Back in March, John noted that the EEOC had issued two technical guidance documents following up on President Trump’s executive order targeting private sector DEI programs. The guidance contained in those two documents raised several specific areas of potential concern, including diverse interview slate policies, employee resource groups with membership restrictions, segregated training and programming, and mentoring or networking programs limited to members of protected classes. This EEOC guidance emphasized that no general business interest in diversity will justify race-motivated employment actions, and also clarified the EEOC’s position on how Title VII applies to other aspects of workplace DEI initiatives and practices.

Over on the PracticalESG blog, Zach Barlow recently noted that the EEOC has announced that it is rescinding its prior long-standing regulatory guidance on voluntary affirmative action programs. This guidance worked within the Civil Rights Act’s Title VII and clarified when employers can take voluntary actions to improve employment opportunities for underrepresented groups. Zach notes:

A recent Sheppard memo discusses the steps that employers should take to reassess programs and ensure compliance in the new regulatory environment:

“Monitor federal and state developments. Rescinding the Guidelines does not affect obligations arising under state or local law. Employers should assess local requirements to ensure compliance.

Assess existing affirmative action programs. Employers should identify all programs, policies, or practices that reference, rely on, or were structured under the Guidelines or that otherwise take race, sex, national origin, or other protected characteristics into account in hiring, promotion, or other employment decisions.

Evaluate legal justifications independently. With the EEOC Guidelines no longer available, employers maintaining voluntary affirmative action measures should assess whether those measures can be independently justified under applicable legal precedent.

Engage counsel before enforcement forces the issue. Employers that assess their programs now—before a charge, complaint, or litigation challenge—will be better positioned to make informed decisions about program design, modification, or discontinuation. Sheppard’s Labor and Employment team is actively monitoring these developments.”

Employers with affirmative action programs can no longer rely on the almost 50-year-old guidance. Now programs must be assessed in light of the EEOC’s current stance. The EEOC has published much on what it considers to be “illegal DEI.” Employers should familiarize themselves with these statements and craft strategies to protect diversity within their organizations and ensure compliance with the government’s interpretation of civil rights law.

These developments will continue to shape public company DEI programs and the disclosure that companies provide regarding these programs in their annual reports, proxy statements and sustainability reports.

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– Dave Lynn