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\u201cProgram participation\u201d is further defined to include membership or participation in, or access or admission to, training, mentoring, or leadership development programs; educational opportunities; clubs; associations; or similar opportunities sponsored or established by the contractor or subcontractor. On March 26, 2026, President Trump signed a new Executive Order titled \u201cAddressing DEI Discrimination by Federal Contractors\u201d (the March 26 Order), which imposes significant new contractual obligations on federal contractors and subcontractors relating to diversity, equity, and inclusion (DEI) programs and practices. Our DEI and Equal Employment Opportunity Compliance Team helps businesses administer and evaluate legally sound, effective DEI policies and initiatives that align with federal and state requirements while advancing workplace culture and business objectives. When it comes to diversity, equity, and inclusion (DEI) programs employers must balance their commitment to fostering inclusive workplaces with the need to comply with evolving laws and regulations. (c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.<\/p>\n<\/p>\n
Executive Order also directed the Attorney General and Director of the Office of Management and Budget (OMB) to identify potential civil compliance investigations of private-sector entities, including federal contractors, as part of a broader effort to deter DEI programs across the economy. This alert summarizes the key provisions of the March 26 Order and Fact Sheet and identifies critical action items for contractors and subcontractors preparing to meet these new requirements, including conducting a privileged inventory of DEI programs, assessing contractual exposure, and creating a compliance plan addressing the March 26 Order\u2019s requirements. Thereafter, each agency head shall regularly review and take appropriate measures to ensure such compliance. The contractor recognizes that compliance with the requirements of this clause are material to the Government\u2019s payment decisions for purposes of section 3729(b)(4) of title 31, United States Code (False Claims Act).\u201d. Can an employer justify taking an employment action based on race, sex, or another protected characteristic because the employer has a business necessity or interest in \u201cdiversity,\u201d including preferences or requests by the employer\u2019s clients or customers? An employment action still is unlawful even if race, sex, or another Title VII protected characteristic was just one factor among other factors contributing to the employer\u2019s decision or action.<\/p>\n<\/p>\n
Under Title VII, DEI initiatives, policies, programs, or practices may be unlawful if they involve an employer or other covered entity taking an employment action motivated\u2014in whole or in part\u2014by an employee\u2019s or applicant\u2019s race, sex, or another protected characteristic. Title VII prohibits employment discrimination based on protected characteristics such as race and sex. From the end of 2025 to the end of March 2026, 60 percent of financial companies in the S&P 500 included a diversity- related disclosure in their 10-Ks, down from 94 percent in 2025 and consistent with 55 percent across the entire S&P 500 for the same period. Given the increased level of focus across the Trump Administration, including at the EEOC, on both traditional and reverse discrimination https:\/\/magzinenews.com\/digest\/how-mobile-app-development-is-shaping-digital-transformation-in-2025\/<\/a> claims tied to DEI programs, even diversity-related content that does not reference DEI specifically may represent a risk.<\/p>\n<\/p>\n