More than a year after President Donald Trump made diversity, equity and inclusion efforts a prime target of his second administration, miring corporate DEI efforts in uncertainty, recent movement suggests clarity remains out of reach.
In his first days in office, Trump moved to rescind any DEI-related activity in the federal government and pledged to “combat illegal private-sector DEI preferences, mandates, policies, programs and activities.” While the positioning is thought to have accelerated already-in-progress DEI rollbacks across corporate America, many organizations took a wait-and-see approach, as Trump’s actions set off significant legal challenges.
Here are the latest updates on those efforts—and what they could mean for the future of corporate DEI:
Federal anti-DEI efforts get a green light
An appeals court last week cleared the way for the administration to ax DEI initiatives in the federal government, overturning a lower court’s ruling striking down Trump’s anti-DEI executive orders.
The three-judge panel wrote in their ruling that they weren’t asked to determine whether banning DEI is “sound policy or not,” but rather the constitutionality of whether Trump can withhold federal funding related to DEI programs. They found the president “may determine his policy priorities and instruct his agents to make funding decisions based on them.”
Commenting on the ruling, Littler’s David Goldstein says federal contractors and grant recipients are now faced with “substantial uncertainty,” particularly around how the administration will require them to “certify” that they aren’t operating DEI programs the government would deem discriminatory.
“In light of the Fourth Circuit’s decision,” Goldstein writes, “federal contractors and grant recipients should carefully review all contract terms regarding compliance with federal non-discrimination laws or DEI practices and, before agreeing to such provisions, should consider potential risks.” Carefully and continuously audit policies and practices, he adds.
A mixed bag for DEI and Big Law
Last year, the administration honed in on DEI-related hiring in the legal field, directing the EEOC to investigate at least 20 of the nation’s largest law firms. The move prompted some firms to publicly back away from DEI, while others pushed back against the agency’s hiring data requests.
This week—after a suit from a group of law students over those requests—the EEOC announced it was ending the investigation, according to Bloomberg.
At the same time, however, the Federal Trade Commission has kept the issue in its own crosshairs, issuing a memo to dozens of firms last month warning that their participation in a DEI-accrediting program created the “potential for liability.”
‘Damage’ already done in schools
Last week, the administration dropped its appeal of a federal order that found the U.S. Department of Education’s guidance on DEI in federally funded schools unconstitutional. In February 2025, the department issued a “Dear Colleague” letter warning about discrimination “against students on the basis of race, including white and Asian students.”
While the guidance carried no legal weight or specific implications for hiring in schools, the judge said it represented a “sea change” in how the department “regulates educational practices and classroom conduct” and caused fear among millions of American teachers that their “lawful, and even beneficial, speech” would be punished.
Although DEI advocates celebrated the administration dropping the appeal, one acknowledged to EdSource that the “damage has already been done,” as scores of schools backed off of DEI-related initiatives over the last year.
Nike under a microscope
The EEOC last week escalated its investigation into Nike for what it calls a potential “pattern or practice of disparate treatment against white employees, applicants and training program participants.” The agency said it previously subpoenaed the organization and filed a subpoena enforcement action to compel Nike to share the information, which covers decisions on hiring, promotions, demotions, layoffs, internships, and leadership and career development dating back to 2018.
In a statement to CBS, a spokesperson for Nike said the organization is “committed to fair and lawful employment practices,” is confident its programs are lawful and will “continue our attempt to cooperate with the EEOC.”
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