DOJ Memorandum for Recipients of Federal Funding Regarding Unlawful Discrimination

Workplace Culture

By:  Kim Adamson

On July 29, 2025, Attorney General Pam Bondi issued a memorandum titled “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination” (the Memorandum). The guidance in the Memorandum emphasizes the  legal risks of programs that involve discrimination based on race, color, national origin, sex, religion, or other protected characteristics “no matter the program’s labels, objectives, or intentions.” The Memorandum includes “non-binding best practices to help entities avoid the risk of violations” of federal anti-discrimination laws. While these “best practices” are not required, entities that receive federal financial assistance are subject to federal anti-discrimination laws, including educational institutions, state and local governments, public and private employers, and nonprofits, and should carefully review the guidance to ensure all programs comply with federal civil rights laws and prevent unlawful discrimination. Organizations and HR departments may want to consider the guidance in the Memorandum as an indication of how the Trump administration interprets existing federal civil rights laws as they apply to Diversity, Equity, and Inclusion (DEI), Diversity, Equity, Inclusion, and Accessibility (DEIA), and Diversity, Equity, Inclusion, and Belonging (DEIB) initiatives.

Summary of “Best Practices” from the Memorandum:

  1. Ensure Inclusive Access: All workplace programs, activities, and resources must be open to qualified individuals, regardless of race, sex, or other protected characteristics. Avoid creating groups or sessions that exclude based on these characteristics.
    1. Sex-separated Intimate Spaces and Athletic Competitions: Sex separation may be necessary in intimate spaces or athletic competitions to protect privacy, safety, or fairness. Requiring employees to share private spaces with the opposite sex or allowing men in women’s sports may violate federal law.
  2. Focus on Skills and Qualifications: Make selection decisions based on specific skills and measurable qualifications directly tied to job or program performance. Avoid using criteria such as socioeconomic or first-generation status, geographic diversity, if they serve as proxies for race, sex, or other protected characteristics.
  3. Prohibit Demographic-Driven Criteria: Do not design programs to influence racial or sex-based representation, even those using facially neutral (i.e., neutral-sounding) criteria. Use universal standards like academic achievement or financial need, applied without regard to protected characteristics or demographic goals.
  4. Document Legitimate Rationales: If using criteria in hiring, promotions, or selecting contracts that might correlate with protected characteristics, document clear, legitimate rationales unrelated to race, sex, or other protected characteristics. Ensure these rationales are consistently applied and are demonstrably related to legitimate, nondiscriminatory organizational or institutional objectives.
  5. Scrutinize Neutral Criteria for Proxy Effects: Examine neutral criteria for hidden bias to assess whether they unintentionally favor certain groups for race, sex, or other protected characteristics. For example, a program targeting “low-income students” must be applied uniformly without targeting areas or populations to achieve racial or sex-based outcomes.
  6. Eliminate Diversity Quotas: Utilize non-discriminatory, performance-based metrics that do not reference race, sex, or other protected characteristics. Discontinue quota-based policies—such as requiring a minority candidate per slate—and replace them with a merit-based process that evaluates all applicants fairly and objectively.
  7. Avoid Exclusionary Training Programs: Training sessions should be open to all qualified participants and must not segregate individuals into groups based on race, sex, or other protected characteristics. Avoid requiring ideological affirmations or personal disclosures that are tied to personal biases or privileges based on a protected characteristic.
  8. Include Nondiscrimination Clauses in Contracts to Third Parties and Monitor Compliance: Include clear nondiscrimination clauses in all agreements, contracts, or partnership agreements, requiring third parties to comply with federal law, and specifically that federal funds cannot be used for programs that discriminate based on protected characteristics. Monitor compliance regularly and withdraw funding from programs that violate federal law.
  9. Establish Clear Anti-Retaliation Procedures and Create Safe Reporting Mechanisms: Establish and communicate policies that prohibit retaliation against those who raise concerns, file complaints, or refuse to participate in potentially discriminatory programs.  Provide confidential and accessible channels for reporting concerns about unlawful practices, and include these protections in official policies, such as employee handbooks, student codes of conduct, and program guidelines.

A Brief Overview of What Has Occurred to Prompt the Recent DOJ Memorandum

President Trump issued Executive Order 14151 on January 20, 2025, titled “Ending Radical and Wasteful Government DEI Programs and Preferencing.” This order mandates the termination of all Diversity, Equity, and Inclusion (DEI) and Diversity, Equity, Inclusion, and Accessibility (DEIA)  programs, positions, and offices within federal agencies, including Chief Diversity Officer positions. It also requires a halt to DEI-related grants and contracts, mandates that federal agencies eliminate DEI initiatives and “equity action plans” established during the previous administration, and prohibits consideration of DEI factors in federal employment practices for hiring, promotions, and performance reviews.

