Trump’s Attack on ‘Illegal’ DEI Disorients Corporate America

President Donald Trump’s executive orders against “illegal” diversity, equity and inclusion policies have left corporations and their lawyers struggling to grasp exactly what that means.

Author of the article:

Bloomberg News

Simone Foxman, Jeff Green and Emily Flitter

Published Jan 23, 2025  •  4 minute read

6z0n2ehgi85cnfcjbuv3vu}z_media_dl_1.jpg Photo by Benjamin Girette /Bloomberg

(Bloomberg) — President Donald Trump’s executive orders against “illegal” diversity, equity and inclusion policies have left corporations and their lawyers struggling to grasp exactly what that means.

Article content

Article content

Trump on Tuesday ordered federal contractors to affirm they don’t “engage in illegal discrimination, including illegal DEI.” He also directed government agencies to draw up a list of publicly traded corporations, large nonprofits and others in the private sector for potential investigations into compliance violations.

Article content

However, the order didn’t provide a definition of what a DEI program is, nor did it say what it believes is unlawful, employment lawyers said. There’s also no detail on what criteria or process agencies should use, they said.

The vagueness of the executive order has caused law firm Seyfarth Shaw’s offices to be flooded with calls from companies trying to figure out how they may be impacted by Trump’s directive.

“Employers are clamoring for specifics on what this means for their programs,” said Annette Tyman, a partner at Seyfarth.

They’re also flummoxed about how federal officials will draw up a list of top offenders, said Laura Mitchell, a lawyer with Jackson Lewis who helps companies navigate federal contracting regulations.  

“These agencies are supposed to be creating this list of the most egregious discriminatory practitioners, based on what? Are they just going out and scouring the Internet?” said Mitchell.

They’re likely to pore over any public comments or information previously shared with government officials about their DEI programs for answers, she said.

Article content

Article content

Still Digesting

“There’s a lot of confusion right now around what is permissible and what is impermissible,” said Andrew Turnbull, co-chair of the global employment and labor practice at law firm Morrison Foerster. “We’re still digesting that ourselves.”

Though the government is limited in its ability to tell companies what internal corporate policies they can and cannot have, it wields influence with federal contractors from Boeing Co. to Amazon.Com Inc. to Bank of America Corp. — all of which bid on contracts to provide goods or services for the US government. 

Efforts to end discrimination in corporate America via executive orders began in the 1960s, when Presidents John Kennedy and Lyndon B. Johnson directed companies to take action to ensure companies didn’t discriminate based on race, religion and national origin. 

Trump also revoked Johnson’s 1965 order directing federal contractors to take affirmative measures to ensure equal opportunities for women and underrepresented groups. It’s unclear what impact that may have on existing government agreements with companies who’d pledged to hire more people from those groups in part to resolve complaints over discrimination, lawyers said.

Article content

The Law

Employers have been barred from considering characteristics like race, gender and religion in hiring under the Civil Rights Act of 1964. However, many large companies reexamined their diversity programs after the Supreme Court threw out affirmative action in university admissions in June 2023. 

Trump’s order “just basically says companies need to be in compliance with civil rights laws on the books,” Turnbull said. Most companies don’t think they violate any laws, he said.

One way companies have been preparing for the new administration is to add directors who have played a role in Trump’s inner circle. Meta Platforms Inc., which recently disbanded many of its diversity efforts, added Trump ally and Ultimate Fighting Championship CEO Dana White to its board. Former Trump campaign advisor David J. Urban joined the board of alternative energy company Eos Energy Enterprises Inc.

Anti-DEI activist Robby Starbuck, who has gained a reputation for online videos calling on companies to scrap DEI programs, said he has privately consulted with about 20 public company CEOs since the election, giving them advice on how to navigate DEI, and was also approached recently about the possibility of serving on the board of a large industrial company, which he declined to identify. He said he also spoke to several Trump department nominees about how they might identify and dismantle DEI in their federal agencies, without providing names.

Article content

Planned Confusion

Other conservative activist groups believe the confusion is part of Trump’s plan.

“How would you like to be on an agency’s top five list of worst actors in a sector?” said Jeremy Tedesco, senior vice president of corporate engagement at the Alliance Defending Freedom, an activist group that’s pressed companies to abandon their diversity initiatives. Tedesco said ADF intends to help the government identify companies it believes practice the most egregious forms of DEI.

“DEI has become incredibly risky, in a very real sense,” he added. “We think the wise course for all these companies is to voluntarily eradicate it before the Department of Justice comes knocking.”

It’s a threat that’s already too real for Dwayne Kwaysee Wright, an assistant professor and director of DEI initiatives at George Washington University’s education and human development graduate school.

At every major corporation and university, the corporate counsel and chief financial officer are likely wondering, “not ‘should I have these programs?’, but ‘can I financially defend it even if I want to have these programs?’,” he said.

“I think the chilling effect is the point,” he said.

Article content