Employment Law Update - March 6, 2025

By Paul R. Smith

DEI Might not Be DEAD Yet

I think it’s fair to say that President Trump isn’t a fan of the letters D, E, and I when used in that order. On Jan. 21, 2025, President Trump issued Executive Order?14173 titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” In the Order, the president ordered all executive departments and agencies “to terminate all discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements.” The Order also directed the Attorney General to “take all appropriate action with respect to the operations of their agencies to advance in the private sector the policy of individual initiative, excellence, and hard work.”

On Feb. 21, 2025, a U.S. District Court in Maryland blocked portions of the executive order. This arose out of a lawsuit (National Association of Diversity Officers in Higher Education et al. v. Trump et al.) initiated by the National Association of Diversity Officers in Education (NADOHE) and the American Association of University Professors (AAUP). The plaintiffs argued that the executive order was unconstitutionally vague in how it defined illegal DEI, and that the executive order constituted an unconstitutional restriction of speech. The court sided with the plaintiffs and issued a nationwide preliminary injunction preventing the executive order from being enforced while litigation is pending. The Trump administration then filed a motion to stay the preliminary injunction. On March 3, 2025, the federal judge denied the motion and refused to remove the preliminary injunction, meaning the prohibition against enforcing the executive order will remain in place. So, the anti-DEI order (which applies most directly to federal employers, but could impact all employers), has been blocked—for now. You can read more here.

The ICE Man Leaveth

One of President Trump’s key campaign promises was to deport millions of undocumented immigrants (read here). But while U.S. Immigration and Customs Enforcement (ICE) arrests increased during Trump’s first weeks in office, the pace has since slowed. In response to that slowing, President Trump has removed Calen Vitello from his position as acting director of ICE. Vitello will stay on with ICE, overseeing enforcement of arrests. A senior White House official has said that a new ICE acting director will be announced soon. You can read more here.

Does the FTC Still Hate Non-competes?

Our readers will recall that last year, while the Biden administration was still in power, the Federal Trade Commission (FTC) promulgated its Non-Compete Clause Rule (you can see the rule here), which effectively banned noncompete clauses. Just before the rule went into effect, a federal district court issued an order blocking the FTC from enforcing the rule. One might have expected that once President Trump went into office, he would direct the FTC to rescind the rule and allow companies to continue to utilize non-competes. However, based on a memorandum he issued on Feb. 26, 2025, the FTC Chairman Andrew N. Ferguson appears to be taking a different approach. Citing the FTC’s mandate to protect the American people from unfair or deceptive practices and unfair competition, Chairman Ferguson directed the agency to form a “Joint Labor Task Force” to “prioritize investigation and prosecution of deceptive, unfair or anticompetitive labor market conduct,” including the use of no-poach/non-solicit agreements, wage-fixing agreements, noncompete agreements and deceptive job advertising. Interestingly, at the time the FTC promulgated the Non-Compete Clause Rule, Mr. Ferguson called the rule unlawful and “the most extraordinary assertion of authority in the Commission’s history.” While it doesn’t appear that the FTC is going to pursue further rulemaking on this issue, Chairman Ferguson’s recent memorandum suggests that the FTC intends to scrutinize non-competes. You can read Chairman Ferguson’s memorandum here.

SCOTUS Seems Skeptical about Heightened Hurdle for Reverse Discrimination Claims

There has been a recent rise in “reverse discrimination” claims—i.e., claims in which a member of a majority group asserts that they were discriminated against based on their majority race, gender, religion, etc. Currently, there is disagreement among the federal circuits as to whether such claims should be treated differently than run-of-the-mill, minority discrimination claims. For example, the Tenth Circuit (which includes Utah), requires a reverse-discrimination plaintiff to meet a higher burden: the plaintiff must show “background circumstances to support the suspicion that the defendant is that unusual employer who discriminates against the majority.” On Feb. 26, 2025, the U.S. Supreme Court heard argument on the case of Ames v. Ohio Department of Youth Services, presumably to resolve the circuit split. In Ames, the plaintiff alleged that she was discriminated against because she was heterosexual, with the promotion she sought going to a homosexual coworker. Given that the plaintiff was asserting a “reverse discrimination” claim, the trial court applied the heightened standard and dismissed the claim. The plaintiff appealed all the way to the Supreme Court.

During oral arguments, most of the justices appeared to agree that, on its face, federal law does not require plaintiffs to meet a higher standard just because they are members of a majority group. For example, Justice Kavanaugh said, “Discrimination on the basis of sexual orientation, whether you are gay or straight, is prohibited. The rules are the same whichever way it goes.” Justice Barrett said the plaintiff “would have the exact same burden and be treated the exact same way under Title VII” if she was gay or straight. And Justice Gorsuch said, “We’re in radical agreement today on that, it seems to me.” Assuming the Court indeed reverses in Ames, and decrees that reverse discrimination claims should be treated the same as other claims, the recent rise in these claims will likely increase even more. You can read more on this here.

Question Corner

By Kristyn B. Escalante

Sick Leave Accrual for Multi-State Employees

Q.???????If an employee works at company locations in two states and resides in one of them, is the employee eligible to receive accrued sick leave under both state laws, and should the employee accrue leave separately based on each state’s requirements?

A.???????Generally, the geographic location where the work is primarily performed dictates under which state law sick leave applies. ?For example, if an employee resides in Idaho, a state which does not require employers to provide paid or unpaid sick leave, but performs work primarily in Washington, Washington’s sick leave laws will apply.

An employer with an employee who works at company locations in two different states may want to consider adopting a uniform leave policy based on the state that offers the most employee-friendly sick leave laws to better ensure compliance.?