At the same time, recent revisions to federal contracting requirements, state-level attorney general guidance and the temporary pause on Foreign Corrupt Practices Act (FCPA) enforcement all contribute to a complex, fast-changing compliance environment. While the legal foundations prohibiting workplace discrimination and harassment remain in place, the tone and focus of enforcement have shifted, forcing companies to question longstanding inclusion goals and programs. Because the administration is likely to take steps quickly to ensure enforcement of the March 26 Order after the 30-day implementation window, companies should be moving swiftly to prepare. Collect and review all prime contracts, subcontracts, and vendor agreements connected to federal government work. The March 26 Order’s definition of “program participation” combined with the administration’s statement that it will scrutinize attempts to conceal or repackage race-conscious programs demonstrates a need for a close, substantive review.
More specifically, equity usually also includes a focus on societal disparities, allocating resources, “decision making authority to groups that have historically been disadvantaged”, and taking “into consideration a person’s unique circumstances, adjusting treatment accordingly so that the end result is equal”. (ii) ensure prompt review of civil actions brought by private persons under 31 U.S.C. 3730(b)(1) concerning Federal contracts or subcontracts, including by rendering a decision on whether to proceed with an action under 31 U.S.C. 3730(b)(4), to the maximum extent practicable, within the 60-day period described in 31 U.S.C. 3730(b)(2). Title VII prohibits workplace harassment, which may occur when an employee is subjected to unwelcome remarks or conduct based on race, https://rolex–replica.us/on-my-rationale-explained-3/ sex, or other protected characteristics. Title VII applies to employers with 15 or more employees; employment agencies (including staffing agencies); entities which operate training programs (including on-the-job training programs); and labor organizations (like unions). The group brings together attorneys with extensive experience in DEI program implementation, Government Contracting & Reporting, and pay equity to ensure clients are prepared to address the inherent challenges in building effective and legally compliant initiatives.
Can an employer excuse its DEI-related considerations of race, sex, or another protected characteristic, provided that the protected characteristic wasn’t the sole or deciding factor for the employer’s decision or employment action? Employers instead should provide “training and mentoring that provides workers of all backgrounds the opportunity, skill, experience, and information necessary to perform well, and to ascend to upper-level jobs.” Employers also should ensure that “employees of all backgrounds . Unlawful limiting, segregating, or classifying workers related to DEI can arise when employers separate workers into groups based on race, sex, or another protected characteristic when administering DEI or any trainings, workplace programming, or other privileges of employment, even if the separate groups receive the same programming content or amount of employer resources. Title VII also prohibits employers from limiting, segregating, or classifying employees or applicants based on race, sex, or other protected characteristics in a way that affects their status or deprives them of employment opportunities. https://labverra.com/articles/addressing-racial-health-disparities-solutions/ Are only employers “covered entities” under Title VII, that is, entities which must comply with Title VII’s prohibition on discrimination?
Current Public Notices
“Program participation” is further defined to include membership or participation in, or access or admission to, training, mentoring, or leadership development programs; educational opportunities; clubs; associations; or similar opportunities sponsored or established by the contractor or subcontractor. On March 26, 2026, President Trump signed a new Executive Order titled “Addressing DEI Discrimination by Federal Contractors” (the March 26 Order), which imposes significant new contractual obligations on federal contractors and subcontractors relating to diversity, equity, and inclusion (DEI) programs and practices. Our DEI and Equal Employment Opportunity Compliance Team helps businesses administer and evaluate legally sound, effective DEI policies and initiatives that align with federal and state requirements while advancing workplace culture and business objectives. When it comes to diversity, equity, and inclusion (DEI) programs employers must balance their commitment to fostering inclusive workplaces with the need to comply with evolving laws and regulations. (c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Provide Inclusivity And Diversity Training Grounded In Antidiscrimination
- Blind-made products are used throughout the federal government, and include brands such as Skillcraft, ARC Diversified, Austin Lighthouse, and Ability One.
- Federal contractors and subcontractors, in particular, face new certification requirements and heightened risk of potential False Claims Act (FCA) liability.
- Specifically, DEI activities impose artificial costs in hiring, promotion, and operations by precluding implementation of merit-based principles; creating excessive workforce turnover by elevating immutable characteristics over job performance; and jeopardizing the sort of employee collaboration and problem-solving that is essential to fostering efficient and high-quality work.
- Courts therefore may still scrutinize whether the certification was in fact material to the government’s payment decision in any given case.
- 42 U.S.C. § 2000e-2(a) (employers); § 2000e-2(b) (employment agencies); § 2000e-2(d) (training programs); § 2000e-2(c) (labor organizations).
