On July 30, 2025, the U.S. Department of Justice issued a Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination, warning that many programs and initiatives labeled as Diversity, Equity and Inclusion (DEI) may violate federal civil rights laws. The Guidance, issued by Attorney General Pamela Bondi, applies to recipients of federal funding, including most educational institutions, healthcare providers, state and local governments, and private employers receiving federal grants or contracts. This Guidance follows the DOJ’s May 19, 2025, announcement of its new Civil Rights Fraud Initiative, which aims to use the False Claims Act (FCA) to investigate and pursue claims against entities that engage in unlawful DEI practices.
The Guidance outlines how longstanding federal antidiscrimination laws apply to programs and policies that incorporate or relate to race, sex, national origin, religion and other protected characteristics. The DOJ cautions that violation of federal antidiscrimination laws may result in the revocation of funding. It further warns that federal funding recipients may be found liable for the unlawful practices of their contractors, grantees and other related third parties.
The Guidance provides important insight into how the DOJ interprets and intends to enforce Title VI, Title VII, Title IX and the Equal Protection Clause with respect to DEI initiatives and programs. Notably, the DOJ makes clear that it will look beyond labels, intentions or perceived benefits of a program in scrutinizing the use of protected characteristics in decision-making.
The following practices receive specific attention and may be viewed as unlawful:
- Restricting eligibility or participation in programs, including scholarships, internships or fellowships, based on race, sex or other protected characteristics, even when framed as promoting diversity or inclusion.
- Prioritizing or requiring candidates from specific identity groups for hiring, admissions or promotions, including “diverse slate” or “underrepresented groups” requirements.
- Separating participants by race or sex for training or discussion purposes or using training content that stereotypes individuals based on protected characteristics.
- Operating programs or events framed around a specific racial or gender identity, particularly if those efforts suggest exclusion or prioritize benefits based on identity, even if participation is technically open to all.
- Using facially neutral criteria such as “lived experience,” “cultural background” or geographic origin as proxies for protected traits.
- Funding or supporting third-party programs that use protected characteristics to determine access, eligibility or participation.
The DOJ also indicates that it will scrutinize policies that allow biological males to access female-only spaces (e.g., bathrooms, locker rooms and dormitories) or participate in women-only athletic events. When the U.S. Supreme Court held in Bostock v. Clayton County (2020) that Title VII prohibits discrimination on the basis of sexual orientation or gender identity, it specifically left open if these practices were required, prohibited or permitted.
In addition to identifying scrutinized practices, the DOJ provides recommendations on best practices to comply with federal antidiscrimination laws:
- Focus on skills and qualifications.
- Prohibit demographic-driven criteria.
- Document legitimate rationales for decisions, programs and initiatives that are not based on protected characteristics.
- Scrutinize neutral criteria to confirm that they do not serve as a proxy for a protected characteristic.
- Eliminate diversity quotas.
- Avoid exclusionary training programs.
- Include nondiscrimination clauses in contracts to third parties and monitor the third party’s compliance.
- Establish clear antiretaliation procedures and create accessible reporting mechanisms.
The DOJ stresses that intentional use of protected characteristics will trigger legal liability unless the use satisfies a high level of judicial scrutiny. The Guidance recognizes, however, that federal laws may permit race-based remedies for specific, documented acts of past discrimination by an institution or for specialized contexts such as correctional facilities, where courts have recognized compelling institutional interests.
The Guidance concludes by urging recipients of federal funding “to review all programs, policies, and partnerships to ensure compliance with federal law,” and to “discontinue any practices that discriminate on the basis of a protected status.” Institutions are also encouraged to implement policies to prevent retaliation against individuals who raise concerns about potentially discriminatory practices. Institutions seeking to conduct such reviews should consider asking counsel to do so in connection with legal advice protected by attorney-client privilege.
This Guidance underscores that DEI-related programs, hiring practices and training courses are squarely within the scope of federal antidiscrimination enforcement, particularly when they involve, or are perceived to involve, identity-based decision-making. The DOJ focuses not only on what is explicitly stated in program criteria, but also on how programs are framed, perceived and implemented. Institutions must not simply avoid overt discrimination, but also should assess whether longstanding or well-intentioned practices could now be viewed as inconsistent with federal law under the DOJ’s interpretation of those laws.
