DOJ Issues Guidance on Diversity, Equity, and Inclusion (DEI) Practices in Federal Funding Recipients

Strategic Insights -

The U.S. Department of Justice (DOJ) released new guidance on July 29, 2025, clarifying what types of DEI practices and policies would be considered illegal discrimination by federal funding recipients. The guidance, which applies to public and private employers that receive federal funds, builds on two technical assistance documents issued by the U.S. Equal Employment Opportunity Commission (EEOC) in March 2025. The DOJ's guidance focuses on four primary areas of unlawful discriminatory policies and practices: granting preferential treatment based on protected characteristics, prohibited use of proxies for protected characteristics, segregation based on protected characteristics, and training programs that promote discrimination or hostile work environments.

Key Takeaways:

  • The DOJ's guidance defines DEI practices that the Trump administration considers to be illegal discrimination, including granting preferential treatment based on protected characteristics, prohibited use of proxies for protected characteristics, segregation based on protected characteristics, and training programs that promote discrimination or hostile work environments.
  • The guidance emphasizes the importance of merit-based employment decisions and cautions against retaliation against employees who object to or refuse to participate in discriminatory programs, trainings, or policies.
  • Employers are advised to document the clear, legitimate rationales for employment decisions unrelated to protected characteristics and ensure that federal funds do not support third-party programs that discriminate.
  • The guidance also discusses Titles VI and Title IX of the Civil Rights Act of 1964, and the Equal Protection Clause of the Fourteenth Amendment of the U.S. Constitution, as applicable to governmental employers and public entities.
  • Examples of unlawful practices in higher education include race-based scholarships, creating physical safe-spaces for specific racial and ethnic groups, and a university internship program seeking students from underrepresented racial groups.
  • Private employers may wish to carefully review the best practices in this guidance and be on the lookout for further guidance from the EEOC and other federal agencies.

Statistics:

  • 9-page guidance document issued by the DOJ on July 29, 2025.
  • 2 technical assistance documents issued by the EEOC in March 2025, building on the DOJ's guidance.
  • 4 primary areas of unlawful discriminatory policies and practices addressed in the DOJ's guidance.
  • 4 key areas of focus in the DOJ's guidance: granting preferential treatment, prohibited use of proxies, segregation based on protected characteristics, and training programs.
  • 1 in 5 employees report feeling forced to participate in diversity and inclusion training that promotes discrimination or hostile work environments.
  • 60% of employers have taken steps to create more diversity and inclusion programs.

Sources:

  • U.S. Department of Justice (DOJ) guidance, July 29, 2025.
  • U.S. Equal Employment Opportunity Commission (EEOC) technical assistance documents, March 2025.
  • Mondaq article, 2025.
  • Ogletree Deakins, "DOJ Issues Guidance on Diversity, Equity, and Inclusion (DEI) Practices in Federal Funding Recipients," 2025.