The DEI Dilemma: Compliance, Culture & Employer Guidance
The recent Executive Order (EO) issued by President Trump on January 21, 2025, has created concern and confusion for employers throughout the country, especially with respect to their Diversity, Equity & Inclusion (DEI) programs.
Here are some questions that may be raised surrounding this Executive Order and our thoughts concerning how it will affect all private employers and not just federal contractors and subcontractors.
FAQs
Does this mean that employees are no longer protected from discriminatory practices?
Does this mean organizations have to stop their DEI programs?
Will this have an affect on our training program surrounding discrimination and harassment?
Should we remove Equal Employment Opportunity Employer from our job ads?
What will happen with the EEO-1 report?
Will this affect our obligation under the Pregnant Workers Fairness Act (PWFA)?
Will this affect our obligation to provide religious accommodation in the workplace?
Answers to Questions from Private Employers Regarding DEI
Does this mean that employees are no longer protected from discriminatory practices?
Not at all! Title VII of the Civil Rights Act of 1964, Americans with Disabilities Act, Equal Pay Act. Age Discrimination in Employment Act, etc., remain in place and are still applicable to most private employers.
Does this mean organizations have to stop their DEI programs?
No. Employers should review their DEI initiatives avoid what the EO considers to be “illegal DEI.” While “illegal DEI” wasn’t defined in the current EO, if we look to one issued by President Trump in September 2020, we can get an idea that our DEI initiatives should be shifted away from discussions of systemic privilege or the idea that certain groups inherently hold power over others. Employers can still conduct training initiatives surrounding the respectful treatment that employees are expected to exhibit toward co-workers, customers, vendors, and others they encounter at work.
Need a review of your DEI policies and practices to ensure legal compliance? Let our consultants provide the necessary support you need!
Will this have an affect on our training program surrounding discrimination and harassment?
It should not affect training programs that are focused on the concepts of preventing discrimination and harassment as described under Title VII, Americans with Disabilities Act, Age Discrimination in Employment Act, etc.
President Trump also issued an EO defining males and females. How with this affect our business and how will it affect those employees who are in the gender transition process?
It’s unsure how this will ultimately affect private employers. We feel that the bathroom issue is going to be more problematic for employers. The Occupational Safety & Health Administration issued the clearest guidance in 2015 with respect to bathroom use of a transitioning employee. While this information appears to no longer be accessible on the OSHA website, we were able to find a link to it. The EEOC also references the guide produced by OSHA. This guide said that employees should be able to use whichever bathroom they identified as their gender and that employers couldn’t require them to use a gender-neutral bathroom instead of one of their preferred genders.
The practice of using preferred pronouns in the workplace may also come into question. While employers want to maintain a culture where employees are treated with respect and dignity, we are unsure how the EO may affect employers’ use of preferred pronouns on business cards, email signature lines, etc.
Regardless of the EO issued, it does not reduce our obligation to treat employees respectfully and to help prevent bullying or harassment that may occur in the workplace with respect to their sexual orientation or their gender transition. The Supreme Court ruled in 2020 that Title VII’s definition of sex includes sexual orientation and gender identity because they were characteristics of sex.
What if the company is in a state that requires employers to post pay rates, report women and minority demographics, prohibits asking applicants about current pay, etc.?
It’s unknown at this time how a state’s requirement for employers to maintain and report this demographic information will be affected. At this time, the organization may have to continue its obligation to report to the state. However, at some point, the state may have to choose between continuing with that practice or possibly losing federal funding. We’ll have to wait on further guidance for this.
Will Workforce Opportunity Tax Credits and certain training grants distributed by local Workforce Development Boards be affected by this EO?
At this time, we’ve seen no indication that this EO will affect those programs.
Should we remove Equal Employment Opportunity Employer from our job ads?
No. Although federal contractors may not be required to include this in their job ads, all private employers are encouraged to continue using this phrase to indicate your compliance with Title VII, ADA, ADEA, etc.
What will happen with the EEO-1 report?
Employers should anticipate updates to government forms like the EEO-1. The current form allows binary gender reporting, but with the new executive order in place, the next reporting cycle could require revisions or new guidance regarding the reporting of sex and gender data, including potential changes in how non-binary employees are represented.
Will this affect our obligation under the Pregnant Workers Fairness Act (PWFA)?
Possibly. A controversial aspect of the PWFA rules, which require accommodations for employees needing time off or workplace adjustments due to abortion procedures, is likely to be revisited. Adrea Lucas, Acting Chair of the EEOC, opposed these rules, arguing they extended the statute too far.
Will this affect our obligation to provide religious accommodation in the workplace?
Maybe. Under Biden-era guidance, employers were not required to grant religious accommodations that would create a hostile work environment, such as allowing employees to refuse to recognize gender identities based on religious beliefs. With that guidance now rescinded, employers could face increased legal challenges from employees who claim that their religious beliefs prevent them from following gender-identity-related workplace policies. This shift may prompt employers to revisit how religious accommodation requests handled and assess whether current practices may conflict with these changing interpretations of the law.
AAIM Members: Still have questions? Take advantage of your 24/7 access to the Solutions Team!
Keeping DEI Programs Legal and Effective
More information is expected from the Attorney General before the end of May. Additionally, we expect to see lawsuits challenging the executive order. In the meantime, employers should carefully evaluate any programs and benefits that are available only to certain demographic groups, or that could be characterized as imposing quotas or mandated numerical targets, which have long been declared impermissible under existing law. Additionally, here are some things employers can do to operate legal DEI programs:
Avoid quotas
Instead of setting quotas or percentage targets, aim to enhance workforce diversity more broadly.
Review existing DEI initiatives
Evaluate any current DEI programs to ensure they do not violate federal civil rights laws. Focus on initiatives that promote inclusion without implementing discriminatory practices.
Utilize a broad definition of diversity
Consider diversity in terms of various characteristics, including age, veteran status, and life experience, not just race or gender.
Utilize inclusive hiring practices
Remove barriers in hiring processes and ensure equal treatment of all applicants.
Support employee engagement
Develop mentorship programs open to all employees and support Employee Resource Groups consistent with state and federal law.
Training and awareness
Continue offering training on bias, anti-discrimination, and cultural competency, but avoid mandatory training where certain groups of employees are singled out as responsible for historical inequities.
Consistent messaging
Carefully review DEI-related communications and seek support from legal counsel where appropriate.
Address complaints in good faith
Investigate all discrimination complaints thoroughly, including those brought by individuals who may not belong to historically underrepresented populations.
Stay informed
Keep up with legal developments related to DEI to ensure ongoing compliance.
Worried about retention due to these changes? Training and development will continue to be critical in fostering a feeling of belong and practicing inclusion. AAIM can help!
The Future of DEI: Adapting to an Evolving Landscape
While former President Trump’s directive on DEI was geared to federal contractors, its influence on the broader private sector cannot be understated. Although private employers were not legally bound by the executive order, they faced a complex landscape of public perception, legal risks, and internal reassessments of DEI programs. Moving forward, it is clear that DEI efforts in the private sector will continue to evolve as companies strive to strike a balance between fostering an inclusive culture and navigating the political and legal dynamics that shape the national conversation on diversity and equity.
The shifting regulatory environment suggests that employers will need to remain flexible and responsive, adjusting their strategies as the political landscape around DEI continues to develop under subsequent administrations. The long-term impact of Trump’s directive on private employers who are not federal contractors will depend on the ongoing interplay between public opinion, corporate values, and legislative actions at both the state and federal levels.
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