A series of executive orders issued during the Trump administration contributed to a shift in how diversity, equity and inclusion policies are viewed.
Government agencies have started removing DEI-related language from websites and official materials, and several well-known companies have followed this lead. At the same time, other organizations have committed to maintaining their DEI programs and principles.
What these changes mean in practice
These developments raise important questions. Are companies fully abandoning DEI policies, or is the situation more nuanced? What are the potential risks for organizations that continue to pursue DEI-related initiatives?
Clarifying the debate about equity
The central controversy surrounding DEI does not appear to stem from the concepts of diversity or inclusion. Instead, much of the debate focuses on the term “equity.” While equality involves treating everyone the same, equity involves giving individuals the specific support they need to succeed.
Although some view this distinction as a matter of semantics, it creates confusion in real-world applications. For instance, if two candidates are equally qualified except that one comes from an underserved community, should a company prioritize that individual in the name of equity?
These questions illustrate how word choice and interpretation play a critical role, especially in the absence of clear legal guidelines.
Federal rules and private companies
Although the executive orders had an immediate effect on federal employees and contractors, private companies are affected differently. This is because the underlying equal employment opportunity laws at both the federal and state levels have not changed.
In fact, some portions of the executive orders are being challenged in court. As of this writing, two federal judges have ruled that multiple agencies must reinstate workers who were terminated during their probationary periods. These rulings are currently under appeal, adding further uncertainty to the legal landscape.
Understanding the legal and reputational risks
It is not against the law to use the term DEI, but doing so may increase a company’s exposure to scrutiny or legal risk. While the First Amendment does offer some protection for DEI-related expression, organizations must consider how they can foster inclusion without violating current or future legal interpretations.
The influence of public opinion is also important. Although many consumer boycotts have not significantly impacted companies to date, that could change. Social media activism also plays a growing role in shaping brand reputation and influencing corporate decision-making.
How companies can reduce legal and reputational risk
Companies that wish to maintain inclusive practices while minimizing risk can take several practical steps:
- Use broader and less-politically charged terms such as “anti-bias” or “opportunity” to emphasize the business value of a diverse workforce.
- Shift training programs toward structural improvements, including standardized hiring and promotion practices. Delivering companywide messages instead of tailoring content to specific groups may also help ensure clarity and consistency.
- Avoid referencing “diversity goals” directly. Recent joint guidance from the Equal Employment Opportunity Commission and the Department of Labor cautions that DEI programs may be considered unlawful if employment decisions are influenced, even partly, by characteristics protected under antidiscrimination laws.
- Conduct regular internal audits to identify potential areas of legal exposure and adjust policies accordingly.
Stay informed and prepared for change
While it is still legal to use DEI terminology, companies should review their official language and messaging to align with the current political and legal environments. Even organizations that currently support existing DEI policies may decide to make adjustments in the future.
For example, although Apple’s board recently voted to maintain its current diversity policies, CEO Tim Cook has acknowledged that ongoing legal developments could eventually require changes.
The importance of communication when making changes
Regardless of the direction a company takes, the success of any policy change — whether it involves scaling back or reaffirming DEI efforts — depends heavily on communication.
Clear, consistent messaging is essential for earning the trust and support of employees, leadership teams and other internal stakeholders. A thoughtful communication strategy can help ensure that any transition is understood and supported throughout the organization.