Management Update

Volume 14, Issue 4

EEOC and DOJ Issue Guidance on DEI-Related Workplace Discrimination – What Constitutes Illegal DEI?

By: Alex Hains

In January 2025, President Trump signed executive orders 14151 and 14173, targeting what were referred to as “illegal” DEI initiatives. The executive orders did not change existing federal law but left employers with some uncertainty regarding what constitutes “illegal” DEI.

On March 19, 2025, the U.S. Equal Employment Opportunity Commission (EEOC) and the U.S. Department of Justice jointly released two documents outlining their stance on in the context of workplace discrimination. The documents clarify how the agencies interpret DEI-related practices under federal anti-discrimination laws and what constitutes “illegal DEI” under Title VII of the Civil Rights Act of 1964 (Title VII).

The EEOC affirmed that Title VII’s protections apply equally to all workers, not just those who are part of a “minority group.” The EEOC explicitly rejected the concept of “reverse discrimination,” stating that “there is only discrimination.”

When is a DEI initiative, policy, program, or practice unlawful under Title VII?

In its new guidance, the EEOC warns that initiatives, policies, programs, or practices may violate the law if they involve an employer taking an employment action “motivated—in whole or part—by race, sex, or another protected characteristic.” The guidance identifies several employment decisions where DEI initiatives could lead to unlawful discrimination, including:

Hiring and firing
Promotions and demotions
Compensation and fringe benefits
Interview selection, including inclusion or exclusion from candidate pools
Internships, fellowships, and summer associate programs
Job duties and responsibilities

Additionally, the EEOC warns that limiting access to certain opportunities based on protected characteristics may constitute discrimination. This includes:

Training programs, including leadership development initiatives
Mentorship, sponsorship, or workplace networking opportunities
Restricting membership in Employee Resource Groups or affinity groups to specific protected groups

The EEOC explained that unlawful limiting, segregating, or classifying workers related to DEI can arise when employers separate 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.

Instead, 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 also should ensure that “employees of all backgrounds . . . have equal access to workplace networks.”

Can an employer justify taking an employment action based on race, sex, or another protected characteristic because the employer has a business necessity or interest in “diversity,” including preferences or requests by the employer’s clients or customers?

No. The guidance emphasizes that employers cannot justify employment decisions based on race, sex, or other protected characteristics—even in pursuit of diversity, equity, or business objectives. This applies even if diversity-related initiatives are seen as operationally beneficial or reflect client or customer preferences. Basing employment decisions on the racial preferences of clients, customers, or coworkers constitutes intentional race discrimination.

What steps should employers take in light of this new guidance?

Employers should review and align their DEI policies, training programs, and decision-making frameworks with the latest guidance to ensure full compliance with federal anti-discrimination laws. This includes conducting a thorough review of existing policies, identifying potential areas of risk, and implementing necessary updates to mitigate legal exposure. Employers should also provide updated training for HR personnel and leadership to ensure consistent application of DEI initiatives within the bounds of the law.

Our attorneys can help employers navigate this new guidance while maintaining a commitment to fostering an inclusive workplace.

Weeding Out: The Clouded Path of President Trump’s Cannabis Stance

By: Kayla Jacob and Fred Preis

In its first 100 days, the Trump Administration signed over 100 executive orders, underscoring the President's stance on various issues. However, despite the flurry of actions, cannabis has yet to spark serious attention on the Administration’s agenda. Thus, the future of cannabis remains, as it has been for some time, hazy and unclear.

Legalization of marijuana remains in limbo

Under federal law, marijuana is classified as a Schedule I controlled dangerous substance, akin to heroin, making it illegal. Yet, many states’ laws permit the use of marijuana for medical, recreational, or both purposes. This creates a legal quagmire, as state laws permitting marijuana use cannot override the federal prohibition of the drug.

Biden's blunt approach to cannabis reform

Former President Biden sought to reschedule marijuana from Schedule I to Schedule III to loosen restrictions and allow regulated use. The Biden-led Drug Enforcement Administration (“DEA”) initiated the administrative rulemaking process to reschedule marijuana, but delays hindered its completion.

Cannabis reform under Trump: puffed-up promises or progress?

During his first term, President Trump’s cannabis reform efforts stagnated. Although he voiced support for states' rights to legalize marijuana, his Administration took a cautious approach. The Trump-led Department of Justice rescinded guidance that had eased federal enforcement in states permitting marijuana use. While the Administration showed openness to cannabis reform—particularly regarding banking with the SAFE Banking Act—broad legalization or major federal reform was never pursued. To date, no action has been taken regarding cannabis reform during Trump's second term.

Impact on employers

The legal status of marijuana leaves employers with more questions than answers, especially concerning drug-free workplace policies.

