State attorneys general are entering the DEI workplace practices conflict and taking sides.
Since President Donald Trump signed three executive orders in late January to end DEI-related workplaces practices, state attorneys general have provided employers with diametrically opposing viewpoints on the continuation of DEI-related workplace practices in their efforts to either supplement or counteract federal enforcement efforts at the state level.
One group of state AGs—in contravention to what the orders direct yet in compliance with their state laws—offers legal support and protection for DEI-related workplace efforts. Other state AGs have aligned themselves with the orders and are reviewing employer DEI efforts for possible discriminatory practices under their states’ laws.
The Trump administration’s EOs and other actions at the national level are spurring employers to review their diversity-related employment practices for potential violations of Title VII and other federal nondiscrimination laws. But with so many state AGs weighing in on the issue, employers have to account for a potential added layer of enforcement at the state level, depending on which side the AGs are fighting on. This can be daunting for organizations doing business in a single state, but even more so for multistate employers.
Federal Actions
The most visible DEI battles so far have been waged in the federal arena.
Executive orders 14151, 14173, and 14230 aim to end DEI workplace policies and practices that conflict with federal nondiscrimination laws.
Since Trump signed the orders, federal agencies have released employment guidance about DEI-related actions in workplaces. For example, the Equal Employment Opportunity Commission issued workplace DEI-related discrimination guidance.
Multiple courts have ruled on Trump’s DEI orders for public- and private-sector employment, sometimes resulting in conflicting rulings.
State AG Actions
Meanwhile, state attorneys general have weighed in on workplace DEI practices and taken opposing legal positions on the orders.
States Exhibiting DEI Approval
Sixteen state attorneys general released in mid-February multistate guidance for employers about maintaining the “viability and important role” of DEI in workplaces.
The AGs said that they “stand ready to support” employer DEI workplace efforts and that these programs promote compliance with nondiscrimination laws and benefit employer culture and operations. They also specified best practices for growing such programs.
Separately, and before Trump was sworn in, 13 state AGs sent a letter to Walmart in early January about the company’s decision to roll back its DEI initiatives, urging the retailer to reconsider.
States Exhibiting DEI Disapproval
Conversely, four different combinations of state AGs have sent letters to certain corporations and other employers in alignment with Trump’s DEI-related executive orders. The letters discourage workplace DEI programs that may violate federal and state nondiscrimination laws, and ask the employers to re-evaluate or eliminate DEI practices that conflict with the AGs’ position.
- On Jan. 23, 10 state attorneys general sent a letter to certain financial institutions, stating that these employers “appear to have embraced race- and sex-based quotas” and requesting that they respond to specific questions, including DEI in their workplaces.
- On Jan. 27, 19 state attorneys general sent a letter to Costco, calling on it to “end all unlawful discrimination” in the company stemming from its DEI policies.
- On April 3, 12 state attorneys general sent letters to the 20 large law firms, requesting the same DEI-related workplace information that the EEOC asked of the firms to ensure compliance with Title VII of the Civil Rights Act of 1964. (The executive order that precipitated the EEOC letters is subject to court orders.)
- On April 15, 15 state attorneys general sent a letter to the Business Roundtable, a trade association for CEOs, asking members “to abandon the unlawful and misguided DEI initiatives that have for too long harmed businesses and consumers alike.”
All in all, 24 state attorneys general signed at least one of these four letters. The AGs in only five states—Alabama, Idaho, Iowa, Montana, and South Carolina—were signatories to all four letters.
Employer Next Steps
While it might be too soon to assess the outcome of the state AGs’ actions on workplace DEI programs, there are indicators. Costco, for example, had a “productive meeting” with the Iowa State Attorney General Brenna Bird in April to discuss, in Bird’s words, “ditching DEI.”
The conflicting stances of state attorneys general regarding workplace DEI programs, as well as various court rulings to the executive orders, create uncertainty for employers — and make compliance challenging.
It’s important to remember that, even if a company’s DEI program appears to be supported under a state attorney general’s guidance, it may still risk violating Title VII based on the language of its DEI program, potentially leading to federal DEI-related discrimination claims under Title VII and the investigations, lawsuits, legal costs, and damages that come along with them.
Moreover, DEI programs risk additional consequences of violating state equal employment opportunity laws. For example, Texas and Iowa have state EEO agencies that receive complaints of state EEO law violations for enforcement of those statutes.
The actions of the state AGs, along with those of the Trump administration at the federal level, highlight certain employment areas that could draw particularly close scrutiny for violations of EEO law, such as:
Hiring and recruiting practices that indicate preferences, such as fellowships, internships, or other employer programs that may be exclusive to one group of individuals or following benchmarks or quotas for hiring individuals based on certain characteristics (also, promotion of any such practices on an employer’s website).
Employee training programs about workforce diversity or inclusive practices for groups of individuals, outside of any requirements for EEO training by law, or including diversity or inclusion workplace goals as part of training programs.
Performance plans, including reviews, bonuses, and promotions that are based, in part, on reaching diversity or inclusion workplace goals.
Employee resource groups and other corporate culture resources that are exclusive to one group of individuals or focused on initiatives that may be exclusive to such groups.
Employer relationships with outside organizations or programs that support DEI-related initiatives or employer supplier diversity initiatives.
With these hotspots in mind, employers can assess their exposure to state AG reviews of their DEI-related practices and take steps to help bring them into compliance with state and federal law. By better understanding state AGs’ positions about DEI, employers may avoid being caught in the ongoing legal DEI conflicts at federal and state levels.
Other analyses of the executive orders featured in the report cover AI regulation, immigration, DEI, and disparate impact liability (publishing soon).
Bloomberg Law subscribers can find related content on our In Focus:DEI in Employment page, our Workplace Nondiscrimination Toolkit resource, and our In Focus: Executive Orders & Actions page.
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