Four States Accused of Violating Federal Anti-Discrimination Order

The Wisconsin Institute for Law & Liberty (WILL) has filed a complaint alleging that New York, Massachusetts, Maryland, and Indiana are violating federal law by continuing to implement race-based contracting policies. This comes after the Trump administration's Department of Transportation (DOT) issued a permanent injunction last fall aimed at ending such practices in federally funded projects.

The core issue revolves around whether these states can legally maintain their Minority Business Enterprise programs, which critics argue discriminate against non-minority business owners. The complaint asserts that these state programs are designed to achieve racial quotas, effectively barring white male business owners from participating in certain contracts.

In October 2025, the DOT published an Interim Final Rule (IFR) that eliminated race- and sex-based presumptions from federal Disadvantaged Business Enterprise programs. Daniel Lennington, vice president and deputy counsel for WILL, stated, "States seem to believe that because certain projects are entirely state funded, the IFR does not apply… But states cannot circumvent federal law simply by using state tax dollars."

Allegations Against State Programs

The complaint details specific instances where the states allegedly imposed discriminatory requirements. For example, New York's DOT is accused of advertising projects with Minority Business Enterprise goals, despite claiming compliance with the Civil Rights Act. Massachusetts DOT recently issued a notice requiring eight percent of contracts to be awarded to minority and women-owned businesses for a pavement project.

Maryland's transportation department reportedly sets a minimum minority business goal of five percent for significant projects, including major highways and tunnels. Similarly, Indiana's DOT is alleged to impose race-based quotas on highway projects, including federal repairs, requiring seven percent of contracts to go to minority businesses and three percent to women-owned businesses.

WILL represents Contractors for Equal Opportunity (CEO), an organization of businesses that claim to have been adversely affected by such discriminatory practices. The CEO's website states, "Whether governments use the phrase ‘Affirmative Action,’ ‘Diversity, Equity, Inclusion,’ or just ‘Supplier Diversity,’ these programs all illegally discriminate based on race and/or gender."

Background on Federal Changes

The Trump administration's actions to dismantle race-based contracting programs followed a successful lawsuit by WILL on behalf of two clients. The Department of Justice (DOJ) found that longstanding affirmative action programs in the DOT were unconstitutional. In September 2025, the DOJ and DOT agreed to eliminate the multi-billion dollar set-aside program for qualifying women-owned and minority-led businesses, which had been in place for 45 years.

Despite these federal changes, WILL's latest complaint suggests that some states are still committed to policies deemed discriminatory. Lennington noted, "The Trump Administration took an important step to end race discrimination in federally funded highway projects. Now some states are flouting that rule by paying for some roadbuilding projects without any federal money."

Responses and Implications

The states named in the complaint have not publicly responded to the allegations. A DOT official did not provide comments when approached for clarification on the matter. The ongoing legal dispute raises questions about the future of race-based contracting policies at the state level and their compliance with federal law.

As the situation develops, the implications for federal funding and state contracting practices could be significant. If the allegations are proven, it may lead to stricter enforcement of federal anti-discrimination laws and potentially reshape how states approach minority business programs in the future.