Each week, Liebert Cassidy Whitmore provides a summary of newly issued Executive Orders and other significant Presidential and federal actions that have a foreseeable impact on governance, compliance, and operational policies for California employers. The summaries below outline the key provisions of each action, along with our brief analysis of their potential implications for municipal agencies, school districts, private schools, and nonprofits.
DOJ Issues Guidance on Nondiscrimination Requirements In Relation to DEI Programs
On July 29, 2025, the U.S. Department of Justice issued guidance clarifying that federal antidiscrimination laws apply to all federally funded programs and initiatives, including those commonly categorized as Diversity, Equity, and Inclusion (DEI) efforts. The guidance interprets and applies statutes such as Titles VI and VII of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, and related federal nondiscrimination laws.
Although the guidance is formally directed at recipients of federal financial assistance, its implications may extend to California employers that are subject to federal nondiscrimination laws. The guidance provides important insight into how the DOJ interprets and intends to enforce existing nondiscrimination laws as they relate to DEI-related policies, practices, and programs.
DEI Programs Must Align with Federal Antidiscrimination Laws
The DOJ underscores that DEI programs – even if well-intentioned – must not result in preferences or exclusions based on protected characteristics, such as race, sex, or national origin.
Caution Against Use of “Facially Neutral” Proxies
The guidance warns that criteria that function as proxies for protected characteristics, such as individuals’ “lived experiences,” “cultural competence,” or neighborhoods, may be unlawful if used as proxies for protected characteristics in decision-making. For example, requiring diversity statements may be problematic if intended to elicit or assess protected characteristics for decision-making purposes.
Illustrative Examples of Potentially Unlawful Practices
The DOJ provides examples of DEI-related practices that may violate federal law if implemented improperly:
Responsibility for Third-Party Vendor Compliance
The guidance advises that recipients of federal funding should actively monitor third-party vendors and contractors for compliance with nondiscrimination laws. While it recommends terminating relationships with vendors that engage in discriminatory practices, the DOJ has not definitively stated whether recipients will be held legally liable for such third-party conduct.
LCW will provide updates regarding the Department’s enforcement of the guidance.
If you have any questions about the above linked Presidential actions, please contact our Los Angeles, San Francisco, Fresno, San Diego, or Sacramento offices.