Trump 2.0: The Latest D&O Update

In prior posts (most recently here), I have noted the ways the new Trump administration’s policies and actions could affect the D&O liability and insurance arena. In the current rapid-fire environment, with daily developments that threaten to overturn established practices and norms, just trying to keep up – much less understand the significance of events – can be a challenge. In an effort to try to keep the scoreboard up to date, I have noted below some of the most recent key developments and tried to describe their significance for the D&O environment.

SEC Pauses the Defense of Climate Change Disclosure Guidelines: The nomination of SEC Chair Paul Atkins has not yet even been confirmed; indeed, he just appeared this past week for his initial Senate Committee hearing. But while Atkins is not yet even on board, the acting SEC leadership is moving forward to undo key Biden administrative initiatives. Among other things, this past week SEC announced that it had voted to end its court defense of the agency’s climate change disclosure guidelines, which the agency had just finalized in March 2024. 

After the agency adopted the disclosure rules last year, several parties, including a group of states’ attorneys general, challenged the rules in court as beyond the SEC’s authority and as unconstitutional. The court challenges were consolidated in the Eighth Circuit, where the litigation remains pending. The agency’s recent move means that the SEC will no longer defend the rules in the Eighth Circuit proceeding.

As noted in a March 28, 2025, Wall Street Journal article (here), the agency’s move to drop its defense of the rules means that the agency “is effectively walking away from the regulations it had established, despite not actually rescinding the rules.”

The remaining Democratic member of the Commission, Caroline Crenshaw, issued a blistering March 27, 2025 statement criticizing the agency’s move to withdraw the defense of the guidelines. She noted that while the rules’ adoption had gone forward in compliance with the Administrative Procedures Act, the agency’s withdrawal of its support of the rules had not. She also argued that withdrawing the defense of the rules while leaving the rules on the books puts the rules, as well as those who job it is to try to comply with the law, “in a strange and perhaps untenable situation.”

The rules seem likely now to be stricken down by the courts and in any event to be non-enforced by the SEC under the current administration. However welcome development this development may be by companies who regretted the burdens that the rules impose, a number of companies will still be obliged to make climate change, sustainability, and other disclosures under the EU Corporate Sustainability Reporting Directive ( as discussed here).

To be sure, at discussed here, the European Commission recently introduced a package of amendments that would streamline the EU disclosure requirements and reduce the number of companies to which the requirements apply. But the continued existence of the EU rules and their continued applicability to a number of companies, including companies based in the U.S., highlights the conflicting obligations companies face as European and U.S. policies and regulatory postures diverge.

This divergence between Europe and the U.S. was underscored in a March 28, 2025, Wall Street Journal article entitled “In Europe, You Can Be Sued for Not Taking Action on Climate Change. In the U.S., It’s The Opposite” (here). Among other things, the article notes that while in the U.S., where asset managers are being too focused on ESG, the Dutch bank ING was told on Friday that it would be sued by a climate advocacy group for not taking strong enough action to tackle climate change.

The different approaches in the two legal environments highlights the difference in the political environments. The problem is that companies that operate in the two environments face the challenge of navigating these challenging circumstances. In the meantime, however, it appears that under the new administration, U.S. companies will not be obliged to meet the SEC’s climate change disclosure guidelines.

SEC Staffers Taking Up Buyout Offers, Shrinking Agency Staff: In addition to the news about the agency’s position in the climate change disclosure guidelines litigation, it also developed this past week that as much as 10% or more of the SEC’s agency staff appears to be positioned to leave the agency as a result of a mix of Trump administration initiatives.

According to a March 21, 2025 Politico article (here), hundreds of SEC staffers have agreed to voluntarily leave the agency, in part by taking up the administration’s $50,000 buyout offer, an “exodus” that the article describes as a development that “stands to substantially shrink the ranks of the top Wall Street regulator.”  Sources cited in the article speculate that the departures could reach as high as 15% of the agency’s staff, or 750 people.

