What “Illegal DEI” Actually Means
The Concept
Beware the “Illegal DEI” Rhetoric
The Trump Administration and others have issued several missives against “illegal DEI.” But what exactly is “illegal DEI”?
Key Resources
Curated by Public Equity Group, with thanks to Linda Goldman and T. Scott Kelly of Ogletree Deakins; Taonga Leslie, formerly of the American Constitution Society; and David Glasgow of NYU School of Law, for their input.
For one thing, “illegal DEI” is a phrase intended to confound and deter efforts to promote diverse, equitable and inclusive organizations. The word “illegal” operates as a modifier, suggesting two possible interpretations:
Interpretation #1:
ALL practices related to diversity are illegal (and should be avoided at all cost!).
Interpretation #2:
A subset of practices is prohibited (the “illegal” ones); other practices are legal, appropriate, and in some cases, legally required.
Interpretation #1 causes widespread confusion, and even panic in some circles. (Decrying “illegal” DEI is like railing against “illegal” banking practices. By definition, “illegal” banking practices, like money laundering, are illegal–obviously. Whereas “legal” banking practices are, well, entirely legal.)
Some argue this wordplay is part of a broader, political agenda to deter and erode civil rights advances. However, the first interpretation—that diversity, equity, and inclusion work is inherently illegal—is incorrect, and the second interpretation is correct. In fact, many policies and practices designed to prevent discrimination and strengthen diversity and inclusion are required by law and remain lawful even as they draw political attention.
Understanding Legal Risk for Diversity, Equity, and Inclusion
Curated by Public Equity Group, with thanks to Linda Goldman and T. Scott Kelly of Ogletree Deakins; Taonga Leslie, formerly of the American Constitution Society; and David Glasgow of NYU School of Law, for their input:
Following a series of legal developments, including the Supreme Court’s June 2023 affirmative-action rulings and the January 2025 executive orders on workplace DEI, organizations are experiencing heightened attention to how discrimination laws are interpreted and enforced. This increased scrutiny affects hiring, promotion, grants and contracts, but much of it reflects long-standing principles already embedded in employment law. For example, employers may lawfully broaden outreach to increase applicant diversity, but they may not consider protected characteristics such as race, sex, or national origin when making hiring decisions. That legal requirement has been extended to university admissions and is now being applied more routinely in a range of related contexts.
As a result, recent government enforcement actions, court cases and agencies have focused on programs that use protected traits as deciding factors in contracting, hiring, promotion, or eligibility for certain opportunities. Examples of practices already found to be unlawful include fellowships or grant opportunities limited to specific racial groups, hiring tie-breakers based on identity, or bonus structures linked to demographic outcomes. These types of practices (and others that require or encourage decision making based on race) are illegal under current law.
LOW RISK
What Remains Legal
Organizations can continue building diverse, inclusive, and discrimination-free workplaces by focusing on access, fairness, and job-related criteria:
Widening recruiting pipelines and outreach, without reserving roles for any group.
Using objective, job-related selection standards and structured interviews.
Supporting voluntary employee affinity groups open to all.
Advancing opportunity using non-protected criteria such as first-generation status, geography, school context, or socioeconomic disadvantage.
In philanthropy, avoiding race-restricted grant contests and considering unrestricted gifts or open RFPs with mission-relevant, race-neutral criteria.
MEDIUM RISK
What Remains in Flux
The legal landscape is evolving. Some practices fall into a gray area where courts have not yet provided clear guidance, or where outcomes may vary by jurisdiction:
Affinity groups or mentorship programs that emphasize particular communities but remain open to all participants
Voluntary collection of demographic data for monitoring and analysis purposes, when not tied to specific benefits or employment decisions
Training content that discusses systemic barriers, bias, or historical inequities, when presented in job-relevant and educational contexts
These areas require careful implementation and ongoing legal review as case law develops.
HIGH RISK
What is Actually Illegal
Recent government enforcement actions and court cases have focused on programs that use protected traits as deciding factors in contracting, hiring, promotion, or eligibility.
Examples of practices already found to be unlawful include fellowships or grant opportunities limited to specific racial groups, hiring tie-breakers based on identity, or bonus structures linked to demographic outcomes.
Keep doing the work and adjust where needed.
Communicate Clearly
In the current climate, uncertainty often leads organizations to pull back more than the law requires. Clear internal communication helps prevent that. Spell out the difference between unlawful preferences and lawful inclusion in policies and staff messages. Most DEI practices remain permissible when implemented with care, so rather than pausing the work, update it and keep monitoring legal developments with your HR and legal partners.
The Bottom Line
The law still allows - and in some cases requires - employers, nonprofits, and funders to expand opportunity, reduce barriers, and foster belonging through race-neutral criteria, consistent processes, and respectful communication.
