The Trump Administration issued executive orders attacking diversity, equity, and inclusion (DEI), portraying many such initiatives as “illegal.” Not long after, the Equal Employment Opportunity Commission (EEOC)—the federal agency charged with rooting out discrimination in employment—took inspiration from the orders to issue novel agency guidance on what constitutes “illegal DEI.”
So, is DEI now illegal? What can—and what should—employers do in the wake of the new guidance?
The Executive Orders Impose Liability & Harsh Penalties
I previously outlined the major requirements of the two primary DEI-related executive orders here. They demand that the federal government dismantle its own DEI activity and that it “combat illegal private-sector DEI” initiatives.
Yet that’s not all these orders do. One of the orders also imposes liability under the Federal Claims Act (FCA), which calls for treble damages. As attorneys and legal scholars have pointed out, contractors and grant recipients can be found liable under the FCA if they have engaged in DEI practices that are deemed “illegal” by the executive order while under contract with the federal government—despite “DEI” remaining woefully ill-defined. The liability potential is simply staggering for organizations that would like to promote DEI while working with the federal government.
The EEOC Issues New Guidance & Goes on the Offensive
In March of this year, the EEOC issued two “technical assistance” documents that provide practical guidance on how to abide by the executive orders. “What To Do If You Experience Discrimination Related to DEI at Work” provides some examples of unlawful workplace DEI practices, such as exclusion from training or mentorship programs and “segregating” workers, such as by limiting affinity groups to only certain kinds of employees.
“What You Should Know About DEI-Related Discrimination at Work” reaffirms that Title VII, the federal law barring discrimination and harassment in employment, applies to both minority and majority groups. Significantly, it also asserts that DEI-related training can produce a hostile work environment if it is “discriminatory in content, application, or context.”
Several former EEOC officials publicly claimed that the guidance constitutes the personal opinions of Acting Chair Andrea Lucas, not the official position of the EEOC. (As explained here, the Commission lost quorum for issuing binding guidance.) Further, they assert that employers have a legitimate interest in promoting diversity, that it is highly unlikely a DEI training could create a hostile work environment, and that workplace affinity groups are legal.
Commissioner Lucas also sent letters to nearly 20 prominent law firms requesting copious information related to DEI practices, as part of a pressure campaign to get them to disavow DEI. Once again, former EEOC officials spoke out publicly to express their “grave concerns” that Lucas appeared to exceed her authority under Title VII and that her letters “imply a duty to respond without any basis in the laws that the EEOC enforces.”
What Should Businesses Not Do?
It is likely only a matter of time before the EEOC establishes quorum and makes Lucas’s guidance the new official stance of the Commission. As a result, legal commentators and scholars generally agree that a few specific actions are likely to be classified as illegal under the new regime. The most basic protection you can afford your business is to steer clear of these practices:
- Quotas. Setting a specific number or percentage for minority group hires throughout an organization or even on a specific team, which predetermines the racial, gender, etc. makeup of the workplace before even assessing available candidates.
- Set-asides. Reserving certain roles or openings at an organization for minority candidates, essentially forgoing the possibility that a majority group candidate could be considered. This includes reserving promotional and other advancement opportunities for minority applicants—instead, they must remain broadly available to the workforce.
- Plus-factors or preferences. According a boost to a candidate in a hiring or promotion process because of minority status, even if that credit is merely to break what would otherwise be a tie of equally qualified candidacies.
- Required diversity metrics. Organizations can announce their general aspirational goals for increased diversity, but they should not establish quantified targets for diverse hires or promotions, whether a percentage of the workforce or a flat number, as doing so can imply that some people will automatically not be considered. Further, performance reviews and compensation should not be tied to hitting these sorts of diversity goals.
- Asking about protected characteristics. It has been a best practice not to ask about any protected class categories, such as race, age, or religion, during hiring or any other selection process, but the EEOC guidance reminds readers that utilizing “diverse slate” hiring practices may involve gathering “pre-employment information about race” or another trait. Depending on the circumstances, using such information in an employment decision could constitute illegal discrimination.
- Stating or implying that “implicit bias” is tied to certain demographic groups. Connecting an innate or deep-seated feature, such as “implicit bias,” to a protected characteristic like race could be seen as illegal under the new orders. If it is delivered to imply, for example, that one group generally suffers from implicit bias toward others, this could potentially constitute creating a hostile work environment under the new EEOC guidance. (But see below for what is allowed.)
- Restricting access to affinity groups. Workplace affinity groups, sometimes referred to as employee or business resources groups (ERGs or BRGs), have come to be commonplace in corporate America, offering minority employees a space to commune and commiserate with one another. Under the new EEOC guidance, reserving membership for workers who share a common trait could constitute “unlawful segregation.” To avoid this charge, such groups must allow open membership to anyone who wants to join, irrespective of their protected class (i.e., their race, national origin, sex, sexual orientation, etc.). These groups likely can continue to focus on a particular culture or identity, but admission cannot be restricted only to members of that group. Some observers think that affinity groups might be immediately disqualified under the new rules, but that remains to be seen.
