How companies are changing DEI in the Trump era
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Companies are scrambling to rejigger, recast or just kill their diversity, equity and inclusion (DEI) policies to avoid the wrath of the White House.
Why it matters: Firms are on a tightrope with legal risks on either side — stick with DEI and face a Trump DOJ investigation or lawsuit; or abandon it, and face the potential for lawsuits from employees and job applicants.
- Either way companies run the risk of angering customers and staff.
Where it stands: Corporate America's DEI anxiety intensified after February 5, when newly sworn-in attorney general Pam Bondi issued a memo directing the DOJ Civil Rights division "to investigate, eliminate, and penalize illegal DEI and DEIA preferences, mandates, policies, programs, and activities in the private sector."
- By March 1, the division should report "the most egregious and discriminatory DEI" practitioners, per the memo.
- That followed an executive order Trump signed the day after taking office that directed agencies to make lists of companies to target.
What they're saying: Since the Bondi memo came out, "I have been on the phone with companies almost nonstop," says Jonathan Segal, an employment attorney at Duane Morris.
- And there's been a flurry of news about several firms including Accenture, Booz Allen, Goldman Sachs and Disney, pulling back or scrapping DEI altogether.
Zoom in: The disappearing policies mostly involve explicitly targeting certain underrepresented groups in hiring. Lawyers say some of these practices were always dicey under federal anti-discrimination laws.
On the chopping block are things like:
- Hiring targets: Specifically, where firms set goals to employ a certain share of Black people or women or folks in other minority groups. McDonald's and Meta recently set aside aspirational representation goals.
- Set asides: Along those lines, firms should avoid saying they want to hire from a certain racial or ethnic group for a certain position, or consider race or gender when deciding between candidates, Segal says.
- Diverse slates: The same reasoning is leading companies to pull back on these policies, which direct recruiters to find certain kinds of candidates in the interview process. Meta recently scrapped this.
Between the lines: DEI policies that are viewed as less risky are changing, too, including employee resource groups, or ERGs, where people from the same background can connect.
- Companies have groups for women, parents, LGBTQ+ people, Black workers, etc. Firms are now making it clear that these groups are open to all.
- Even activities meant to celebrate certain groups are getting the heave-ho. One bank pulled back on programming for International Women's Day, the NYT reported last weekend.
The big picture: Anti-DEI sentiment was building, and companies were rolling back polices, before Trump took office.
- 45 companies have been attacked for their DEI policies over the past three years by opposition groups led by White House deputy chief of staff Stephen Miller, and activist Edward Blum, according to a tally from Bloomberg.
- The trend intensified starting Jan. 20, as Trump issued the first of many executive orders on the topic.