These developments arise amidst the Trump administration’s move to shrink the government generally. According to the article, the recent and likely upcoming staff reductions at the SEC have “sparked broad concern among both current and former agency officials who warn that some of the most experienced staffers are leaving after having spent years overseeing the nation’s financial markets.” Concerns about the departures’ impact on the agency are exacerbated by the fact that agency has already moved to shutter a number of its regional offices, including those in Los Angeles and Philadelphia.

As John Jenkins noted in his March 27, 2025 post on The CorporateCounsel.net Blog about these developments (here), the SEC staff departures raise the question whether the agency will have sufficient personnel to fulfill the administration’s objectives at the agency. The attrition at the agency also “is a source of legitimate concern for public companies and the lawyers who advise them.”

I will say this: one of the most important reasons that the U.S. financial markets are so widely respected is that there has been an active and engaged cop on the beat. At some point, staff departures – and in particular departures of the most experience staff – will mean that the trustworthy cop may no longer be as effective as it has been in the past. This could create a serious problem both for the financial markets and for investors.

DOJ, EEOC Issue Guidance on Trump Administration’s Policies on DEI: On March 19, 2025, the U.S. Department of Justice (DOJ) and the Equal Employment Opportunity Commission (EEOC) issued a joint statement and released two technical assistance documents focused on educating the public about unlawful discrimination related to diversity, equity, and inclusion (DEI) in the workplace.

The agencies’ joint March 19, 2025, press release can be found here. The EEOC’s accompanying document “What to Do If You Experience Discrimination Related to DEI at Work”  can be found here, and the accompanying document entitled “What you Should Know About DEI-Related Discrimination at Work” can be found here.

The documents collectively project the position that DEI initiative can run afoul of the anti-discrimination laws if an employment action is motivated in relation to a protected characteristic, such as race or gender. The documents cite of examples of DEI-related actions that could be counter to the law’s requirements include efforts to “balance” the workforce; limit or classify employees; make hiring or promotion decisions or make access to mentoring or support programs based on protected characteristics. Indeed, among other things, the documents suggest that even DEI training programs could give rise to a hostile work environment claim, and even that reasonable opposition to DEI training could constitute protected activity that could prohibit employer retaliation.

The documents collectively take a curious approach. These documents are not intended to help companies to ensure that their DEI programs are in compliance with the requirements of the law. Rather, the documents are addressed to company employees and appear calculated to educate employees on how to protect themselves from potentially unlawful purposes or impact of DEI initiatives.

The guidelines and other documents are open to criticism for their lack of clarity. The documents do not, in a way that might have been helpful to well-intentioned employers, help employers to understand what constitutes “illegal DEI.” It also doesn’t require a cynical mindset to see these documents as intended as “shots across the bow” – the documents seem intended to have a chilling effect on corporate DEI programs. At a minimum, the guidelines appear intended to suggest that the administration’s is taking aim at traditional programs intended to try to redress historical discrimination.

The most practical concern about the agency’s guidelines is they seem calculated to try to encourage employees and advocacy group’s to legally challenge corporate DEI programs. The agencies’ publication of these guidelines and their articulation of their approach to DEI seem to intended to foreshadow future government enforcement actions against employers under the anti-discrimination laws with respect to DEI. The documents’ clear intent to speak directly to employees about their putative rights with respect to employer DEI programs also seems meant to encourage employees to consider taking action against their employers with respect to corporate DEI initiatives. At a minimum, the agencies’ statements on these issues create a complicated compliance environment for employers who have in the past promoted DEI initiatives. 

It should be noted that the administration’s hostility to DEI is not limited to just the EEOC and the U.S. Department of Justice. The Wall Street Journal reported over the weekend (here) that the Federal Communications Commission is investigating Disney for its diversity, equity, and inclusion practices. The agency’s Chair has previously publicly stated his intent for the agency to use its investigative powers to combat diversity initiatives in the private sector.