On July 29, 2025, Federal Guidance on DEI Programs was issued by the U.S. Department of Justice (DOJ). A memorandum on DEI-related policies and practices that it considers unlawful. The memorandum provides examples of best practices to ensure that programs comply with federal discrimination laws. The guidance applies to entities that receive federal financial assistance or must comply with federal anti-discrimination laws, including educational institutions, state and local governments, and public and private employers. The DOJ notes that its guidance is not mandatory; rather it consists of “practical recommendations” to stay legally compliant.
Risky DEI Practices That Could Violate Federal Law
Federal civil rights laws, such as Title VI, Title VII, and Title IX, prohibit discrimination based on race, color, national origin, sex, religion, and other protected traits. The DOJ advises entities to consider whether any of their DEI-related activities might fall into one of the following risky categories:
1. Preferential Treatment Based on Protected Characteristics
Programs that explicitly reserve opportunities, such as scholarships, internships, or hiring preferences, for individuals who are part of a certain protected class are likely unlawful unless they meet extremely narrow legal exceptions.
Avoid:
- Race-specific scholarships or mentorship programs
- Hiring or admission preferences based on race or another protected class, even if framed as addressing “underrepresentation”
- Designated employee facilities, lounges, or “safe spaces” open only to specific racial or ethnic groups
2. Use of Proxies for Protected Traits
Using criteria like “lived experience,” “cultural competence,” “cross-cultural skills” or targeting specific geographic areas may seem neutral, but can violate the law if used intentionally to advance racial or sex-based preferences.
Avoid:
- Requiring applicants or candidates to describe their cultural background in a way that intrinsically ties them to certain demographics, such as requiring them to describe “obstacles they have overcome” or to provide a “diversity statement,” and using such information as a proxy for selection
- Recruitment focused on geographical areas or institutions based on their racial or ethnic composition without a job-related justification
3. Segregation of Training, Facilities, and Program Eligibility
Trainings or programs that restrict access to participants by race or sex – such as affinity groups – can be seen as unlawful segregation. The DOL clarifies that while segregation is generally prohibited, biological sex-based separation for purposes like restrooms, showers, locker rooms, dormitories, and athletic competition is still permitted, and may be required “particularly where they compromise women’s privacy, safety, or professional standing.”
4. Diversity Quotas and Priorities
Setting goals or minimum “diverse candidate” slates, or prioritizing protected characteristics in selection criteria for hiring, internships, admissions, scholarships, leadership initiatives, or training, based on race or sex is unlawful. Additionally, vendor contract awards based on the ownership demographics of a business is not permitted unless legally justified.
Avoid:
- Policies requiring a certain percentage of “diverse” candidates in a finalist pool
- Requiring decision-making panels to include diverse individuals
- Diversity-focused performance evaluations
- Giving automatic preference to women- or minority-owned vendors without a legal basis
5. DEI Training That Creates a Hostile Work Environment
DEI trainings are unlawful if they “stereotype, exclude, or disadvantage individuals based on protected characteristics or create a hostile environment” through their “content, structure, or implementation.”
Avoid:
- Requiring employees to acknowledge privilege based on their race or sex
- Excluding or penalizing individuals because of their protected characteristic
- Use of videos, presentations, and workplace training materials that single out, demean, or stereotype individuals based on their protected characteristics (i.e. males having “toxic masculinity,” or white people being “inherently privileged”)
Best Practices to Stay Compliant
The DOJ outlines best practices for employers to mitigate their risk of noncompliance:
- Open Access: Ensure all programs, activities, and benefits are open to everyone, regardless of race, sex, or other protected class. However, separation is necessary “where biological differences implicate privacy, safety, or athletic opportunity.”
- Focus on Job-Related Criteria: Use objective, measurable criteria based on skills and qualifications that directly relate to the job or program.
- Avoid Demographic-Driven Goals: Do not design programs around increasing demographic representation unless based on race-neutral and legally sound criteria. Use criteria such as academic merit or financial hardship without regard to protected characteristics or demographic goals.
- Review Selection Criteria: Ensure that proxies for race, sex, or other protected characteristics like “first-generation status” or “geographic area” aren’t being used, and that all criteria for selections and related processes are based on legitimate nondiscriminatory objectives.
- Discontinue Unlawful Policies that mandate representation of specific protected classes in candidate pools, hiring panels, or final selections. Ensure that all such policies are based on merit.
- Review Trainings for segregation, exclusionary practices, or biases based on protected characteristics.
- Assess Practices of Third-Party Contractors: Review their program materials, participant feedback, and outcomes to ensure they are compliant with discrimination laws.
- Ensure Anti-Retaliation Protections: Establish and communicate anti-retaliation policies for reporting concerns, filing complaints, and refusing to participate in unlawful programs.
It is important to note that DEI programs are not inherently unlawful, and that the foregoing is not mandatory. This guidance, however, should prompt a thoughtful review of how your organization’s programs are structured and justified. If you receive federal funds, you face a higher level of scrutiny and should consider conducting a review of your DEI programs for risky practices that may be viewed as discriminatory.
You may read the memorandum here: Memo from Attorney General Bondi: Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination