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DEI in the Workplace – A Quickly Changing Landscape!

04.15.25 written by

With the Trump administration moving at breakneck speed on all things DEI, I thought it would be a good time to provide a general update on where things currently stand on DEI initiatives and legal risks and compliance strategies employers should consider. 

Below are just a few examples of the Trump administrations actions related to DEI initiatives within both the federal government and the private sector:  

How does the Trump administration define “illegal DEI”?

President Trump’s January 21 Executive Order defines prohibited conduct as:

  • Illegal discrimination and preferences; and
  • Workforce balancing based on race, color, sex, sexual preference, religion, or national origin.

While this type of conduct has long been prohibited by existing federal law (discrimination and quotas have always been unlawful under Title VII of the Civil Rights Act and other statutes), there is no doubt the Trump administration is looking to take additional steps regarding DEI initiatives.

With that being said, President Trump’s Executive Order regarding DEI and private sector employers does the following:

  • Instructs Federal officials, including the Attorney General and all agency heads to prepare and submit a report that the administration will use to establish new “civil rights” policies against corporate DEI programs within 120 days – or by May 21. The report must include recommended measures to encourage the private sector to “end illegal discrimination and preferences, including DEI,” as well as a proposed strategic enforcement plan.
  • Directs all federal agencies to “combat illegal private-sector DEI preferences, mandates, policies, programs, and activities” and to take all appropriate action to advance the order’s policy of “individual initiative, excellence, and hard work” among private employers. 
  • The order does not apply to private-sector employment and contracting preferences for military veterans and individuals with disabilities.

It is critical to note that well designed DEI programs have never been illegal, and remain viable despite the Trump administration’s efforts, but they must comply with anti-discrimination laws such as Title VII. Just as under any prior presidential administration, employers must ensure their initiatives do not involve:

  • Quotas;
  • Set asides; or
  • Policies that explicitly favor or disadvantage employees based on race, gender, or other protected characteristics.

What are the biggest legal risks for employers implementing DEI programs?

Given the latest developments, you need to recognize that even well-constructed DEI programs could run some risk for your organization. The risks include:

  • Increased risk of discrimination lawsuits alleging DEI-related unlawful discrimination from employees who feel disadvantaged.
  • Scrutiny from federal and state agencies such as the EEOC, OFCCP, State AGs, and DOJ – including potential agency audits.
  • Internal employee complaints, spurred on by messaging from the White House and external advocacy groups encouraging employees to take action.
  • Public scrutiny from employees and members of the public, amplified by social media and other news outlets.
  • Potential conflicts between federal restrictions and state/local laws that mandate diversity initiatives.

What types of DEI practices are most likely to come under scrutiny?

While the following actions have always been risky, they are especially likely to come under fire given recent events:

  • Hiring or promotion policies that give explicit preference to certain demographic groups.
  • Internships or mentoring programs that give explicit preference to certain demographic groups.
  • Employee training that includes race- or gender-based stereotyping.
  • Affinity group policies that exclude employees based on protected characteristics.
  • Supplier diversity initiatives that mandate racial or gender-based quotas.
  • Policies that limit speech or expression in a manner perceived as restricting certain viewpoints.
  • AI-driven hiring or evaluation tools that unintentionally embed or reinforce bias.

Equal Employment Opportunity Commission (“EEOC”) and Department of Justice (“DOJ”) Guidance

In some recent guidance jointly issued by the EEOC and DOJ, the two agencies suggest that DEI Programs might be unlawful if the program causes an employer to take an employment action motivated in whole or in part by an employee’s race, sex, or another characteristic protected by federal and state anti-discrimination laws.

The EEOC and DOJ’s joint guidance puts employers on notice that the traditional purpose of DEI (to explicitly favor particular groups to increase diversity in the workplace) may be illegal under Title VII, which is consistent with the Trump administration’s vocal opposition to DEI programs, and is supported by the Trump administration’s recent victory before the Fourth Circuit Court of Appeals which allowed it to temporarily ban all DEI programs within the federal government.

In addition, the EEOC provided additional guidance on its website. This guidance (1) restates that Title VII protects all individuals, not just minority or historically underrepresented groups; (2) reminds employers that many DEI programs and considerations are not Title VII compliant merely because the program uses, or the employer considered, several characteristics when making an employment decision; (3) that “diversity” is not a business necessity that justifies discrimination under Title VII; and (4) that mere DEI training could, under certain circumstances, create a hostile work environment.

Written by:
Scott M. Zurakowski, Esq.
330-497-0700
szurakowski@kwgd.com

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