Revised Code, national origin, or ancestry.” Section 125.111 of the Revised Code implements the same requirements for contracts with cities, villages, counties, townships,and any other political subdivision. President Trump’s order creates a dilemma for businesses that work on government contracts: their affirmative action efforts, which will still be necessary to comply with state contracts, will likely place these contractors into noncompliance with their federal contracts.

Employers who do business with the federal government should remain attentive to the fast-paced and sweeping changes that are underway in the early days of the second Trump presidency.

*Scott DeHart represents public and private sector employers in all aspects of labor and employment law including employment discrimination, collective bargaining, union avoidance and affirmative action plans. Ken Hurley represents public and private employers in all facets of labor and employment law. For assistance in navigating the landscape of affirmative action, DEI, and anti-discrimination law at the federal and state levels, contact Scott DeHart (shd@zrlaw.com) or Ken Hurley (kjh@zrlaw.com) at 614-224-4411.

NLRB Cracks Down on Employer “Captive Audience” Meetings

By George S. Crisci*

In a decision released last week, the National Labor Relations Board (“NLRB) jettisoned nearly eight decades of its own precedent, ruling that an employer violates the National Labor Relations Act when it requires its employees — under threat of discipline or discharge — to attend meetings in which the employer expresses its views on unionization. In holding that these so-called “Captive Audience” meetings are unlawful, the Board unceremoniously discarded a 76-year precedent established by Babcock & Wilcox Co., 77 NLRB 577 (1948).

The Board’s hotly anticipated decision in Amazon.com Services LLC, represents a forceful crack-down on one of the most effective and commonly used tactics by private sector employers who face a union organizing drive. For decades, these “captive audience” meetings have been a fixture of union elections – an opportunity and forum in which employers can express their view of the potential negative effects that unionizing may have on the general workforce. The Board’s decision comes on the heels of a significant ruling earlier this month in Siren Retail Corp., NLRB Case No. 19-CA-290905, in which the Board overturned a nearly 40-year precedent and held that employers are no longer permitted to categorically tell workers that unionization will negatively impact their relationship with management.

The Board majority explained that captive audience meetings violate Section 8(a)(1) of the NLRA because they have a reasonable tendency to interfere with and coerce employees in the exercise of their collective bargaining rights. However, the Board majority explained that employers can still lawfully hold meetings with workers to express the employer’s views on unionization if certain guardrails are in place: (1) the workers must have advance notice of the subject of the meeting, (2) attendance must be voluntary with no adverse consequences for failure to attend, and (3) no attendance records of the meeting may be kept. The Board majority also made clear that its decision applies only prospectively, clearly a recognition that employers have reasonably relied on the Babock & Wilcox standard and the numerous NLRB decisions upholding “captive audience” meetings as permissible for nearly eight decades.

NLRB General Counsel Jennifer Abruzzo first identified “captive audience” meetings as a violation of NLRA rights in a memo issued in April 2022, signaling her intention to challenge this practice in proceedings before the Board and to ask the Board to overrule Babcock & Wilcox. Last week’s decision marks the culmination of GC Abruzzo’s efforts.

However, with the impending inauguration of President-elect Donald J. Trump on January 20,2025, GC Abruzzo’s service as the NLRB General Counsel – and her triumph today over “captive audience” meetings – are likely to be short-lived. President Biden unceremoniously terminated GC Abruzzo’s predecessor, Peter Robb, on the very afternoon of his presidential inauguration, January 20, 2021. Absent GC Abruzzo’s resignation, history is likely to repeat itself and bring a swift end to GC Abruzzo’s tenure.

Although GC Abruzzo’s successor will undoubtedly identify today’s decision on his or her agenda and ask that it be reconsidered and reversed by the Board, employers should not expect an immediate return to the Babcock & Wilcox standard in January 2025 and possibly not until after August 2026. The expirations of the five-year terms of current Board members are staggered on an annual basis, and a reversal of today’s decision will depend on new appointments by the President altering the composition of the current Board. One Board seat (held by Chair McFerran) expires next month, and President Biden has nominated her for reappointment during the current lame-duck Congress. If the Senate approves her reappointment, then the earliest that the Board composition could change from a Democratic to a Republican majority would be August 2026 because the seat that expires in 2025 is held by the only Republican Board member. If the Senate fails to reappoint Chair McFerran, then majority control could switch during the first few months of next year, when President Trump would nominate (and the Republican-majority Senate likely would confirm) replacements for the seat currently held by Chair McFerran and another vacant seat formerly held by John Ring. After that, it will take a period of time that cannot be accurately quantified for the new Republican-majority Board to identify a suitable pending case to issue a decision that reverses the Board’s decisions.

Until the Board (hopefully) restores its Babcock & Wilcox standard, employers are well-advised to refrain from holding “captive audience” meetings. Employers are still free to communicate with employees about the downsides of unionization and to express their views about organizing drives; however, employees must have advance notice of the topic of such meetings, attendance must be voluntary, and no attendance records may be kept.

*If you have questions relating to these recent NLRB decisions and the changed prohibited employer actions, please contact Zashin & Rich’s experienced Labor attorneys: George Crisci (gsc@zrlaw.com) at (216) 696-4441, and Jonathan Downes (jjd@zrlaw.com) or Scott DeHart (shd@zrlaw.com) at(614) 224-4411.

Texas Court Vacates DOL 2024 Salary Threshold Rule Nationwide

By Michele L. Jakubs*

The United States District Court for the Eastern District of Texas vacated the Department of Labor’s (“DOL”) 2024 Rule that would have rendered millions of executive, administrative and professional employees nonexempt on January 1, 2025. The DOL 2024 Rule would have increased the salary threshold required for the most commonly used exemptions under the FLSA. Employees are exempt from overtime if they are paid on a salary basis and meet the duties requirements for one of these exemptions: executive, administrative, or professional.

The Court, in Texas v. DOL, previously issued a preliminary injunction preventing the DOL from enforcing the July 1, 2024 salary increase ($844 per week) for Texas as an employer only. On Friday, the Court ruled that the DOL did not have the authority to enact a rule that essentially replaced the duties tests for exempt status with a salary test and vacated the DOL rule nationwide. The Court stated that the exemptions require “that an employee’s status turn on duties—not salary—and because the 2024 Rule’s changes make salary predominate over duties for millions of employees, the changes exceed the Department’s authority to define and delimit the relevant terms.” The Court went on to state: “When a third of otherwise exempt employees who the Department acknowledges meet the duties test are nonetheless rendered nonexempt because of an atextual proxy characteristic—the increased salary level—something has gone seriously awry.”

Ultimately, the Court vacated the DOL’s 2024 Rule in its entirety. The DOL may appeal the decision or issue a revised rule. For now, however, the salary threshold for the executive, administrative and professional exemptions remains at the pre-2024 level of $684 per week or $35,568 per year and at $107,432 per year for highly compensated employees.

*If you have questions relating to the DOL’s new rule, or any other labor and employment law issues, please contact Zashin & Rich’s Wage and Hour Practice Leader, Michele Jakubs (mlj@zrlaw.com) at (216) 696-4441.