How Will the Change in DEI Law Affect Discrimination Lawsuits?

How Will Recent Executive Orders Affect Employees?

Diversity, Equity, and Inclusion (DEI) policies have long fostered fair and inclusive workplaces. They not only create environments where employees from various backgrounds feel valued but also serve as a key safeguard against discrimination lawsuits. However, recent changes in DEI law, particularly those outlined in President Trump’s Executive Order (EO) titled “Ending Radical And Wasteful Government DEI Programs And Preferencing,” have sparked discussions around the future of workplace initiatives and their potential legal implications.

The employment discrimination attorneys at Barrett & Farahany will explain the nuances of this policy shift, its potential impact on private-sector companies, and how employees can stay informed and protected. Whether you’re navigating the intricacies of DEI policies or concerned about workplace discrimination laws, we’ll cover all you need to know.

What Has Changed in DEI Law?

DEI policies have been pivotal in evaluating diversity, equity, and inclusion initiatives and identifying areas for improvement. However, the recent EO has raised questions about the landscape of DEI practices in the private sector, after it has been effectively ended in the private sector. Here’s what we know so far:

What is President Trump’s Executive Order?

On January 21, 2025, President Trump issued an Executive Order aimed at “restoring merit-based opportunity” while addressing potential illegal discrimination or preferences under DEI programs. The EO directs federal agencies, in collaboration with the U.S. Attorney General, to identify and review DEI-related practices in the private sector. Among the directives:

1. Identifying key sectors and companies to assess.
2. Recommending civil compliance investigations into private organizations.
3. Litigating or intervening in instances of alleged illegal discrimination.
4. Exploring regulatory or sub-regulatory action to deter certain DEI principles.

While the EO does not outright prohibit DEI practices, it signals heightened scrutiny of such programs. For employees, this means potential changes in how DEI policies are designed and implemented across workplaces.

What Does This Mean for Private-Sector Companies?

The EO may create tension for private companies, particularly those juggling federal anti-discrimination requirements and state obligations, such as affirmative action. Private employers are being urged to evaluate their DEI initiatives carefully to avoid possible conflicts with federal laws while ensuring compliance with state-level regulations. 

This evolving landscape demands vigilance, as new investigations and enforcement actions could have significant consequences.

DEI Standards and Evaluations in the Workplace

To better understand the implications of these law changes, it’s important to explore what DEI standards evaluate and how they are utilized. DEI standards evaluate an organization’s:

• Diversity: Representation of individuals from various backgrounds, including differences in race, gender, religion, age, and more.
• Equity: Fair treatment for all employees, ensuring unbiased decision-making in areas like compensation, promotions, and opportunities.
• Inclusion: Whether employees feel a genuine sense of belonging and value within the organization.

How Do Organizations Use DEI Standards?

Private companies use evaluations to:

1. Identify Gaps: Assess areas where diversity, equity, or inclusion efforts are lagging.
2. Commit to Continuous Improvement: Align practices with best-in-class DEI standards to create a welcoming workplace.
3. Gain Credibility: Obtain independent recognition for efforts, enhancing their employer brand and reputation.

Key DEI initiatives include:

• Diversity training programs.
• Inclusive recruitment and hiring practices.
• Policy updates to ensure equality.
• Employee resource groups (ERGs) for underrepresented employees.

DEI standards provide actionable insights, empowering companies to create inclusive workplace cultures. Employees directly benefit from transparent and accountable policies.

The Benefits of Implementing DEI Policies

DEI policies are more than just ethical business practices—they are essential components of a thriving workplace. Here’s why:

DEI Mitigates Discrimination Lawsuits

By proactively addressing inequities and unfair treatment, companies can reduce their legal risks. For example, measures such as auditing pay practices or requiring diverse candidate pools demonstrate a commitment to inclusion that may strengthen anti-discrimination defenses.

Promoting Inclusion Improves Retention and Engagement

Creating environments where employees feel heard, valued, and represented results in higher engagement and lower turnover.

Driving Performance and Innovation

A diverse and inclusive team often brings varied perspectives to problem-solving, driving innovation in industries ranging from technology to healthcare.

Navigating Change as an Employee or Employer

The changing DEI landscape impacts both employees and employers. Here are some strategies to help both groups adapt effectively:

For Employees:

1. Know Your Rights: Stay informed about federal and state anti-discrimination laws. Understand how recent changes may influence workplace policies impacting promotions, pay equity, or inclusion efforts.
2. Speak Up: Employees can participate in workplace feedback sessions or address concerns with HR departments to ensure company policies align with legal standards.
3. Join Employee Resource Groups (ERGs): ERGs can be platforms for underrepresented employees to advocate for equitable practices and drive positive change.

For Companies:

1. Conduct Comprehensive Reviews: Businesses should evaluate their DEI programs to ensure compliance with evolving federal laws while maintaining alignment with state obligations.
2. Integrate Accountability Metrics: Include clear benchmarks to measure the impact and success of DEI policies. Regularly review hiring data, retention rates, and promotion demographics.
3. Engage External Professionals: Consulting with legal or DEI professionals can help mitigate risks associated with accusations of illegal discrimination or preferences.
4. Enhance Leadership Awareness: Train leaders to drive equity-focused initiatives that align with legal and ethical obligations.

Proactivity is critical. By adopting transparent policies and fostering an inclusive environment, organizations can mitigate disputes and create cohesive teams.

Contact Barrett & Farahany For Help If Your Employer Discriminates Against You in the Aftermath of This EO

President Donald Trump’s new executive orders do not mean that workplace discrimination is legal. If your employer discriminates against you, you still have legal defenses to protect yourself and seek compensation. For help, contact our employment discrimination attorneys to schedule a consultation.