On July 29, 2025, the U.S. Department of Justice issued its most sweeping guidance yet on what it considers unlawful discrimination in federally funded programs. The memorandum, signed by Attorney General Pam Bondi, clarifies DOJ’s interpretation of federal civil rights laws in the context of diversity, equity, and inclusion programs and related initiatives. Although formally directed to recipients of federal funding, the guidance points to a broader enforcement posture that could affect private employers, contractors, and state and local governments.
The announcement builds on a series of administration actions, including President Trump’s executive order to end “illegal DEI” programs, DOJ memoranda pledging to investigate DEI practices, and the creation of a Civil Rights Fraud Initiative using the False Claims Act to pursue civil rights violations involving federal funds. It also follows similar guidance from other agencies, including the Department of Education and the Department of Health and Human Services, warning that certain diversity-focused practices may run afoul of federal antidiscrimination law.
Scope and Reach of the Guidance
The guidance outlines a non-exhaustive list of policies and practices that DOJ views as unlawfully discriminatory and could result in the revocation of federal funding. DOJ emphasizes that recipients of federal funding may also be liable for discrimination if they knowingly support or fund unlawful practices carried out by contractors, grantees, or other third parties.
The memorandum makes clear that DOJ intends to rely on a broad range of statutory and constitutional provisions when pursuing enforcement. These include:
- Title VI of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, or national origin in any program or activity receiving federal financial assistance.
- Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on race, color, religion, sex, or national origin.
- Title IX of the Education Amendments of 1972, which prohibits discrimination based on sex in education programs or activities receiving federal financial assistance.
- The Equal Protection Clause of the Fourteenth Amendment, which prohibits state and local governments from denying any person equal protection of the laws.
By framing the guidance in terms of these core statutory and constitutional provisions, DOJ indicates that its enforcement approach is intended to be broad in reach. The agency is not limiting its scrutiny to educational institutions or grant programs. It is applying these civil rights requirements across sectors and making clear that both direct and indirect recipients of federal funds — as well as private employers and public entities not directly tied to federal funding in some cases — could face enforcement if their programs, policies, or third-party relationships run afoul of these prohibitions.
Practices DOJ Views as Unlawful
The DOJ’s guidance memo identifies a range of policies and practices it views as unlawful under federal civil rights laws. While the memorandum is organized into four primary sections, one of those, “Segregation Based on Protected Characteristics,” contains a distinct discussion on use of protected characteristics in candidate selection. Because that subtopic presents a significant and independent area of enforcement risk, it is described here as its own category for clarity.
1. Granting Preferential Treatment Based on Protected Characteristics
This involves providing opportunities, benefits, or advantages to individuals or groups on the basis of protected traits such as race, color, national origin, sex, or religion, in a manner that disadvantages other qualified individuals. Examples include scholarships or fellowships reserved for a particular racial group, hiring or promotion preferences for underrepresented groups, and exclusive access to facilities or resources based on race or ethnicity.
2. Prohibited Use of Proxies for Protected Characteristics
Using seemingly neutral criteria that serve as substitutes for explicit consideration of race, sex, or other protected traits can be unlawful. Examples include “lived experience” or “cultural competence” requirements that favor candidates of certain backgrounds, recruiting from geographic areas chosen because of demographic composition, or requiring “diversity statements” in ways that advantage applicants based on protected traits.
3a. Segregation Based on Protected Characteristics
Creating or maintaining programs, activities, or facilities that separate or limit participation based on race, sex, or other protected traits is generally prohibited. Examples include race-based breakout groups in training, identity-exclusive facilities such as “BIPOC-only” lounges, and programs open only to members of certain demographic groups. The memo also warns that failing to maintain sex-separated intimate spaces and athletic competitions for women and girls can, in DOJ’s view, violate Title IX and Title VII.
3b. Use of Protected Characteristics in Candidate Selection
Section C of the Bondi memo also addresses a distinct set of practices involving hiring, contracting, and program participation. DOJ considers explicit or implicit use of race, sex, or other protected traits in candidate selection to be unlawful. Examples include “diverse slate” hiring requirements, demographic quotas in procurement, and participation targets in scholarships or internships.
4. Training Programs That Promote Discrimination or Hostile Environments
Training that stereotypes, excludes, or disadvantages individuals based on protected traits, or that fosters a hostile environment, can violate federal law. Examples include DEI training asserting that “all white people are inherently privileged” or that “toxic masculinity” is an inherent trait, particularly where dissent is penalized.
Risks and Recommendations
The DOJ’s guidance further signals a heightened enforcement posture with significant potential consequences for noncompliance. Risks include loss of federal funding, exposure under the False Claims Act with treble damages and statutory penalties, increased scrutiny by other agencies or private litigants, reputational harm from public allegations of discrimination, and conflicts with state or local DEI requirements that may mandate measures DOJ views as unlawful.
To reduce these risks, organizations should act now to review and revise policies, practices, and relationships. This includes conducting a comprehensive review of DEI-related policies, eligibility criteria, and recruiting and hiring practices; auditing third-party agreements to ensure federal funds are not used to support discriminatory programs; reassessing training content to avoid stereotyping, compelled speech, or exclusionary structures; and strengthening documentation of legitimate, nondiscriminatory rationales for selection criteria. Entities should also maintain strong anti-retaliation protections, create accessible reporting channels, and develop strategies for addressing conflicts between federal guidance and state or local mandates. Engaging legal counsel early will help identify risks, ensure alignment with applicable laws, and prepare the organization to respond to any inquiries or challenges.
Conclusion
The DOJ’s July 29 guidance marks a decisive shift toward aggressive enforcement of federal civil rights laws in the DEI context. Although directed to recipients of federal funding, its reach is broader, and its enforcement tools are varied. Compliance now requires more than avoiding overt discrimination. It demands proactive review of policies and their effects, oversight of contractors and partners, and ongoing monitoring to ensure alignment with federal requirements. The financial, legal, and reputational costs of noncompliance make immediate attention to these issues essential.
