Legal Corner: The legality of municipal diversity initiatives
In This Section
CML Newsletter
March 3, 2026
By Robert Sheesley, CML general counsel
In 2021, CML’s President’s Initiative highlighted equity and diversity to promote concepts of diversity, equity, and inclusion (DEI) among its members and within CML. The goal is hard to argue with: “to help local elected leaders build inclusive communities where people from all backgrounds and orientations thrive socially, economically, academically, and physically.” CML highlighted the ongoing work of its members to create a broader awareness of the impacts of government actions and to ensure inclusion in all aspects of municipal work.
All municipalities should assess their DEI programs, just as they do any policies, to ensure that they do not impermissibly classify or discriminate based on an individual's protected characteristics, like race, sex, sexual orientation, transgender status, age, disability, national origin, political affiliations, or religious practice. Several municipalities have already done this work only to reaffirm their commitment to ensuring that their government works for all parts of their community.
Recent federal executive actions have caused some municipalities to question both their efforts to promote diversity and the potential for the loss of grant funding. Executive Order 14151, Ending Radical and Wasteful Government DEI Programs and Preferencing, requires the end of “illegal DEI . . . mandates, policies, program preferences and activities" in the federal government. Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, says that “illegal DEI” policies violate federal civil-rights law and mandates that federal agencies require any grant recipient or contracting party to (1) agree to comply “in all respects with all applicable Federal anti-discrimination laws”; and (2) “certify that it does not operate any programs promoting DEI that violates any applicable Federal anti-discrimination laws.”
Federal agencies have implemented these requirements. The U.S. Department of Justice’s Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination (a.k.a. the “Bondi Letter”) offered “non-binding suggestions” about compliance with anti-discrimination laws. These include the DOJ’s current opinion that “[f]acially neutral criteria (e.g., ‘cultural competence,’ ‘lived experience,’ geographic targeting) that function as proxies for protected characteristics violate federal law if designed or applied with the intention of advantaging or disadvantaging individuals based on protected characteristics.” The U.S. Department of Transportation, in what is known as the “Duffy Memo,” declared that “any policy, program, or activity that is premised on a prohibited classification, including discriminatory policies or practices designed to achieve so-called ‘diversity, equity, and inclusion’ presumptively violates federal law.”
While these are just statements of opinion, and not formal rulemaking, court decisions, or changes in law, municipal concerns are not unwarranted. Significant funding has been pulled from some municipalities and states. Litigation is ongoing across the country, but few, if any, court orders apply to Colorado municipalities. (In 2025, the U.S. Supreme Court limited how courts can issue nationwide injunctions in Trump v. Casa, essentially requiring governments to be parties to a lawsuit or protected as a subsidiary of a state’s lawsuit.)
Federal grants require certifications made “under penalty of perjury” by municipal officials. An untrue statement could carry criminal and civil penalties. These certifications are often required at the beginning of the grant, but some agencies have included them as part of draw requests later in a process. Within the past year, the policies with which a municipality agrees to comply have changed regularly, even during the course of a grant. Municipal employees, particularly managers and attorneys, should scrutinize certifications carefully and perform necessary diligence to confirm that their statements are truthful and that the organization will meet the grantor’s expectations.
DEI programs implicate two areas of law. Constitutionally, the Equal Protection Clause of the 14th Amendment prohibits a government from “deny[ing] to any person within its jurisdiction the equal protection of the laws.” In short, a law must treat “similarly situated” people in the same manner and, if it does not, courts can evaluate why and how the law differentiates (i.e., discriminates) between people. Differences based on race are the most suspect, while sex-based distinctions receive a lower level of “intermediate scrutiny.” Race-conscious government actions can survive only in the narrowest circumstances and cannot rely on vague notions or immeasurable concepts. Race-neutral criteria in programs (like cultural competence) have been upheld.
DEI also implicates federal anti-discrimination statutes like Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d, et seq.; Title IX of the Education Amendments of 1972, 20 U.S.C.§ 1681, et seq.; Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794; the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq.; and the Age Discrimination Act of 1975, 42 U.S.C. § 6101, et seq.
Improperly created DEI programs could turn into unlawful discrimination if they are unlawfully discriminatory on their face or in their implementation. For example, last year, a unanimous U.S. Supreme Court confirmed that Title VII of the Civil Rights Act of 1964 protected all individuals from discrimination based on a protected characteristic, not just members of a minority group, in a so-called “reverse discrimination” case (Ames v. Ohio Department of Youth Services).
DEI training programs for employees also could cross a line into unlawful discrimination by the creation of a racially hostile work environment. Under federal law, an employee must show that the workplace hostility is “severe and pervasive,” or that the workplace is “permeated” with discriminatory conduct that is severe, frequent, physically threatening or humiliating, and disruptive of work. In 2024, a panel of the 10th Circuit Court of Appeals rejected a white employee’s hostile work environment claim that stemmed from a single DEI training class (Young v. Colorado Department of Corrections), but only because it was not “severe and pervasive.” The panel’s decision noted that “race-based training programs can create hostile workplaces when official policy is combined with ongoing stereotyping and explicit or implicit expectations of discriminatory treatment. The rhetoric of these programs sets the stage for actionable misconduct by organizations that employ them.” Notably, the Colorado Anti-Discrimination Act no longer follows the “severe and pervasive” standard, leaving open the potential for state law claims arising directly from DEI training (C.R.S. § 23-34-402, as amended by SB23-172).
