Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
In corporate boardrooms across the country, three letters have become a legal flashpoint: DEI.
Diversity, equity and inclusion initiatives became standard in employers’ corporate governance and talent strategy, flowing from the Civil Rights Act of 1964 and decades of affirmative action policy. The George Floyd protests in 2020 caused another surge, with many corporations, universities, and other employers expanding their DEI programs.
That tide has turned.
SCOTUS speaks
The ripple began with the Supreme Court’s decision in Students for Fair Admissions v. Harvard (2023) and its companion case against the University of North Carolina. The court held that race-based affirmative action in university admissions violated the Equal Protection Clause and Title VI of the Civil Rights Act.
Although the decision addressed higher education, its reasoning reverberated into the workplace. Justice Neil Gorsuch’s concurrence highlighted parallels between Title VI and Title VII — the federal employment discrimination statute — suggesting that employment decisions based on race may conflict with civil rights law, even if well-intentioned.
Subsequent decisions strengthened that current. In Muldrow v. City of St. Louis (2024), the court clarified that Title VII plaintiffs need only show “some harm,” but not necessarily significant harm, lowering the threshold for discrimination claims. In Ames v. Ohio Department of Youth Services (2025), the court eliminated the heightened evidentiary standard previously applied to so-called “reverse discrimination” claims, holding that majority-group plaintiffs could proceed under the same framework as any other Title VII claimant.
Challenges from white or male employees alleging exclusion from their employers’ diversity programs would thereafter face fewer hurdles. These decisions emboldened policymakers, litigants and advocacy groups to challenge race‑ and gender-based DEI programs. Under these evolving standards, employers must continually monitor and scrutinize how they hire, train, promote and discipline employees and structure workplace initiatives to comply.
Executive orders, EEOC guidance
In January 2025, Indiana Gov. Mike Braun issued Executive Order 25-14 eliminating DEI initiatives in state government, replacing them with a merit‑based framework, forbidding use of state resources on DEI programs, and directing state agencies to review policies in light of SFFA.
At the federal level, President Trump issued executive orders EO 14151 and EO 14173, aimed at “illegal DEI discrimination and preferences.” These orders sought to dismantle federal DEI offices, rescinded longstanding affirmative‑action requirements and directed federal agencies to scrutinize race- or sex-based employment practices. EO 14173 expressly revoked President Lyndon B. Johnson’s Executive Order 11246, the 1965 order requiring certain federal contractors to take affirmative steps to ensure equal employment opportunities for women and minorities, which was the legal basis for many DEI programs.
Executive Order 14173 also required federal contractors and grant recipients to certify that they do not operate illegal DEI programs, exposing the certifying entity to False Claims Act (FCA) civil and qui tam (private) liability for any false certifications. Indiana agencies are requiring similar certifications.
The Equal Employment Opportunity Commission has likewise taken an assertive posture. In March 2025, the EEOC and Department of Justice issued joint guidance warning that DEI initiatives may violate Title VII if they involve employment decisions motivated — even in part — by race or sex. The agencies highlighted risks in:
• race- or sex-restricted leadership development programs
• exclusive fellowships or mentorship initiatives
• candidate “slates” built with demographic targets
• employee resource groups limited by protected characteristic and
• DEI training programs that create hostile work environments.
The guidance emphasizes that labels do not insulate employers from scrutiny and that no “good” motive or business interest justifies race or sex preferences in employment decisions.
Litigation rises with tide
Title VII prohibits employment decisions motivated by protected characteristics. Enforcement and litigation are now increasingly focused on protecting individuals who have not traditionally been considered part of a protected class.
Hiring and fellowships: Post-SFFA litigation frequently targets hiring pipelines and fellowship programs. A familiar pattern has emerged: lawsuit filed, eligibility criteria revised, case dismissed, damages undisclosed.
In Bresser v. Chicago Bears Football Club, a white DePaul University law student challenged the Bears’ fellowship program seeking a “person of color and/or female law student.” The case settled. In another, American Alliance for Equal Rights v. Jopwell, a hiring platform revised its eligibility language in the face of a lawsuit claiming that it unlawfully excluded white and Asian applicants.
Scholarship and grant programs have also faced legal challenges under 42 U.S.C. § 1981, which prohibits race discrimination in contracting. Several prominent organizations including McDonald’s, Amazon, and the American Bar Association have either revised or ended race-restricted programs in response to lawsuits.
DEI training: While courts generally acknowledge that discussing race or systemic bias as part of DEI training is not inherently discriminatory, risk increases when training becomes accusatory, segregated by protected characteristics or tied to tangible employment consequences.
In De Piero v. Pennsylvania State University, a professor alleged a hostile work environment created by diversity trainings and messaging that framed “whiteness” and “white privilege” and encouraged white employees to acknowledge their complicity in systemic racism. The claim survived dismissal but failed at summary judgment, with the court finding the conduct not sufficiently severe or pervasive to violate Title VII.
Similarly, in Diemert v. City of Seattle, a challenge to mandatory training under the city’s “Race and Social Justice Initiative” did not succeed. The trainings allegedly portrayed white employees as inherently privileged, biased, or complicit in systemic racism and encouraged them to acknowledge their role in oppression. The court concluded that the training alone did not establish a hostile work environment.
So far, many claims survive early motions but ultimately fail on the merits. The cost, publicity and uncertainty create meaningful risk.
Employers aim to stay safe
No employer wants to be caught in the surge of litigation. But companies face competing pressures: the legal risk of race and gender conscious programming and the business and reputational risks of reversing course to abandon inclusion efforts altogether.
Attorneys advising employers must encourage a careful balance within practical guardrails:
• Ensure that hiring and promotion decisions are race and gender neutral.
• Avoid exclusionary eligibility criteria in fellowships, scholarships and all workplace programs and events.
• Review DEI training to eliminate stereotyping or mandatory identity-based messaging.
• Monitor evolving federal and state guidance.
Importantly, the answer is not a wholesale retreat from diversity initiatives. Inclusive recruiting, outreach to underrepresented communities and bias mitigation efforts generally remain permissible so long as they do not grant preferences based on protected characteristics.
The key distinction is between inclusive access and exclusive preference. Programs open to all employees, grounded in business necessity and based on objective criteria present less risk than offering identity-restricted benefits or setting demographic targets.
Messaging is also critical. Statements suggesting quotas, demographic outcomes or collective guilt may draw unwanted scrutiny. As a result, some employers have rebranded DEI programs as “D&I” or “workplace inclusion” to distance them from the affirmative-action connotation of the
term “equity.”
For entities that contract with government agencies, careful review is especially critical. Before signing certifications to state or federal agencies, employers should evaluate whether existing programs could confer race- or sex-based preferences. In this evolving legal environment, employers find value in conducting periodic compliance reviews—ideally conducted under privilege—which, if done on structured and routine basis, help mitigate both regulatory and False Claims Act exposure.
Forecasting currents ahead
A new emphasis on race- and gender-neutrality seems to be pushing out an era of unchecked DEI experimentation. As DEI-related litigation progresses, greater clarity will emerge. Until then, employers must remain vigilant through a transition of shifting enforcement priorities, executive directives, and an energized plaintiffs’ bar.
Attorneys who counsel employers can guide them to preserve lawful and worthy inclusion efforts while avoiding preferences that litigants and regulators are increasingly prepared to challenge. Employers who adapt thoughtfully—grounding their programs in merit, access and equal opportunity—are most likely to remain safely ashore.•
__________
Townsend is a partner at Krieg DeVault LLP and serves as chair of the firm’s Employment Law Practice Group.
Please enable JavaScript to view this content.