During President Trump’s first days in office, he signed a series of executive orders that effectively dismantle diversity, equity, and inclusion (DEI) initiatives in the public sector and implicate the private sector.
Following the orders, the OPM and the United States Office of the Attorney General issued memos to provide guidance as to what may constitute an “illegal” DEI or diversity, equity, inclusion, and accessibility (DEIA) program and how the orders are to be enforced. One of the Attorney General’s memos directs the DOJ to begin comprehensive investigations into federally funded private companies for potential civil rights violations concerning their DEI and DEIA practices. The memo instructs the DOJ to report its enforcement strategy by March 1, 2025. The DOJ has pledged to identify “egregious offenders” and initiate both civil and criminal investigations into DEI–related employment practices.
The memo excludes from its mandate “educational, cultural, or historical observances” that celebrate diversity, recognize historical contributions, and promote awareness but do not discriminate, exclude, or divide based on race or sex.
Private companies that are federal contractors or subcontractors, including higher education, research institutions, and not-for-profit service providers, among others, will be impacted by these orders. Those that provide any type of services to or receive funding from the federal government should review and, if necessary, revise their DEI initiatives to ensure they remain compliant.
Federal contractors that falsely certify compliance with the executive order’s DEI restrictions could face potential claims or liability under the False Claims Act. Also, arguing that DEI policies result in race- or sex-based discrimination, employees may continue to challenge hiring and promotion decisions under Title VII.
What employers should do now:
- Assess and revise current DEI policies. Conduct a thorough assessment of existing hiring, promotion, and training programs to ensure compliance with the new directives. Modify policies or programs that might subject the company to risk of noncompliance or a potential claim.
- Consult legal counsel. To mitigate risks, engage legal counsel to interpret the implications of the executive order on the company’s practices.
- Monitor compliance. Implement mechanisms to track compliance with the new or revised policies.
- Stay informed on further guidance. We anticipate the release of additional guidance regarding the DEI executive orders, which will provide further clarity and direction. Staying informed will enable businesses to adapt to any new requirements.
If you have any questions regarding the content of this alert, please contact Carolyn Marcotte Crowley, partner, at ccrowley@barclaydamon.com; Sierra Leitten, law clerk, at sleitten@barclaydamon.com; or another member of the firm’s Labor & Employment Practice Area.
The Labor & Employment Podcast is an award-winning biweekly Barclay Damon Live presentation that keeps you updated on all things employees. Our Barclay Damon hosts and their guests discuss state and federal anti-harassment and discrimination laws; wage and hour and misclassification audits; onboarding, disciplining, and offboarding employees; enforcing restrictive covenants; and other topics of interest to employers. Click here to watch or listen to the Labor & Employment Podcast, and click here to watch or listen to Barclay Damon’s other award-winning podcast series, Cyber Sip™.