Practical Advice for Virginia Private Sector Employers Regarding their DEI Policies & Practices

Article by Todd Leeson[1]
There is much confusion regarding whether private sector employers are able to maintain policies regarding Diversity, Equity and Inclusion (DEI) in the workplace. I have been following the public policy and legal issues surrounding DEI for years. I have also closely scrutinized the activities over the last few weeks including the Executive Orders (EOs) recently issued by President Trump. This article is the combination of my experience, as well as dozens upon dozens of articles and legal authorities I have studied. It is not exhaustive, but is intended to convey my primary thoughts at this time.
For purposes of this article, the three primary EO’s to note are as follows:
- Executive Order 14173: “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” issued January 21, 2025.
- Executive Order 14151: “Ending Radical and Wasteful Government DEI Programs and Preferencing,” issued January 20, 2025.
- Executive Order 14168: “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,’ issued January 20, 2025.
Executive Orders cannot replace or overrule laws enacted by Congress, state laws, or decisions of the United States Supreme Court. For example, Title VII of the Civil Rights Act of 1964 remains settled law: employers cannot discriminate against persons, or condone harassment, on the basis of their race, sex, national origin, or religion. (Likewise, pursuant to the Age Discrimination Employment Act, Americans With Disabilities Act, and Pregnant Workers Fairness Act, employers cannot discriminate against persons on the basis of their age, disability, pregnancy, childbirth, or related medical conditions.)
Moreover, in Bostock v. Clayton County, 590 U.S. 644 (2020), the U.S. Supreme Court held that “sex” discrimination under Title VII included discrimination against a person due to his or her sexual orientation or gender identity. In addition, the Virginia Human Rights Act expressly prohibits discrimination on the basis of “sexual orientation” and “gender identity.” (More on this topic later in the article.)
For additional context, recall that in Students for Fair Admissions v. Harvard, 600 U.S. 181 (2023), the U.S. Supreme Court held that colleges could not make admission decisions based on an applicant’s race. This was not an employment case. But much has been written regarding its potential applicability to Title VII cases in the workplace.
These EO’s do not invalidate all private sector DEI initiatives. Here is the operative language:
“I further order all agencies to enforce our longstanding civil-rights laws and to combat illegal private-sector DEI preferences, mandates, policies, programs, and activities. (emphasis added). EO 14173.”
The EO further objected to those entities who have adopted “dangerous, demeaning, and immoral race and sex based preferences under the guise of DEI.” (emphasis added).
The EO’s require the Attorney General to publish a proposed enforcement report within 120 days with a “plan of specific steps or measures to deter DEI programs . . . that constitute illegal discrimination or preferences.” Thus, we should receive more specific content regarding the Administration’s position after May 2025.
So, the key question is this: what DEI practices are “illegal?”
Let’s take the most obvious examples of policies that are “illegal.”
- There can be no “set-asides.” For example, an employer cannot hold a position open for a person based on his or her race, sex or other protected class.
- There can be no “quotas.” An employer cannot have a policy stating that it will strive to employ (or promote) a certain percentage of women or minorities in management. Similarly, a business should not have aspirational targets or goals that reward diversity—for example, an employer should not link a manager’s pay to his or her results in promoting or retaining females or minority employees.
- There can be no preferences. This is analogous to the SFAA college admissions decision. An employer cannot break a tie or give a “plus” to an applicant or employee based on his or her protected class (e.g., race or sex). [On January 28, 2024, Mark Cuban posted on X (Twitter) that while he only hired that the best persons, “race and gender can be part of the equation.” Then EEOC Commissioner Andrea Lucas (now the acting EEOC Chair) replied that he was “dead wrong on black-letter Title VII law.”]
Another example of a policy or program that would likely be deemed “illegal” would be a leadership development program limited to female managers. Likewise, it is likely not permissible to have an internship or scholarship program restricted by race (or any other protected class).
As we evaluate the shifting landscape, here’s an important concept to follow: Employers must ensure that their hiring practices, evaluations, and promotion protocols are based on individual merit, skills and performance. The National Society for Human Resource Management (SHRM) organization recently opined as follows:
“SHRM recommends that all private companies evaluate their inclusion and diversity initiatives to ensure that they provide equal access to opportunities, skills development, and do not give special advantages to one person or group over another, avoiding any perception of identity-based favoritism.”
