New DOJ Memo Clarifies Legal Risks of DEI Programs—Employers Should Take Note

The Department of Justice just offered more clarity on something most employers already know: you can’t treat people differently based on race or sex. But how does that principle apply to your DEI programs?

A new DOJ memo outlines where DEI initiatives might run afoul of federal law. It doesn’t change the rules—but it does spell out how some practices could create legal exposure.

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TL;DR: A July 29, 2025 memo from the Department of Justice warns that certain diversity, equity, and inclusion (DEI) policies may violate federal civil rights laws—especially in hiring, promotions, training, and workplace programs. While the memo addresses federally funded entities, its analysis relies heavily on Title VII, which applies to nearly every private employer.

This post highlights what the federal government views as some of the most pressing compliance risks related to DEI efforts, based on examples pulled directly from the DOJ memo.

📄 https://www.justice.gov/ag/media/1409486/dl

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How DEI Can Cross the Legal Line

According to the DOJ, DEI programs may violate civil rights law when they:

• Use race, sex, or other protected traits to drive decisions
• Segregate individuals by race or sex
• Promote stereotypes or hostile messages
• Retaliate against those who object to potentially discriminatory practices

Below are specific DOJ examples related to employment that raise legal red flags.

⚠️ DOJ-Flagged DEI Practices That May Be Illegal

1. Prioritizing candidates based on protected characteristics
   A federally funded entity’s DEI policy prioritizes candidates from “underrepresented groups” for admission, hiring, or promotion—bypassing qualified candidates who do not belong to those groups—where the preferred “underrepresented groups” are determined on the basis of a protected characteristic like race, rejecting otherwise qualified candidates who do not meet this racial criterion.
2. Mandating race-based composition in interview slates
   A research institute requires faculty interview panels to include a minimum number of candidates from specific racial groups, regardless of the applicant pool’s qualifications or availability, rejecting otherwise qualified candidates who do not meet this racial criterion.
3. Favoring vendors based on sex or race
   A state agency’s DEI contracting policy automatically advances women-owned or minority-owned businesses over equally or more qualified vendors that don’t fall into those categories. The DOJ notes that this includes using sex or race as a tiebreaker or primary criterion.
4. Reserving opportunities for specific racial groups
   Race-exclusive internships, mentorship programs, or leadership initiatives that reserve spots for specific racial groups—regardless of intent to promote diversity—violate federal civil rights law.
5. Trainings that promote stereotypes based on protected traits
   Required DEI trainings that include statements such as “all white people are inherently privileged” or “toxic masculinity” may violate Title VII if they stereotype individuals or create a hostile work environment.
6. Segregating training groups by race
   DEI trainings that divide participants into race-based discussion groups and prohibit individuals of other races from attending certain sessions raise legal concerns under Title VII.
7. Restricting participation in events based on identity
   DEI events or workshops that limit eligibility to individuals who identify with a specific racial or ethnic group (e.g., “for underrepresented minorities only”) or mandate sex-specific participation may be unlawful if others who meet objective program criteria are excluded.
8. Using training materials that demean or stereotype
   Training programs that repeatedly use videos, presentations, or materials that stereotype or demean individuals based on protected traits could contribute to a hostile environment under Title VII.
9. Retaliating against employees who raise concerns
   An employer may not take adverse action against an employee who opposes DEI practices they reasonably believe violate antidiscrimination laws—even if the employer disagrees with the complaint.

What Employers Should Do Now

✅ Review your DEI efforts. Focus on hiring, training, and selection processes.
✅ Avoid identity-based criteria. Don’t limit access to programs or opportunities based on race, sex, or other protected traits.
✅ Rework DEI trainings. Ensure content doesn’t stereotype or isolate participants.
✅ Take concerns seriously. If employees raise questions about whether DEI initiatives comply with the law, listen carefully and ensure managers are trained to respond appropriately—without retaliation.

Final Thought

This isn’t the first time the federal government has flagged legal risks tied to DEI efforts. But this memo offers more clarity—and more concrete examples—than we’ve seen before. The takeaway: DEI is not illegal. But if it treats people differently based on race, sex, or other protected characteristics, it’s unlawful discrimination.