DEI programs also can help to identify and remedy facially neutral practices that have a “disparate impact” on certain groups. This theory has been recognized by courts since 1971 and is codified in federal and state law. Another federal directive, Executive Order 14281, Restoring Equality of Opportunity and Meritocracy, ordered agencies to deprioritize enforcement of disparate impact liability because the executive views the “pernicious” theory as requiring racial considerations. The order does not limit liability from Colorado law, private suits under federal law, or potential future federal actions.
CML’s members have embraced DEI in a way that serves these goals without risking unlawful discrimination. Some communities incorporate DEI concepts into governance by creating advisory committees or task forces that help identify issues relevant to traditionally underrepresented communities and to expose more parts of a community to municipal work. Others ensure accessibility throughout the community by providing translated materials for meetings, laws, and notices, scheduling meetings at different times and locations to accommodate different sectors, and offering accommodations to persons with disabilities.
Within organizations, municipalities have worked to reduce the potential for discrimination by removing systemic barriers and by training their workforce. This might include conducting recruitment efforts and contract procurement through non-traditional means and modifying job or contract requirements to attract a broader pool of applicants and vendors. Employee orientations and trainings include DEI elements that seek to promote broader cultural understandings among staff that allow them to better serve a community and reduce interpersonal conflicts.
Because of the potential impacts outlined above, municipalities should review DEI programs and their implementation but should not rush to assume they are unlawful because of federal executive orders or agency directives. As part of meaningful local self-determination, cities and towns should be able to build and rely on lawful DEI efforts without fear of retaliation. These programs have allowed boards and councils to make better decisions, obtain a clearer picture of how an action affects all parts of a community, recognize impacts of past actions, and implement remedies where appropriate.
This column is not intended and should not be taken as legal advice. Municipal officials are always encouraged to consult with their own attorneys.
All municipalities should assess their DEI programs, just as they do any policies, to ensure that they do not impermissibly classify or discriminate based on an individual's protected characteristics, like race, sex, sexual orientation, transgender status, age, disability, national origin, political affiliations, or religious practice. Several municipalities have already done this work only to reaffirm their commitment to ensuring that their government works for all parts of their community.
Why is this an issue now?
Municipal DEI programs have been challenged recently by federal actions that threaten funding and even civil investigations as a consequence of maintaining DEI programs. These federal actions unfairly criticize all DEI programs by equating them to vehicles for discrimination.Recent federal executive actions have caused some municipalities to question both their efforts to promote diversity and the potential for the loss of grant funding. Executive Order 14151, Ending Radical and Wasteful Government DEI Programs and Preferencing, requires the end of “illegal DEI . . . mandates, policies, program preferences and activities" in the federal government. Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, says that “illegal DEI” policies violate federal civil-rights law and mandates that federal agencies require any grant recipient or contracting party to (1) agree to comply “in all respects with all applicable Federal anti-discrimination laws”; and (2) “certify that it does not operate any programs promoting DEI that violates any applicable Federal anti-discrimination laws.”
Federal agencies have implemented these requirements. The U.S. Department of Justice’s Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination (a.k.a. the “Bondi Letter”) offered “non-binding suggestions” about compliance with anti-discrimination laws. These include the DOJ’s current opinion that “[f]acially neutral criteria (e.g., ‘cultural competence,’ ‘lived experience,’ geographic targeting) that function as proxies for protected characteristics violate federal law if designed or applied with the intention of advantaging or disadvantaging individuals based on protected characteristics.” The U.S. Department of Transportation, in what is known as the “Duffy Memo,” declared that “any policy, program, or activity that is premised on a prohibited classification, including discriminatory policies or practices designed to achieve so-called ‘diversity, equity, and inclusion’ presumptively violates federal law.”
While these are just statements of opinion, and not formal rulemaking, court decisions, or changes in law, municipal concerns are not unwarranted. Significant funding has been pulled from some municipalities and states. Litigation is ongoing across the country, but few, if any, court orders apply to Colorado municipalities. (In 2025, the U.S. Supreme Court limited how courts can issue nationwide injunctions in Trump v. Casa, essentially requiring governments to be parties to a lawsuit or protected as a subsidiary of a state’s lawsuit.)
Federal grants require certifications made “under penalty of perjury” by municipal officials. An untrue statement could carry criminal and civil penalties. These certifications are often required at the beginning of the grant, but some agencies have included them as part of draw requests later in a process. Within the past year, the policies with which a municipality agrees to comply have changed regularly, even during the course of a grant. Municipal employees, particularly managers and attorneys, should scrutinize certifications carefully and perform necessary diligence to confirm that their statements are truthful and that the organization will meet the grantor’s expectations.
