Practical Policies: Discerning DEI Discrimination

In the latest episode of the Mintz on Air: Practical Policies podcast, Member Jen Rubin unpacks the recent EEOC guidance on DEI discrimination with fellow Employment Member, Geri Haight. Jen and Geri discuss the content and upshot of the EEOC guidance and provide some practical guidance for employers on how to manage the challenges these workplace developments pose for employers. This episode is part of a series of conversations designed to help employers navigate workplace changes and understand general legal considerations.

Jen and Geri discuss:

1. A breakdown of the EEOC's joint guidance with DOJ on DEI “Discrimination”
2. A discussion regarding the “Illegal DEI” concept
3. What the future holds for the workplace and DEI programs
4. The ongoing tension between federal and state laws
5. Practical guidance for employers

Listen to gain a better understanding of what the landscape looks like for DEI programs under the Trump administration and what employers should keep in mind as they consider their own programming, current and future.

Discerning DEI Discrimination - Transcript

Jen Rubin (JR): Welcome to Mintz On Air: Practical Policies podcast. Today's topic is Discerning DEI Discrimination. I'm Jen Rubin, a Member of the Mintz Employment Group with the San Diego-based bicostal employment practice representing management, executives, and corporate boards. Thank you for joining our Mintz On Air podcast. I hope you have had the opportunity to tune into our programs previously. If you have, you know that my guests and I have been discussing a variety of employment-related topics and developments. If you have not tuned into our previous podcasts and would like to access our content, please visit us at the Insights page at mintz.com.

So today, I'm joined by my Boston-based colleague, Geri Haight who is also an employment lawyer. Geri counsels clients on a host of employment issues ranging from pre-litigation dispute resolution through the litigation and arbitration process and on appeal. Geri spent nearly eight years as an in-house lawyer, so she has a particular insight into how businesses manage employment practices, policies, and potential disputes every day. Geri brings a practical approach to advising clients on workplace issues such as discrimination, harassment, retaliation, wage and hour, restrictive covenants, and trade secret protections. Hello, Geri, and thanks for joining Mintz On Air.

Geri Haight (GH): Hi Jen, thank you so much for having me.

Unpacking EEOC and DOJ Guidance on DEI

JR: So today Geri and I are going to be discussing the recent guidance that the EEOC released jointly with the Department of Justice, which sets forth the government's interpretation of the term, “Illegal DEI” that was the subject of a number of executive orders the current administration issued in January. Now those orders, in effect, put the government contractors, and the private sector on notice that certain activities relating to DEI, which, for those of you who don't know the acronym, stands for Diversity, Equity, and Inclusion. Those activities could lead to a number of adverse government actions ranging from debarment from government contracting, investigations, criminal sanctions, and even civil litigation. The EEOC's guidance, which was issued on March 19, was intended to explain what types of DEI activities the government considered illegal. With that, Geri, I'd like to start with a very brief explanation of the executive orders that President Trump issued in January and their current legal status. Can you tell me about those orders?

GH: Sure, Jen. There are three that are primarily at issue here. The first is entitled ‘Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government’. That executive order primarily deals with the definition of sex as an individual's immutable biology classification as either male or female. That order directs federal agencies to enforce laws governing sex-based rights. So here, on this podcast we're talking about Title VII and its reference to sex, which could be implicated by this executive order.

The second one is ‘Ending Radical and Wasteful Government DEI Programs and Preferencing’. That executive order calls for the termination of any discriminatory programs, including, “Illegal DEI” and diversity, equity, inclusion, and accessibility policies and programs across the federal government, including training policies and programs. The goal of that executive order is to eliminate all federal DEI initiatives, but it also has an enforcement provision that implicates private employers as well.

The Third executive order is entitled ‘Ending Illegal Discrimination and Restoring Merit-Based Opportunity’. That executive order really instructs the Office of Federal Contract Compliance Programs (OFFCP) to stop promoting diversity, to stop holding federal contractors and subcontractors responsible for taking affirmative action to eradicate discrimination and that allow or encourage federal contractors to engage in workforce balancing based on protected characteristics such as race, color, sex, sexual preference, religion, or national origin.

Collectively, these executive orders have been viewed as basically putting the private sector on notice that they need to carefully scrutinize their diversity, equity, and inclusion programs.

Of course, this all comes in the context of DEI not being defined anywhere in Title VII, which is the primary and long-standing federal anti-discrimination measure. Title VII of the Civil Rights Act which prohibits discrimination based on protected characteristics like sex and race.

JR: One of the things that seems to be targeted by these orders is this concept of “Illegal DEI”, right? Can you tell us the state of challenges relating to that term? What's going on in the courts right now?

