The future of DEI programs: Legal risks and emerging challenges

March 3, 2025

Blog Post

Diversity, Equity, and Inclusion (DEI) initiatives have been a central focus for many companies seeking to foster inclusive workplaces. However, as legal scrutiny intensifies, businesses must carefully evaluate their DEI programs to ensure compliance with evolving employment law standards.

Legal challenges to DEI initiatives

Many DEI-related activities predate the formal adoption of the term "DEI." Still, recent legal challenges have raised concerns about whether these programs unlawfully provide preferential treatment based on race, gender, or other protected characteristics. Courts and regulatory agencies are increasingly scrutinizing whether DEI policies inadvertently disadvantage majority-group employees, leading to claims of reverse discrimination.

One key argument against specific DEI programs is that "anti-racism" policies have resulted in discrimination against white and Asian employees. Employers implementing race-conscious hiring, promotions, or training programs must be mindful of potential legal exposure under Title VII of the Civil Rights Act of 1964, which prohibits discrimination against both majority and minority groups.

Supreme Court cases shaping the legal landscape

Ames v. Ohio Department of Youth Services

The U.S. Supreme Court is currently reviewing Ames v. Ohio Department of Youth Services, a case in which a woman alleges she was denied a job opportunity based on her sexual orientation. A central question in the case is whether Title VII’s anti-discrimination protections apply equally to majority and minority groups. A ruling in favor of the plaintiff could reinforce the principle that employment discrimination laws protect all employees, regardless of their demographic status, and could embolden more legal challenges to DEI-related policies that provide differential treatment.

Muldrow v. City of St. Louis

Another recent Supreme Court decision, Muldrow v. City of St. Louis, has lowered the bar for proving an adverse employment action. Previously, employees had to demonstrate a material employment disadvantage, such as termination, demotion, or a significant pay cut. Under the new standard, plaintiffs must only show that they suffered "some harm" to bring a claim. This shift could open the door for more employment discrimination lawsuits, including those challenging the fairness of DEI initiatives.

What this means for employers

With the legal landscape shifting, businesses must reassess their DEI programs to mitigate potential risks. Plaintiffs’ attorneys are increasingly analyzing workplace policies and internal communications for evidence of discrimination against majority-group employees. As a result, companies should take proactive steps to ensure that their DEI initiatives comply with federal and state employment laws.

Key considerations include:

Avoid explicit preferences—Programs that advantage one demographic group over another could invite legal challenges. Instead, focus on broad-based inclusion efforts that do not create unfair advantages.
Reviewing hiring and promotion criteria – Ensure that decisions are based on objective qualifications rather than demographic factors.
Updating policies in light of recent case law – Companies should work with legal counsel to review their policies in light of Muldrow and other relevant rulings.
Training HR and leadership teams – Employers should educate their teams on how to implement DEI initiatives in a legally compliant manner.

Conclusion

While companies have historically viewed DEI programs as positive steps toward workplace inclusion, recent legal developments signal a new era of heightened scrutiny. Employers must strike a careful balance between promoting workplace diversity and adhering to anti-discrimination laws that apply equally to all employees. Given the evolving legal landscape, businesses should consult experienced employment counsel to evaluate and refine their DEI policies.

For more information on compliance strategies or to assess the legal risks of your company’s DEI initiatives, contact a Labor and Employment attorney at McDonald Hopkins today.

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