Corporate DEI Hindered By Threats and Probes—Not Rules or Cases

Two federal actions, issued within days of each other by different agencies, point to a common enforcement strategy emerging in Washington over diversity, equity, and inclusion—one that relies less on winning cases in court and more on using investigation and threat as tools of governance.

This new strategy signals a heightened legal risk for businesses and professional firms that participate in collective governance initiatives, even when those initiatives stop short of binding commitments or discriminatory outcomes. For regulators, the strategy offers leverage without the constraints of judicial review.

The immediate consequences are already visible: Diversity Lab announced Feb. 12 that it is pausing the Mansfield Rule, a law firm DEI initiative promoting broader pools for hiring and promotions. Diversity Lab is furloughing most of its staff after receiving federal scrutiny and inquiries tied to firms’ participation in the program.

Whether that approach ultimately strengthens or undermines the rule of law is a question that extends well beyond the current debate. But enforcement by deterrence—rather than by decision—has become a defining feature of the regulatory landscape.

FTC, EEOC Actions

In late January, the Federal Trade Commission warned dozens of major law firms that participation in a diversity certification program could expose them to antitrust liability. Around the same time, the Equal Employment Opportunity Commission opened an investigation into Nike Inc.’s workplace practices following allegations that its diversity efforts discriminated against white employees.

One action invokes labor-market antitrust theory; the other rests on Title VII of the Civil Rights Act. One targets coordination among elite law firms; the other scrutinizes a single consumer-facing corporation.

The FTC’s letters, signed by Chairman Andrew Ferguson, warned firms including DLA Piper and Paul Weiss that their participation in the Mansfield Certification program—run by legal consulting firm Diversity Lab—could constitute unlawful collusion under the Sherman and FTC Acts. The concern, according to the letters, is that shared diversity metrics and “knowledge-sharing calls” could distort competition for legal talent.

Labor-market antitrust enforcement isn’t new. In recent years, federal agencies have targeted no-poach agreements and wage-fixing schemes as anticompetitive restraints on workers. What is novel is the application of that theory to a publicized governance initiative aimed at expanding hiring pools rather than restricting them.

A viable enforcement action would require evidence that firms exchanged competitively sensitive information and coordinated in ways that suppressed wages or limited mobility. Absent such proof, the legal theory faces substantial hurdles under established antitrust doctrine, which typically demands more than parallel conduct or shared aspirations.

The Nike investigation raises a parallel set of questions. Title VII prohibits discrimination in employment decisions, not the adoption of diversity goals or internal cultural initiatives as such. To prevail, the government would ultimately need to show that Nike’s practices resulted in unlawful disparate treatment or impact. Investigations alone don’t require that showing.

Taken Together

Enforcement posture links these two recent actions, not doctrinal strength. Both rely on the same basic mechanism: initiating investigations or issuing warning letters under longstanding statutes to create uncertainty, impose compliance costs, and signal regulatory risk without first testing those theories through adjudication.

For large institutions, particularly law firms and global brands, that risk is often enough. Antitrust discovery can be intrusive and expensive. Employment investigations can disrupt internal operations and invite reputational scrutiny. Even when there’s a low likelihood of ultimate liability, the incentive to disengage from potentially controversial programs is high.

That dynamic helps explain why these actions matter even if they never produce courtroom victories. The regulatory effect occurs earlier, at the point where firms reassess whether participation in collective governance efforts—whether diversity certifications, benchmarking initiatives, or shared best practices—is worth the exposure.

This shift has broader implications for corporate and professional governance. Over the past decade, firms have increasingly relied on shared frameworks to address issues that fall outside traditional regulation, from diversity and inclusion to cybersecurity and artificial intelligence ethics.

These initiatives often depend on information-sharing, third-party certification, and collective norm-setting. Diversity Lab’s pause in operations illustrates how quickly such frameworks can become legally vulnerable, and potentially unavailable, when enforcement pressure intensifies.

By casting those mechanisms as potential legal liabilities, federal agencies risk fragmenting governance efforts that were designed to fill regulatory gaps. Firms may respond by retreating into isolation—avoiding shared standards altogether—rather than competing more vigorously for talent or improving workplace outcomes.

That outcome would mark a departure from traditional understandings of both antitrust and civil rights law. Antitrust has long distinguished between coordination that restrains competition and conduct that merely reflects common responses to shared challenges. Civil rights law has focused on discriminatory outcomes, not the existence of diversity programs themselves. Blurring those lines shifts enforcement away from results and toward process.

Whether these theories would survive judicial scrutiny remains an open question. Antitrust claims based on information sharing typically require a demanding rule-of-reason analysis. Title VII claims depend on evidence of discriminatory decision-making. In both contexts, courts have historically been cautious about extending liability absent clear harm.

But courts may never get the chance to answer those questions. If the primary effect of enforcement is deterrence rather than adjudication, legal uncertainty becomes the point. Warning letters and investigations can reshape behavior without producing precedent, leaving regulated entities to navigate an increasingly opaque landscape.

Seen in this light, the FTC’s letters and the Nike investigation are less about diversity policy than about regulatory method. They illustrate how agencies can deploy legacy statutes to influence modern governance practices without engaging in formal rulemaking or litigation.

When enforcement becomes a signaling device rather than a pathway to adjudication, uncertainty itself becomes a regulatory tool. In that environment, firms must evaluate not only what the law clearly prohibits, but also what regulators are prepared to challenge.

Columnist Carliss Chatman is a professor at SMU Dedman School of Law. She writes on corporate governance, contract law, race, and economic justice for Bloomberg Law’s Good Counsel column.

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