“How to Adjust your DEI Initiatives Under Trump’s New Guidelines,” (January 28, 2025, accessed at SHRM.org.)
Private employers are urged not to overreact. As Vicki Lipnic, a former Republican EEOC Commissioner, recently noted: “You always have to parse, what do people mean by DEI. You could have 20 different kinds of corporate programs that would fall under the category.” “How Trump’s Assault on DEI Will Ripple Across Corporate America,” (Wall St. Journal, Jan. 24, 2025). In other words, it would be a mistake for an employer to suddenly disband or scrap its entire “DEI” plan as a knee-jerk reaction to the show of force from the Trump Administration. If an employer acts rashly, it could also suggest to current employees that its existing plan was unlawful and/or that it is no longer committed to having a more inclusive or diverse workforce.
So What Policies or Initiatives Should an Employer Keep or Adopt?
Employers can and should cast a wide net in their recruitment efforts. The business case for maintaining a “diverse” workforce cannot be plausibly refuted. Employers should seek to attract and hire the best candidates from a broad cross-section of available resources. As Benjamin Spencer, the Dean of William & Mary’s Law School, wrote:
“The objective of any hiring process is to acquire excellence. . . . But excellence doesn’t simply mean hiring the person with the best grades, the highest scores, or the most awards. I have interviewed top students whom I would never hire because they lacked maturity, judgment, empathy, personality, perspective or experience. . . . . No demographic group has a monopoly on talent. The excellence that employers seek doesn’t exclusively or predominately reside within a single demographic of the population. . . . A hiring process that produces a monolithic group of employees isn’t yielding the most qualified people for the positions. . . . Firms will need to work harder to ensure that they get exposed to a robust pool of prospective hires.”
“Throw Out the Diversity Playbook and Reimage Inclusive Hiring,” (published in Bloomberg Law News, November 10, 2023).
Employers can and should continue their EEO education, training and commitment. “DEI” training is another concept fraught with sensational headlines and frequent misinformation. Let’s break it down.
It remains unlawful for an employer to permit an employee to be subjected to discrimination or harassment based on a protected class (e.g., sexual harassment). To this end, employers must continue to publish and follow their EEO policies and complaint process. Moreover, employers must educate their employees, and train their managers on company policy and protocol. Virtually every week an aggrieved person obtains a substantial verdict or settlement in a discrimination or harassment case against an employer because a supervisor is found to have disregarded or violated an employer’s EEO policy. Simply put, businesses need to stay the course, and take proactive measures in support of their EEO commitment.
To be sure, some employers have gone too far in their “DEI” training. It is not prudent for employers to permit training in which white, male managers are essentially told that they are perceived to be “racist” or “sexist” in their past actions. Indeed, there are pending lawsuits in which employees have plausibly alleged that an employer’s DEI/EEO training went too far. See, e.g., Pumariega v. Basis Glo. Techs., 2024 U.S. Dist. Lexis 190747 (N. D. Il. Oct. 21, 2024)(employee plausibly alleged his termination was in retaliation for his complaints that the company’s DEI training conflicted with his religious beliefs).
While the details matter, it is my judgment that employers can continue to include “implicit bias” education as part of its EEO training. (A few years ago, I was at my local YMCA and struck up a conversation with a man who noted he just moved to the region. When I asked what brought him here, he responded his “spouse obtained a great job here.” I asked, “what does she do?” He responded that “he was recruited here by a [local company].” I learned an important lesson that day.
Employers can and should continue their efforts to be Inclusive and Welcoming to All. This is another topic in which there has been some confusion, and mis-steps. Perhaps it is best to illustrate this point with an obvious example. Not everyone in your workplace is a Christian who celebrates Christmas. If you promote your company’s annual “Christmas” party, there are likely some employees who will feel left out. In my judgment, it is not wise for business executives to cater to the “majority” and/or to proclaim “that’s just the way it is.”
Walmart has recently garnered publicity (positive and negative) after announcing some specific changes to its DEI initiatives. In partial response to criticism it received, Walmart responded, “we’re the same company with the . . . same commitment to creating a sense of belonging for all of our associates .” “Shareholders Chide Walmart CEO Following Recent DEI Rollback,” (Bloomberg Law, Daily Labor Report, Jan. 15, 2025). I believe this is a helpful (and lawful) statement.
