Decisions by the U.S. Supreme Court from the 1970s and 1980s recognized a narrow exception to Title VII of the Civil Rights Act of 1964 under which employers may, in limited circumstances, consider legally protected characteristics (e.g., race or sex) as part of a voluntary affirmative action program designed to remedy the effects of past discrimination. Under this precedent, affirmative action programs that satisfy these stringent criteria are not unlawful employment practices under Title VII.
This framework has taken on heightened significance in the wake of last year's executive order targeting employer diversity, equity, and inclusion (DEI) programs. The executive order conditioned payment of grants or federal contracts with compliance with federal anti-discrimination law and impose potential False Claims Act liability for engaging in "illegal DEI." Although the executive order does not define that term, historically lawful remedial affirmative action programs have not been considered "illegal" under Title VII.
Yet, a new court case filed by the U.S. Department of Justice (DOJ) argues that employers violate Title VII even if their conduct falls within the limited circumstances previously permitted by the Supreme Court. The DOJ's new position could have important consequences for federal contractors and grant recipients alike.
What does the law currently say regarding when employers may engage in "affirmative action" and similar activities?
Title VII applies to employers (including private corporations with 15 or more employees) and generally deems an employer's decision an "unlawful employment practice" if it was made "because of" an "individual's race, color, religion, sex, or national origin." 42 U.S.C. §§ 2000e-2(a)(1)-(2). Other federal laws also prohibit discrimination in employment, including the Equal Protection Clause of the U.S. Constitution (which applies to governmental employers) and Title VI of the Civil Rights Act of 1964 (which may apply to recipients of federal financial assistance, including grant recipients and federal contractors).[1]
Yet, in a pair of cases from 1979 and 1987, the Supreme Court created a narrow exception to the general prohibition on employment decisions based on protected characteristics. This exemption—known as the Weber-Johnson or "remedial-program exception" to Title VII's requirements—permits employers to voluntarily consider race or sex as part of an affirmative action program designed to remedy the effects of past discrimination. See, e.g., Am. All. for Equal Rts. v. Fearless Fund Mgmt., LLC, 103 F.4th 765, 776 (11th Cir. 2024) (discussing United Steelworkers of Am., AFL-CIO-CLC v. Weber, 443 U.S. 193 (1979) and Johnson v. Transportation Agency, 480 U.S. 616 (1987)).
Characterizing Weber-Johnson as an "extremely narrow exception," the current chair of the Equal Employment Opportunity Commission (EEOC) described the doctrine as follows in 2024:
Employers can consider race and sex only in very limited circumstances as part of voluntary, remedial affirmative action plans under Title VII … [T]o justify a voluntary affirmative action plan, a company needs either actual past discrimination, the existence of a significant statistical disparity, or a "manifest imbalance" in "traditionally segregated" job categories … And even with a valid voluntary affirmative action plan, a company can never use quotas or inflexible goals. It also must be a temporary plan, not for maintaining a "balanced" workforce.
The EEOC's guidelines regarding permissible affirmative action programs under Title VII are codified at 29 C.F.R. Part 1608.
What is the DOJ saying about the Weber-Johnson exception for remedial programs now?
The DOJ now claims that more recent Supreme Court cases have diverged from Weber-Johnson, and that programs enacted under that body of law have improperly "greenlighted" race and sex discrimination.
In March 2025, the DOJ and EEOC jointly issued guidance reemphasizing EEOC's prior admonition that "very careful implementation of affirmative action and diversity programs is recommended to avoid the potential for running afoul of the law[.]" DOJ also acknowledged in guidance to grant recipients last July that consideration of protected characteristics was permissible "in rare cases where such discrimination satisfies the relevant level of judicial scrutiny." These statements were consistent with the understanding that voluntary affirmative action programs are lawful when implemented in accordance with the Weber-Johnson exception.[2] Similarly, the U.S. Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) stated in June and July of 2025 that its prior regulations requiring contractors to have affirmative action plans were "vulnerable to legal challenge as unlawful" but did not assert that employers' voluntary affirmative action programs violated Title VII in all circumstances.
In contrast, on January 14, 2026, DOJ filed a complaint in federal district court against the state government of Minnesota, alleging that its "statutory and regulatory affirmative action mandate" for its employees violates Title VII. The complaint is noteworthy because it argues that more recent Supreme Court decisions mean that the Weber-Johnson exception no longer applies—full stop.
