Worker Bias Suits Reveal DEI Dual Compliance Trap for Employers

President Donald Trump’s executive orders curtailing the diversity efforts of companies and the federal government have created a tricky tightrope for employers to walk as they defend staffing decisions plaintiffs say were made to appease his administration.

Trump upended the anti-bias legal landscape by banning diversity, equity, and inclusion in the government and ordering federal agencies to target private employers’ DEI. He also revoked a longstanding EO aimed at eliminating race and sex discrimination and requiring affirmative action at federal contractors.

The policy pronouncements and ensuing legal threats pushed employers to stay on the administration’s good side by rolling back or rebranding DEI practices. But this also opened the door to bias suits from minorities in addition to those from largely White workers objecting to DEI.

“I would call it almost a compliance pincer movement that these employers are caught in, because on one hand, if you go too far with DEI, then you’re risking” lawsuits from nonminorities that already are emerging, said Janette Levey, founder of the employment law boutique Levey Law LLC.

“If you panic in response to political pressure and abruptly pull back on everything you were doing before,” companies will face traditional race discrimination claims by minorities, Levey said.

Employment attorneys said recent lawsuits by Black ex-employees alleging International Business Machines Corp.'s and Rotork Controls Inc.‘s compliance with federal anti-DEI demands resulted in their terminations underscore this precarious environment.

Contractors like IBM and Rotork face greater competing liability risks than other businesses while trying to safeguard federal dollars in their revenue pipelines, as they are simultaneously subject to Trump’s orders and varying state public contracting policies, attorneys said.

“Of course, these government contracts are very lucrative, and they’re worried about losing contracts,” Levey said. “But the underlying law itself is still the same. Discrimination on either end remains illegal.”

The new cases show a “broader tension” between employers navigating compliance with Title VII of the 1964 Civil Rights Act and the government’s “competing policy focus” regarding DEI, said Kara M. Maciel, founding partner of Conn Maciel Carey LLP.

Companies must ensure actions like terminations or reductions in force are backed by legitimate, nondiscriminatory business reasons and documented to protect against litigation from all angles, Maciel said.

‘Inexplicable Exodus’

The IBM cases filed in New York and Maryland federal courts accuse the company of illegally firing Black executives last year “to appease” the administration and retain government agencies’ favor.

IBM veterans Annette Brooks and Zena Washington allege they were among the company’s few Black vice presidents and were terminated in an “inexplicable exodus” of Black senior executives following Trump’s anti-DEI orders.

IBM characterized the complaints as meritless.

The company has concurrently combated US Justice Department allegations that it illegally used diversity practices like tying bonuses to demographic targets, reaching a $17 million False Claims Act settlement in April 2026 under the administration’s new Civil Rights Fraud Initiative. IBM denied wrongdoing but voluntarily agreed to revise some diversity practices, DOJ said.

Meanwhile, a fired Rotork worker’s Florida federal suit accused the manufacturer of rolling back diversity efforts to avoid losing federal contracts, resulting in his February firing on the pretext of performance issues.

Rotork can’t comment on the pending litigation’s specifics, but “strongly” disputes the claims, Head of Change Management & Communications Adam Rogers said in a statement. He added that Rotork is committed to “maintaining a workplace that is respectful, inclusive, and compliant with all applicable laws.”

“If the actions were in fact taken to curry favor with the Trump administration, that would not be a legal defense,” said Michael Selmi, an employment discrimination law scholar at Arizona State College of Law.

“There could be an argument that these particular individuals were hired and promoted to comply with the previous EO and now they were terminated to comply with the new EO,” Selmi said. “I can’t imagine an employer making that claim, though I suppose it is possible.”

If the suits survive summary judgment, settlement value will increase “exponentially” and expose companies to potentially high damages, Levey said.

Several cases cite Section 1981 of the Civil Rights Act of 1866, which has no caps on compensatory or punitive damages.

Those contractors aren’t the only ones being sued.

Edward D. Jones & Co. faces dual bias lawsuits from White employees alleging equity-related policies were discriminatory and Black employees alleging widespread pay bias.

And JPMorgan Chase & Co. is fighting claims it engaged in systemic bias against African Americans, maintaining “merely performative” DEI.

Federal workers have perhaps been most immediately affected by Trump’s anti-DEI orders.

Hispanic former immigration judge Irma Perez recently alleged in California federal court that she was fired partially due to the orders’ effects, despite positive performance assessments during a two-year probationary period. Her complaint cited disproportionate DOJ termination of women and minority immigration judges.

Federal vs. State

Some companies have landed in conflicting regulatory orbits when it comes to diversity.

Last year, the Federal Communications Commission approved Verizon Communications Inc.'s acquisition of Frontier Communications Parent Inc., with the condition that it roll back its DEI efforts.

That created an opening for the California Public Utilities Commission, which also had to approve the merger, to assess compliance with state laws and regulations promoting diversity in the utility workforce and supply chain.

To secure the CPUC’s approval, Verizon struck multiple agreements to support California’s public policy goals, including a $10 million partnership with the state’s university system to build a workforce development program “to recruit from underrepresented populations.”

Attorneys and academics argue that the push for DEI, alongside critics’ growing legal threats, makes it difficult for businesses genuinely committed to overall fairness in hiring and promotion to find a path forward.

Employers shouldn’t stop DEI initiatives, but instead audit to ensure practices are carried out in a neutral manner that doesn’t consider protected classes, they said.

“This is sort of an evolving area, and many companies are watching how courts are going to look at these cases,” Maciel said.