July 2025From OFCCP’s request to federal contractors on DEI compliance to a pivotal Supreme Court ruling on nationwide injunctions, the past few weeks have brought critical developments that could reshape how companies operate, govern, and engage their workforce. In this month’s Trendline Report, we unpack four key takeaways from Trendline Strategies’ executive briefing on the DOJ civil fraud initiative, explore the broader implications for corporate compliance and governance, and spotlight what federal contractors need to know about recent OFCCP and DOL actions. Below is Trendline’s take on the latest legal, policy, and regulatory trends impacting the business community. |
Workforce |
OFCCP Invites Voluntary Disclosures Showing Compliance with Ant-DEI EOOn June 27, Department of Labor’s OFCCP Director Michelle Eschbach issued a letter inviting federal contractors to voluntarily submit narrative summaries detailing how they have complied with Executive Order (EO) 14173 and discontinued practices tied to the now-rescinded EO 11246. While emphasizing that participation is optional, the letter critiques the prior framework for encouraging race- or sex-based employment decisions and signals OFCCP’s concern that some contractors may have overcorrected in their use of DEI-focused placement goals—resulting in potential unlawful disparate treatment. Contractors who wish to respond may do so via OFCCP’s Contractor Portal by September 25, 2025. Framed as a voluntary opportunity to “share information,” the letter raises questions about OFCCP’s authority and how it may use voluntary disclosures. With President Trump’s signing of Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” and OFCCP’s recently proposed implementing regulations, OFFCP likely lacks the authority to take direct action related to responses. Additionally, the timing comes amid budget uncertainty, with the FY 2026 proposal eliminating OFCCP’s funding entirely. Contractors and grantees that choose to respond should assume that OFFCP will share responses with other agencies, including the Department of Justice or Equal Employment Opportunity Commission. In light of this uncertainty, federal contractors are encouraged to evaluate their practices—particularly any that involve demographic targets or DEI programs—and consult legal counsel before taking action or submitting information that could later be scrutinized in investigations or litigation. |
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DEI & Fraud? Get Ahead of False Claims Act RisksOn June 26, Trendline Strategies hosted a virtual briefing on the DOJ’s Civil Rights Fraud Initiative, which invokes the False Claims Act to target alleged “illegal DEI discrimination” under President Trump’s Executive Order 14173. Legal experts including Former Department of Labor Secretary Tom Perez discussed how the initiative impacts DEI programs, increases enforcement risks, and creates some uncertainty. A few points to remember, include:
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Business Implications of SCOTUS Decision: Limiting Nationwide Injunctions |
| To close out its 2024-2025 term, the Supreme Court issued a 6–3 decision in Trump v. CASA, significantly limiting the authority of federal courts to issue nationwide injunctions—including those blocking presidential actions. The ruling narrows the permissible scope of injunctive relief to what is necessary to provide complete relief only to the plaintiffs before the court.
This development is reshaping the legal landscape for large companies. With fragmented enforcement, businesses can no longer count on a single court to halt federal rules nationwide—meaning legal strategies must now span multiple districts. This can raise costs and create complexity, especially for multistate employers navigating varied laws on non-competes, visas, DEI and more. As agencies fast-track deregulation in favorable jurisdictions, companies may also seize strategic advantages, fueling regulatory arbitrage. The result? Tighter compliance programs and a need to monitor developments across every region. From January 20 to April 29, the Trump Administration has faced 25 nationwide injunctions temporarily halting implementation of executive branch policies on various issues ranging from federal funding, immigration, DEI, and elections. Click the link below to read Trendline’s analysis of the ruling. |
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Corporate Governance |
SEC Explores Easing Public Company RegulationsU.S. exchange operators and the Securities and Exchange Commission are exploring whether to ease regulatory burdens for public companies in an effort to attract more high-value startups to go public. These previously unreported discussions involve the SEC, Nasdaq, and the New York Stock Exchange, and include potential reforms such as reducing disclosure requirements, lowering IPO costs, and limiting the influence of minority investors. |
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Recent Shareholder Votes on Anti-DEI Proposals Overwhemingly FailDespite a surge in proposals to scale back diversity and inclusion efforts, shareholders aren’t buying it. Even as activist campaigns grow more aggressive, the majority of investors are standing firm—voting to uphold DEI initiatives and rejecting efforts to dismantle them. Trendline is closely monitoring these developments—here’s a quick look at the 2025 vote results so far this proxy season. |
AI & Technology |
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States Retain Ability to Regulate Artificial Intelligence |
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The United States Senate voted overwhelmingly on Tuesday to eliminate a proposed 10-year federal ban on state regulation of artificial intelligence from President Trump’s tax and spending package. In a 99–1 vote, lawmakers adopted the amendment introduced by Senator Marsha Blackburn. The decision paves the way for states to continue to legislate around AI. Last year, 45 states introduced AI bills, and 31—plus Puerto Rico and the Virgin Islands—passed legislation. |