Labor & Employment Law Daily Wrap Up, INDUSTRY NEWS, TRENDS—Paramount Skydance, Nexstar, Charter, AT&T, and Verizon receive letters from coalition of state comptrollers regarding DEI rollbacks, (Aug 25, 2026)

By Brandi O. Brown, J.D.

Each company received a similar joint letter from the comptrollers of New York City, New York State, Connecticut, California, Maryland, and Massachusetts.

A coalition of comptrollers and treasurers from six predominantly Democratic-led states and municipalities recently sent letters expressing concern about several companies' decisions to alter, curtail, or eliminate diversity, equity, and inclusion (DEI) programs and related disclosures while seeking federal approval for mergers or acquisitions.

Mark D. Levine, New York City Comptroller, along with the comptroller, controller, or treasurer of New York State, Connecticut, California, Maryland, and Massachusetts sent letters to Paramount Skydance Corporation, Nexstar Media Group Inc., Charter Communications, Inc., AT&T Inc., and Verizon Communications Inc., voicing concerns about whether the companies adequately evaluated the legal, financial, operational, and human-capital risks associated with the DEI changes and whether their boards fulfilled their oversight responsibilities when trying to gain regulatory approval of recent or proposed mergers or acquisitions. Paramount merged with Skydance, Nexstar acquired TEGNA Inc., AT&T acquired U.S. Cellular spectrum assets, Verizon acquired Frontier Communications, and Charter is seeking approval of its pending acquisition of Cox Communications.

DEI rollbacks and associated risks. The comptrollers explained that they were concerned that modifications undertaken in connection with the regulatory approval process would introduce longer-term risks and costs on the company and its long-term shareholders.

“The elimination of diversity and inclusion programs also creates distinct business risks,” they write. “Inclusive human capital management programs support and may directly bolster talent recruitment, employee retention, and overall operational performance. This connection is underscored by market leaders across sectors, such as Costco and Netflix, which have publicly reaffirmed their commitments despite broader corporate retrenchment, signaling that these programs remain vital to long-term shareholder value and company performance.”

Disney as example. In their letters to all five companies, the comptrollers argued that Disney demonstrated that companies can withstand heightened regulatory scrutiny without abandoning DEI initiatives. They noted that Disney faced FCC review and other scrutiny regarding its DEI practices but "successfully navigated these heightened regulatory pressures without dismantling its foundational practices."

“By choosing instead to vigorously defend its corporate governance structure through formal legal channels, Disney demonstrated that total policy retrenchment is a discretionary governance choice rather than a regulatory necessity.”

“Ultimately,” the comptrollers explained, “the continuity maintained by the market and sector peers mentioned above demonstrates that dismantling these initiatives is a discretionary Board choice rather than a legal or regulatory necessity.”

Clarifications sought. For each company, they requested “clarification on two points.” Regarding formal risk assessments, they queried, “Whether management presented the Board with a formal documented assessment outlining the legal, financial, operational, and human capital implications of modifying these initiatives, reporting practices, and related internal controls.” Regarding governance oversight frameworks, they questioned, “Whether the Board explicitly determined that sufficient compliance, monitoring, and disclosure mechanisms would remain in place following these changes, and if so, how the Board evaluated their adequacy.”

Companies: Paramount Skydance Corporation; Skydance Media; Nexstar Media Group, Inc.; TEGNA Inc.; Charter Communications, Inc.; Cox Communications; AT&T Inc.; US Cellular; Verizon Communications Inc.; Frontier Communications

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