Texas Attorney General Opinion Reshapes Legal Risk Around DEI Programs

Key Takeaways

• DEI Programs Reframed as Legal Risk in Texas: A new Texas Attorney General opinion declares race- and sex-based DEI programs unconstitutional, reshaping compliance expectations for state and local government entities.
• Binding Guidance for Public Sector, Broader Implications for Private Firms: While binding on Texas state agencies, the opinion warns that private employers operating DEI programs may face legal exposure under existing anti-discrimination laws.
• Procurement and Supplier Programs in Focus: Historically underutilized business (HUB) and Disadvantaged Business Enterprise (DBE) programs are singled out as unconstitutional, raising immediate implications for procurement, contracting, and third-party risk management.
• Prior Legal Guidance Overturned: The opinion reverses a 1999 attorney general opinion, closing what the current office describes as decades-long ambiguity around the legality of race-based government programs.
• Enforcement Signal, Not Just Policy Guidance: The Attorney General’s office has indicated it will investigate and pursue action against entities maintaining DEI or affirmative action programs deemed unlawful, elevating this from policy debate to enforcement risk.

Deep Dive

Texas Attorney General Ken Paxton has issued a legal opinion declaring Diversity, Equity, and Inclusion (DEI) policies unconstitutional across Texas state and local government, a move that significantly alters the compliance landscape for public institutions and potentially for private organizations operating in the state.

The opinion concludes that decades of state laws and policies incorporating race- or sex-based decision-making violate both the U.S. Constitution’s Equal Protection Clause and the Texas Constitution’s Equal Rights Amendment. According to the attorney general’s office, more than 100 Texas statutes and programs rely on DEI frameworks that now fall outside constitutional limits under this interpretation.

While the opinion is binding on Texas state agencies, it also carries broader implications. The document warns that private-sector employers engaging in race or sex-conscious DEI practices may be exposing themselves to legal liability under existing state and federal anti-discrimination laws, signaling heightened legal risk beyond the public sector.

At the center of the opinion is a strict reading of constitutional equal protection principles. The analysis argues that government action cannot lawfully treat individuals differently based on immutable characteristics such as race or sex, regardless of whether such distinctions are intended to promote equity or inclusion. Programs that prioritize access to funding, contracts, employment, or representation on these grounds, the opinion states, constitute unlawful discrimination rather than permissible policy objectives.

The opinion also overturns a 1999 legal opinion issued by then Attorney General John Cornyn, which declined to directly address the legality of race-based government programs. Paxton’s office argues that the earlier guidance left constitutional questions unresolved, allowing DEI-related practices to expand across state government without clear legal boundaries.

A significant portion of the opinion focuses on historically underutilized business (HUB) programs and similar initiatives that prioritize public grants or contracting opportunities based on race or sex. The analysis concludes that these programs establish impermissible classification regimes and rely on prohibited proxies for merit, resulting in unconstitutional allocation of taxpayer funds. The opinion explicitly distinguishes these programs from benefits for veterans and veteran-owned businesses, which it says remain lawful because eligibility is tied to service rather than personal characteristics.

The opinion also examines Disadvantaged Business Enterprise (DBE) programs and statutory requirements that mandate consideration of race or sex when appointing members to state boards, commissions, and committees. According to the analysis, such mandates rest on assumptions that individuals of a particular race or sex represent the interests or viewpoints of an entire group, an approach the opinion finds incompatible with constitutional standards.

In supporting its conclusions, the opinion points to the U.S. Supreme Court’s 2023 decision invalidating race-based affirmative action in college admissions at Harvard University and the University of North Carolina. That ruling held that such programs failed to meet strict scrutiny and reaffirmed the Court’s position that racial classifications by the state are inherently suspect. Paxton’s opinion interprets the decision as extending beyond higher education, reinforcing constitutional limits on race-based preferences across government programs.

The Office of the Attorney General stated that it will continue to investigate and pursue enforcement actions against school districts, state agencies, and local governments that maintain DEI or affirmative action programs deemed unconstitutional. While attorney general opinions do not carry the force of statute, they are binding on state agencies unless overturned by a court or superseded by legislation, giving the guidance immediate operational significance for governance, procurement, and compliance functions across Texas government.

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