Alarmed, Employers Ask: What Is ‘Illegal D.E.I.’?

A year ago, many companies openly celebrated Black History Month and stocked their shelves with Pride-themed products. Now, they are taking a more discreet approach—what some legal experts call “rainbow-hushing.” This refers to the quiet rebranding or scaling back of diversity, equity, and inclusion (D.E.I.) initiatives.

These companies are pulling back or going silent as they prepare for potential lawsuits spurred by former President Trump’s campaign against D.E.I. They face a delicate balancing act: keeping enough diversity programs intact to avoid future discrimination claims while also steering clear of federal investigations, legal challenges from conservative groups, and Trump’s scrutiny.https://svtoday.org/

D.E.I. programs—such as mandatory training on bias and discrimination—were originally designed to help dismantle systemic barriers in increasingly diverse workplaces.

“D.E.I. initiatives gained traction because they addressed genuine issues within organizations,” said Musa al-Gharbi, a sociologist and assistant professor at Stony Brook University who has extensively studied diversity programs. “Now, they’re essentially being told to ignore these problems, which doesn’t seem legally viable.”

The legal landscape surrounding D.E.I. has grown uncertain, especially since Trump signed an executive order threatening federal investigations into what he calls “illegal D.E.I.”—a vague term that has left lawyers scrambling to interpret its implications.

“We’re navigating uncharted territory,” said Jon Solorzano, a partner at Vinson & Elkins, who is advising numerous companies on their D.E.I. policies. “People are really anxious.”

For private-sector businesses that are not federal contractors, the actual legal framework for D.E.I. remains unchanged. However, the way these laws are interpreted and enforced has shifted significantly.

The primary law governing workplace discrimination in the private sector is Title VII of the Civil Rights Act of 1964, which prohibits employment decisions based on race, sex, and other protected categories. The Equal Employment Opportunity Commission (EEOC), an independent agency, enforces this law. Under Trump’s leadership, two Democratic commissioners were swiftly removed and replaced. The newly appointed acting chair, Andrea Lucas, has stated her priority is to combat “unlawful D.E.I.-motivated race and sex discrimination.”

“Rather than focusing on discrimination against Black workers and women, their efforts are now targeting discrimination against majority groups under the banner of D.E.I.,” said David Glasgow, executive director of the Meltzer Center for Diversity, Inclusion, and Belonging at NYU’s law school.

Trump’s executive order also directs federal agencies to identify nine organizations to investigate for alleged “illegal D.E.I.”

A recent Department of Justice memo signaled that enforcement of this order may include criminal investigations, a prospect that has left many organizations deeply concerned, Glasgow noted. A coalition of academics, diversity officers, and other professionals has already filed a lawsuit to block the executive order.

Meanwhile, corporate leaders are racing to understand what the administration considers “illegal D.E.I.” Some clues can be found in the Supreme Court’s 2023 ruling that struck down affirmative action in college admissions. While the decision does not directly apply to private employers, legal experts warn that diversity-driven fellowships, internships, and mentorship programs limited to specific demographic groups could now pose legal risks.

“Anything that appears exclusive could be flagged as illegal D.E.I. by the administration,” said Craig E. Leen, a partner at K&L Gates specializing in employment law.

Jocelyn Samuels, one of the Democratic EEOC members ousted by Trump, expressed concern that even basic D.E.I. efforts—such as collecting workforce diversity data—are now being called into question, despite their legality and importance.

“It’s an incredibly difficult dilemma for employers,” she said.

Edward Blum, the lawyer behind the Supreme Court case that ended race-conscious college admissions, has since pressured major law firms to revise fellowship programs originally designed for underrepresented groups. He argues that corporate legal teams have long known that such diversity initiatives rest on shaky legal ground.

“This isn’t a new realization for the legal community,” Blum said. “They’ve understood for years that setting different application standards based on race or ethnicity is legally problematic.”

That said, many diversity initiatives remain legally sound. Employee resource groups that are open to all, unconscious bias training for all staff, educational events, and inclusive celebrations like Black History Month are generally considered low-risk.

“As long as no preferential treatment is given to protected groups, those D.E.I. efforts should be fine,” Glasgow explained.

Still, ambiguity remains. Could publishing diversity goals on a company website or sharing workforce data with external organizations like the Human Rights Campaign invite federal scrutiny?

Solorzano warned that linking executive bonuses to diversity metrics might attract government attention, as it could be interpreted as incentivizing hiring decisions based on race or gender.

Yet, scaling back too aggressively on D.E.I. poses risks of its own.

“Legal teams often caution CEOs that eliminating diversity training altogether could backfire if the company is later sued for discrimination,” said Frank Dobbin, author of Getting to Diversity: What Works and What Doesn’t.

Employment lawyers, now inundated with corporate inquiries, are crafting strategies to help executives navigate this shifting legal and political landscape.

Solorzano has developed a checklist for clients seeking guidance. He advises them to evaluate how any D.E.I. changes might impact different stakeholders: Will investors be on board? Could there be consumer backlash? Will employees push back? Might top talent start looking elsewhere?

Consumer-facing brands, such as Target—which has recently scaled back its D.E.I. commitments—or Costco, which has doubled down, must tread especially carefully. These companies risk boycotts from both D.E.I. supporters and opponents.

Solorzano also recommends that businesses proactively disclose in investor reports that their D.E.I. policies could lead to lawsuits or boycotts.

Target exemplifies the dilemma many companies face. It is being sued by shareholders who claim it failed to disclose the risks of its D.E.I. initiatives while simultaneously facing backlash from pro-D.E.I. consumers for rolling back those commitments.

Criticism of identity-based corporate programs isn’t exclusive to conservatives. Some on the far left argue that D.E.I. initiatives distract from labor movements that could more effectively address economic inequality. Even those who have built and led corporate diversity programs are questioning their effectiveness, urging leaders to reevaluate which initiatives create real impact and which were merely performative.

“Many of these efforts have been about optics,” said Lily Zheng, a D.E.I. strategist and author of Reconstructing DEI. “If a company can scrap its D.E.I. efforts overnight, that’s a sign those commitments were never truly meaningful.”

Concerns about navigating this evolving D.E.I. environment are surfacing at corporate gatherings. In January, executives from the artificial intelligence industry—including representatives from OpenAI and DeepMind—met in Gloria Steinem’s living room, hosted by media startup Charter and Bloomberg Beta, to discuss gender equality in tech. One computer scientist voiced concern about whether an organization she works with, which supports underrepresented groups in A.I., should remove language from its website that highlights support for Black, Latina, and nonbinary individuals.

Steinem reflected on the long history of pushback against efforts to increase representation for women and minorities:

“There’s always a backlash,” she said. “Especially when you’re getting close to real power.”