Executive Orders and the Assault on DEI in the Workplace

Executive Orders and the Assault on DEI in the Workplace

The social and legal history of Diversity, Equity and Inclusion (known today known as “DEI”) emerged from the early civil rights movements leading to the Civil Rights Act of 1964. In the late 70s/early 80s America embraced the moral imperative of "affirmative action” recognizing the practice as a vital tool to eradicate historical inequities. The term "diversity" became popular in Corporate America in 1987, after an article was published by the Hudson Institute (a New York City “liberal think tank”) predicting a commercial advantage of demographic workforce changes. By the 2000s, the term DEI became synonymous with a workplace that was not only tolerant of a diverse class of workers but also embraced it!

Recent Political Developments

President Trump's January 2025 Executive Orders, while not federal law, have started the domino effect of tumbling DEI initiatives in the federal workforce. By his own account, the impetus behind the President’s orders is to “restore values of individual dignity, hard work and excellence.’ Many feel that this may be a dog whistle to corporations that it is now fair game to reinstate institutional barriers to “equal” employment.  While federal employees are encouraged to report their colleagues who continue to further DEI efforts, legal challenges are anticipated.

But Michigan is not budging.  In response to the President’s orders, Governor Whitmer has issued Executive Directive 2025-1 reaffirming our state’s commitment to diversity while ensuring federal compliance. The Governor’s directive makes clear that while Michigan remains committed to following federal actions, it will rail against initiatives that violate constitutional law.  

Meanwhile, the private sector remains divided, with some companies restricting DEI policies while others continue to adopt them.

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The ‘Not So’ Quiet Dismantling of Civil Rights Protections

In 2023, the Supreme Court ruling in Students for Fair Admissions (SFFA) v. Harvard signaled a major shift in affirmative action ideology, potentially opening floodgates to erosion of civil rights protections in employment, housing, and other areas. In this decision, Justice Clarence Thomas paradoxically argued that "affirmative action imposes a stigma on minorities" suggesting that minorities are already protected under the constitutional principle that "all men are created equal." A suggestion that has not historically been the case.  

This year, the Supreme Court will hear oral argument in Ames v. Ohio Department of Youth Services, a reverse discrimination case where a heterosexual employee alleged, she was passed over for promotion in favor of a gay woman. The case tests the "background circumstances" requirement used by the Sixth Circuit, which requires plaintiffs to show either an employer's inclination to discriminate against the majority or something "fishy" about the hiring decision. While Ames doesn't directly challenge DEI programs, the case carries significant implications for such initiatives. If the Supreme Court sides with Ames and eliminates the "background circumstances" requirement, it could lower the evidentiary threshold for reverse discrimination claims. The potential consequence? Companies might face more lawsuits challenging DEI policies, potentially creating a chilling effect on diversity initiatives as organizations weigh increased legal risks against their inclusion goals.

What can be gleaned from these two cases is that the U.S. Supreme Court has shown a recent trend of protecting the majority interests at the expense of minority rights.

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DEI Impact on Discrimination Lawsuits

Research on DEI initiatives' impact on discrimination lawsuits shows mixed results. While some studies indicate companies with robust DEI policies face fewer lawsuits, others suggest these programs increase discrimination reporting by raising awareness. EEOC data reveals workplace discrimination charges have fluctuated despite widespread DEI adoption, with retaliation claims becoming more prevalent and discrimination categories expanding to include age, disability, and sexual orientation.

However, DEI policies alone cannot prevent lawsuits. It will require comprehensive programs featuring clear reporting mechanisms to resolve issues internally before legal escalation. The effectiveness of these initiatives in preventing litigation depends critically on senior leadership commitment, integration with core business processes, regular monitoring, quality implementation, and accessible grievance procedures.

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The Bottom Line for Employers

Should the Supreme Court rule in favor of Ames, how should companies respond? Those that value diversity in the workplace and recognize its benefits should thoughtfully consider designed policies to maintain their legal protection. Management that places a priority on employment decisions (hiring, firing, promoting, or demoting) based on legitimate business factors rather than protected characteristics will continue to have strong legal standing. Executives that consistently apply neutral policies (and maintain detailed records of its decision-making process) will remain well-positioned to defend against any discrimination claims, regardless of the Ames outcome.  

Practically speaking, employers would be wise to consider implementing an objective evaluation criterion for employment decisions, document performance-based reasons for management decisions, and educate corporate leadership about the sources of bias to provide insight into their own subconscious proclivities. Today, nearly 2/3 of all mid-size companies employ DEI initiatives with higher percentages in Fortune 500 businesses.  Implementing sound business management practices will serve as a crucial safeguard against liability arising from discriminatory conduct.

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