Monday morning musings for workplace watchers.
DOL Leaders’ Legal Battles| States Take Up Anti-DEI Mantle
Rebecca Rainey: Now that they’ve survived their confirmation battles to become top leadership at the US Department of Labor, Lori Chavez-DeRemer and Keith Sonderling face a thicket of pending legal challenges against rules enforced by the agency.
During her confirmation hearing last month, Chavez-DeRemer vowed to review all rules at the agency and reaffirmed her support of the independent contractor model, an issue at the center of one of the DOL regulations being challenged in court.
The lawsuits target rules on independent contractor status, overtime pay protections, and other policies that were issued during the previous administration. The Trump DOL is largely expected to peel back these regulations, as most were opposed by business groups and Republicans.
Here’s where the litigation stands:
Overtime: There are at three active lawsuits seeking to overturn the DOL’s 2024 overtime rule, which sought to expand overtime pay protections to many salaried workers earning less than $58,656 annually.
The rule has been blocked by two federal courts in Texas, but the DOL has appealed both of those cases to the Fifth Circuit. Notably, the agency’s appeal of one of those cases brought by software company Flint Avenue LLC was filed in February, weeks after President Donald Trump took office. Another lawsuit challenging the rule in the US District Court for the District of Columbia brought by a Christian school association is still in the briefing stages.
Independent contractor status: Five separate groups filed legal challenges against the DOL’s 2024 worker classification rule, which changed how the agency determines whether a worker is an independent contractor in business for themselves or an employee who qualifies for protections under federal law.
The new test, which went into effect in March 2024 expanded the factors that could indicate employee status, generally making it harder for employers to use independent contractors. Independent contractor arrangements exist nearly everywhere in the economy, but dominate the gig, trucking, and construction industries in particular.
Three of those lawsuits brought by individual contractors and companies who said their business relationships with contractors would be chilled under the new rule have had their cases tossed out, after they failed to establish standing to prove they would be harmed by the change. Two of those cases have been appealed to the Eleventh and Tenth Circuits. A judge in Tennessee just dismissed the third case last week, although the freelancers that brought the suit can still appeal.
In a separate pending case against the independent contractor rule, a coalition of business groups have been pressing the Trump DOL to hurry up and resolve the dispute or pause enforcement of the rule. The Coalition for Workforce Innovation, which sued over the rule in the Eastern District of Texas, urged the court to proceed with a status conference in the case despite the DOL’s requests for further delay due to the transition of leadership at the agency. Ultimately, the judge sided with the Trump administration and has pushed the next conference in the case to April 2.
The Trump administration is also due to provide a status report to the Fifth Circuit in another challenge to the 2024 independent contractor rule brought by Louisiana-based trucking firm Frisard’s Transportation. The company had appealed a lower court’s denial of their request for temporary restraining order or preliminary injunction against the rule in April 2024. The case has been in briefing ever since. On Jan. 24, the court granted a request from the Trump administration to delay oral arguments in the case, so long as it provides an update on where it stands on the regulation by March 25.
Chris Marr: Lawmakers in Republican-led statehouses from Florida to Wyoming are doubling down on the anti-DEI movement with proposals that echo the Trump administration’s federal policy efforts.
Most of the bills related to diversity, equity, and inclusion target public-sector programs, such as those at universities or within state and local government agencies—similar to state lawmaker efforts over the past three years. A handful of legislatures are considering proposals that could also affect businesses receiving state funding or private-sector companies more broadly.
The state efforts mirror two sweeping anti-DEI orders President Donald Trump issued on the first and second days of his new term in the White House—but without the threat of investigation for alleged civil rights violations Trump promised. At least one federal court has blocked the Trump administration from enforcing portions of its DEI orders, and the administration has appealed that decision to the US Court of Appeals for the Fourth Circuit.
In the tug-of-war over DEI policies, opponents argue they promote illegal discrimination in lieu of merit-based hiring and college admissions. Supporters of the policies say they’re aimed at correcting historical disparities based on traits such as race, gender, and LGBTQ+ status.
North Carolina legislators have introduced perhaps the broadest state proposal this year. That measure (HB 171) seeks to restrict the DEI activities of any “State agency, unit of local government, or non-State entity”. If enacted, it would bar them from accepting federal money that requires adherence with DEI mandates and to discontinue any such existing programs.
The bill, which is still awaiting committee review in the state House, would prohibit the use of public funds for applying DEI criteria in employment decisions, offering or requiring DEI training, and maintaining DEI offices or dedicated staff positions.
In West Virginia, a pending bill (SB 574) would ban use of public funds by any entity for DEI-related training, diversity-office staff, mandates for employees or others to provide preferred pronouns, or requirements for any job applicant to provide a statement of support for DEI-related viewpoints.
Texas lawmakers are considering a bill (HB 436) to limit the use of diversity-related trainings and hiring criteria by state agencies while also barring agencies from making public funding or contracts to private businesses contingent on compliance with DEI standards. It’s among a dozen or more related bills pending in Texas, including one that would ban electric utilities from operating DEI programs.
Most of these bills still await legislative review. In Wyoming, which has already finished its legislative session for 2025, Gov. Mark Gordon (R) vetoed one bill and signed another dealing with DEI programs and instruction at colleges and universities, criticizing the vetoed bill as lacking clear definitions and targeting college curriculum “with a sledgehammer without regard to what gets smashed.”
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