Written by Jessica C. Jeffrey and Mike Rahmn from Nelson Mullins Riley & Scarborough LLP on February 12, 2025
How is the Trump Administration Rolling Back DEI Initiatives?
On January 21, 2025, President Trump signed an executive order (the “Order”) titled, “Ending Discrimination and Restoring Merit-Based Opportunity,” which directed the federal government to terminate practices and policies that protect and promote diversity and inclusion. The Order also briefly addresses diversity and inclusion activities in the private sector.
The Order’s purpose was to eliminate diversity programs that the Trump Administration believes perpetuate discrimination and prioritize identity over merit. The Order specifically addresses diversity, equity, and inclusion (DEI) and diversity, equity, inclusion, and accessibility (DEIA) programs. Because the Order failed to define the types of DEI or DEIA initiatives that violate federal laws, it is unclear how far the Order reaches.
More recently, on February 5, 2025, the Office of Personnel Management (OPM) and the United States Attorney General’s Office attempted to offer some limited guidance as to what may constitute an “illegal” DEI or DEIA program. The guidance offered by the OPM (the “OPM Memo”), targeted the public sector and specifically directed agencies to eliminate DEI or DEIA. The OPM Memo stated that “[u]nlawful discrimination related to DEI includes taking action motivated, in whole or in part, by protected characteristics.”
The guidance offered by the Attorney General’s Office (the “AGO Memo”) focused more on the private sector and provided that the Department of Justice will “investigate, eliminate, and penalize illegal DEI and DEIA preferences, mandates, policies, programs, and activities in the private sector and in educational institutions that receive federal funds.” While the AGO Memo provides little substantive guidance, a footnote indicates that the Order is not intended to “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.”
How Should Employers Respond?
The Trump Administration’s actions, particularly the AGO Memo giving investigative and penalizing power to the Department of Justice, will likely create real consequences for employers whose DEI or DEIA initiatives are found to be illegal. Thus, the key concern for employers is to manage compliance with federal policy, even as it continues to develop.
Since the Order’s issuance, employers have responded in different ways. However, there are certain steps that all employers should now take to ensure compliance or mitigate risk.
1. Assess DEI/DEIA Initiatives and Diversity Training Programs
While many employers have implemented robust diversity and inclusion initiatives and programs, some of these programs may inadvertently conflict with the Trump Administration’s mandates. Thus, employers must take a close look at their diversity initiatives and training programs to ensure they align with the new regulations. For example, employers may want to consider eliminating any initiatives and/or training materials that encourage action based on protected characteristics (e.g., race, color, religion, sex, national origin, disability and genetic information), as well as Employee Resources Groups, whose programs are designed to retain, train and/or develop employees based on protected characteristics. Employers’ affinity and mentor programs may be legal, if attendance and participation are not restricted by protected characteristics and participants are not segregated by protected characteristics.
2. Conduct Internal Audits of Hiring, Promotion and Pay Policies
Employers should seek to comply with merit-based practices and adopt objective criteria in hiring, promotions, and pay decisions, and ensure those decisions are not based on protected characteristics.
3. Communication and Transparency
Employers should foster an open and transparent environment within their organizations. Communicating clearly about the changes in diversity programs and training policies will help employees understand the goals and rationale behind these adjustments.
4. Consult Employment Counsel
Companies should be aware that the legal landscape surrounding diversity and inclusion is continuously and quickly evolving. The authors of this article and other Nelson Mullins employment attorneys are monitoring developments in this area to provide advice about whether diversity initiatives, policies and procedures may be out of compliance with federal law.
Conclusion
The Order, along with the guidance provided by the OPM and Attorney General memoranda, mark a significant shift in the way the federal government will handle diversity and inclusion programs. For employers, it is essential to review and adjust diversity programs and hiring practices to remain compliant with these directives. This may involve restructuring or eliminating some programs and training materials, conducting internal audits, and ensuring that merit-based principles guide all employment decisions. However, employers must remain adaptable and stay informed of new policies that may emerge, ensuring that their practices reflect the latest legal and regulatory requirements.
