Last week, Attorney General Bondi released what is arguably the U.S. Department of Justice's (DOJ) most comprehensive guidance on its view of the legality of Diversity, Equity, and Inclusion (DEI) programs. On his very first day in office, President Trump issued an executive order making clear that his administration would prioritize ending "illegal DEI" programs. DOJ later established a Civil Rights Fraud Initiative to investigate and pursue claims under the False Claims Act and similar authorities against federal fund recipients whose DEI policies DOJ deems discriminatory.
AG Bondi's guidance now clarifies the administration's expansive view on what constitutes "illegal DEI." Although the memo focuses on organizations that receive federal funding, the memo's overriding message is clear: Any organization that maintains a broad or arguably improper DEI policy — whether it receives federal funds or not — risks close federal scrutiny.
A Broader Net Than Ever Before
The new guidance applies to a wide range of entities. The DOJ memo refers not only to statutes governing recipients of federal money, such as Title VI and Title IX, but also to federal laws that apply to private employers who receive no such funding (Title VII). The guidance also discusses ways in which state and local governments might run afoul of the Fourteenth Amendment's Equal Protection Clause by employing DEI policies and practices. This guidance confirms a new enforcement era: DOJ is no longer concerned primarily with race-conscious admissions criteria or DEI programs on university campuses. It is now focused on whether DEI results in illegal discrimination within each and every agency, organization, and corporation.
Real-World Examples From the Guidance
DOJ's guidance provides concrete illustrations that directly implicate corporate practices. Among them:
- Hiring and Promotion: According to the guidance, any programs that give preference to candidates based on race, gender, or other protected characteristics — even as part of a broader DEI initiative — may violate Title VII.
- "Diverse Slate Policies" (sometimes called the "Rooney Rule"): Even programs that simply require interview slates to include a minimum number of candidates from underrepresented demographic groups might violate federal antidiscrimination law.
- Procurement and Contracting: Set-asides or preferences for vendors based on identity traits, such as race or gender, might run afoul of the law.
- Fellowships and Internships: The memo flags programs that limit opportunities to individuals from specific demographic groups as potentially discriminatory. Notably, even race-neutral categories — such as individuals who are the "first generation" to attend college or who reside in an "underserved geographic area" — could trigger scrutiny and might be unlawful if the underlying intent is race-conscious.
- Proxies for Protected Characteristics: Organizations or programs that use facially neutral criteria (e.g., "lived-experience" or "cultural competence") could lose federal funding if those criteria are intentionally used as substitutes for protected characteristics.
- Employee Resource Groups and Trainings: Programs that exclude or prioritize participation based on race, gender, or religion are subject to scrutiny, and employees who object to discriminatory training may not be retaliated against.
- Failure to Maintain Single-Sex Spaces: In DOJ's view, allowing transgender women to use single-sex bathrooms in accord with their gender identity could create a hostile work environment under Title VII. The guidance does not address conflicting state requirements.
Best Practices and Compliance Considerations
Even though AG Bondi's memo is non-binding guidance, it offers a roadmap for organizations seeking to minimize potential legal exposure by aligning their DEI efforts with DOJ's enforcement views. Among DOJ's recommended best practices:
- Ensure inclusive access to workplace programs, activities, and resources.
- Use neutral, individualized criteria in employment and contracting decisions, and document legitimate rationales.
- Avoid quotas, preferences, or exclusive opportunities based on protected characteristics.
- Include non-discrimination clauses in third-party contracts requiring compliance with federal law.
- Conduct regular legal reviews of DEI-related policies, training materials, and performance metrics.
What Corporate Leaders Should Do Now
This guidance should again prompt organizations that receive federal funds and private employers to carefully assess their DEI policies and practices to ensure they comply with federal law if they haven't already done so. In short, any identity-based decision-making could, in DOJ's view, expose organizations to significant legal risk.
© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
