ANALYSIS: A Risk Barometer for Employers in Today’s DEI Climate

Through a series of executive orders and agency actions, the Trump administration is making its case that DEI—which many proponents deem critical for employers to ensure the prevention of discrimination in the workplace—may itself constitute discrimination in violation of Title VII and other federal anti-discrimination laws.

In the wake of this meteoric shift, employers are scrambling to figure out which of their policies, programs, and practices are most likely to attract an investigation or enforcement action by a federal agency, and result in actual legal liability.

Here are three types of DEI programs that present a high, medium, and low risk that employers can use as a barometer to gauge the potential pressure of their own programs.

High Risk: Exclusive Career Opportunities

The category posing the highest level of risk is any kind of job opportunity or career development program reserved exclusively for a particular race, sex, or other characteristic protected by federal anti-discrimination law. This also includes set-asides where a specific percentage or number of slots are reserved for members of such groups. This category does not, however, include affirmative action programs required by federal law for veterans or individuals with disabilities.

At-risk programs may include internships, fellowships, mentorships, sponsorships, leadership development programs, and training programs. This means that summer associate programs that are designed to provide opportunities for members of under-represented and historically disadvantaged races—which were not an invention of the recent DEI era and have existed in Big Law and the corporate world for a while without serious controversy—are the likeliest casualty of the administration’s purge on DEI.

What makes these types of programs especially vulnerable is that individuals are entirely disqualified from participating in them based on their race, sex, or other protected identity characteristic. Programs that involve preferential treatment—or even riskier, total exclusions—based on protected characteristics are at the heart of what the Trump administration is calling DEI-based discrimination. And while race and sex are not the only characteristics protected by federal anti-discrimination law, they are the demographic categories most associated with DEI-era workplace programs and are thus the main classifications of interest to the administration.

Employment programs in which an individual’s protected characteristic renders them completely ineligible to participate are likely to face the most judicial scrutiny as to their compliance with Title VII and Section 1981. It is no surprise that organizations that have had their diversity programs challenged in recent litigation by anti-DEI legal groups have opted to change the terms of their programs rather than risk an unfavorable determination by a court.

Employers whose exclusive job programs are for individuals who have experienced particular hardship do not run afoul of federal anti-discrimination law, as long as they do not base their selection on protected characteristics and do not use facially neutral criteria as a proxy for protected characteristics.

Medium Risk: Employee Resource Groups

The middle—and perhaps the most legally interesting—category contains employee resource groups (ERGs), business resource groups (BRGs), and employee affinity groups, all of which may be centered on a shared identity that is protected by federal anti-discrimination law.

Letters sent by the EEOC to prominent Big Law firms inquiring about their DEI-related employment practices, as well as informal guidance issued by the EEOC and the Department of Justice on DEI-based discrimination, paint a picture of the Trump administration’s theory about how such groups may constitute unlawful discrimination.

Risk factors include:

• groups focused on a protected characteristic, particularly race or sex;
• the exclusion of individuals from joining such groups or participating in group events based on their own protected characteristics;
• employer direction, sponsorship, promotion, or encouragement of such groups, including through the use of employer funds, company time, company premises, or other employer resources; and
• career, workplace, and business advantages flowing from membership, such as opportunities for professional networking within or outside the company and increased client contact.

It is unclear how the administration would treat programs that contain only a few of the more minor risk factors. For example, a company may have an employee-run LGBTQ+ group that explicitly keeps membership open to all employees regardless of their sexual orientation or gender identity; receives some or no company funding for its events; holds meetings that do not count as work time on company premises; places no emphasis on advancing the professional interests of LGBTQ+ individuals within the company; and largely focuses on celebrating the culture, experiences, and contributions of LGBTQ+ people. The group holds non-mandatory events open to all employees that do not count as hours worked. The events and the group are advertised on company channels.

This scenario describes the set-up of what is more appropriately described as an “affinity group” rather than an ERG or BRG. ERGs and BRGs were essentially a popular DEI-era re-styling of employee affinity groups when it was an advantage, not a liability, for a company to brand its employee infrastructure as “DEI” and highlight the company’s career and business development opportunities for members of historically underrepresented or disadvantaged groups. In contrast with affinity groups, ERGs and BRGs have more of a focus on developing the professional interests and networks of its members. Despite their differences, the three names are often used synonymously.

Even if the Trump administration were to take issue with such an affinity group, it is unlikely that a court would deem an employer allowing such a group to have violated federal anti-discrimination law. While the Supreme Court held last year in Muldrow v. St. Louis that an injury need not be significant to be actionable under Title VII, it still must cause “some harm,” not “no harm.” And if a company offers a wide range of non-exclusive groups for employees to join that focus on a variety of shared interests or experiences, including those that do not constitute protected characteristics, it is hard to cognize a serious claim of injury based on their existence.

However, the closer an affinity group program comes to providing job advantages to individuals based on their protected characteristics and excluding individuals from these advantages based on their own protected characteristics, the more at risk it is of violating federal anti-discrimination law.

Low Risk: EEO Trainings

Quite simply, workplace anti-discrimination and anti-harassment training grounded in equal employment opportunity principles is highly unlikely to violate federal anti-discrimination law. Training that is designed to create an environment devoid of discrimination and harassment that helps employees and managers understand the behavior that is expected of them to reach this goal is, instead, the very essence of anti-discrimination law.

The Trump administration has taken issue with certain elements of EEO trainings that were popularized in the DEI era such as unconscious or implicit bias, micro-aggressions, and notions of critical race theory and anti-racism. However, as long as anti-discrimination and anti-harassment training does not demean or negatively stereotype any race, sex, or other protected characteristic, it is very unlikely to constitute discrimination or harassment under federal law on its own. The bar for a hostile work environment claim is high, and courts have been reluctant to find for plaintiffs bringing such claims based on workplace trainings.

Other analyses of the DEI executive orders featured in the report cover corporate responses, litigation, diversity analytics, and state bar compliance. The full report is available to Bloomberg Law subscribers and nonsubscribers.

Bloomberg Law subscribers can find related content on our In Focus: Executive Orders & Actions and our In Focus: DEI in Employment page.

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