Article contributed by Jaclyn K. Ruocco, Esq., Ellenoff Grossman & Schole LLP
There is a lot of misinformation in the news and online social media platforms regarding the state of diversity equity and inclusion (DEI) programs in the workplace.
After the White House issued several executive orders targeting DEI programs, a presenter on a recent webinar with approximately 32,000 attendees exclaimed to the crowd “DEI is dead, get over it!”
However, DEI in the private employer context remains not only legal, but potentially necessary for businesses to remain compliant with federal and state workplace anti-discrimination laws. As employers, businesses should be aware of your obligations under such workplace anti-discrimination laws, including the legality of DEI programs.
Background: Title VII of the Civil Rights Act and the Harvard Student Admissions Case That Struck Down Affirmative Action
Title VII of the Civil Rights Act, a longstanding federal statute, prohibits private employers across the country from making employment decisions — including hiring, firing, promotions, and pay — based on a worker’s protected characteristic.
Protected characteristics under federal law include age (40 or older), sex (including pregnancy, sexual orientation and gender identity), race, color, national origin, disability and religion, among others.
Some states like New York have a broader list of protected characteristics than those under federal law. For example, a worker’s weight and height is protected in New York.
As a result, it has always been the case that businesses cannot refuse to hire someone based on their color, for example, or create illegal hiring quotas like setting aside a number of jobs for only women. In very limited circumstances, affirmative action plans have been legal, including in the private employer context.
A properly implemented affirmative action plan allows a business to take into consideration a job candidate’s race, for example, when making certain employment decisions.
However, in June 2023, the Supreme Court struck down the legality of affirmative action in college admissions in Students for Fair Admissions v. Harvard and many have argued that the Court’s ruling applies in the private employer context as well.
More recently, the White House rescinded Executive Order 11246, which since 1965 required that certain federal contractors implement affirmative action plans.
But… DEI Initiatives Are Not Necessarily Affirmative Action Plans
A proper DEI program does not give a business the right to make employment decisions based on a worker’s protected characteristic like affirmative action plans.
Instead, DEI programs are designed to promote diversity, equity and inclusion in the workplace through education, recruitment efforts, mentorship, and policies such as pay equity. An example of a DEI program is when a business includes in its recruitment efforts historically black colleges and universities (HBCUs).
This increases the diversity of the candidate pool but any subsequent decision to hire a candidate by that business is based on qualifications and merit, not based on race or color. Workplace anti-discrimination training is another example of a DEI program (which in some states, including New York, is also required by law).
Employee resource groups (also known as affinity groups) are another example of a DEI program. None of these programs should be exclusive and instead, should be open to all workers at the work site.
Remember that Federal and State Anti-Discrimination Workplace Laws Remain Intact
Federal and state laws that protect workers based on their protected characteristics remain the law of the land. On the federal level, in addition to Title VII, the Americans with Disabilities Act provides various protections for workers with a disability, including obligations for a business to provide reasonable accommodations.
The Family and Medical Leave Act protects workers who are in need of medical leave or leave to care for a family member.
Many states have their own workplace anti-discrimination laws that require things like paid prenatal leave, paid family leave, gender neutral bathrooms, lactation rooms, religious observance accommodations and many others. The argument can be made that recent challenges to DEI programs may not change this.
DEI Programs in the Private Employer Context Remain Legal but Will Be Subject to Increased Scrutiny Under the Current Trump Administration
The White House issued several Executive Orders that prohibit DEI programs and policies but these orders only apply to federal government agencies, certain organizations that receive federal funding, and federal contractors.
None of these orders prohibit DEI programs in the private business context, most likely because of the constitutional barriers in doing so.
However, a recent Department of Justice (DOJ) memorandum directed DOJ staff to propose by March 1 “appropriate measures to encourage the private sector to end illegal discrimination and preferences, including policies relating to DEI and DEIA.”
Whether the White House intends to target “illegal” DEI programs – meaning, those that are not implemented properly and thus, have always been unlawful under Title VII and other anti-discrimination laws – or intends to target all DEI programs in the private business context – including lawful DEI programs – remains to be seen.
Businesses should have their DEI policies reviewed by legal counsel and consider the risk of maintaining such polices under the heightened scrutiny by the White House.
Jaclyn K. Ruocco is a partner in the Firm’s Labor and Employment Practice Group. Ms. Ruocco represents hospitality companies in all areas of federal, state and local labor and employment law, including traditional labor relations, employment counseling, and employment litigation defense.
As part of her practice, Ms. Ruocco has broad experience in negotiating and interpreting labor contracts and separation agreements, conducting management and employee trainings, and devising company policies. Ms. Ruocco can be reached at (212) 370-1300 or jruocco@egsllp.com.
