Contact: Devon Mills
Recently signed executive orders issued by the Trump administration have raised questions about the future of diversity, equity, and inclusion (DEI) initiatives and workplace protections, particularly for federal contractors. While these orders directly impact businesses that contract with the federal government, their influence extends far beyond, creating uncertainty for all employers, including private companies, nonprofits, and state and local entities.
While the orders signal a shift in federal enforcement priorities, employers must understand state and local laws—including strong protections in California and New York—remain firmly in place. As such, businesses across industries must be cautious about making any immediate changes that could expose them to legal risk.
Here, we break down the key implications of Trump’s DEI and gender-related orders and what businesses should do next.
DEI Under Scrutiny – But Still Legal and Advisable
The Trump administration has ordered federal agencies to scrutinize and, where possible, curtail DEI initiatives in hiring and promotions. This includes directing agencies to:
Identify and deter “illegal DEI discrimination and preferences” across sectors, including publicly traded corporations, non-profits, and higher education.
Target high-profile DEI practitioners for compliance investigations or litigation.
Develop enforcement plans to eliminate practices deemed inconsistent with federal civil rights laws.
While these directives may create uncertainty, it is critical to note that, at present, DEI programs remain lawful under federal law. In fact, the U.S. Equal Employment Opportunity Commission (EEOC) continues to encourage employers to “[r]ecruit, hire, and promote with EEO principles in mind, by implementing practices designed to widen and diversify the pool of candidates.”
Furthermore, California law explicitly requires employers to prevent discrimination in hiring and employment practices. Under the California Fair Employment and Housing Act (Cal. Gov. Code, § 12940 et seq.), employers cannot discriminate against job applicants or employees based on race, color, national origin, gender, sexual orientation, gender identity, disability, or other protected characteristics.
Rolling back DEI programs may, in fact, have unintended legal consequences. Recently, the National Institute for Workers’ Rights—an affiliate of the plaintiff-oriented National Employment Lawyers Association—issued a memo warning that scaling back DEI initiatives could be used as evidence in discrimination claims. An employer’s decision to move away from DEI efforts may serve as circumstantial evidence of discriminatory intent or suggest that an employment action was based on protected characteristics such as race, gender, religion, or national origin.
Additionally, anti-DEI statements made by senior executives, decision-makers, or supervisors may be viewed as indicators of bias, akin to direct discriminatory remarks. Collectively, these factors could strengthen claims that an employer has fostered a hostile work environment or engaged in unlawful discrimination.
Employer Takeaway
Businesses should not interpret Trump’s orders as requiring them to dismantle DEI efforts. Instead, they should review existing policies to ensure compliance with state and federal law and consult legal counsel if adjustments are necessary.
Gender Identity and Workplace Rights – Federal vs. State Protections
Another of Trump’s orders seeks to limit federal recognition of gender identity, defining legal protections strictly in terms of biological sex. However, this does not override state laws protecting transgender and nonbinary employees.
For example, California’s Gender Recognition Act, which has been in effect since 2019, ensures that:
Transgender and nonbinary individuals receive full legal recognition.
Employees have the right to use restrooms and other sex-specific facilities consistent with their gender identity.
Employers cannot discriminate against individuals based on gender identity or expression.
Additionally, the California Attorney General has reaffirmed that the state will continue enforcing its existing anti-discrimination laws despite federal policy changes.
Employer Takeaway
Employers operating in California, New York, and other states with strong anti-discrimination laws must continue upholding workplace protections for transgender employees. Companies should reaffirm inclusive policies and remind employees of their legal rights to maintain compliance and prevent workplace disputes.
Moving Forward – Practical Steps for Employers
In the wake of Trump’s actions during his first days in office, employers should take a measured approach rather than making reactive changes. Key steps include:
Reviewing DEI and anti-discrimination policies to ensure compliance with state and federal laws.
Training HR and leadership teams on applicable employment laws, particularly in jurisdictions with strong protections.
Monitoring enforcement actions and legal developments that may impact hiring, promotions, and workplace policies.
Consulting legal counsel before altering workplace policies in response to federal executive orders.
Bottom Line
While federal policy shifts may create uncertainty, employers should stay the course when it comes to DEI and workplace protections, particularly in states with robust anti-discrimination laws. Misalignment with these laws could lead to compliance risks, potential liability, and reputational harm.
This blog post is not offered, and should not be relied on, as legal advice. You should consult an attorney for advice in specific situations.