While no federal or state law prohibits private employers in Louisiana from banning marijuana use, state employers must comply with the State’s anti-discrimination law that prevents adverse action based solely on a positive marijuana test. Federal contractors must also account for governing federal regulations that may conflict with their state’s medical marijuana laws.

This does not mean employers cannot take action against employees who are impaired at work. Employers should consult legal counsel for guidance on these issues.

As the legal landscape evolves, employers must stay informed and navigate the complexities of marijuana policies with caution.

Navigating Affirmative Action: Compliance After the Repeal of Executive Order 11246

By: Philip Giorlando, Fred Preis, and Rachael Jeanfreau

Employers across the United States, whether federal government contractors or not, face unanswered questions surrounding the repeal of Executive Order 11246 for their workplace policies and practices. This Article will address what President Trump's Executive Order did, how it impacts both Federal government contractors and all private employers, and the affirmative action requirements that still apply to Federal government contractors based on legislative statutes that are still in effect.

The Repeal of Executive Order 11246 and Its Impact

On January 21, 2025, President Trump issued an executive order titled "Ending Illegal Discrimination and Restoring Merit-Based Opportunity," which repealed Executive Order 11246. For decades, Executive Order 11246 required Federal contractors to take affirmative action to ensure equal employment opportunities for women and minorities. Its repeal has generated significant discussion among Federal contractors and private employers regarding the future of affirmative action obligations in the workplace.

President Trump's Order provides that current Federal government contractors can continue to comply with the requirements of Executive Order 11246 until April 20, 2025. At that point, Federal government contractors would be prohibited from following their Affirmative Action Plans as it relates to minorities and gender-based hiring practices. Beginning April 20, 2025, employers should no longer make hiring decisions based on any efforts to meet minority or gender-based goals outlined in their Affirmative Action Plan, otherwise they may risk exposure to legal challenges.

Employers should be aware that the repeal of Executive Order 11246 does not change the many Federal and State laws that prohibit employment discrimination based on protected characteristics such as race, sex, gender, sexual orientation, gender identity, national origin, or religion. However, President Trump's recent Executive Order also instructed all Federal agencies to take all appropriate action to ensure that private sector employers no longer use Diversity, Equity, and Inclusion programs that rise to the level of discriminating on the basis of someone's race, sex, gender, or other protected characteristic.

Some Affirmative Action Requirements Are Still In Effect

Additionally, while Executive Order 11246 is no longer in effect, this does not mean that affirmative action requirements for Federal contractors have been entirely eliminated. Businesses that work with the Federal government are still subject to Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA), which impose distinct affirmative action obligations, although the obligations are less burdensome that as proscribed in Executive Order 11246.

Understanding these remaining requirements is crucial for maintaining compliance and avoiding potential penalties.

Section 503 of the Rehabilitation Act of 1973

Section 503 requires federal contractors and subcontractors to take affirmative action to hire and advance qualified individuals with disabilities. The law aims to provide equal employment opportunities while ensuring that workplace environments are accessible and accommodating.

Who Must Comply?

Companies that have federal contracts or subcontracts valued at more than $15,000 are subject to Section 503. However, additional affirmative action program (AAP) requirements apply to businesses with 50 or more employees and a contract worth $50,000 or more.

Key Requirements

Written Affirmative Action Plan (AAP) – Businesses with qualifying contracts must develop a formal plan to ensure equal employment opportunities for individuals with disabilities.
Reasonable Accommodations – Employers must make adjustments for disabled employees unless doing so would cause undue hardship.
Self-Identification Process – Employers must invite applicants and employees to voluntarily disclose their disability status, with strict confidentiality rules.
Recordkeeping & Reporting – Employers must document efforts to hire and promote individuals with disabilities, maintaining records for up to three years.
Utilization Goals – While not a quota, the 7% workforce goal helps measure efforts to employ individuals with disabilities.
Job Posting & Notice Requirements – Businesses must post notices informing applicants and employees about their rights under Section 503.
Compliance Audits – The Office of Federal Contract Compliance Programs (OFCCP) may conduct audits to ensure compliance.

Consequences of Noncompliance

Failure to meet Section 503 obligations can result in serious penalties, including:

Loss of federal contracts
Withholding of progress payments
Legal action or fines

Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA)

VEVRAA mandates affirmative action in hiring and promoting qualified protected veterans. This law supports veterans transitioning from military to civilian employment and ensures they receive fair opportunities.

Who Must Comply?

VEVRAA applies to businesses with federal contracts or subcontracts worth $150,000 or more. Unlike some other regulations, VEVRAA does not allow aggregation of contract values to determine coverage.

