The Skinny:
· DEI stands for diversity, equity and inclusion – three laudable goals corporations in recent years have focused on, specifically on the heels of the Black Lives Matter movement.
· Notwithstanding these goals, since their passage, long before either Trump administration, federal employment laws have prohibited making employment decisions based upon legally protected classes, including hiring, firing, promotion, etc., even when such decisions were made in an effort to lift up a historically disadvantaged group.
· DEI was a target of the first Trump Administration, for example, its issuance of executive orders banning certain DEI trainings. It has once again become a focus point for this second Trump Administration in a more pointed manner. Trump has signed several executive orders related to abolishing “illegal” DEI programs. Examples of such executive orders include those affecting Big Law, colleges and universities, federal contractors and those receiving federal grants under the Department of Labor (“DOL”). The executive orders focus on an entity certifying it is not participating in “illegal” DEI and cancelling contracts and grants of those who are.
· Certification of non-participation in “illegal” DEI is complicated for a couple reasons: it is not completely clear what qualifies as “illegal” DEI, and it may trigger a False Claim Act claim if the certifying party is found to be participating in any such “illegal” DEI.
· The certification provision of Executive Order 14173 that was supposed to be effective April 21, 2025 was just enjoined nationwide as against the DOL with respect to any grantee or contractor. The rest of the order, described below remains intact for now.
· Guidance recently released by the Trump Administration sheds some light on how the government may interpret “illegal” DEI and thus, how it may enforce its certification requirements.
· Employers, even those who are not federal contractors or grantees, should take note of the guidance and review their DEI programs accordingly to avoid becoming a target of a discrimination investigation.