Articles

Employment Law Update: DEI Injunction Lifted and EEOC Issues DEI Guidance Documents

What Employers Need to Know

Date: April 10, 2025
The Fourth Circuit Court of Appeals has lifted a nationwide injunction on the Diversity, Equity, and Inclusion (DEI) Executive Orders issued by President Trump in January 2025. This means the DEI Executive Orders can and will be enforced while litigation over their constitutionality continues. The Fourth Circuit’s decision restores the government’s ability to enforce three key provisions. Federal agencies may now: 
  1. “[T]erminate ... all … ‘equity-related’ grants or contracts” within 60 days. Executive Order 14151.
  2. Require contractors and grantees to certify “its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions” and that “it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.” Executive Order 14173.
  3. Take action to encourage the private sector to end “illegal discrimination and preferences, including DEI.” Executive Order 14173.
As the injunction was lifted, the Equal Employment Opportunity Commission (EEOC) issued two Guidance Documents for employees and employers regarding DEI in the workplace:
 
Together, these documents emphasize that DEI has no special legal definition or exemption under Title VII of the Civil Rights Act of 1964 (Title VII). Reviewing this guidance will help employers understand how their employment policies and procedures will be analyzed by the EEOC when faced with a charge of discrimination. Below are six important highlights:
  1. The EEOC’s position is that there is no such thing as “reverse” discrimination; there is only discrimination.
  2. Title VII’s protections apply equally to all workers and are not limited to “minority group,” (such as racial or ethnic minorities, workers with non-American national origins, “diverse” employees, or “historically under-represented groups”), or women. Different treatment based on race, sex, or another protected characteristic can be unlawful discrimination, no matter which employees or applicants are harmed.
  3. Under Title VII, an employer initiative, policy, program, or practice may be unlawful if it involves an employer or other covered entity taking an employment action motivated—in whole or in part—by race, sex, or another protected characteristic.
  4. Title VII prohibits employers from limiting, segregating, or classifying employees or applicants based on race, sex, or other protected characteristics in a way that affects their status or deprives them of employment opportunities. In the context of DEI programs, unlawful segregation can include limiting membership in workplace groups, such as Employee Resource Groups (ERG), Business Resource Groups (BRGs), or other employee affinity groups, to certain protected groups.
  5. Title VII explicitly provides that a “demonstration that an employment practice is required by business necessity may not be used as a defense against a claim of intentional discrimination.” Client or customer preference is not a defense to race or color discrimination.
  6. Depending on the facts, an employee could plausibly allege that a diversity or other DEI-related training created a hostile work environment.
In light of these changes, employers should:
 
  • Review DEI policies and practices for neutrality.
  • Eliminate quotas or preferences based on protected characteristics in employment decisions.
  • Review resource and affinity groups to ensure inclusivity.
  • Make opportunity inclusive, not exclusive.
  • Provide opportunity, training, mentoring, and networking access to employees of all backgrounds.
  • Review and revise diversity training content.
  • Ensure managers are aware of their obligations.
  • Reinforce discrimination and anti-harassment policies.

For help with navigating through the changing DEI landscape, please reach out to Whiteford’s Labor and Employment Law Team. We will continue to monitor and report on developments.
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.