The law of DEI
The specter of discriminatory DEI efforts is generally contrary to reality, but DEI programs must take care to avoid decision-making based on protected characteristics unless they can meet exceptionally high standards. Whether a municipality’s program is an “illegal DEI” program ultimately depends on whether the concepts are implemented in a way that is contrary to law.DEI programs implicate two areas of law. Constitutionally, the Equal Protection Clause of the 14th Amendment prohibits a government from “deny[ing] to any person within its jurisdiction the equal protection of the laws.” In short, a law must treat “similarly situated” people in the same manner and, if it does not, courts can evaluate why and how the law differentiates (i.e., discriminates) between people. Differences based on race are the most suspect, while sex-based distinctions receive a lower level of “intermediate scrutiny.” Race-conscious government actions can survive only in the narrowest circumstances and cannot rely on vague notions or immeasurable concepts. Race-neutral criteria in programs (like cultural competence) have been upheld.
DEI also implicates federal anti-discrimination statutes like Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d, et seq.; Title IX of the Education Amendments of 1972, 20 U.S.C.§ 1681, et seq.; Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794; the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq.; and the Age Discrimination Act of 1975, 42 U.S.C. § 6101, et seq.
Improperly created DEI programs could turn into unlawful discrimination if they are unlawfully discriminatory on their face or in their implementation. For example, last year, a unanimous U.S. Supreme Court confirmed that Title VII of the Civil Rights Act of 1964 protected all individuals from discrimination based on a protected characteristic, not just members of a minority group, in a so-called “reverse discrimination” case (Ames v. Ohio Department of Youth Services).
DEI training programs for employees also could cross a line into unlawful discrimination by the creation of a racially hostile work environment. Under federal law, an employee must show that the workplace hostility is “severe and pervasive,” or that the workplace is “permeated” with discriminatory conduct that is severe, frequent, physically threatening or humiliating, and disruptive of work. In 2024, a panel of the 10th Circuit Court of Appeals rejected a white employee’s hostile work environment claim that stemmed from a single DEI training class (Young v. Colorado Department of Corrections), but only because it was not “severe and pervasive.” The panel’s decision noted that “race-based training programs can create hostile workplaces when official policy is combined with ongoing stereotyping and explicit or implicit expectations of discriminatory treatment. The rhetoric of these programs sets the stage for actionable misconduct by organizations that employ them.” Notably, the Colorado Anti-Discrimination Act no longer follows the “severe and pervasive” standard, leaving open the potential for state law claims arising directly from DEI training (C.R.S. § 23-34-402, as amended by SB23-172).
DEI programs also can help to identify and remedy facially neutral practices that have a “disparate impact” on certain groups. This theory has been recognized by courts since 1971 and is codified in federal and state law. Another federal directive, Executive Order 14281, Restoring Equality of Opportunity and Meritocracy, ordered agencies to deprioritize enforcement of disparate impact liability because the executive views the “pernicious” theory as requiring racial considerations. The order does not limit liability from Colorado law, private suits under federal law, or potential future federal actions.
Municipal DEI efforts seek to remedy and prevent discrimination
Far from being vehicles for discrimination, DEI programs and anti-discrimination laws are complementary policies, at least as implemented by Colorado municipalities. CML’s then-Executive Board President Bob Widner, in the April 2021 issue of Colorado Municipalities, explained:
government is commissioned with the representation and service of diverse constituents, perhaps government should be a leader in establishing diversity, equity, and inclusion within our organizations. A government that does not embrace and welcome the diversity inherent in its community, that does not advance equity and fairness among all individuals, and that does not extend a sincere inclusive spirit to everyone, is not a government of those they serve. Because government’s quintessential purpose is to serve the people, government must lead by example in the advancement of the principles of diversity, equity, and inclusion.
CML’s members have embraced DEI in a way that serves these goals without risking unlawful discrimination. Some communities incorporate DEI concepts into governance by creating advisory committees or task forces that help identify issues relevant to traditionally underrepresented communities and to expose more parts of a community to municipal work. Others ensure accessibility throughout the community by providing translated materials for meetings, laws, and notices, scheduling meetings at different times and locations to accommodate different sectors, and offering accommodations to persons with disabilities.
Within organizations, municipalities have worked to reduce the potential for discrimination by removing systemic barriers and by training their workforce. This might include conducting recruitment efforts and contract procurement through non-traditional means and modifying job or contract requirements to attract a broader pool of applicants and vendors. Employee orientations and trainings include DEI elements that seek to promote broader cultural understandings among staff that allow them to better serve a community and reduce interpersonal conflicts.
Because of the potential impacts outlined above, municipalities should review DEI programs and their implementation but should not rush to assume they are unlawful because of federal executive orders or agency directives. As part of meaningful local self-determination, cities and towns should be able to build and rely on lawful DEI efforts without fear of retaliation. These programs have allowed boards and councils to make better decisions, obtain a clearer picture of how an action affects all parts of a community, recognize impacts of past actions, and implement remedies where appropriate.
This column is not intended and should not be taken as legal advice. Municipal officials are always encouraged to consult with their own attorneys.