Key Takeaways
- Two federal agencies provided more information about what the Trump administration considers unlawful discrimination related to diversity, equity and inclusion (DEI) efforts in the private sector.
- The guidance states that DEI initiatives, policies, programs or practices may be unlawful if they involve an employer or another covered entity taking an employment action motivated – in whole or in part – by an employee’s or applicant’s race, sex or other protected characteristics.
- Employers should immediately begin working with legal counsel to audit all DEI policies, plans and statements to ensure compliance with the guidance as well as other federal, state and local laws.
In a follow-up to our previously published article concerning what steps employers should take in the wake of President Donald Trump’s efforts to end illegal DEI discrimination, we note that the federal government has since supplied guidance that provides further insight into when DEI programs cross the line.
Unlawful Discrimination
On March 19, the U.S. Department of Justice (DOJ) and the Equal Employment Opportunity Commission (EEOC) issued two “technical assistance documents” (Guidance) that shed more light on what the federal government considers unlawful DEI practices. The Guidance notes that while Title VII of the Civil Rights Act does not reference DEI, the law prohibits employment discrimination based on any protected characteristics, such as race and sex. Accordingly, any DEI initiative, policy, program or practice that results in an employment action motivated – in whole or in part – by a protected characteristic may be unlawful. In other words, if a protected characteristic is one of the factors that contributes to an employment decision or action, it could constitute discrimination.
In addition to quotas or workforce balancing based on protected characteristics, the Guidance outlines several other ways in which illegal DEI-based discrimination can take place in the workplace:
- Hiring
- Firing
- Promotion
- Demotion
- Compensation
- Fringe benefits
- Access to or exclusion from training (including training characterized as leadership development programs)
- Access to mentoring, sponsorship or workplace networking/networks
- Internships (including internships labeled as “fellowships” or “summer associate” programs)
- Selection for interviews, including placement in or exclusion from a candidate slate or pool
- Job duties and/or work assignments
The Guidance clarifies that employers are not permitted to consider a protected characteristic as a factor when taking any of these actions, even if they have a business necessity or interest in diversity, including preferences or requests from a client. The Guidance states that Title VII does not permit, and the Supreme Court has not adopted, an exception for business interest in diversity and equity: “Basing employment decisions on the racial preferences of clients, customers, or coworkers constitutes intentional race discrimination.”
Employee Resource Groups
Employee resource groups (ERGs) and business resource groups (BRGs) are voluntary, employee-led groups that are typically organized around a shared background, interest or issue. Many employers have established these affinity groups in the past few years, organized around sex, race or other characteristics, for the purposes of networking, mentorship, and personal and professional development.
The Guidance does not say that ERGs or BRGs are prohibited, but it does place restrictions on their activities. The Guidance says that Title VII does not permit employers to limit, segregate or classify employees or applicants based on protected characteristics in a way that would affect their status or deprive them of employment opportunities. Employers must provide training, mentoring and access to workplace networks equally. ERGs, BRGs and similar affinity groups cannot limit membership or programming to only certain individuals or protected classes.
Finally, the Guidance states that employees cannot be separated into groups based on their protected characteristics in any workplace programming or other “privileges of employment,” even if the groups receive the same content or amount of employer resources.
Training
Many employers provide regular antidiscrimination training for their staff. According to the Guidance, such training may be the basis for a hostile work environment charge.
“Depending on the facts, an employee may be able to plausibly allege or prove that a diversity or other DEI-related training created a hostile work environment by pleading or showing that the training was discriminatory in content, application, or context.” The Guidance goes on to say that an employee may be protected from unlawful retaliation if they oppose a DEI training “if the employee provides a fact-specific basis for his or her belief that the training violates Title VII.”
Additionally, when administering training, employers are not allowed to separate workers into groups based on their protected characteristic.
Previous Guidance
Prior to the release of the Guidance, the Trump administration had provided some information on what may amount to discrimination under DEI programs.
On Feb. 5, newly confirmed Attorney General Pamela Bondi issued a memo directing the DOJ’s Civil Rights Division to investigate, eliminate and penalize illegal DEI preferences, mandates, policies, programs and activities in the private sector (DOJ Memo). The DOJ Memo stated that it is “intended to encompass programs, initiatives, or policies that discriminate, exclude, or divide individuals based on race or sex. … It does not prohibit educational, cultural, or historical observances – such as Black History Month, International Holocaust Remembrance Day, or similar events – that celebrate diversity, recognize historical contributions, and promote awareness without engaging in exclusion or discrimination.”
Another memo issued on Feb. 5, by the acting director of the Office of Personnel Management (OPM Memo), directed federal agencies to end unlawful discrimination practices and policies, which are defined to mean any actions that are “motivated, in whole or in part, by protected characteristics.” For example, federal agencies are required to end “unlawful diversity requirements for the composition of hiring panels” and “candidate pools.”
The OPM Memo additionally calls for the end of “discriminatory” ERGs within the federal government. The directive prohibits federal government employers from:
- Promoting unlawful DEI initiatives and recruitment, hiring, preferential benefits (including career development opportunities), or employee retention
- Limiting attendance at ERG meetings and events, or dividing participants who are in attendance, based on a protected characteristic
- Permitting the formation of some ERGs but not others
The OPM Memo, however, permits agency directors to let employees host affinity group lunches, engage in mentorship programs, and gather for social and cultural events.
Although the OPM Memo specifically applies to federal agencies, the Trump administration recently said in a legal filing that this directive is one of the ways it has provided guidance on what constitutes “unlawful discrimination related to DEI.”
Next Steps for Employers
The Guidance is not a formal regulation or statute. It is considered only subregulatory guidance, and courts could take a different position on what constitutes illegal discrimination in employment. But the Guidance is a declaration of how the government intends to interpret and enforce Title VII. Accordingly, the most prudent course for the time being is for employers to incorporate the Guidance in their comprehensive DEI audits and, where appropriate, modify their policies. Time is of the essence as a federal circuit court recently lifted the stay that had been imposed on an executive order that directs federal agencies to deter the use of “illegal DEI discrimination and preferences” in the private sector. The ruling permits the federal government to take enforcement action without delay.
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