Diversity, Equity, and Inclusion (DEI), sometimes expanded to include Accessibility (DEIA), has faced criticism in the media for being perceived as entitlement-driven, disconnected from the broader population, lacking genuine inclusivity, and focused on meeting quotas. During the first Trump administration, some government agencies implemented DEI training that framed all white individuals as inherently privileged and prejudiced, reportedly separating them into different rooms for reprimanding. Additionally, corporations like Wells Fargo and Microsoft introduced executive diversity targets aimed at addressing past social injustices. However, these initiatives were often implemented without coordination with compliance departments.
The backlash was severe. After President Biden took over and reinstated DEI in the government policy and practices, Edward Blum and Steven Miller through political action committees filed lawsuits against various organizations to stop DEI and “affirmative action” practices. The Vulture Fund case, which had to do with monies specific to Black female entrepreneurs along with the Harvard and University of North Carolina affirmative action case headlined these efforts.
Based in part on the backlash, on January 21, 2025, President Trump signed Executive Order 14173, titled "Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” Specifically, it terminates “diversity, equity, and inclusion” (DEI) discrimination in the federal workforce, and in federal contracting and spending. It revoked Executive Order 11246 Equal Employment Opportunity for federal contractors. It made it clear that large organizations from private companies to universities who embrace DEI that may violate civil rights laws will be targeted by the Department of Justice.
Does that mean all DEI is illegal? No. There is no definition of what is legal or illegal DEI except the statement it cannot violate the civil rights laws. A federal judge in Maryland recently enjoined that part of the EO for that reason.
Should an employer stop doing DEI? Probably not. Depends on whether the DEI was shaming people, setting quotas, or otherwise segregating people by protected classes – probably not in those cases.
Employers should still embrace diversity. Most will agree that diversity from population is thought to positively impact organizations. Therefore, programs such as celebrating various months, various people, and various cultures should still be on the radar. President Trump celebrated Black History Month with Tiger Woods.
As for pronoun usage, there is nothing currently legally prohibiting companies from allowing employees to use their preferred pronouns in their own email systems, although some states have passed laws prohibiting certain employers from using pronouns (e.g., FL for K-12 schools and contractors).
Employee Resource Groups or ERGs are still important for organizations to give employees a safe place for themselves to congregate. However, the trouble comes when the groups are not inclusive of others and those not traditionally identifying with the group wish to join and are not allowed in. Employers should backtrack and rethink admission policies and keep them open to all.
On the other hand, there may be nothing in the law that prevents people of the same gender or race to voluntarily limit participation when there is no additional benefit, reward, or penalty associated with doing so. There is also a federal case from the U.S. 7th Circuit Court of Appeals that allowed a company to prevent a religious ERG from forming given that it would be espousing anti-LGBT sentiment. One other issue to keep in mind is the NLRB issue of taking suggestions from an ERG and implementing it. With the current administration, they may try to penalize these employers by declaring the ERG as a union.
Diversity is also important in pipeline development whether external or internal candidates. Affirmative Action today was not about quotas, though it got caught up in the noise of Harvard and DEI. It was about preparing those who otherwise would not be able to get through the door onto the playing field. Under EO 11246, only the most qualified are to be hired, regardless of race or gender. Should there be targeted programs today? It may be dicey given the interpretations of diversity programs trying to achieve greater pipeline participation, but if employers focus on socio-economic circumstances or possibly marginalized employees to attract candidates, it should yield similar diverse candidate results. It should be advertised to all that all can participate and are welcomed, but only the most qualified will be hired for the role. If a possible candidate or employee wants the role, the employer should have the resources available for them to achieve those results. The onus then is on the candidate, not the employer, but managers often are not great career resources for an employee.
In the end, diversity is important, should be embraced, and should be redefined as knowledge of working in a harmonious workplace providing opportunities for all to grow and achieve more than their current role or state. Diversity reduces friction, think DiSC type programs which show how people disseminate, interpret, and act upon information or respectful workplace trainings (which cross over into compliance trainings). Therefore, don’t stop diversity but grow it thoughtfully within the organization.
Source: Morrison Foerster LLP 2/19/25