A federal appeals court’s decision allowing two of President Donald Trump’s executive orders targeting diversity, equity and inclusion programs to stand won’t preclude future challenges of the administration’s anti-DEI enforcement, management-side attorneys told HR Dive.
Upon returning to the White House last year, Trump signed a series of orders targeting diversity, equity and inclusion programs. One targeted federal government DEI initiatives. A second directed federal agencies to prepare a report on encouraging private-sector organizations to end DEI and require that all federal contract and grant recipients certify that they do not operate discriminatory DEI programs.
Plaintiffs sued to block those two orders but were ultimately unsuccessful, with the 4th U.S. Circuit Court of Appeals vacating a lower court’s preliminary injunction last month. The 4th Circuit held that the plaintiffs were unlikely to succeed in showing that a substantial number of the orders’ applications would lead to the suppression of their free speech rights.
Though the bar set by the court proved too high for the plaintiffs to clear in N.A.D.O.H.E. v. Trump, the decision also left open the possibility that future government actions applying the orders could be found unconstitutional, said Jonathan Segal, partner at Duane Morris.
That’s reflected in a concurring opinion authored by Chief Judge Albert Diaz, who wrote that a part of the court’s rationale was that the plaintiffs did not challenge the termination or legality of any particular DEI program. But Diaz appeared wary of some of the alleged effects of the administration’s stance, namely “important programs terminated by keyword; valuable grants gutted in the dark; worthy efforts to uplift and empower denigrated in social media posts.”
Organizations might want to keep those words in mind should an agency attempt to prescribe or punish DEI-related speech that is not unlawful, Segal said. He specifically referred to the U.S. Equal Employment Opportunity Commission, whose Republican majority has prioritized enforcement against DEI programs that violate federal antidiscrimination laws.
“Are they going to find violations or conduct that reasonably violated Title VII [of the 1964 Civil Rights Act], or are they going to potentially go further even if there is no violation?,” Segal said of EEOC.
Decision reinforces ‘aggressive’ enforcement posture
The government’s next steps remain to be seen, but employers have a few clues about what enforcement could look like. Those come courtesy of two publications issued last year: a joint EEOC and U.S. Department of Justice release outlining examples of unlawful DEI-related workplace discrimination and a DOJ memo describing practices prohibited for employers receiving federal funding.
Both releases showed the administration is committed to an aggressive enforcement position, Segal said, and employers will need to respond by creating a “risk continuum” covering all potentially affected DEI programs.
For example, EEOC and DOJ have spoken out against the use of quotas or other forms of balancing an employer’s workforce along race, sex or similar characteristics. The DOJ memo specifically identified diverse hiring slates — policies requiring that a list of candidates for a particular position include a minimum of candidates from specific racial groups or other protected categories — as policies that unlawfully disadvantage otherwise qualified candidates.
Meanwhile, employer initiatives that merely seek to cast a wider net to attract top talent from a broad range of applicants “should be lawful if constructed and worded properly,” Segal said.
Moreover, federal agencies have long investigated potential violations of statutes like Title VII and, in DOJ’s case, the False Claims Act, which governs situations in which recipients of federal funds or contracts knowingly engage in unlawful discrimination despite certifying their compliance with civil rights laws. Segal said that reality means employers have always needed to be mindful that their policies are responsibly constructed and enforced.
“I think some employers have made the mistake of assuming that if they look just at their employment policies, they don’t have any violations of the law,” he added. “You have to look not just at the policies, but also the practices.”
Regulators are actively investigating DEI programs at multiple organizations, said Andrew Turnbull, partner at Morrison Foerster. EEOC, for instance, has issued requests for information from employers and has even taken some to federal court for refusing to do so.
The absence of a DEI program also does not preclude enforcement against an employer found to have engaged in unlawful discrimination, Turnbull noted, referring to comments made by a DOJ deputy assistant attorney general last month. He said it’s important for HR departments to recognize that the Trump administration is not just looking to scrutinize DEI, but also illegal discriminatory practices generally.
Now is the time for a DEI self-audit
Even if employers believe they are compliant with applicable antidiscrimination laws, it’s important to conduct an audit or privileged DEI risk assessment, Turnbull said.
From there, employers can determine which programs, if any, present potential enforcement risks. They can also drill down to determine the degree of risk, whether low, medium or high, and “triage” to determine how to move forward, he continued. In doing so, employers should know that there’s a difference between a risk of litigation and a risk of liability.
“The difference is that you may be able to defend this claim in court, but litigation is its own kind of risk,” Turnbull said, noting the associated costs involved.
Performing an audit also allows an employer to show regulators and courts that it has made a good-faith effort to ensure compliance, Segal said, making it much harder to prove that the company has violated the FCA in particular. Regulators, he added, are more likely to go after employers that simply assume compliance without doing their due diligence.
“Doing that puts you in a better position in the event there’s a challenge down the road,” Segal said.
In the meantime, employers also shouldn’t give up on DEI training or programs, such as those which aim to educate employees about implicit bias and help to prevent workplace discrimination. “There’s nothing in and of itself unlawful about doing that,” Turnbull said.
It’s also key for HR to be aware of internal complaints from employees about potentially unlawful programs, he continued, and to ensure that managers and leaders take such complaints seriously and avoid retaliation.
Segal similarly said that employers should continue to maintain programs that have the goal of eliminating workplace discrimination, rather than give in to DEI fatigue wholesale. “I get that employers don’t want to be sued by White men,” he added, “but they shouldn’t retreat so far that there appears to be indifference of discrimination towards other groups.”
