Companies Parse What Makes a DEI Program Illegal Under Trump

Businesses already facing scrutiny over diversity programs will need to ramp up internal legal checks of hiring, training and other initiatives following President Donald Trump’s fresh blitz on what his administration describes as “illegal DEI.”

Trump on Tuesday night issued an executive order directing federal agencies to clamp down on corporate diversity, equity and inclusion policies that the administration argues can themselves be a form of “discrimination,” starting with drawing up a list of potential targets for investigations. Trump’s move—following years of conservative attacks on DEI—will further galvanize corporate diversity rollbacks that gathered speed in recent months.

Companies “don’t want to operate with targets on their back from the government,” said Tyree Jones, a labor and employment attorney at Polsinelli.

The administration’s attacks on DEI will also accelerate shifts in how companies talk about diversity, spark closer reviews of who has access to corporate opportunities, and prompt more businesses to shut down their diversity teams or fold them into other areas of their operations.

But companies need not necessarily scrap existing programs—just review them closely, adjust as necessary, and decide how they want to navigate this new environment, employment lawyers said.

“If your DEI program was lawful before, it’s still lawful. It’s just being scrutinized more,” said Vicky Slade, an attorney at Davis Wright Tremaine LLP and co-chair of the firm’s LGBTQ+ Attorneys Affinity Group.

“Everyone has to make their own decisions around their risk tolerance at this juncture,” she added.

Photo Illustration: Jonathan Hurtarte/Bloomberg Law

Paring Back Programs

The order follows a string of news about businesses—from big-box giant Walmart Inc. to big tech leaders Meta Platforms Inc. and Amazon.com Inc.—reeling in their diversity commitments. While much of corporate America has steadfastly pursued diversity initiatives and argued that it’s a business imperative, in the past few years, companies have tamped down how much they talk about DEI overall.

The reversals come amid mounting conservative attacks on corporate diversity programs from activists, including social media influencer Robby Starbuck. Legal threats also gathered momentum as conservative activists including Stephen Miller, now White House deputy chief of staff for policy, targeted companies by arguing that their DEI programs violate Title VII of the 1964 Civil Rights Act.

Those calls to cut corporate DEI efforts have ballooned since the Supreme Court’s 2023 decision barring affirmative action in college admissions.

Still, some companies continue making a business case for DEI programs—including the CEOs of JP Morgan and Goldman Sachs, speaking this week at the World Economic Forum in Davos.

Employers that do end or scale back DEI programs must remember that they could still face lawsuits alleging they are discriminating against the people those programs were helping.

“For companies that are thinking, ‘I don’t know what the heck to do. I should just scrap my whole DEI program because it’s too risky,’ it’s important to recognize the significant risk that is on the other side of that coin,” Slade said.

Carrying On

The executive order focuses on illegal diversity programs, said Joanna Colosimo, vice president of workforce analytics and compliance strategy at DCI Consulting, adding that most businesses are already “making sure everyone is included and complying with civil rights laws.”

Companies should review all their programs that could fall under the definition of DEI, attorneys said, including hiring practices, trainings on implicit bias, and employee resource groups.

While most businesses have already launched diversity reviews since the Supreme Court’s affirmative action decision, Jones said, they need to examine management development programs, for example, as well as any public-facing communications about such initiatives. Businesses should also document why they have certain diversity objectives “so that if you’re challenged, you have a body of evidence to point to,” he said.

“The irony of these challenges to DEI, which are initiatives that are designed to expand opportunities for all people, is that they demonize those efforts without ever proving that someone was actually discriminated against based on any protected characteristics,” he added.

To stay on the safe side, companies need to check whether they can broaden the eligibility requirements of any of their DEI initiatives focused on race or gender, while still meeting the programs’ objectives, said Jason Schwartz, a co-chair of the Gibson, Dunn & Crutcher LLP labor and employment practice group.

“The basic goals remain the same,” Schwartz said. “Attracting the best talent from the broadest, most robust diverse pipeline.”

Some programs may not have to be fully discarded, but would need tweaks. For example, Slade said, a company with a fellowship program traditionally aimed at certain diverse groups based on race, sexual orientation or sexual identity that wants to continue the program could broaden the scope to consider participants with different backgrounds or perspectives.

DEI Rebrand

Amid the ongoing backlash, companies had already been renaming or rebranding their DEI programs. Trump’s order, however, aims to blunt this strategy, referring to DEI programs “whether specifically denominated ‘DEI’ or otherwise.”

Depending on the company, Colosimo said, “there’s going to be a lot of massaging of terminology” like DEI, an acronym which has already fallen somewhat out of favor.

The Society for Human Resource Management, the world’s largest HR association, announced in July that it dropped the “E” for equity from what it previously called “IE&D” to “address the current shortcomings of DE&I programs, which have led to societal backlash and increasing polarization.”

The society said in a statement on Wednesday that it believes in “the importance of inclusion and diversity” and looks forward “to continued engagement with the Trump administration to discuss this critical topic and work collaboratively to ensure workplace practices that promote opportunity and success for all.”

Companies are trying to be more precise about how they discuss their diversity initiatives, instead of just saying they have DEI programs, as the acronym has become demonized, Schwartz said.

“DEI is such a broad and undefined term that nobody knows exactly what the heck that means,” Schwartz said.

—With assistance from David Hood