What Does “Illegal DEI” Mean?

GH: There have been a host of challenges. The primary one, and the one that's kind of gotten the farthest thus far, is a challenge brought in the Federal District Court in Maryland. That court ruled on a preliminary injunction motion and found that the executive orders were illegal on the basis of the term, “Illegal DEI” because that term was not defined and wasn't certain enough to allow potential enforcement targets to avoid penalties and other measures that could be flowing from the text of the executive order. The court noted that even the government for purpose of opposing the injunction couldn't describe what the term “Illegal DEI” meant.

That injunction issued by the court was issued on a nationwide basis, which was important because it had the effect of not only enjoining activity within the District of Maryland, but also throughout the United States. It didn't prohibit some conduct by the government in basically collecting information about DEI practices and programs, but the enforcement mechanism was enjoined.

That injunction order was challenged immediately by the government to the Fourth Circuit, which stayed that injunction's effect. With more to come on that! There was some language in the Fourth Circuit decision that was actually supportive of DEI programming in general but found that it was a premature injunction that had been issued. There's more to come on the litigation front with respect to the court's evaluation of these executive orders.

JR: The District of Maryland stayed that particular executive order in fact, partially on the basis of the term “Illegal DEI” really had no meaning. The Fourth Circuit kind of stepped in and said, “No, we're not going to allow this injunction to go into effect. We want there to be more legal and factual development before us, before we're going to issue a decision, right?” More to come from the legal perspective.

GH: Exactly. That's right.

JR: The government tells us not to do something or we're going to face penalties, even criminal penalties. But if we don't really know what this illegal conduct is, it makes it difficult to avoid committing it, right? It'd be helpful to know exactly what the government means by this concept of engaging in “Illegal DEI”. Geri, what happened next with this situation?

GH: I would just start by saying that I'm not sure we really do know exactly what it is even sitting here today. The EEOC, through its acting chair, together with the Department of Justice, issued a joint fact sheet, guidance, and FAQs regarding DEI-related discrimination at work. In these materials, they noted that DEI initiatives are not something that are defined within existing law. There's no real federal definition of DEI programming. Basically, the EEOC and the DOJ were issuing guidance to say, this is what we're concerned about, and here’s the existing legal framework to analyze it. The materials described – “Illegal DEI” – as discrimination that's based on protected characteristics. It says that, of course, you can't discriminate on the basis of race and sex. That's a longstanding principle, it has been the law since the 60s, and it's still the law today.

These really focus on preventing employers from making employment-based decisions on protected characteristics, which of course employers haven't been able to do for some time. It also says that you can't have separate workplace groups based on protected categories; you can't harass people based on protected categories; you can't retaliate against your employees based on protected categories. I In the language of these materials issued by the EEOC and DOJ, these are undercover of this DEI language, saying that there could be a DEI basis that employers have been utilizing to harass, retaliate, and discriminate against employees based on race or gender.

JR: Sounds to me, based upon what you just described, Geri, that a lot of this information is basically obvious restatements of what Title VII has protected since 1964. Did the EEOC provide any additional information that describe what these concepts are so that employers and businesses can modify their activities to avoid committing “Illegal DEI”?

Burden of Proof, Workplace Training, and ERGs: What Does the Future Hold?

GH: It's a great question, Jen, and I think the issue of what exactly is “Illegal DEI” remains an open question. There were some pieces of the EEOC's and DOJ's recent guidance, which is noteworthy. The first thing I'll point out is the statement in the guidance regarding the burden of proof for showing discrimination.

The EEOC said, that with respect to what has been considered reverse discrimination, there's no required higher showing of proof for so-called reverse discrimination. What that really means is, when a member of a majority group brings a claim for discrimination under Title VII, there's been an open question about whether there's a higher burden of proving discrimination against a majority member. Interestingly, this is an issue that is pending before the Supreme Court currently. There's a case that was heard for oral argument just recently. The case is called Ames v Ohio Department of Youth Services. In that case, there's a straight woman who brings a claim of reverse discrimination against her employer, claiming that she was the victim of anti-straight discrimination. The court is evaluating whether there should be a higher burden of proof for a majority member. The circuit court, in that case, the Sixth Circuit, required a showing of “background circumstances” to support allegations of reverse discrimination.

The EEOC guidance chimes in on that debate and says that its position is that there's no such thing as reverse discrimination. There's only discrimination under Title VII. The EEOC says it's the same thing, it's the same standard to prove, regardless of whether you're a member of a majority or minority group. This is a really interesting issue which will be decided by the Supreme Court this summer probably around a June time frame, so we'll get an answer on that issue in terms of what the Supreme Court thinks.

