How to Run a Legally Compliant DEI Program

The Trump Administration's focus on ending "illegal DEI discrimination" was recently operationalized by the U.S. Equal Employment Opportunity Commission (EEOC) and U.S. Department of Justice (DOJ) in guidance released on March 19, 2025. The agencies released two documents "focused on educating the public about unlawful discrimination related to diversity, equity, and inclusion (DEI) in the workplace." The first document is an employment poster-style notice issued jointly by the EEOC and DOJ, "What You Should Know About DEI-Related Discrimination at Work." The second document is a webpage elaborating on those points issued solely by the EEOC, "What To Do If You Experience Discrimination Related to DEI at Work." These documents (the Guidance) provide direction to employers who may have questions about how to continue to support an inclusive workplace while also complying with federal laws that prohibit discrimination. The Guidance in and of itself does not have the force of law and is not a formal regulation, but it does provide important insight into the priorities and legal views of the EEOC and DOJ when it comes to DEI programs.

This Holland & Knight alert summarizes the Guidance and provides helpful tips to employers who may be looking to modify their DEI programs in light of the Guidance.

The Standard: The Civil Rights Act of 1964

The Guidance is based on Title VII of the Civil Rights Act of 1964. Title VII prohibits employers from discriminating in hiring, firing, training, and other terms and conditions of employment because of race, sex, religion and other protected characteristics. In particular, it is a violation for an employer to "fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment because of such individual's race, color, religion, sex, or national origin."¹ Title VII also prohibits "limit[ing], segregat[ing], or classify[ing] [] employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's race, color, religion, sex, or national origin."² Title VII likewise prohibits discrimination on these bases in regard to "admission to, or employment in, any program established to provide apprenticeship or other training," including "on-the-job training programs."³

According to the EEOC and DOJ, "[u]nder Title VII, DEI initiatives, policies, programs, or practices may be unlawful if they involve an employer or other covered entity taking an employment action motivated—in whole or in part—by an employee's or applicant's race, sex, or another protected characteristic."

The Guidance

The EEOC provides the following guidance regarding when DEI would be considered unlawful under Title VII:

The prohibition against discrimination applies to a wide variety of aspects of employment. In order to allege a colorable claim of discrimination, workers only need to show "some injury" or "some harm" affecting their "terms, conditions, or privileges" of employment. The prohibition against disparate treatment, including DEI-related disparate treatment, includes disparate treatment in:

• Hiring;
• Firing;
• Promotion;
• Demotion;
• Compensation;
• Fringe benefits;
• Access to or exclusion from training (including training characterized as leadership development programs);
• Access to mentoring, sponsorship, or workplace networking / networks;
• Internships (including internships labeled as "fellowships" or "summer associate" programs);
• Selection for interviews, including placement or exclusion from a candidate "slate" or pool;
• Job duties or work assignments

The EEOC describes particular activities that it considers unlawful, including race- or gender-conscious trainings and mentorship groups:

This prohibition applies to employee activities which are employer-sponsored (including by making available company time, facilities, or premises, and other forms of official or unofficial encouragement or participation), such as employee clubs or groups. In the context of DEI programs, unlawful segregation can include limiting membership in workplace groups, such as Employee Resource Groups (ERG), Business Resource Groups (BRGs), or other employee affinity groups, to certain protected groups.

Unlawful limiting, segregating, or classifying workers related to DEI can arise when employers separate workers into groups based on race, sex, or another protected characteristic when administering DEI or any trainings, workplace programming, or other privileges of employment, even if the separate groups receive the same programming content or amount of employer resources.

Employers instead should provide "training and mentoring that provides workers of all backgrounds the opportunity, skill, experience, and information necessary to perform well, and to ascend to upper-level jobs." Employers also should ensure that "employees of all backgrounds … have equal access to workplace networks."

The EEOC also addresses common justifications for DEI programs, indicating its intent to broadly enforce the standard regardless of an employer's motivation for implementing DEI policies:

• "An employment action still is unlawful even if race, sex, or another Title VII protected characteristic was just one factor among other factors contributing to the employer's decision or action."
• "Client or customer preference is not a defense to race or color discrimination ... Employment decisions based on the discriminatory preferences of clients, customers, or coworkers are just as unlawful as decisions based on an employer's own discriminatory preferences."
• "Depending on the facts, an employee may be able to plausibly allege or prove that a diversity or other DEI-related training created a hostile work environment by pleading or showing that the training was discriminatory in content, application, or context."
• "The EEOC does not require a higher showing of proof for so-called 'reverse' discrimination claims. The EEOC's position is that there is no such thing as 'reverse' discrimination; there is only discrimination."
• "Title VII prohibits employers and other 'covered entities' from retaliating because an individual has engaged in protected activity under the statute … Depending on the facts, protected opposition could include opposing unlawful employment discrimination related to an employer policy or practice labeled as 'DEI.'"

The EEOC and DOJ also warn that "unlawfully using quotas or otherwise 'balancing' a workforce by race, sex, or other protected traits" can violate Title VII.

Key Takeaways for Employers

Unlike the directives found in Executive Order (EO) 14173, "Ending Illegal Discrimination and Restoring Merit-Based Opportunity," the Guidance, as well as Title VII of the Civil Rights Act of 1964, applies to all employers with 15 or more employees, not just government contractors. It also applies to state and local governments, staffing agencies, entities that operate training programs and labor organizations (unions). Although the Guidance does not have the force of law or substantive regulation, it does indicate how the EEOC and DOJ will enforce Title VII. Accordingly, employers should use the Guidance when evaluating existing policies and practices.

