Critical Member Update: DOT Memo Overview in Plain English

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April 28, 2025

Federal Transportation Funding, DEI Policies, and What It Means for Our Communities

On April 24, 2025, Secretary of Transportation Sean Duffy issued a memo to every recipient of DOT financial assistance. The message: funding is at risk if recipients are found to be violating federal law - especially when it comes to immigration enforcement or running programs based on race or sex, even if the intention is to promote diversity, equity, or inclusion (DEI).

On the surface, it sounds simple: follow the law, avoid discrimination, and there’s no problem. But it’s not clear that this is factually correct.

Where Things May Not Line Up

The memo frames everything as enforcement of “existing law,” but it’s not that straightforward. What DOT is calling noncompliance is based on a much narrower interpretation of civil rights laws than most cities, towns, and transportation agencies have been working under for decades.

These new expectations aren’t coming from Congress. They’re coming through executive orders and agency interpretation - meaning they haven’t been fully tested in court. Communities are being asked to dismantle or abandon DEI programs not because the courts have ruled against them, but because the administration has stated preemptively that these programs are illegal.

They may at some point become illegal - through the courts - but the legal community’s current consensus interpretation of case law indicates that as of today, they are not. (But that could change when these challenges are heard.)

It’s confusing. It’s unsettling. And it leaves communities, railroads, contractors, grant recipients - and even the DOT and FRA - without a clear path forward.

What the Transportation Industry Is Doing

The transportation industry - freight, passenger, and infrastructure - has largely embraced DEI over the past decade.

Every single Class I railroad maintains DEI initiatives, though some have removed hot-button terminology. At least in public statements, railroads have been clear that diverse teams are more than PR - they’re good for safety, innovation, and long-term success.

Infrastructure and construction firms are similar. So far, we can find no major builders - the companies actually putting shovels in the ground for transportation projects - that have come out against DEI. They might be tweaking internal language and making sure federal contracts are airtight, but they aren’t walking away from the value of a diverse workforce.

Where there has been some pullback is in heavy equipment manufacturing. Companies like Ford, Caterpillar, and John Deere have scaled down or cancelled their DEI efforts.

What’s Happening at the City Level

At the community level, the picture’s pretty clear: the overwhelming majority of major cities still maintain DEI offices or programs.

But pressure to dismantle is mounting. In Nashville, Tennessee, new state laws are forcing the city to scramble to protect or reframe its DEI work. In Enfield, Connecticut, the Town Council voted to disband its DEI committee altogether.

Most cities aren’t abandoning DEI, but political and legal pressure is growing - fast.

What It Means for Railtowns and Rail Communities

For rail communities, MPOs, DOTs, first responders, and everyone else depending on federal transportation funding, the situation boils down to this:

• Compliance with federal law remains mandatory - but “what counts” as compliance is shifting fast and mostly through executive action, not through clear-cut legal rulings.

• Maintaining a commitment to fairness, opportunity, and strong workforce pipelines is still broadly considered best practice - and it still matches what most of the transportation industry is doing.

• There’s a need for caution and awareness. Being thoughtful about language, reviewing grant compliance, and avoiding unnecessary risk is smart, as is obtaining qualified legal expertise to establish your plan of action.

Despite Duffy’s memo being potentially unenforceable or unconstitutional, the Trump 47 administration’s actions since taking office suggest they’re not likely to hesitate to implement it - particularly in states or cities already resistant to their agenda.

At Railtowns.org, we’re keeping a close watch. We’ll continue providing updates and support to help communities and partners navigate the noise - without losing sight of the real goal: building a rail-connected America that’s safe, accessible, and thriving for everyone.

What Railtown Communities Should Do Now

We want to be very clear: nothing in this update should be taken as legal advice. Every community’s situation is different, and how the new federal policies affect you may depend on factors like your existing programs, funding sources, and state or local laws.

That said, here’s what we recommend every railtown and grant recipient consider doing right now:

• Engage Legal Counsel: If your community receives any DOT funding - whether directly or through MPOs, transit agencies, or other intermediaries - consult an attorney familiar with federal grant compliance and civil rights law. They can help you assess whether any current policies, practices, or public statements could create risk under the new interpretation framework.

• Review Your Grant Agreements: Look closely at your existing grant contracts, cooperative agreements, or award letters. Understand what compliance terms you’ve agreed to - and whether new conditions could apply retroactively or only to future funding.

• Audit Internal and External Programs: Inventory any initiatives tied to transportation, infrastructure, hiring, contracting, or workforce development. Pay close attention to language around race, sex, national origin, and immigration status. Focus on whether programs are framed around economic disadvantage, geographic need, or other neutral terms.

• Prepare Contingency Plans: Know ahead of time how your community would respond if a grant were frozen or challenged. Would you need to shift language, amend policies, or submit additional certifications? Building a proactive plan now can save a lot of pain later.

• Document Compliance Efforts: Keep a clear paper trail showing that your community is making good faith efforts to comply with federal law as it evolves. If enforcement actions are taken later, documentation can be a critical defense.

• Stay Tuned: This landscape is changing fast. Court challenges are already in motion, and further executive actions are likely. We’ll continue to monitor developments and offer plain-language updates to help you stay informed.

Closing Reminder:

While the current DOT memo reflects an aggressive federal interpretation of civil rights law, it’s not yet backed by settled court rulings. Communities must balance caution with realism - protecting critical funding while standing firm on the values that have made America’s rail communities stronger, safer, and more connected.

If you’re unsure what next steps make sense for your town, your MPO, or your regional partners, reach out. We’ll help connect you to people or organizations who can guide you.