- Restricting access to advancement programs. The EEOC guidance clearly states that “access to or exclusion from” training, mentorship, sponsorship, leadership, and networking programs on the basis of a protected class could be discriminatory and violative of the law.
- Violations of religious belief. Some workers may claim that training, policies, mandates, etc. constitute “illegal DEI” if they present viewpoints that are opposed to their religious beliefs. Organizations, and the trainers they hire, should be mindful of how workplace training may be misconstrued. Steering clear of mentioning religion is advised, as well as sticking to the law and your organization’s values.
What Can Businesses Do?
Reacting to the executive orders, attorneys general from various states jointly issued guidance on DEI initiatives in the private sector. Their Multi-State Guidance asserts that “the federal government does not have the legal authority” to render what are otherwise legal practices unlawful within private organizations, even if they receive federal funds. They believe that the executive order “conflates unlawful preferences in hiring and promotion with sound and lawful best practices for promoting” DEI, and even “mislabels” these preferences as DEI, which “creates confusion as to lawful practices and policies…” In response, their collective guidance is meant to set the record straight.
Below are DEI-related activities that organizations generally should be able to do, even in light of the executive orders and EEOC guidance. These activities are aligned with the Multi-State Guidance and the professional opinions of many legal scholars and commentators.
- You don’t have to comply preemptively or over-comply. In the wake of the executive orders, some companies have eliminated their DEI initiatives or significantly scaled them back, bowing to unprecedented and public pressure from the administration, often only to face boycotts and public outcry from those who support such initiatives. Yet others have chosen to push back and fight. Your organization does not necessarily have to do more than what is absolutely necessary for compliance. It does not have to snuff out every semblance of DEI, to wildly reshape its guiding values, or to take other drastic measures. You do not have to comply prematurely, nor should you feel that you need to over-comply, surpassing what the orders dictate.
- Audit DEI programs. It would be wise to conduct a review of your DEI initiatives under attorney-client privilege. Be sure to assess your organization’s mission and core values as you do so, and also review the business case for DEI. You might consider doing this in tandem with a workplace culture audit that looks at your organization’s environment more broadly.
- Cast a wide net. DEI is supposed to be about providing opportunities to people to whom they were previously denied. Instead of using race or sex in decision-making, consider casting a wider net in your recruitment and promotion efforts. Perhaps your organization can recruit from a more varied college base, including HBCUs for example, or maybe you can enhance internal promotional opportunities. You might place a note in job posts that you encourage applications from diverse candidates, although everyone will receive the same consideration. Extending your recruitment funnel in these ways can ensure a diverse talent pipeline while remaining compliant with current regulations.
- You can still value diversity. An organization’s core values and overall strategic goals can still include expanding the diversity of the workforce, as long as particular metrics are not imposed (see above). Carefully crafted internal communications and external-facing collateral can highlight your organization’s commitment to increasing opportunity for all people, including those to whom it has been historically denied.
- You can have affinity groups. The Multi-State Guidance recommends employee resource groups (ERGs) as a best practice for retention. Yet affinity groups or ERGs will likely be found lawful only employees are eligible to join irrespective of the characteristic around which the group is centered. For example, a Latino ESG could support and celebrate Latino culture and contributions, but would likely have to remain open to black, white, Asian, and other workers.
- You can still offer training. Diversity training is still possible, and the Multi-State Guidance even recommends training on “unconscious bias” as a best practice. If this training is delivered in a broad way—e.g., “anyone can hold unconscious bias toward others”—then it would likely be able to pass muster even under the new orders and EEOC guidance. Ensure your training providers are aware of the recent guidance and how to best comply with it without comprising their message.
- Stand by your values—or don’t, but own your position. No matter the course of action you choose, be authentic. If your business decides to abandon diversity commitments out of fear, be clear with your team and clients about those fears and your motivations, and prepare for potential fallout. Likewise, if you double down on your DEI initiatives, be open about doing so and ready for pushback. No matter what, have a clear sense of your values and a clear message.
In the wake of the executive orders and new EEOC guidance, it would be wise to audit your DEI programs and how they are implemented across your organization. By the same token, you don’t have to abandon your commitment to diversity, equity, inclusion, accessibility, or belonging simply because there are new regulations.
For additional recommendations, consult the Multi-State Guidance for all of its best practices for recruitment, retention, and integration. There is plenty that your business can continue to do to support a diverse workforce that wants to create and maintain an open-minded and thriving company culture.
A more extensive version of this post can be found on the author’s Medium profile here. Read our previous coverage of the anti-DEI executive orders and various challenges to them here.