On July 29, 2025, the U.S. Department of Justice (DOJ) issued a memorandum for federal funding recipients on unlawful DEI programs, detailing how federal antidiscrimination laws such as Title VII apply and outlining employer best practices for compliance.
Overview of DOJ Guidance
The DOJ memorandum requires federal fund recipients to follow civil rights laws, including Title VII, which prohibits employers with 15 or more employees from discriminating based on protected characteristics.
Prohibited Practices
The memorandum outlines unlawful practices that could jeopardize grant funding, including:
- Preferential treatment based on protected characteristics (e.g., race-based programs, preferential hiring, or restricting access to resources by race or ethnicity);
- Prohibited use of proxies for protected characteristics (e.g., cultural competence requirements, geographic or institutional targeting, and “overcoming obstacles” narrative or diversity statement requirements);
- Segregation based on protected characteristics (e.g., race-based training sessions, segregation in facilities or resources, implicit segregation through program eligibility, race-based candidate pool selection, sex-based selection for contracts, and race- or sex-based program participation); and
- Training programs that promote discrimination or hostile environments (e.g., trainings that stereotype individuals based on protected characteristics).
Employer Best Practices
The DOJ memorandum recommends best practices for federal funding recipients to comply with antidiscrimination laws, such as:
- Ensure inclusive access. Make all programs, activities, and resources accessible to qualified individuals, except where sex separation is necessary for privacy, safety, or opportunity.
- Focus on skills and qualifications. Make selection decisions based on measurable skills and job-related qualifications.
- Prohibit demographic-driven criteria. Eliminate any programs or policies that create discriminatory outcomes, even if not explicit.
- Document legitimate rationales. Record clear, nondiscriminatory reasons for employment decisions.
- Scrutinize neutral criteria for proxy effects. Carefully review and document that neutral criteria are not proxies for protected characteristics.
- Eliminate diversity quotas. End policies that require representation of specific groups in hiring and focus on performance-based metrics.
- Avoid exclusionary training programs. Open training to all qualified participants, avoid group segregation by protected trait, and do not require affirmation of specific beliefs or personal biases.
- Include nondiscrimination clauses in contracts to third parties and monitor compliance. Include nondiscrimination clauses in agreements, monitor compliance, audit for discrimination, and end funding for noncompliant programs.
- Establish clear anti-retaliation procedures and create safe reporting mechanisms. Adopt and share anti-retaliation policies, include them in handbooks, and offer confidential reporting channels.
Employer Takeaways
While the DOJ guidance does not change existing law, it clarifies how DEI programs will be evaluated and offers best practices to help prevent discrimination claims. All employers—not just federal funding recipients—should consider reviewing and applying these guidelines. Download the bulletin for more details.
