A bill that has advanced to the Arizona Senate would allow employees to seek damages and injunctive relief against employers that violate state or federal laws prohibiting diversity, equity, and inclusion (DEI) “policies” and “concepts.” If passed and not vetoed, this legislation could increase uncertainty and liability for employers with programs and practices that could be labeled as unlawful DEI policies.

• Arizona House Bill 2135 proposes a private right of action allowing employees to seek statutory damages against employers for violating DEI policies.
• The legislation could expose employers to significant liability, with minimum damages set at $100,000, amid growing federal scrutiny of lawful DEI initiatives.
• It is unclear at this time whether it will be passed and signed into law by the governor.

Arizona House Bill (HB) 2135, titled, “Prohibited Diversity, Equity and Inclusion Policies,” would create a private right of action under Arizona law against covered entities that violate state or federal laws prohibiting certain DEI “polices” or “concepts.” The Arizona House of Representatives passed the bill on February 23, 2026, and it was sent to the state Senate, where it is currently under consideration.

The legislation could raise further concerns for employers engaging in lawful DEI initiatives and practices. The Trump administration and the U.S. Equal Employment Opportunity Commission (EEOC), as well as other federal agencies, continue to intensify enforcement...

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