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April 18, 2025 Article

Navigating New DEI Compliance and Enforcement Trends: What Employers Need to Know

A series of recent executive orders and federal agency actions have introduced significant changes to how workplace diversity, equity, and inclusion (DEI) programs are evaluated under federal law. While longstanding legal obligations prohibiting discrimination remain in place, employers—particularly federal contractors and grant recipients—are now facing increased scrutiny related to DEI-related practices, including hiring, workplace training, and employee resource groups.

These developments have raised important compliance considerations for organizations seeking to support inclusive workplaces while also navigating evolving interpretations of civil rights laws. This client alert highlights key changes and offers practical takeaways for employers seeking to assess and align their policies with current federal expectations.

Core Anti-Discrimination Protections Remain Unchanged

While recent federal directives target certain DEI-related practices, it’s important to recognize what has not changed. Federal law continues to prohibit employment discrimination on the basis of race, color, religion, sex, and national origin under Title VII of the Civil Rights Act of 1964. Employers may not make employment decisions based on these characteristics or engage in practices that unlawfully limit opportunities for any such group.

A February memorandum from the U.S. Attorney General has also clarified that activities such as educational or cultural observances (e.g., Black History Month or Holocaust Remembrance Day) that promote awareness or celebrate historical contributions are not considered prohibited DEI programs.

Key Executive Order Impacting DEI for Private Sector

Recent executive actions aim to shift how federal agencies interpret civil rights laws and encourage the private sector to examine the legality of DEI-related practices:

  • Executive Order 14173 (“Ending Illegal Discrimination and Restoring Merit-Based Opportunity”) directs all federal agencies to identify and address potentially unlawful forms of discrimination, including in DEI programs. Agencies are also instructed to encourage private-sector employers to end practices that may be inconsistent with civil rights laws.
  • Agencies are prioritizing compliance reviews of large corporations, nonprofit institutions, and professional associations, with a focus on programs or practices that may include preferences based on race or sex.
  • While the order emphasizes a "merit-based" approach to opportunity, it does not clearly define what constitutes unlawful DEI activity, contributing to increased uncertainty.

EEOC and DOJ Shifts in Enforcement

Recent leadership shake-ups at the EEOC and DOJ signal a new focus on enforcing anti-discrimination laws in a manner that applies equally to all protected groups, regardless of majority or minority status:

  • EEOC Quorum Loss: The Commission currently lacks a quorum to issue regulations or rescind prior guidance documents, but continues to process complaints and investigations. In particular, the Commission is encouraging covered individuals to file charges related to unlawful DEI.
  • New Technical Guidance: In March 2025, the EEOC and DOJ issued joint technical assistance, titled “What To Do If You Experience Discrimination Related to DEI at Work,”  cautioning that DEI programs may be unlawful if they involve employment decisions based, in whole or in part, on race, sex, or other protected characteristics.
  • ‘Reverse Discrimination’ Emphasis: The agencies reiterated that all individuals are protected under Title VII and that the law prohibits discrimination against any group, regardless of demographic makeup.

Federal Contractors: Heightened Risk and Reduced Clarity

Federal contractors face heightened compliance risks under the new directives:

  • End of EO 11246 Enforcement: The administration has rescinded EO 11246, a foundational framework for affirmative action among federal contractors. The Office of Federal Contract Compliance Programs (OFCCP) has been directed to cease related operations, though enforcement remains in place for disability- and veteran-related affirmative action under separate laws.
  • New OFCCP Leadership: In March 2025, new leadership at the OFCCP announced a shift in focus toward investigating past affirmative action plans for potential evidence of unlawful discrimination. Contractors are advised to review prior submissions and assess their exposure.
  • Gender Ideology Restrictions: An additional executive order (EO 14168) prohibits the use of federal funds to promote “gender ideology,” which the order defines narrowly as policies or materials that affirm gender identities not aligned with biological sex. What is required for compliance is not yet clear. Federal agencies have until May 20, 2025 to submit an update on how the EO will be implemented for contractors to achieve the policy of the order.

Workplace DEI Trainings: A Valuable Compliance Tool But Proceed With Caution

Workplace trainings remain a permissible and often valuable tool to support nondiscrimination, but employers should carefully evaluate the content, application, and context of DEI training programs:

  • Content Scrutiny: Trainings that ascribe negative traits to individuals based on race, sex, or other protected characteristics may present legal risk. For example, a DEI training program that tells non-minority employees to be “less oppressive” or “less ignorant.”
  • Hostile Work Environment Claims: The EEOC has cautioned that DEI trainings could support hostile work environment claims if they are discriminatory in content, application, or context.
  • Segregated Trainings: The EEOC interprets Title VII as prohibiting the separation of employees into training groups based on protected characteristics, even if the same materials are used.

Key Takeaways for Employers

  • Review DEI Programs under Attorney-Client Privilege: Evaluate all DEI-related workplace initiatives to ensure they are consistent with current interpretations of federal civil rights laws.

  • Assess Training Content: Review training materials for potential legal risk, ensuring all content is inclusive and neutrally applied.

  • Monitor Litigation and Guidance: Stay informed of ongoing court decisions and regulatory updates, especially as challenges to executive actions and federal guidance continue.

If you have questions about how these developments may impact your organization—or would like assistance reviewing or updating your DEI policies—please contact a member of our Employment Law Group