It has been reported that Federal Agencies are no longer permitted to highlight celebrations such as Black History month. On this point, it was encouraging to see Virginia Governor Glenn Youngkin highlight the significance of Black History Month in official postings on February 1, 2025. There is no compelling reason that a private employer cannot also note a holiday or celebration that has some significance or relevance to its employees.
Let’s return to the concept that employers should cast a wide net to attract “excellent” employees. Having invested the time, money and resources to do so, it is equally important to adopt sound practices to retain your best employees. We are not talking about preferences. Instead, businesses are well advised to maintain a welcoming and inclusive environment for all their employees.
The Public Policy Debate Regarding Transgender Employees. As noted above, it is unlawful under Federal and Virginia law to discriminate against employees based on their gender identity. On April 29, 2024, the EEOC issued Enforcement Guidance on Harassment in the Workplace in which it included examples of conduct that constituted discrimination based on an employee’s gender identity. The EEOC also filed lawsuits against employers alleging discrimination and/or harassment against employees based on their gender identity.
In EO 14168, however, President Trump recently declared new Federal policy that there are only two genders, male and female. Further, the EEOC’s new Acting Chair Andrea Lucas thereafter stated the Trump Administration’s firm position that a female employee, among other rights, has the legal right to a single-sex restroom.
There is, and will continue to be, litigation to establish the contours of these rights. For example, what if a supervisor objects to referring to an employee by their preferred pronouns because it conflicts with his religious beliefs? Similarly, what if a female employee objects when a biological male employee, who is transitioning to female, requests to use the women’s restroom?
In my judgment, there are no definite legal answers to these challenging and evolving questions. Each situation must be evaluated based on the unique circumstances. Employers should engage in an interactive discussion with the key persons to assess whether there is a compromise solution or accommodation that is reasonable or viable.
Thoughts on Whether to Use the “DEI” Label. I emphasize (again) that there is nothing inherently unlawful for a company to have a “DEI” policy or plan. It is the specific details of an employer’s plan or policies that matter. But what about the term itself? Has “DEI” become too toxic? Must employers rename their policies? Here too, there are no definite answers.
“Diversity” should focus on employing well-qualified persons who have varying life experiences. It may include persons who come from disadvantaged backgrounds, geographic locations, persons with disabilities, veterans, or persons who have excelled in spite of challenges. In other words, “diversity” must be much broader than just race or sex.
“Equity” is the term that engenders the most controversy because of a misperception of its definition. Viewed properly, the focus is on “equal opportunity,” not equal outcomes or equal results. If a disabled employee is able to excel at her job with the aid of a reasonable accommodation (e.g., better lighting or larger computer screen for a visually-impaired employee), this is a prudent (and legally required) step to take.
As we have reviewed, the term “Inclusion” refers to taking measured and meaningful steps to make your employees feel like they are welcomed, celebrated, and that they belong. In an inclusive or welcoming workplace, everyone is treated as a valuable player on the team.
I am not going to opine regarding what label an employer should use and/or whether it should rename its DEI policy or programs. The more important point, in my view, is for executives to take a fresh look at their current policies, programs and practices, as well as the culture of the workplace.
(As you may recall, SHRM’s Board announced in July 2024 that it would remove “equity” from the equation and instead focus on Inclusion and Diversity (I&D). It concluded that the term “equity” caused unnecessary confusion and was better framed as being part of Inclusion.)
The Trump Administration has made it crystal clear that it is looking to make public examples of employers, especially larger employers, who maintain “illegal” DEI policies. To this end, businesses are also well advised to consult with experienced employment counsel, especially if there are concerns that your current policies or practices may have some legal risk. Engaging employment counsel also allows the employer to maintain an attorney-client privilege that will permit candid and creative communications to assess the best steps to take in response to our shifting political and social landscapes.
President Trump’s high profile and decisive actions, including his flurry of Executive Orders, caught most employers off guard. These actions (and others to come) cannot be ignored. On the other hand, businesses should make the time to understand their options, and level of risk. Employers are more likely to prosper if they invest the time, energy and resources to hire, retain, and promote their best employees.
[1] I appreciate the helpful editorial assistance provided by my daughter, Morgan Leeson, Fuqua School of Business (Duke) MBA Candidate, Class of 2026.