DOJ Issues Long-Awaited Guidance Regarding DEI
We bring to your attention a significant development from the U.S. Department of Justice (DOJ), which may impact your workforce, especially if you receive federal funding.
On July 29, 2025, the DOJ released new guidance clarifying the legal boundaries of Diversity, Equity, and Inclusion (DEI) initiatives for recipients of federal funds. Employers that receive federal funding should take note of these developments to ensure compliance and minimize exposure to legal and financial risk.
Key Takeaways from the DOJ Guidance:
Just don’t discriminate. In its memorandum, the DOJ emphasizes that while DEI programs are encouraged, they must comply with federal anti-discrimination laws, including Title VI of the Civil Rights Act and Title IX of the Education Amendments. These laws prohibit discrimination based on race, color, national origin, and sex in programs or activities receiving federal financial assistance. The DOJ describes unlawful DEI training programs are those that—through their content, structure, or implementation—stereotype, exclude, or disadvantage individuals based on protected characteristics or create a hostile environment.
The DOJ’s definition of unlawful DEI: The guidance warns that DEI initiatives crossing into preferential treatment or quotas based on protected characteristics (such as race or sex) may be considered unlawful if it disadvantages other qualified individuals. For example, setting aside positions, scholarships, or benefits exclusively for certain groups could violate federal law.
Still permissible DEI practices: The DOJ clarifies that organizations can still pursue DEI goals through lawful means. This includes outreach, recruitment, and training programs that encourage diversity, as long as they do not involve explicit preferences or exclusions based on protected characteristics.
Risk of Enforcement: The DOJ has signaled increased scrutiny and potential enforcement actions against organizations whose DEI programs are found to be discriminatory. Recipients of federal funds should review their policies and practices to ensure compliance.
What Employers Should Do:
Audit existing DEI programs. Fully assess your current DEI initiatives to ensure they do not involve unlawful preferences or quotas. Such audits should preferably be by employment counsel and under privilege.
Consult employment counsel if you are unsure whether a particular DEI practice is compliant. It is essential to seek legal guidance early on. Being proactive will go a long way to mitigate potential risk.
Maintain clear records of your DEI policies and the steps taken to ensure they align with federal requirements.
Fully document reasons for making hiring and promotion decisions to illustrate you are utilizing legitimate rationale in making those selections.
Educate HR and management teams on the legal issues, risk, and best practices related to DEI efforts.
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Staying informed and proactive is essential to both advancing diversity and avoiding legal pitfalls. If you have questions or need assistance reviewing your DEI programs, please feel free to reach out to Alejandro Pérez.
This publication and/or any linked publications herein do not constitute legal, accounting, or other professional advice or opinions on specific facts or matters and, accordingly, the author(s) and PierFerd assume no liability whatsoever in connection with its use. Pursuant to applicable rules of professional conduct, this publication may constitute Attorney Advertising. © 2025 Pierson Ferdinand LLP.
