The U.S. Department of Justice (DOJ) has set its sights on diversity, equity, and inclusion (DEI) programs, signaling heightened enforcement risks for employers. In a memorandum, Attorney General Pam Bondi directed the DOJ to investigate and penalize DEI initiatives that discriminate on the basis of race or sex.

The memorandum comes on the heels of President Trump’s executive order aimed at ending “illegal DEI” in workplaces across America. In a prior alert, we noted that the executive order’s primary aim is to end DEI and affirmative action obligations that federal contractors and subcontractors have, but also encourages private-sector employers to end their own voluntary DEI programs.

As Bondi’s memo notes, the President’s executive order instructs DOJ to report on its enforcement strategy by March 1, 2025. As a result, employers should act now to assess potential exposure and consider whether it's necessary to take any proactive steps now to mitigate risk.

Companies—particularly federal contractors, publicly traded corporations, large nonprofits, and educational institutions—face growing legal risks, including:

• DOJ Investigations: The agency has pledged to identify “egregious offenders” and initiate both civil and criminal investigations into DEI-related employment practices.
• Potential Lawsuits: Employees may challenge hiring and promotion decisions under Title VII, arguing that DEI policies result in race- or sex-based discrimination.
• False Claims Act Liability: Federal contractors that falsely certify compliance with the executive order’s DEI restrictions could face penalties under the civil False Claims Act.

What Employers Should Do Now

• Review DEI Policies: Audit hiring, promotion, and training programs to assess compliance risks.
• Document Justifications: Ensure any diversity initiatives are legally sound and based on permissible business considerations.
• Seek Legal Guidance: Given the evolving landscape, employers should consult with experienced employment counsel to navigate compliance challenges.

The DOJ’s focus extends beyond federal contractors, reaching private-sector employers, educational institutions, and other organizations with active DEI programs. While Bondi’s memo notes that cultural and historical observances—such as Black History Month and Holocaust Remembrance—are explicitly excluded from the DOJ’s investigations, the broad scope of enforcement remains unclear.

For more information on this and related issues, contact the authors Kenneth Rosenberg at krosenberg@foxrothschild.com and Kelly McNaughton at kmcnaughton@foxrothschild.com or another member of the firm's Federal Government Contracts or Labor & Employment teams.

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the author(s) and not necessarily this law firm or its clients. Prior results do not guarantee a similar outcome.