Since inauguration, the Trump Administration has targeted Diversity, Equity, and Inclusion (“DEI”) and Diversity, Equity, Inclusion, and Accessibility (“DEIA”) programs across both public and private sectors. The administration’s stated goal is to eliminate what it describes as unlawful employment and contracting practices in the public and private sectors.

On January 21, 2025, President Donald Trump signed Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, focused on ending illegal discrimination and reinstating merit-based opportunities in both the public and private sectors. In Executive Order 14173 (the “Order”), President Trump stated, “Illegal DEI and DEIA policies also threaten the safety of American men, women, and children across the Nation by diminishing the importance of individual merit, aptitude, hard work, and determination when selecting people for jobs and services in key sectors of American society…” The Order, among other provisions, mandated that federal contracts and grants require recipients to comply with all federal antidiscrimination laws and certify that they do not run any DEI programs that violate these laws. Discussed in more detail here.

On February 5, 2025, in the wake of the Order, Attorney General Pam Bondi issued an internal memo within the Department of Justice (“DOJ”) titled Ending Illegal DEI and DEIA Discrimination and Preferences. The memo emphasized two main goals: 1) Ending Illegal DEI and DEIA Discrimination and Preferences, and 2) Guidance to Institutions Receiving Federal Funds. The memo indicates that the DOJ’s Civil Rights Division will take action to investigate and address unlawful DEI and DEIA practices—such as preferences, mandates, policies, and programs—within the private sector and in educational institutions that receive federal funding. The goal: to identify, eliminate, and hold accountable any illegal activities related to DEI and DEIA initiatives.

Further, this order mandates that the Civil Rights Division and the Office of Legal Policy submit a joint report by March 1, 2025, outlining their recommendations for enforcing federal civil rights laws and suggesting additional measures to eliminate illegal discrimination and preferences in the private sector. The joint report must also identify the “most egregious and discriminatory DEI and DEIA practitioners in each sector of concern” and recommend a plan to deter the use of DEI and DEIA programs, additional potential litigation activities, and other general strategies to end such programs. As of March 11, 2025, the Civil Rights Division and the Office of Legal Policy have not submitted this joint report. Despite these directives, the Attorney General did not define what constitutes “most egregious and discriminatory DEI and DEA practitioners,” nor indicate what type of repercussions those entities may face, if any. The joint report must provide specific strategies to “encourage the private sector to end illegal DEI discrimination and preferences and comply with all Federal civil-rights laws,” including requiring each federal agency (which includes more than 400 agencies) to identify “[u]p to nine potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets of 500 million dollars or more, State and local bar and medical associations, and institutions of higher education with endowments over 1 billion dollars.”

Lastly, the memo briefly outlines that the DOJ, in collaboration with the Department of Education, will issue guidance to educational institutions receiving federal funds to ensure compliance with the Supreme Court’s Students for Fair Admissions decision, discussed in depth here. While it indicates that the Civil Rights Divisions will take action to promote adherence, it provides limited details on the specific directives to be issued.

It is highly likely that private companies will also be affected by Order 14173, but to what extent remains uncertain. As the memo clearly demonstrates, one of the primary ways to dismantle DEI programs will be to strongly incentivize or coerce private companies to discontinue their DEI initiatives. There will likely be a chilling effect on employers who utilize DEI programs. Specifically, a main concern is whether employers should spend resources and money defending their current DEI programs, modifying, or scrapping such programs altogether. Although larger companies may decide to make the investment, smaller companies with more limited budgets may be forced to end all DEI programs. Additionally, pressure and backlash from the public may influence the economic analysis of employers and shift the manner in which they decide to continue any DEI efforts.

Despite the uncertainty, the Executive Orders do not repeal or amend existing anti-discrimination statutes, including Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on race, color, religion, sex, or national origin. As such, employers should adhere to any existing policies and practices that prohibit discrimination in the workplace.

On February 21, 2025, U.S. District Judge Adam Abelson of the U.S. District Court for the District of Maryland issued a nationwide preliminary injunction in Nat’l Ass’n of Diversity Officers in Higher Education v. Trump, enjoining the Trump Administration from implementing parts of the Order and Executive Order 14151 (Ending Radical and Wasteful Government DEI Programs and Preference) (collectively, the “Orders”). EO 14151, among various things, directed federal agencies to terminate all “equity-related” grants or contracts.

The Court held the following provisions of the Orders were unconstitutional under the First and Fifth Amendments of the U.S. Constitution:

• The requirement that federal contractors and grantees certify that they do not operate “illegal” DEI programs and comply with federal discrimination laws for purpose of False Claims Act (the “Certification” provision in EO 14173 Section 3(b));
• The provision directing the Attorney General to deter “illegal” DEI programs and principles in the private sector by, in part, submitting a report identifying up to nine civil enforcement investigations of certain private sector companies, associations, and educational institutions (the “Enforcement Threat provision in EO 14173 Section 4); and
• The requirement that federal agencies terminate federal equity-related grants or contracts (the “Termination” provision in EO 14151 Section 2(b)(i)).

While the injunction temporarily bars the enforcement of these provisions, the court did not enjoin the Attorney General from pursuing enforcement actions against individual companies for their DEI programs or continuing to prepare the report that was due on March 1, 2025.

On February 24, 2025, the Trump Administration immediately appealed the court’s temporary injunction with the United States Court of Appeals for the Fourth Circuit, meaning a final resolution may take some time. For now, it’s important to understand that the anti-DEI certification the administration sought to include in federal contracts and the termination of “equity-related” grants and contracts should be paused for now.

Key Takeaways and Recommendations

• It is important for employers to stay up-to-date with the Trump Administration’s DEI initiatives, as there will likely be more developments.
• Obligations under state and federal antidiscrimination laws remain in effect, regardless of the recent Executive Orders.
• Employers should conduct an internal audit of existing DEI policies or initiatives and anti-discrimination policies and practices. These policies should then be closely reviewed to determine if they need to be adjusted, rephrased, or removed. The focus of such an audit should be on identifying any elements that could implicate unlawful, demographic-based preferences or exclude any individuals based on protected categories.

To learn more about any of the Executive Orders above and how they may impact your business or any other general questions, please contact the authors of this article or your Dykema relationship attorney. It should be noted that this area of the law is rapidly developing, and we will continue to provide updates as new information arises.