Six months after President Trump ordered the federal government to end “illegal DEI,” the U.S. Department of Justice issued a Memorandum providing guidance on diversity-related practices that it considers unlawful.
The Attorney General’s Memorandum, Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination, “clarifies the application of federal antidiscrimination laws to programs or initiatives that may involve discriminatory practices, including those labeled as Diversity, Equity, and Inclusion (‘DEI’) programs.” The Memorandum is characterized as “guidance” and “non-binding best practices,” rather than “mandatory requirements,” but it clearly sets forth the position of the federal government.
In addition, the Memorandum is geared toward recipients of federal funds, such as contractors and grantees, but it also applies to entities that “are otherwise subject to federal anti-discrimination laws,” such as Title VII of the Civil Rights Act. Accordingly, all covered employers should be mindful of the DOJ’s position.
The Memorandum outlines a non-exhaustive list of discriminatory practices. Although the general principles espoused by the DOJ are not likely to generate controversy, the application of those principles to certain circumstances is likely to be challenged. The Memorandum is summarized below.
Preferential treatment based on a protected characteristic is unlawful. Conferring any benefit, such as scholarship or internship eligibility, based on a protected characteristic, disadvantages other qualified individuals and violates federal law -- except in very limited circumstances. The DOJ also explains that limiting access to “safe spaces” or lounges based on a protected characteristic is discriminatory.
Use of neutral factors as a proxy for a protected characteristic is unlawful. An employer cannot use “ostensibly neutral criteria that function as substitutes for explicit consideration of” a protected characteristic when such factors “correlate with, replicate, or are used as substitutes for protected characteristics” or the “intent [is] to advantage or disadvantage individuals based on protected characteristics.”
The DOJ states that “[c]riteria like socioeconomic status, first-generation status, or geographic diversity must not be used if selected to prioritize individuals based on racial, sex-based, or other protected characteristics.” (Emphasis added). Presumably, these types of criteria can be considered for other reasons, such as a goal to assist economically disadvantaged individuals regardless of race or gender.
Recruiting from specific geographic areas or institutions “because of their racial or ethnic composition” is an example of an unlawful proxy. The DOJ does not address the longstanding practice of many employers to recruit from historically black colleges and universities and other sources to create a diverse candidate pool. The U.S. Equal Employment Opportunity Commission endorsed such a practice in 2006, stating that recruitment from diverse sources is consistent with Title VII. It is unclear whether that existing guidance will be rescinded by this Administration.
Requiring applicants to describe “obstacles they have overcome” is unlawful if the information is used to provide an advantage to those of a certain race or gender.
The DOJ recommends that employers “document clear, legitimate rationales unrelated to” protected characteristics and evaluate neutral criteria to determine whether they are actual proxies for protected characteristics.
Segregation based on a protected characteristic is unlawful. Employers cannot segregate or restrict access to programs or resources based on protected characteristics because such practices create unequal treatment or reinforce stereotypes.
The DOJ states, however, that the failure to maintain separate intimate spaces based on sex would violate federal law. Allowing “males, including those self-identifying as ‘women,’ to access single-sex spaces designed for females – such as bathrooms, showers, locker rooms, or dormitories – undermine[s] the privacy, safety, and equal opportunity of women and girls.” The DOJ recommends that employers “affirm sex-based boundaries rooted in biological differences” to avoid the creation of a hostile work environment under Title VII.
Use of protected characteristics in selecting candidates is unlawful. Employers cannot use protected characteristics as a basis for selecting candidates for hire, promotion, or other employment benefits. This prohibition includes “diverse slate” policies where an employer commits to consider a certain number or percentage of individuals with specific protected characteristics. The DOJ also states that “diversity decision-making panels” and “diversity-focused evaluations” are prohibited, but does not specifically define what these terms mean.
Significantly, the DOJ says that requiring contractors to meet a certain level of work hours from individuals of specific protected characteristics – obligations which are mainstays of many state public work laws – is unlawful. As an example, the Memorandum provides as follows:
“A federally funded state agency implements a DEI policy the prioritizes awarding contracts to women-owned businesses, automatically advancing female vendors or minority-owned businesses over equally or more qualified businesses without preferred group status. This includes any contract selection process that uses sex or race as a tiebreaker or primary criterion, such as policies favoring “minority- or women-owned businesses without satisfying the appropriate level of judicial scrutiny.
As we previously reported, a federal judge preliminarily enjoined the U.S. Department of Transportation from mandating the use of race- and sex-based presumptions for contractors, and the DOT ended the program at issue.
Training programs that promote discrimination are unlawful. Training programs that stereotype, exclude, or disadvantage individuals based on protected characteristics may create a hostile environment. The DOJ specifically calls out trainings that promote concepts of “white privilege” or “toxic masculinity” as problematic.
Conclusion
The DOJ advises that violations of these antidiscrimination principles could result in revocation of grant funding and warns that recipients of federal funds could be liable for discrimination “if they knowingly fund the unlawful practices of contractors, grantees, and other third parties.” Thus, contractors and grantees should be proactive if they become aware of unlawful practices by their business partners and consider the termination of funding for noncompliance.
In addition, employers should evaluate their own policies for practices that could be considered unlawful. Employers should also stay tuned for additional guidance from the EEOC and other federal agencies as they implement the DOJ’s guidance.