On January 21, 2025, President Trump signed Executive Order 14173, titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” This order rescinds prior executive orders related to diversity in federal contracting, including Executive Order 11246, previously issued in 1965, which mandated affirmative action programs for federal contractors. It directs agencies to ensure contractors and grantees certify that they do not operate “illegal” DEI programs that violate anti-discrimination laws. The order further tasks the Attorney General with developing a plan to combat “illegal” DEI practices in the private sector and identifying potential targets for investigation, such as large corporations, nonprofits, foundations, and higher education institutions. The order also requires federal contractors and grantees to certify that their DEI programs do not use protected characteristics as motivating factors and are consistent with federal anti-discrimination laws and regulations. The order specifically does not apply to affirmative action for individuals with disabilities or protected veterans.

Attorney General Pam Bondi issued an internal memorandum on February 5, 2025, titled “Ending Illegal DEI and DEIA Discrimination and Preferences.”  The memorandum directed the DOJ’s Civil Rights Division to investigate, eliminate, and penalize illegal DEI and DEIA preferences, mandates, policies, programs, and activities in the private sector and in educational institutions.

On March 19, 2025, the U.S. Equal Employment Opportunity Commission (EEOC) and the U.S. Department of Justice (DOJ) released non-binding technical assistance guidance documents warning that employers’ DEI policies, programs, and practices can violate Title VII of the Civil Rights Act of 1964 (Title VII). The first guidance document, issued by both the EEOC and DOJ, is titled “What To Do If You Experience Discrimination Related to DEI at Work,” which states that employers are prohibited from: “disparate treatment,” ”limiting, segregating, or classifying employees based on race, sex, or other protected characteristics,” “harassment,” and “retaliation.” The other guidance document, issued solely by the EEOC, is titled “What You Should Know About DEI-Related Discrimination at Work,” which provides information about how an employer’s DEI initiatives, policies, programs, or practices may be unlawful. Both describe the circumstances under which an employee may raise a DEI-based Title VII discrimination claim against an employer.

What Should Employers Do Next

Now is the time to review, update, and implement policies, programs, handbooks, and other organizational or institutional documents to ensure compliance with federal civil rights laws and to minimize legal risks related to DEI, DEIA, and DEIB.

  1. Audit DEI Programs and Policies to Identify Potential Risks

Review all initiatives to ensure they do not involve preferential treatment or exclusion based on protected traits. Programs labeled as DEI, DEIA, or DEIB must still comply with federal laws that prohibit discrimination based on race, sex, color, national origin, religion, and other protected characteristics.

  1. Revise Hiring and Promotion Policies

Ensure decisions are based on objective, skill-based criteria, not demographic targets, or proxies. Practices that give preference to individuals based on protected characteristics, such as race-based hiring goals or scholarships, may violate Title VI, Title VII, and Title IX. Criteria such as “lived experience” or “cultural competence” may be considered discriminatory if they serve as indirect proxies for race or other protected characteristics.

  1. Train HR, Recruitment, and Leadership Teams

Educate staff on the legal boundaries of DEI efforts and the importance of adhering to compliance standards. Creating exclusive spaces or events based on race, gender, or other protected traits is considered discriminatory under federal law.

  1. Review Third-Party Relationships

Vet contractors and partners for alignment with federal law. Ensure clear nondiscrimination clauses are included in all contracts and agreements. Monitor the compliance of third-party partners that receive federal funds and discontinue contracting relationships where noncompliance is found.

  1. Monitor State Law Conflicts

Be aware of potential conflicts between federal guidance and state/local laws.

  1. Engage Legal Counsel

Discuss and review DEI policies, programs, handbooks, and other documents to identify any potential risks. Review and update any third-party agreements regarding non-discrimination clauses.

  1. Ensure the Organization has a Safe Reporting Mechanism

Ensure the organization or institution has established an anonymous hotline for individuals to raise concerns or file complaints related to unlawful discrimination.  Review handbooks, codes of conduct, and other communications to ensure that anti-retaliation procedures and safe reporting procedures are documented.

Note:  ILG builds customized Ethics/Ombuds Hotline Programs for companies of all sizes.  Our unique program includes a confidential Hotline contact for members, employees, and clients to report incidents via email or phone.  Please contact us if you would like to discuss this further. 

While the DOJ’s July 29, 2025, Memorandum does not carry the force of law, it signals increased federal scrutiny and enforcement. Organizations and HR leaders should treat this guidance as a call to action to ensure DEI efforts are inclusive, lawful, and merit-based.

 Sources:

Recent Posts

Archives