On July 29, 2025, the U.S. Department of Justice (DOJ) issued sweeping guidance clarifying how federal anti-discrimination laws apply to Diversity, Equity, and Inclusion (DEI) programs.[1] This move, part of a broader enforcement initiative under the Trump Administration, signals a significant shift in how DEI efforts will be scrutinized, especially for organizations receiving federal funding. The guidance, reinforced by the Equal Employment Opportunity Commission (EEOC)[2], outlines practices deemed unlawful and offers non-binding best practices to assist employers in avoiding legal risk.
The DOJ’s memorandum emphasizes that DEI programs are not exempt from federal civil rights laws, regardless of the program’s intentions or labels. Any use of protected characteristics—such as race, sex, or national origin—in hiring, admissions, or contracting is presumptively unlawful, unless it meets strict judicial scrutiny. This includes race-based scholarships, hiring preferences for underrepresented groups, and contracting advantages for minority or women-owned businesses. Even facially neutral criteria, like “cultural competence” or “overcoming obstacles,” may be deemed unlawful if used as proxies for identity traits.
Segregation in programming is another area of concern. The DOJ warns against separating employees or participants based on race or sex, such as race-based training groups or exclusive “safe spaces.” While sex-segregated intimate spaces (e.g., bathrooms, locker rooms) are permitted—and in some scenarios required—other forms of identity-based separation are likely to violate federal law. The EEOC further cautions that limiting membership in Employee Resource Groups (ERGs) based on identity traits may likewise constitute unlawful discrimination.
Training programs are under heightened scrutiny as well. The DOJ and EEOC highlight that DEI training programs that stereotype, exclude, or demean individuals based on identity may create a hostile work environment. The DOJ cites training referencing “white privilege” or “toxic masculinity” as examples of such programs. Employers are advised to avoid similar mandatory ideological affirmations and ensure that all training courses are inclusive and open to all qualified participants.
The guidance also addresses retaliation protections. Employers are advised not to take adverse action—such as disciplinary action—against individuals who raise concerns about or refuse to participate in potentially discriminatory DEI programs. Such concerns or refusals may include opposition to training content or selection practices perceived as biased. Both DOJ and EEOC’s documents reinforce the Trump Administration’s commitment that “reverse discrimination” claims brought by members of majority groups are treated under the same legal standards as traditional discrimination claims.
To help organizations align with federal law, the DOJ outlines a series of non-binding best practices. These include ensuring inclusive access to all programs, using skills-based selection criteria, eliminating quotas or demographic benchmarks, and documenting legitimate, nondiscriminatory rationales for decisions. Employers are also encouraged to include nondiscrimination clauses in contracts and to monitor third-party compliance, particularly when federal funds are involved.
Growing Federal Scrutiny: Recent High-Profile Investigations
The DOJ’s memorandum does not stand alone. Other Trump administration agency actions demonstrate the federal government’s commitment to increase scrutiny of corporate DEI initiatives/ Two recent EEOC actions illustrate the kinds of DEI programs drawing government attention.
EEOC’s Sweeping Subpoena in Nike’s DEI “Pattern or Practice” Investigation
In February 2026, Nike became the subject of a significant EEOC investigation after the agency issued a broad administrative subpoena seeking detailed records related to the company’s hiring, promotion, and DEI-related practices. The EEOC is alleging that Nike may have violated federal anti-discrimination law “by engaging in a pattern or practice of disparate treatment against White employees, applicants, and training program participants in hiring, promotion, demotion, or separation decisions (including selection for layoffs); internship programs; and mentoring, leadership development, and other career development programs”.[3] The subpoena seeks information on training, employee demographic data, pay practices, and documents related to diversity commitments.[4]
Coca-Cola Beverages Northeast, Inc. (“Coca-Cola”) Facing Federal Lawsuit Alleging Unlawful DEI Practices
Coca-Cola is also facing federal scrutiny after the EEOC filed a lawsuit alleging that one of the company’s DEI-related initiatives amounted to unlawful sex discrimination. According to court filings, the agency alleges that the company excluded male employees from a two-day employer-sponsored networking event in September of 2024, held at the Mohegan Sun Casino Resort in Connecticut. The lawsuit claims this exclusion violated Title VII by denying male employees access to the professional development, networking opportunities, and paid work-excused time provided to female participants.[5]
What Employers Should Do Now
In this evolving legal environment, employers should reassess their DEI initiatives to ensure compliance. This includes reviewing:
- Hiring and promotion practices
- Training materials and DEI curriculum
- Employee Resource Group (ERG) policies
- Contracting and supplier-diversity programs
- Demographic benchmarking and goals
- Third-party vendor practices
While reviewing and updating an organization’s programs and materials may be complex, Critchfield attorneys are available to assist. Our team includes many attorneys knowledgeable in employment law who can help your organization remain compliant with local, state, and federal employment laws—now and in the future.
[1] https://www.justice.gov/ag/media/1409486/dl?inline
[2] https://www.eeoc.gov/wysk/what-you-should-know-about-dei-related-discrimination-work
[3] Application for Order to Show Cause at 2, EEOC v. Nike, Inc., No. 4:26-mc-00128 (E.D. Mo. Feb. 4, 2026).
[4] Id., at Exhibit 1.
[5] Complaint, EEOC v. Coca-Cola Beverages Northeast, Inc., No. 1:26-cv-115 (D.N.H. Feb. 17, 2026).