It is no secret that the legal landscape for human resources compliance has changed drastically in recent years. Some of the more notable developments have resulted from President Trump’s Executive Orders, which sought to eliminate workplace diversity, equity, and inclusion (DEI) initiatives. Federal government officials and agencies continue to issue statements and guidance on DEI programs and initiatives, while some state governments have been pushing back. For many employers, this has led to confusion and uncertainty.
Given the changing federal enforcement landscape, it is important for employers to:
- Understand what is legally permitted vs. what is prohibited
- Review current policies for compliance purposes, and
- Maintain company values.
DEI: Permitted vs. Prohibited
By way of background, the Trump administration issued several Executive Orders and memoranda that changed the landscape of DEI programs and rights of employers, including, but not limited to:
- Executive Order 14151 (1/20/25) – An order claiming to end “illegal DEI” in government agencies, grants, and contracts.
- Executive Order 14173 (1/21/25) – An order elaborating that “diversity, equity, and inclusion’ (DEI) or ‘diversity, equity, inclusion, and accessibility’ (DEIA)… can violate the civil rights laws of this Nation.”
- Office of the Attorney General Memorandum (2/5/25) – A memorandum directing the Department of Justice’s Civil Rights Division to “investigate, eliminate, and penalize illegal DEI and DEIA [diversity, equity, inclusion, and accessibility] preferences, mandates, policies, programs, and activities in the private sector and in educational institutions that receive federal funds.”
- Executive Order 14298 (3/26/26) – An order banning federal contractors from participating in “racially discriminatory DEI activities.”
Federal agencies, such as the Equal Employment Opportunity Commission (EEOC) and the Department of Justice (DOJ), have also provided guidance to help employers ensure compliance.
While “illegal DEI” remains a vague term, the following are strictly prohibited because they violate anti-discrimination laws when they relate to gender, race, religion, and other traits protected under the law:
- Quotas and metrics
- Exclusionary groups and programs
- Using discriminatory characteristics as deciding factors for employment decisions
- Using incentives to give advantages based on race, gender, etc.
Scrutiny of DEI initiatives continue to grow at the federal level, even as the underlying laws remain largely unchanged.
What to DO with DEI
In response to these Executive Orders, guidance, and scrutiny, employers have taken various actions to mitigate risk. Some employers made major shifts in internal policies and cut DEI initiatives altogether. At the same time, other companies have merely re-branded DEI programs to maintain their diversity goals.
What should your company be doing regarding DEI? The answer changes on a company-to-company basis. Many employers have determined that certain non-prohibited DEI initiatives are fundamental to or supportive of their particular business objectives, while other employers believe less in the benefits of those initiatives and worry more about noncompliance risk.
At a minimum, all employers should:
- Stay informed – Employers and HR professionals should stay up to date on any new Executive Orders, administrative guidance, and court decisions to ensure compliance with the law. This is particularly important considering the bounds of these Executive Orders are still being tested in the courts, which may further alter an employer’s rights under the law.
- Review your DEI practices – Employers should perform a comprehensive review of their internal policies to ensure their current practices comply with existing Executive Orders and guidance. Given recent developments, this is particularly important for employers who perform work for the federal government. Businesses should also review any programs and opportunities provided to employees to ensure participation criteria are not unlawful. When reviewing policies, HR leaders should be mindful of how programs are structured and communicated, ensuring they are compliant, clearly defined, and defensible.
Consider consulting with an experienced employment law attorney who stays up to date on federal legislation and guidance. They can provide you with reliable advice and assist in your audit of internal policies and practices to help ensure compliance as new developments arise.
Compliance and Culture: You Don’t Have to Choose
Despite the series of Executive Orders attempting to eliminate DEI, employers do not have to abandon their diversity goals in order to remain compliant with evolving Executive Orders and legal guidance. Diversity can be good or necessary for business.
Employers and businesses should focus on creating fair, inclusive, and opportunity-driven workplace practices that are rooted in business objectives, employee engagement, and lawful decision-making. Employers who align their initiatives with clearly defined policies, consistent application, and compliance oversight can continue fostering strong workplace cultures while mitigating legal risk.