Key Requirements

Written AAP for Veterans – Businesses meeting the threshold must develop an AAP detailing efforts to recruit, hire, and advance protected veterans.
Self-Identification Invitations – Employers must invite job applicants and employees to voluntarily identify as a protected veteran.
Job Listings with State Agencies – Covered employers must list job openings with state workforce agencies.
Recordkeeping & Reporting – Employers must document veteran hiring efforts, keeping records for three years.
Benchmarking Goals – Companies must compare their veteran employment against national hiring benchmarks.
Notice & Posting Requirements – Like Section 503, businesses must post notices about VEVRAA rights and obligations.
OFCCP Compliance Audits – The OFCCP monitors and enforces compliance through audits and evaluations.

Consequences of Noncompliance

Failing to comply with VEVRAA can result in:

Contract termination or suspension
Financial penalties
Prohibition from future federal contracts

Final Thoughts for Business Owners

For Federal contractors, compliance with Section 503 and VEVRAA is an ongoing requirement even though Executive Order 11246 has been rescinded. Business owners should regularly review their affirmative action programs, ensure proper documentation, and proactively engage in outreach and recruitment efforts.

For all employers, both Federal government contractors and non-contractor private entities, having their policies and procedures reviewed to address the new scrutiny given to hiring practices should reduce the likelihood of a charge or lawsuit under these newly enacted Federal government policies.

When ICE Comes to the Jobsite

By Murphy J. Foster, Jr.

With workplace immigration enforcement on the rise, employers need to be proactive about compliance and prepared to handle potential visits from the Immigration and Customs Enforcement (“ICE”), whether for a routine I-9 audit or an enforcement action. The goal is to comply with the law while protecting your business and employees. On January 20, 2025, President Trump signed an Executive Order aimed at enhancing immigration enforcement, including a commitment to initiate what has been described as “the largest domestic deportation operation in American history.” This includes a directive for ICE to conduct raids in various sectors, with construction being identified as a likely target due to its high reliance on undocumented workers. ICE’s presence at the workplace can be discomforting and disruptive. Although ICE agents are not police officers, the uniforms may say “police” or “federal agent” and local law enforcement may accompany them.

Employers should minimize risk through compliance and should ensure they satisfy their Form I-9 obligations by doing the following:

Confirm that all employees have properly completed I-9s on file: Cross-check payroll records to ensure compliance.
Conduct regular audits: Periodically review I-9 records to identify and correct discrepancies. Internal audits demonstrate that an employer takes this requirement seriously and in good faith and can reduce penalties if a government audit finds violations. Consider involving outside legal counsel for thorough audits.
Train staff: Conduct regular I-9 training of HR staff, managers, and other team members who complete I-9 forms. Training should include identifying documentation issues and handling situations involving potential unauthorized workers.
Consider using E-Verify: While not mandatory for all employees, utilizing the E-Verify system, like regular internal audits, can show an employer’s due diligence in verifying work eligibility and may help reduce penalties in case of violations.

The United States Constitution dictates that all persons have the right to remain silent in the face of investigations. Employees do not have to answer an ICE agent’s questions, hand over their identification documents, or otherwise cooperate without a judicial warrant. Instead, Company supervision should direct the ICE agent to an office or job trailer away from the work area where their presence might otherwise be disruptive and cause concern among customers, employees, or other visitors.

A judicial warrant is one issued by a judicial court and is signed by a judge or a magistrate. These warrants allow ICE to conduct any search, seizure, or arrest as authorized in the warrant, including employee files. Judicial warrants must be complied with. An administrative warrant (issued by Homeland Security or ICE) does not require compliance, and employees cannot be punished for refusing to comply. An administrative warrant does not authorize a search, though in certain instances it may authorize the agent to make a seizure or arrest.

Generally speaking, a general contractor is not responsible for IRCA (Immigration Reform and Control Act of 1986) compliance by its subcontractors. General contractors are not required to verify employment authorization for the employees of subcontractors and thus should not attempt to control the I-9 or E-Verify process of their subs. However, general contractors should have strong contractual provisions in their subcontractor agreements. These provisions should: a) require subcontractor compliance with IRCA; b) state that each request for payment constitutes a warranty of compliance with those laws; c) reserve the right to demand proof of compliance; and d) provide for defense and indemnity from the subcontractor for any immigration violations.

While a general contractor should not assert control over its subcontractor’s Form I-9 and E-Verify processes, certain “tells” require a general contractor to take affirmative action. These include: a) a credible tip that calls into question the work authorizations of a specific employer; b) a credible tip that a subcontractor is employing illegal immigrants; c) an employee request “sponsorship” for a work Visa; d) accusations of identity theft relating to a worker; or e) an ICE investigation into the subcontractor or worksite.

Because of the risk of substantial civil and criminal penalties, a general contractor should absolutely ensure that its own I-9 and E-Verify process for confirming employee identity and documentation is followed carefully. A general contractor should also be aware of the potential risk of liability for knowingly permitting or allowing a subcontractor to utilize undocumented labor.