Specifically, DOJ's press release contends that "[w]hile the U.S. Supreme Court previously sanctioned the consideration of race and sex in hiring for 'traditionally segregated job categories,' the United States argues such outdated precedents are inconsistent with both the text of Title VII and subsequent Supreme Court caselaw." The DOJ argues this includes Students for Fair Admissions, Inc. v. President & Fellows of Harvard Coll., 600 U.S. 181 (2023) (SFFA), which interpreted the U.S. Constitution's Equal Protection Clause and Title VI of the Civil Rights Act to prohibit using race as a consideration in college admissions (i.e., seeking a racially diverse student body through admissions decisions). In addition to SFFA, the complaint cites the dissenting opinions in Weber and Johnson and more recent caselaw suggesting that the text of Title VII controls over its "spirit," which DOJ asserts was the basis for the Weber-Johnson exception.
What does this mean for federal contractors and grant recipients?
While the DOJ's court filing cannot itself displace binding precedent from the Supreme Court regarding the proper interpretation of Title VII, the case is significant and worth tracking for any employer with policies or programs targeted at remedying the effects of past discrimination (potentially including DEI programs).
First, the DOJ's new litigation may result in the Supreme Court altering its long-standing interpretation of Title VII. The DOJ's press release noted that the U.S. attorney general has "invoke[d] a provision of Title VII that entitles the United States to expedited review by a three-judge district court and direct appeal to the United States Supreme Court." It is therefore possible that the Supreme Court will overrule Weber-Johnson.
The Supreme Court has not yet extended the logic of SFFA to employment discrimination claims under Title VII, though commentators acknowledge that it could elect to do so notwithstanding doctrinal distinctions. See, e.g., Caroline L. Ferguson, Diversity Hiring in the Workplace: The Implications of Students for Fair Admissions on Title VII, 57 Tex. Tech L. Rev. 443, 446 (2025) (arguing SFFA "should not affect permissible workplace diversity initiatives" but acknowledging that "the legal standard for Title VII DEI initiatives may change in the near future"); William R. Corbett, Stripping Title VII Down to Its Bare Essentials: Uncovering an Employee-Friendly Employment Discrimination Law, 94 Geo. Wash. L. Rev. Arguendo 35, 59 n.94 (2025) ("Although the Court is not bound to find that [SFFA] … applies to affirmative action and racial preferences under Title VII, the Court may revisit and modify its test for the validity of affirmative action plans under Title VII").
Second, the DOJ's position raises questions regarding the scope of potential liability under new terms that are already being added to federal grants and contracts under President Trump's Executive Order 14173, "Ending Illegal Discrimination and Restoring Merit-Based Opportunity." The EO requires insertion "in every contract or grant award" a "term" requiring the contractor or grant recipient "to agree that its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government's payment decisions for purposes of" the False Claims Act. It also requires a term requiring the contractor or recipient "to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws."
Although the Federal Acquisition Regulatory (FAR) Council is developing a forthcoming rule to implement the EO, individual agencies have already begun to incorporate such terms into contracts (an example from the U.S. Department of Agriculture can be found here). The same is true of agreements with grantees for federal financial assistance (an example from the U.S. Department of Health & Human Services can be found here).
DOJ's new court filing raises the possibility that the federal government will treat any consideration of protected characteristics in employment—including practices permissible under current law like the Weber-Johnson exception— as "illegal DEI" under the executive order and its implementing contract and grant terms. If that position were to prevail in court, it could eliminate a defense that contractors and grantees might otherwise raise if a given employment practice is alleged to violate Title VII. Given that the potential consequences of such violations under the EO include not only termination of the contract (for default) or the grant (for non-compliance), but also False Claims Act liability, the loss of any viable legal defense, however narrow, could prove significant.
What should contractors and grant recipients do now?
While legal challenges to the EO continue to work their way through the courts, many contractors and grant recipients have already altered their employment practices in response to the EO and its implementation by the federal government to date. Nevertheless, contractors and grantees are well advised to review their employment policies and programs to determine whether any might be considered unlawful. Given that dispositive administrative guidance and court decisions regarding the scope of those terms may be unavailable or in flux, consultation with legal counsel may be necessary as well. Venable's Government Contracts and Grants and Labor and Employment Groups will continue to monitor developments (readers may subscribe for further alerts at https://www.venable.com/insights/subscription-center).
[1] There are circumstances in which these laws (rather than Title VII) could govern an allegation of employment discrimination. See, e.g., Bloomberg v. New York City Dep't of Educ., 119 F.4th 209, 210 (2d Cir. 2024) (noting that a Title VI claim "with respect to any employment practice of any employer" is barred "except where a primary objective of the Federal financial assistance is to provide employment"); Engquist v. Oregon Dep't of Agr., 553 U.S. 591, 597 (2008) (explaining that "States do not escape the strictures of the Equal Protection Clause in their role as employers.").
[2] The DOJ's July guidance to grant recipients did not expressly state whether the reference to "the relevant level of judicial scrutiny" pertained to the Weber-Johnson exception to Title VII or some other standard, such as the "strict scrutiny" review applied under the U.S. Constitution's Equal Protection Clause or Title VI of the Civil Rights Act.