Burkhard Fassbach

As this blog’s readers know, DEI as a topic has proven to be a high priority under the new Trump administration. The administration’s approach to DEI is important not only for domestic U.S. companies, but also for multinational companies with U.S. subsidiaries. In the following guest post, Burkhard Fassbach examines the DEI-related issues for multinational companies. Burkhard is a D&O lawyer in private practice in Germany. I would like to thank Burkhard for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Burkhard’s article.Continue Reading Guest Post: What Multinational Corporations Should Know About DEI Risks in the US

Even before the start of the new Trump administration, corporate DEI initiatives faced increasing scrutiny. With the new administration, DEI initiatives face even greater scrutiny. Following Trump’s January inauguration, the President and the Attorney General declared that the new administration intends to target what they have called “illegal DEI.” The administration’s approach creates regulatory and enforcement risks for companies and their executives with respect to DEI issues. And as detailed in a recent law firm memo, these developments could also give rise to increased corporate and securities litigation risks as well, as discussed below. The Winston and Strawn law firm’s April 28, 2025, memo entitled “Securities Litigation Risk in the Evolving DEI Landscape” can be found here.Continue Reading Corporate and Securities Litigation Risk in the New DEI Environment

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.Continue Reading Trump 2.0: The Latest D&O Update

Last month, when I assembled my list of the Top D&O Stories of 2024, I not only designated the November 2024 election of Donald Trump to a second Presidential term as last year’s top story but I also suggested that the advent of his second administration would likely be the top story of 2025 as well. We are now just four weeks into the Trump’s second term, and it is clear that my prognostication about the impact of the new Trump administration is truer than I ever imagined and in ways that I never foresaw.

The purpose of this post is to try to compile in one place a list of the ways in which – at least so far and at least as far as we know – the early actions of the new Trump administration has already impacted or will impact the world of D&O liability and insurance. Continue Reading Trump 2.0 and D&O (So Far)

Early in the New Year, McDonald’s announced that as a result of an outside law firm audit it would be  ending some of its diversity practices, citing as the reason the U.S. Supreme Court’s 2023 decision outlawing affirmative action in college admissions. Notwithstanding this corporate action, just a few days later McDonald’s was hit with a civil rights lawsuit filed by a conservative activist alleging that a Hispanic scholarship program the company sponsors is discriminatory based on race. As discussed below, this new lawsuit is just the latest anti-ESG lawsuit conservative activists have filed based on DEI-related and other issues. A copy of the January 12, 2025, complaint in the new McDonald’s lawsuit can be found here.Continue Reading McDonald’s Sued in ESG-Backlash Lawsuit over Hispanic Scholarships

The directors’ and officers’ liability environment is always changing, but 2024 was a particularly eventful year, with important consequences for the D&O insurance marketplace. The past year’s many developments also have significant implications for what may lie ahead in 2025 – and possibly for years to come.  I have set out below the Top Ten D&O Stories of 2024, with a focus on future implications. Please note that on Wednesday, January 15, 2025 at 11:00 AM EST, my colleagues Marissa Streckfus, Chris Bertola, and I will be conducting a free, hour-long webinar in which we will discuss The Top Ten D&O Stories of 2024. Registration for the webinar can be found here. I hope you can join us for the webinar.Continue Reading The Top Ten D&O Stories of 2024

On December 11, 2024, the Fifth Circuit, sitting en banc, and by a vote of 9-8, struck down Nasdaq’s board diversity rules. The full Court’s decision overrules an earlier ruling of a three-judge panel that had upheld the Nasdaq rules.  The en banc panel held that the SEC exceeded its authority when it approved the rules. The court’s ruling, which can be found here, represents the latest blow against corporate DEI initiatives.Continue Reading Fifth Circuit Strikes Down Nasdaq Board Diversity Rules

As I have documented on this site, conservative advocacy and legal groups have been pursuing an aggressive ESG backlash campaign. Among other things, these groups’ efforts have caused several high-profile companies to walk back their DEI initiatives. These groups have also pushed for state-level anti-ESG legislation and have also even pursued anti-ESG litigation. The litigation results have been mixed at best, as noted for example here. However, in the ESG-backlash securities lawsuit filed by a conservative advocacy group against Target in the wake of a consumer boycott following the company’s LGBT “Pride Month” campaign, a federal district court has denied the defendants’ motion to dismiss. As discussed below, there are several interesting features of the court’s ruling. A copy of the Court’s December 4, 2024, opinion can be found here.Continue Reading ESG Backlash Securities Suit Against Target Survives Dismissal Motion

As often happens when companies are hit with securities class action lawsuits, Lululemon, which in August was sued in a securities suit, was hit with a parallel shareholder derivative lawsuit. The derivative suit allegations not only largely track the allegations in the prior securities suit, but the derivative suit complaint expressly refers to the prior securities lawsuit filings. However, there is an unusual twist. In addition to tracking the same allegations as the securities suit, the Lululemon derivative suit complaint contains an entirely new and different set of allegations – and the new set of allegations are interesting in their own right.

The new allegations relate to the Lululemon’s DEI program (or what Lululemon called its IDEA program, standing for Inclusion, Diversity, Equity, and Action). DEI programs have been the recent focus of attention, with, for example, some companies facing litigation for even having a DEA program, and other companies (such as Ford and Harley-Davidson) having to publicly back away from their DEI program in response to political pressure. The allegations in the new Lululemon derivative complaint do not seek to challenge the company for having adopted this kind of program; the allegations instead question the company’s actions for doing too little to combat discrimination and eliminate racial issues at the company. In the context of a changing environment surrounding ESG issues in general, and DEI issues in particular, the new Lululemon lawsuit represents an interesting development, as discussed below. The derivative complaint in the new lawsuit can be found here.Continue Reading Lululemon Hit with Derivative Suit for Allegedly Ineffective DEI Program

There is no doubt that, as I have previously noted on this site, the conversation about ESG has changed over time, particularly as ESG has faced a political backlash. These changes not only concern ESG itself but each of its three constituent pillars – and while ESG discussions frequently focus on the “E” pillar, and in particular on climate change, the changes in the ESG conversation also concern the “S” pillar as well. Of the recent changes surrounding the Social component of ESG, arguably none is more important that the U.S. Supreme Court’s 2023 decision in Students for Fair Admissions v. Harvard College, in which the Court ruled that race-based policies should not be used in university admissions. In a May 23, 2024, Law360 article entitled “The State of Play in DEI and ESG One Year After Harvard Ruling” (here), attorneys from the Crowell & Moring law firm review the ways that the Supreme Court’s decision in the Harvard case have changed the dialog surrounding Diversity, Equity and Inclusion (DEI) and ESG.Continue Reading ESG, DEI, and the Supreme Court’s College Admissions Decision