Explicit preferences based on protected characteristics such as race or sex have always been illegal. However, some recent prevailing practices may now present risk for employers. Here are tips from Holland & Knight based on the Guidance:

• Employers do not need to eliminate wholly their DEI programs, but the focus should be on "inclusivity," ensuring all employees are respected and have opportunities to succeed. Any consideration of race, sex or other protected characteristics in the terms and conditions of employment may be considered unlawful by the EEOC and DOJ.
• In all their specific employment actions, employers should be guided by the principle to "not consider race, color, sex, sexual preference, religion, or national origin," the directive that was laid out in EO 14173. No employment action should be made because of a protected characteristic, even if such consideration is only a "plus factor," "tiebreaker" or otherwise part of the decision-making process.
• Company polices and employee handbooks should be revised if they include demographically based "diversity" goals, targets or quotas that could be considered discriminatory balancing efforts. Similarly, employee compensation, incentives, or other financial or performance metrics tied to such goals, targets or quotas should be reevaluated.
• Leadership programs, affinity groups, employee resource groups and mentorship groups that exclude individuals based on protected characteristics are likely to be viewed as unlawful and should be revisited.
• When making hiring or promotion decisions, companies should not consider race, sex, religion or other protected characteristics. Companies should also reconsider "diverse slate" requirements that mandate or exclude candidates based on protected characteristics.
• Segregated training sessions are likely to be viewed as unlawful, even where the content of the presentation is the same.
• Employers should avoid providing training or education that contains heated or controversial rhetoric or themes, or requires affirmations of such controversial items or that otherwise could make employees feel ashamed, angry or uncomfortable because of a negative focus on a particular racial group, ethnicity or sex, based on the EEOC's position that DEI trainings can potentially create a hostile work environment.
• Though the terms "DEI," "equity," "diversity" and the like are not illegal, employers should use them with care to avoid any suggestion that they are being used to make decisions based on protected characteristics.
• Employers should not retaliate against employees who opt out, question or voice respectful opposition to DEI programs or trainings.
• If an employer has a "Chief Diversity Officer" or other similar personnel, careful attention should be given to what those personnel do.
• Companies should conduct a comprehensive review of internal policies and procedures to identify potentially unlawful discrimination and consult legal counsel to answer any questions.

DOJ and EEOC Signals Aggressive Enforcement 

The DOJ and EEOC indicate that they will aggressively enforce Title VII as it applies to DEI programs. In the press release accompanying the Guidance, Deputy U.S. Attorney General Todd Blanche said, "The Department of Justice is committed to ending illegal DEI initiatives, policies, and programs."

Similarly, EEOC Acting Chair Andrea Lucas stated, "Far too many employers defend certain types of race or sex preferences as good, provided they are motivated by business interests in 'diversity, equity, or inclusion.' But no matter an employer's motive, there is no 'good,' or even acceptable, race or sex discrimination."

Relation to Current Litigation Over DEI EOs

There is currently ongoing litigation over the validity of some of the provisions in recent EOs that are directed at DEI. However, the DOJ-EEOC Guidance is not directly affected by that litigation.

On Feb. 21, 2025, Judge Adam Abelson of the U.S. District Court for the District of Maryland issued a nationwide preliminary injunction in Nat'l Ass'n of Diversity Officers in Higher Education v. Trump, __ F. Supp. 3d __, 2025 WL 573764 (D. Md. Feb. 21, 2025), barring the government from enforcing EO provisions that 1) directed all executive agencies to "terminate … 'equity-related' grants or contracts" (the Termination Provision), 2) directed all executive agencies to "include in every contract or grant award" a certification, enforceable through the False Claims Act, that the contractor and grantee "does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws" (Certification Provision) and 3) directed the U.S. Attorney General to take "appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI," "deter" such "programs or principles" and "identify … potential civil compliance investigations" to accomplish such "deter[rence]" (Enforcement Threat Provision).

This injunction, which Holland & Knight reported on in a previous alert, enjoined portions of EO 14151, "Ending Radical and Wasteful Government DEI Programs and Preferencing," and the aforementioned EO 14173, mandated the elimination of all DEI programs throughout the federal government and required federal contractors and federal grant recipients to certify that they do not maintain any DEI programs that violate federal antidiscrimination laws.

However, on March 14, 2025, the U.S. Court of Appeals for the Fourth Circuit lifted the nationwide injunction in a unanimous decision, allowing enforcement of these EOs to proceed. (See Holland & Knight's previous alert, "DEI in Flux: Fourth Circuit's Decision Resuscitates DEI Executive Orders," March 18, 2025.) Neither the previous injunction nor this Fourth Circuit ruling affects the elimination of affirmative action requirements for government contractors, as discussed in a previous Holland & Knight alert, "President Trump Ends Affirmative Action Requirements for Government Contractors," Jan. 23, 2025.

Time will tell whether the Guidance is also challenged in court. If not, in the meantime, the Guidance's principles will be tested and developed through affirmative enforcement and private lawsuits under Title VII.

Conclusion

The DOJ and EEOC plan to aggressively enforce Title VII in the DEI context. Although the DOJ-EEOC Guidance does not have the force of law or regulation, it does indicate how the EEOC and DOJ interpret Title VII. Accordingly, employers should use the Guidance to evaluate the lawfulness of existing policies and practices. Several prevailing practices may now present heightened legal risk for employers. Employers do not need to eliminate entirely their DEI programs and activities, but they must ensure that the protected characteristics are not considered when making employment decisions. Please contact the authors if you have specific questions for your business.

Notes:

¹ 42 U.S.C. § 2000e-2(a)(1).

² 42 U.S.C. § 2000e-2(a)(2).

³ 42 U.S.C. § 2000e-2(d).

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.