On July 29, 2025, the U.S. Department of Justice (DOJ) issued a memorandum to all federal agencies clarifying how federal antidiscrimination laws apply to recipients of federal funding – particularly in the context of Diversity, Equity, and Inclusion (DEI) programs. The memorandum outlines non-binding best practices intended to assist entities in complying with federal antidiscrimination laws; these recommendations are not mandatory requirements but serve as practical guidance to help minimize the risk of legal violations.

The following are key highlights from the DOJ’s memorandum:

• Compliance Obligations: All recipients of federal funds – including educational institutions, employers, and state/local governments – must ensure their programs do not discriminate based on race, sex, religion, or other protected characteristics. This applies regardless of the program’s stated intent or terminology.
• DEI Programs Not Legally Exempt: Programs labeled as Diversity, Equity, and Inclusion (DEI), Diversity, Equity, Inclusion, and Accessibility (DEIA), or Diversity, Equity, Inclusion, and Belonging (DEIB) are subject to the same legal scrutiny. Euphemistic or indirect language does not shield discriminatory practices.
• Examples of Prohibited Practices Include:
  • Race- or sex-based scholarships, hiring quotas, or training sessions.
  • Use of proxies such as “cultural competence” or “lived experience” that functionally favor protected groups.
  • Segregated spaces or programs based on race or sex.
  • “Diverse slate” hiring mandates or contract preferences based on protected traits.
• Clarification on Sex-Based Protections: The guidance reaffirms the importance of maintaining sex-separated “intimate” spaces – such as bathrooms and locker rooms – and athletic competitions. Policies allowing biological males in female-only spaces may violate Title IX and Title VII.
• Anti-Retaliation Protections: Individuals who object to or decline participation in potentially discriminatory programs are protected from retaliation.

Compliance Recommendations:

• Use neutral, merit-based criteria for hiring, admissions, and program eligibility.
• Avoid demographic quotas or race/sex-based selection requirements.
• Ensure training programs are inclusive and do not stereotype or exclude.
• Include nondiscrimination clauses in third-party contracts and regularly monitor vendor compliance.
• Establish clear anti-retaliation policies and safe reporting channels.

This guidance signals a notable shift in federal enforcement priorities. Organizations that receive federal funding should promptly review their DEI initiatives, hiring practices, and grant-funded programs to ensure compliance with federal law and proactively mitigate legal, financial, and reputational risks. 

If you have questions about this guidance or your workplace policies in general, please reach out to Jennifer Craighead Carey or any attorney in Barley Snyder’s Employment Practice Group.