They have also pressured foreign companies with U.S. government contracts to comply with the order, drawing ire from foreign officials. As of 2024, affirmative action in the United States had been increasingly replaced by emphasis on diversity, equity, and inclusion, while nine states explicitly banned affirmative action use in the employment process. In 2023, the Supreme Court explicitly rejected affirmative action regarding race in college admissions in Students for Fair Admissions v. Harvard. The Economist has also stated that surveys of international companies indicate that the number of people hired for jobs with “diversity” or “inclusion” in the title more than quadrupled since 2010. It helps eligible veterans access federal job opportunities by allowing them to compete for positions typically open only to current federal employees and by reinforcing veterans’ preference in hiring. In 1990, President George H. W. Bush signed the Americans with Disabilities Act, which requires employers to provide reasonable accommodations to employees with disabilities, and imposes accessibility requirements on public accommodations.
Scope of “Racially Discriminatory DEI Activities”
With some states moving to remove the protected characteristic of gender identity from their antidiscrimination laws, employers operating across jurisdictions face added complexity and should prioritize clarity in their training programs. Guidance from a coalition of 16 state attorneys general underscores the importance of continuing nondiscriminatory DEI efforts, reinforcing these programs as a risk mitigation strategy. For organizations to remain compliant, it’s essential that they revisit their DEI strategies and audit risk exposure.
Key Contacts
- Ogletree has long partnered with employers across all industries on their inclusion practices, including private companies, federal contractors, federal grant/money recipients, non-profit organizations and higher education institutions.
- The use of mandatory “diversity statements” within academia, wherein an applicant or faculty member outlines their “past contributions”, and plans “for advancing diversity, equity and inclusion” if hired, has become controversial and sparked criticism.
- Under Title VII, DEI initiatives, policies, programs, or practices may be unlawful if they involve an employer or other covered entity taking an employment action motivated—in whole or in part—by an employee’s or applicant’s race, sex, or another protected characteristic.
- Employment decisions based on the discriminatory preferences of clients, customers, or coworkers are just as unlawful as decisions based on an employer’s own discriminatory preferences.
More recently, concepts have moved beyond discrimination to include diversity, equity, and inclusion as motives for preferring historically underrepresented groups. Blind-made products are used throughout the federal government, and include brands such as Skillcraft, ARC Diversified, Austin Lighthouse, and Ability One. Later amendments added veterans from conflicts after World War II, special provisions for the mothers of disabled or deceased veterans, and job-specific training for veterans entering the federal or private workforce. In 1944, the Veterans’ Preference Act codified the previous executive orders, clarified criteria, and included special hiring provisions for disabled veterans. Early DEI efforts included preferential hiring and treatment of veterans of the US Civil War, their widows, and orphans, in 1865. The concepts of DEI predate the terminology, and variations sometimes include terms such as “belonging”, “justice”, and “accessibility”.
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- (c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
- Executing “diverse slate” policies also can require employers to ask or otherwise obtain pre-employment information about race, or another protected characteristic.
- Our DEI and Equal Employment Opportunity Compliance Team helps businesses administer and evaluate legally sound, effective DEI policies and initiatives that align with federal and state requirements while advancing workplace culture and business objectives.
- “Pre-employment questions about race can suggest that race will be used as a basis for making selection decisions.
Executive Order also directed the Attorney General and Director of the Office of Management and Budget (OMB) to identify potential civil compliance investigations of private-sector entities, including federal contractors, as part of a broader effort to deter DEI programs across the economy. This alert summarizes the key provisions of the March 26 Order and Fact Sheet and identifies critical action items for contractors and subcontractors preparing to meet these new requirements, including conducting a privileged inventory of DEI programs, assessing contractual exposure, and creating a compliance plan addressing the March 26 Order’s requirements. Thereafter, each agency head shall regularly review and take appropriate measures to ensure such compliance. The contractor recognizes that compliance with the requirements of this clause are material to the Government’s payment decisions for purposes of section 3729(b)(4) of title 31, United States Code (False Claims Act).”. Can an employer justify taking an employment action based on race, sex, or another protected characteristic because the employer has a business necessity or interest in “diversity,” including preferences or requests by the employer’s clients or customers? An employment action still is unlawful even if race, sex, or another Title VII protected characteristic was just one factor among other factors contributing to the employer’s decision or action.
42 U.S.C. § 2000e-2(a) (employers); § 2000e-2(b) (employment agencies); § 2000e-2(d) (training programs); § 2000e-2(c) (labor organizations). Depending on the facts, protected opposition could include opposing unlawful employment discrimination related to an employer policy or practice labeled as “DEI.”. Generally, protected activity consists of either participating in an EEO process (such as an employer or EEOC investigations or filing an EEOC charge) or opposing conduct made unlawful by Title VII. Title VII prohibits employers and other “covered entities” from retaliating because an individual has engaged in protected activity under the statute. Employment decisions based on the discriminatory preferences of clients, customers, or coworkers are just as unlawful as decisions based on an employer’s own discriminatory preferences.
