One of the central aims of President Trump’s executive order of January 21 is to declare a many-sided legal war on “illegal DEI” at private employers. But what is illegal DEI? The question is more easily asked than answered.
There would probably be wide agreement on one instance of illegal DEI, namely a company’s discriminating against a qualified candidate in hiring or promotion to make numbers come out in workforce demographics or simply to favor what the law calls a protected group. Discrimination and preferences of that sort have gone on openly for decades, in no small part because of the program of affirmative action for federal contractors introduced by the now-revoked Executive Order 11246 of 1965.
The Supreme Court seemed to countenance such preferences for many years, notwithstanding the language of the Civil Rights Act of 1964 itself. But recent decisions such as that in the Students for Fair Admissions case suggest that the court’s tolerance has come to an end. So far, so straightforward.
But “illegal DEI” must mean more than that. For one thing, if discriminatory preferences were the whole game, the executive order could readily have used a more specific term, such as “illegal preferences.” Instead, it uses “illegal DEI,” sometimes adding variations on the word “discrimination.” What other kinds of DEI practices might it have in mind as discriminatory or otherwise illegal?
Here are three categories of employer practice by way of example:
- Employee trainings that get into questions of race or sex. What if white or male employees say these make them uncomfortable or guilty or singled out? Does it matter whether essentially similar sessions are couched as harassment and discrimination prevention, sensitivity training, or diversity training, or whether they draw on controversial concepts such as “implicit bias”?
- Changes in hiring practices that are not themselves based on race or sex, but could have proxy effects based on those. Some employers have revamped hiring methods to drop or alter standardized tests, standardize interview questions, remove college degree requirements, or lift bars on hiring ex-offenders. In each of these instances some employers have cited DEI motivations, while others have adopted the same changes for reasons unrelated to DEI or from a mix of motives. Does that matter?
- Many companies have either permitted or encouraged the formation of employee affinity groups for women, particular racial groups, gays, and so forth. Tangible business reasons for doing so may include improved recruitment (at historically black or women’s colleges, for example), an early warning grapevine to identify claims of discrimination that otherwise might eventuate in lawsuits, and defenses against future claims that the company maintained a “hostile environment” toward a group. Legit or no?
The Trump administration may in time hand down guidance about which of these practices it regards as unlawful discrimination, and given the mood of its conservative base it will probably challenge some instances. The law firm Littler notes that “numerous high-profile advocacy groups are committed to publicly highlighting and calling for investigation of [DEI] programs they consider unlawful.” But for the most part, on the topic of what counts as discrimination, all the administration can offer are opinions, because it doesn’t get to decide what the Civil Rights Act of 1964 and other relevant statutes mean; the courts do.
As I’ve written, employment discrimination law is one of the topics in which the executive branch—in particular, the federal Equal Employment Opportunity Commission—has the very worst record in obtaining deference from the courts for its interpretations. Beyond that, the courts have proved relatively tolerant of most of the practices listed above, even, for example, when conservative employees have claimed that workplace celebrations or obligatory trainings discriminated against them by being overly “woke” in content.
What raises the stakes in all this is that the executive order makes clear its intent to make life legally hot for employers that retain practices it sees as DEI-ish whether or not any courts have ruled those practices discriminatory.
Significantly, bounty-hunting private lawyers will be set loose under the False Claims Act to demand triple damages based on bills submitted to Washington by federal contractors accused of breaking the rules. The FCA claims can pose bet-the-company legal uncertainties, which is one reason defendants may choose to settle them for cold cash even if they are relatively confident the law will come out eventually on their side.
There is more. Agencies will have to cooperate at regular intervals with higher-ups to identify practices suitable for enforcement action as well as “potential regulatory action and sub-regulatory guidance.” There will be investigations forced like seedlings in greenhouses: the order directs each agency to come up with a list of up to nine private sector employers proposed for investigation in its sector. Public shaming will probably be part of the list strategy as well. The law firm Seyfarth observes:
Notably, [the report identifying private-sector enforcement targets] is to be submitted to the Assistant to the President for Domestic Policy, one of the most senior White House policy positions responsible for coordinating domestic policy across the federal government. The involvement of such a senior White House official, rather than leaving enforcement solely up to agency discretion, signals that the administration intends to maintain direct oversight of enforcement efforts against major private sector organizations’ DEI programs. This high-level attention from the White House suggests we can expect aggressive and coordinated enforcement actions once targets are identified.
Many of the practices likely to come under new attack, it should be noted, were themselves adopted on the advice of compliance officers and lawyers—and not just in response to the now-rescinded executive orders of the civil rights era. Indeed, it is typical for DEI offices at companies to have grown up from a core of compliance functions. Harassment training, which is compulsory under some states’ laws, came to wide adoption because courts penalized companies in harassment suits if they didn’t have it. Many policies seen as solicitous of minority interests originated similarly, as efforts to mitigate damages in case of future discrimination claims.
Employers can look forward once again to being whipsawed by a heavy-handed government, sued if they do and sued if they don’t, with the stuff that was mandatory last month now being forbidden, if you believe those in charge. Just don’t assume the new campaign anymore than the old is sure to prevail in court.