Shortly after taking office, President Trump issued an executive order, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (the EO), to eliminate the "illegal" diversity, equity, and inclusion (DEI) policies of federal agencies and government contractors. This EO also has important implications for employers in the private sector.
Specifically, the EO expressly encourages the private sector to "end illegal DEI discrimination and preferences." The EO also contains a threat of enforcement—it directs the attorney general to make recommendations to deter private sector DEI and to identify potential enforcement targets.
On February 21, 2025, a federal judge issued a preliminary injunction temporarily blocking the enforcement threat provision. Nevertheless, employers can expect the Trump administration to remain hostile to DEI, and a successful appeal or final ruling on the merits could reinstate the EO's enforcement provision.
Given these developments, employers should understand their legal obligations related to DEI, and they should also weigh the benefit of DEI programs against the potential risk of continuing to support them.
What Is "Illegal DEI"?
The EO does not define "illegal DEI programs," leading to confusion about how employers should comply. Is a presentation honoring Women's History Month okay? Should companies take down web pages dedicated to DEI? Suspend internship programs geared toward diverse applicants?
The EO does not provide clear answers to these questions, although simply wishing employees a happy Women's History Month or providing an optional educational presentation on the subject is likely permissible. The EO appears to focus on promoting "merit-based opportunity" and prohibiting employers from "balancing" their workforce based on race, color, sexual preference, religion, or national origin. Notably, existing laws like Title VII already prohibit employment discrimination, and covered employers are barred from making personnel decisions based on protected characteristics.
The EO's vagueness regarding DEI formed the basis of the court's February 21, 2025 preliminary injunction. The court found that because the private sector had no way of knowing whether a particular policy, program, discussion, or announcement was illegal, the EO was unconstitutionally vague. Employers can expect forthcoming regulatory guidance to shed light on what constitutes illegal DEI.
What Steps Should Employers Take Regarding DEI?
In the meantime, recommended action regarding DEI is largely dependent on the employer's business, culture, and risk tolerance. One the one hand, no company wants to be a target of litigation or a federal investigation, so risk-averse employers may be tempted to eliminate any DEI-related positions, programs, training, or external messaging, such as the company DEI web page. On the other hand, DEI is valuable to many employers. Many companies have found that a diverse workforce is beneficial because a wealth of perspectives can lead to increased productivity and ingenuity. DEI initiatives may also help to create strong workplace culture when employees from various backgrounds feel included and valued. Accordingly, some employers may decide that DEI efforts are worth the risk.
Regardless of your company's stance on DEI and its level of risk aversion, we recommend taking the following steps now:
- Identify DEI programs and messaging that may violate the EO. Employers should flag potential offending training, programs, web pages, announcements, and contractual language. Look for buzzwords like "DEI," "equity-based," "stereotype," "bias," and "prejudice." Employers that take this step will be better prepared to make changes regarding DEI programming if necessary.
- Maintain compliance with federal anti-discrimination laws like Title VII and applicable state laws. The Trump administration's recent executive orders have not changed existing law regarding discrimination and harassment in the workplace. Therefore, employers must continue to ensure that personnel decisions are made for non-discriminatory business reasons. Furthermore, they must implement and enforce policies that discourage discrimination and harassment, and train employees and managers accordingly.
Employers with questions about DEI are encouraged to contact the authors for assistance.