By Dawn S. Holiday 

WHERE WE ARE

On January 21, 2025, President Donald Trump issued an Executive Order titled, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the “Order”). The Order instructed all executive departments and federal agencies to “terminate all discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements.” Notably, per the Order, all federal agencies are “to enforce our longstanding civil-rights laws and to combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.”

The Order casts doubt as to the legality of corporate DEI programs and policies. The Attorney General is ordered to submit “recommendations for enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI,” within 120 days. It is unclear what constitutes “illegal DEI” outside of current state and federal anti-discrimination laws. The Order further mandates federal agencies to identify and recommend investigations into private-sector entities, such as corporations and educational institutions, perceived to be practicing discriminatory DEI policies, which could potentially lead to legal and financial repercussions. DEI programs and initiatives will face more scrutiny than ever before.

Further, the Order places intentional emphasis on merit-based hiring. The administration seeks to prioritize merit-based hiring practices by targeting DEI programs, arguing that these initiatives have resulted in unfair discrimination and a merit-based approach will promote equal opportunity without preferential treatment.

On the corporate front, these measures signal a significant policy shift, aiming to dismantle initiatives perceived to prioritize demographic characteristics over individual qualifications.

WHAT PRIVATE EMPLOYERS SHOULD DO NOW

The reality is that DEI programs are facing resistance due to perceived political or preferential connotations. Private sector employers are encouraged to act now.

1. Review and Adjust. DEI programs, in and of themselves, are not illegal if properly designed and implemented. Companies should evaluate existing DEI initiatives to determine whether they align with the new federal directives. This process may involve modification, scaling back, or discontinuation of programs that may run afoul of the current administration’s policies.

2. Be in the Know. The DEI landscape is ever evolving. Employers should continue to watch for further developments, enforcement actions, and legal challenges. Companies should stay informed to ensure compliance and to protect against legal risks. Understanding shifts in the DEI landscape helps to address employee expectations and societal trends, ensuring they remain competitive and relevant in an increasingly diverse and global workforce.

3. Consult Legal Counsel. Given the complexities of the Order, the implications for non-compliance, and the uncertainty about the future of DEI, employers should consult with legal counsel to ensure that DEI programs are tailored to organizational goals and for assistance in navigating compliance while supporting fair employment practices.

By implementing these strategies, companies can adapt to the new regulatory environment while continuing to promote fair and inclusive workplaces.

The opinions expressed are those of the authors and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice. For more information on DEI changes under the Trump Administration, please contact Dawn S. Holiday or a member of the Labor and Employment practice.