First, the Context – President Trump’s Executive Order 14173, “Illegal DEI”, and the Impact of the New Guidance

On January 21, 2025 President Trump issued Executive Order (EO) 14173 “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” which, among other things, coined the term “illegal DEI.”

Illegal DEI and DEIA policies not only violate the text and spirit of our longstanding Federal civil-rights laws, they also undermine our national unity, as they deny, discredit, and undermine the traditional American values of hard work, excellence, and individual achievement in favor of an unlawful, corrosive, and pernicious identity-based spoils system.

However, the EO did not define “illegal DEI”. Employers were left to try to interpret the EO’s meaning regarding “illegal DEI” and how to apply it, in practical terms, to employers’ DEI and EEO practices.

Importantly, one part of EO 14173 states that federal contractors soon would be required to certify compliance with all applicable federal non-discrimination laws and also that employers do not maintain employment practices that promote “illegal DEI”.

Several lawsuits have followed challenging the certification requirement, in part, based on the argument that “illegal DEI” is not defined in any law, regulation, or government guidance, and therefore the term is unconstitutionally vague and the certification requirement is unlawful.

With this new detailed Guidance, the Administration seeks to define with specificity, and provide examples of and best practices to avoid, illegal DEI. As such, the Guidance provides a practical ‘benchmark’ for employers to assess their DEI and EEO programs. It also may provide the Administration with a persuasive argument allowing courts to conclude the “certification” requirement is lawful.

Next, The Guidance

On July 29th, Attorney General Pam Bondi issued a Memorandum entitled “Guidance For Recipients Of Federal Funding Regarding Unlawful Discrimination” (the Guidance) that seeks to – and to a good extent does – provide practical guidance regarding “the application of federal antidiscrimination laws to programs or initiatives…, including those labeled as Diversity, Equity, and Inclusion ("DEI") programs”.

The Memo provides clear insights into what the Administration considers “Unlawful Discriminatory Policies And Practices.” It includes specific, practical detail, as well as best practices employers may consider to avoid “illegal DEI.”

In essence, the Guidance wants employers to ensure all employment programs and practices recognize only two genders, are wholly race/ethnicity blind, and focus exclusively on merit.

An open question is whether at least some of the Guidance’s examples of “illegal DEI” may go beyond existing federal anti-discrimination law. However, it provides important clarity and insight regarding how the Administration interprets those laws, and how the Administration may seek to enforce those laws against employers that receive federal funds.

Key Takeaway

We encourage employers to analyze the Guidance and use it as a benchmark against existing DEI (even if you no longer use that term) and EEO programs and practices. This exercise should allow your organization to identify and assess potential risks, and determine your acceptable level of risk tolerance.

If you have questions or would like assistance, please contact your Silberman Law legal professional or simply respond to this Alert.