The guidance also touched on a number of other issues. The guidance says employers cannot limit access to workplace programs like leadership development, sponsoring, mentoring, fellowship programs, things at issue in the hiring process, such as interview selections, kind of what criteria is taken into consideration. They tick through all of the phases of the employment life cycle where there could be discrimination, which are the same life cycle issues that we deal with and have historically dealt with under Title VII and applicable state laws. This is hiring, firing, promotion, demotion, setting compensation, fringe benefits, trainings, mentoring, all of the considerations that all employers have taken, have been thinking about in just implementing programming to diversify their workforce, not only that, every step along the employment process where there could be a discrimination claim, it's the same as it always has been.

JR: So nothing new there basically.

GH: No, nothing new. It's the same analysis under Title VII. The implication, of course, is that when you read this guidance, the implication is clearly that majority groups have somehow been disadvantaged and discriminated against based on DEI programming that seeks to diversify and create an inclusive workforce. That's the underlying premise here. There's discussion in the EEOC guidance about segregating employees based on protected characteristics. That could be in the form of leadership training programs, mentoring programs, sponsorship programs, etc.

The EEOC says you can't do that. You can't do it to the exclusion of others. And also, that employers can't use business necessity to justify such discrimination. So, if an employer is saying, for example, we need to foster the development of a certain protected group because we just don't have very many of that protective grouping, of that protected characteristic in our workforce, that you can't use business necessity argument to justify such programming.

JR: If I could just interject here, there are cases out there issued by the Supreme Court of the United States that address certain circumstances where, in fact, some historical discrimination can form the basis for certain very targeted programming. Interesting to see whether and how the EEOC can overturn existing Supreme Court precedent, but that remains to be seen.

I also find interesting the use of the word ‘segregate’. Segregation, as we know, is a very politically charged word historically for Americans, and importing that language into these guidances. Is an interesting development.

One thing I want to ask you about, because this is my takeaway from reading these materials from EEOC and DOJ, t is that they call out ERGs – for those of you who don't know what that stands for, it’s Employee Resource Groups. For example, women's groups or African American groups or individuals who consider themselves Asian, and so on. Many employers have these groups as a resource to their employees. This was called out in the guidance and in fact, there was a little bit of discussion about them. Can you tell us what the EEOC had to say about ERGs?

GH: In the EEOC's view, this is targeted. In the example you gave about women's groups, that's a sex-based exclusionary program. In the EEOC's view under Title VII, for example, it's making a distinction based on a protected characteristic in a prohibited way, which is and can be construed as, discriminatory.

The real question is how does that really relate to a discrimination outcome here? Where if you're having, for example, just a group that is focused on networking and building commonality and community among a group of people who may be a minority group within an existing workforce for purposes of building bonds and making people feel like they have support, should those groups be open to others that are not members of the same protected category? The EEOC's answer to that is clearly yes, as comes through in this guidance. Such groupings are fine, I would say, even under the EEOC's analysis, so long as those programs and networking groups, etc are open to members who don't share the protected characteristic. In the example you gave, making a program for women open to men as well, or the programming associated with that group open to all. And I think really the key here is inclusivity.

The EEOC is looking at this as, and it, comes through in this guidance, DEI is exclusionary in concept. Even though the ‘I’ stands for ‘inclusivity’, they are viewing it as exclusive, exclusivity, or promoting exclusivity, which somehow seems strange, but they're saying that the goal of the workplace under Title VII is to make everyone equal. It’s this idea that has been coming up through the Supreme Court, through decisions from, for example, Clarence Thomas, that we should have a colorblind, genderblind workforce, everybody should be treated equal without regard to those protected characteristics.

JR: Yes, and if it were so easy, of course, to erase our history, perhaps that might be obtainable without any particular programs. In any event, I don't want to digress because I want to take us back to, again, this guidance that was issued by EEOC because employers are really looking for help in understanding what this concept of “Illegal DEI” is. That really is the focus. We are employment lawyers and we're trying to advise our clients about that.

The Ongoing Tension Between Federal, State, and Local Laws

JR: Let me turn to something that I think is a very interesting topic when it comes to this, and that's workplace training. For example, many states and some local municipalities require there to be certain training for employees in the workplace relating to a number of issues that are intended to address many of the issues in Title VII to root out discrimination, to make sure individuals feel safe and welcomed in their workplace, and that the workplace is a productive place where people are free from harassment and so on and so forth. The issue here, however, is the federal government has not yet, we haven't seen yet an executive order that has declared state and local legislation illegal relating to DEI.

For example, to my knowledge, as of the time of this podcast, we don't have a declaration that California's requirement that employers train their employees about things relating to, for example, gender identity and making sure that employees understand what that term is in the face of the executive order, which actually provides that there are only two sexes. We have a conflict there. As far as I know, there has not been a direct challenge by the federal government.

