Within a few days of taking office, President Trump issued an executive order entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” which is aimed at “terminating all discriminatory and illegal preferences” in federal agencies and in the private sector.

In March, the federal Equal Employment Opportunity Commission (EEOC) released long-awaited guidance regarding what constitutes unlawful “diversity, equity, and inclusion” (DEI) policies.

So, where are we now?

EEOC Guidance

According to the EEOC, although the term “DEI” is not used in Title VII of the Civil Rights Act of 1964 (Title VII), certain DEI policies or practices may be unlawful if they result in employment actions motivated – in whole or in part – by any employee’s or applicant’s race, sex, or another protected characteristic. The guidance further specifies that Title VII’s prohibition of “disparate treatment” includes DEI-related disparate treatment in actions such as hiring, firing, promotion, demotion, compensation, access to or exclusion from training, access to mentoring or networking, internships, selection for interviews, and job duties or work assignments.

The EEOC offers the following examples of instances of DEI programs that may violate the law: limiting membership in workplace groups, such as Employee Resource Groups (ERGs), Business Resource Groups (BRGs), or other employee affinity groups, to certain protected groups; and separating 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.

Additionally, the EEOC reiterates that DEI-related considerations of a protected characteristic are still unlawful even if the protected characteristic was not the sole factor driving the employer’s decision or action. Moreover, the guidance emphasizes that there is no “diversity interest” exception to Title VII compliance and that employees may be able to allege a hostile work environment by showing that DEI training was discriminatory in content, application, or context.

Employer Steps to Remain Legally Compliant

To ensure DEI programs and policies are compliant with the law, employers should audit their job descriptions and interview questions to ensure they do not include preferences based on race, sex, or other protected characteristics. Also, promotions and other employment-related actions should be transparent and follow standardized procedures rather than focusing on “workplace balancing.” Of equal importance, employee benefits, such as mentorships and leadership training and workplace groups, should be offered to all employees, regardless of their protected characteristics. The EEOC guidance specifically states that employers “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 should also ensure that ‘employees of all backgrounds … have equal access to workplace networks.”

Because there is no “diversity interest” exception, businesses should avoid basing their employment decisions on discriminatory client or customer preference. As the EEOC guidance states,

[C]lient or customer preference is not a defense to race or color discrimination. Basing employment decisions on the racial preferences of clients, customers, or coworkers constitutes intentional race discrimination. 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.

Although Title VII does permit employers to use the “bona fide occupational qualification” (BFOQ) affirmative defense in limited cases to excuse employment decisions based on religion, sex, or national origin (not race or color), this defense only applies where religion, sex, or national origin is a BFOQ “reasonably necessary to the normal operation of that particular business or enterprise.” The EEOC adamantly affirms:

No general business interests in diversity and equity (including perceived operational benefits or customer/client preference) have ever been found by the Supreme Court or the EEOC to be sufficient to allow race-motivated employment actions.

With regards to providing DEI training, employers should ensure it is not discriminatory in “design, content, or execution.” In a footnote to this section of the guidance, the EEOC refers to its amicus brief submitted in a federal appellate court case in which the EEOC cited a district court decision:

[A]lthough discussions about race are permitted under Title VII—and indeed, could contribute positively to nuanced, important conversations about how to form a healthy and inclusive working environment … the way these conversations are carried out in the workplace matters: When employers talk about race—any race—with a constant drumbeat of essentialist, deterministic, and negative language, they risk liability under federal law.

On the other hand, where an employee fails to provide evidence of discrimination, the EEOC in the amicus brief acknowledges that, “the mere fact that an employer requires employees to participate in an anti-discrimination training is not enough to show that the training falls into a category of conduct prohibited by Title VII.”

Although the EEOC guidance does not have the effect of law, following its guidelines will help employers continue implementing their DEI programs without incurring legal liability.