Geri, I'm going to ask you to dive into this very complex issue here. If an employer has employees in all 50 states, some of those states require training on some of these topics that could be “Illegal DEI”, right? What should those employers do? I realize this may be a very unfair question!

GH: I would say I know that this topic was touched on in a previous podcast, and this conflict is now, potentially, between federal and state and local laws. It's a real problem. You use the California example, but I'll use the New York example. The statute in New York specifically requires and contemplates anti-discrimination measures and trainings having to do with that statute about gender identity. An employer can't just disregard it. It's not guidance. It's actually statutorily required. It does put the two positions, the federal position currently as expressed under that executive order, and the state and city requirements in direct conflict.

We, as employment lawyers, can't advise our clients to violate state and local law. We just simply can't. That would be malpractice. We have to somehow harmonize the two seemingly inharmonious positions. What you have to do in that case is simply cover both to say that we're training a New York-based workforce, here are the requirements under New York law, we're complying with those requirements and making this very clear, while at the same time making clear the federal position. Now with this EEOC guidance falling under Title VII, this is how this issue would be viewed. It complicates the messaging for sure. But for the time being, until there is some way to harmonize those two conflicting positions, that’s the way that employers need to approach that issue. For example, we have clients all the time asking us, “Do we need to change our handbook policies? What are we doing?” I can't advise companies to be changing handbook policies to violate state and local law. That's just untenable.

The only thing I'll add, Jen, is that it's a particularly difficult point because in the EEOC guidance, with respect to training, there's a particular thrust of a position here that says that DEI trainings can potentially create a hostile work environment. When we're talking about gender identity and compliance with New York law, for example, or other issues in other states that there could be a real conflict that could give rise to a potential hostile work environment claim under the EEOC's guidance.

Conducting Policy and Handbook Audits

JR: You mentioned policies and handbooks. Obviously, some of our advice that we give as employment lawyers is that it's a great idea to do an annual review. Because it's not just these developments relating to the Trump administration, but there's constantly changes in the laws that need to be accounted for. Setting that aside, are these executive orders and the recent EEOC guidance about premising an audit of the DEI policies in order to address some of these issues? Tell me your views about conducting an audit to deal with these issues?

GH: I highly recommend that employers audit their programming and their handbooks and anything that could fall under this amorphous heading of “Illegal DEI”. A lot of our clients, as you know Jen, really took a deep dive into their programming in the wake of the Supreme Court's ruling in the college admissions case. If you have programming that does in fact exclude based on any protected characteristic, primarily race or gender or sex, you want to carefully review those programs in light of these executive orders and just the thrust of federal law in this arena currently. It is very important to do that.

Also, you need to be incredibly thoughtful about your programming in general, as you always should have been. This idea that we need to somehow change everything now, is somewhat a false assumption. Most companies, most businesses, private, public, regardless, have been thoughtful about these programs and have not been discriminatory to begin with. Now is the time to take a close look and make sure that programs you're about to implement, programs you have implemented, are compliant with the current state of the law. It's important that we not confuse this real questioning of DEI as an attack on merit-based success of segments of the workforce because the idea that DEI meant that unqualified people received some kind of benefit from an employer, I view as a false premise and one that is not underlying DEI programming.

Businesses need to make clear that, of course they can support all areas of their workforce and have the same requirements applied to all. You succeed at all businesses based on your performance, your work. I do not believe there are real considerations at play here that promote an unqualified person based on sex, race, or other characteristics. Just remembering that we all should be on the same level playing field and making sure that that is a reality in your workforce is something that we can all agree on. The federal government, state government, local government are all focused on just building and maintaining an open playing field. And that really should be a unifying message.

JR: I'm going to close out on that because it seems to me that it would be incomprehensible that a business, whether it's for-profit or nonprofit, would hire somebody solely to check some sort of box if that person did not have the qualifications to do the job. I do not know how you run an organization based upon that premise. It's been somewhat frustrating to see the message of DEI lost in the context of, these are not merit hires when, in fact it's all about unmasking the merit, right? And making sure that you've got that level playing field.

Total alignment with you on that. And thank you, Geri, for helping to explain to the extent we can, the meaning of the EEOC, DOJ guidance and this concept of “Illegal DEI”. This is, of course, a developing story. We have things that are taking place every day that are helping to add some substance to this and we at Mintz are following these issues very close closely.

Once again I'm Jen Rubin. Thank you, Geri Haight, and those of you who have tuned into our Practical Policies podcast. I invite you to visit us at Mintz.com for more content and commentary. Thank you.

Subscribe To Viewpoints