It is an understatement to say that ending "DEI" is a priority of the Trump Administration. While conservative attacks on "DEI" are not new, the sheer volume of administration actions can be overwhelming. The health care industry has already been the target of some attacks on DEI programs, and many in the industry will be affected.
Every Employer Covered by Title VII is Affected. New interpretations of existing law are changing EEOC enforcement activities. Employers now need to grapple with what is "legal," and conflicts with state laws.
Recipients of Federal Financial Assistance. The key leverage the Administration has used is to threaten to or actually cut off federal financial assistance to force changes to "DEI" policies. Efforts to push back have resulted in retaliation.
- Many in the health care industry receive direct or indirect grants from the Department of Health and Human Services (HHS), NIH, and other federal agencies. Many others accept reimbursement through Medicare and Medicaid, which the government says is receipt of federal financial assistance.
- ACA Section 1557 incorporates Title VI, Title IX, Section 504, and the Age Discrimination Act. The interpretation of Title VI, which have focuses primarily involving schools and higher education, also apply to every entity covered by ACA Section 1557.
- Many state and local government programs receive federal financial assistance that are passed through to the health care industry.
Federal contractors. Federal contractors were among the first affected by the end of Executive Order 11246 affirmative action requirements. If health care providers or other entities seek federal contracts in the future, they will have to agree to new contract provisions addressing "illegal DEI."
Larger Employers. Law firms were among the first targets of the Administration, especially firms that had opposed the President and the Administration’s positions. It will not be a surprise if larger health care entities opposed to various HHS actions become targets.
So, What is "Illegal DEI?"
While federal agency guidance is evolving, it apparently includes (1) any practices by employers or schools that identify or categorize applicants, employees or participants by their protected categories; and (2) anything the Administration believes is contrary to any of its Executive Orders, including those related to disparate impact and number of genders. The guidance and actions in higher ed and K-12 schools could easily be extended to non-discrimination in health care, housing, places of public accommodation and other business activities regarding their customers, patients, and participants.
Priorities and Enforcement
Immigration is a high priority, taking resources from other issues. Discrimination against immigrants is a low priority. Any claims of "antisemitism" or other religious harassment is a priority (especially Christians and Jews), as are the rights to free expression and practice of religion in the workplace. So are claims of reverse discrimination or harassment of Whites, or preferences for women over men. There are multiple attacks against the LGBTQ community, which are likely to lead to attempts to reverse recent Supreme Court protections.
Enforcement at every agency is going to be limited for now. There have been mass layoffs at the Department of Education Office of Civil Rights. An estimated 50% or more of attorneys and investigators at the DOJ Civil Rights Division have taken buyouts, been forced out or transferred to new roles. The EEOC has seen significant decreases. Loyalty and commitment to compliance with all Executive Orders and interpretations is required of the remaining employees.
There are hundreds of lawsuits challenging various Executive Orders and Administration actions, but it may take years before we have clear answers on their legality.
The Executive Orders
Here are some of the relevant Executive Orders.
Revoked–EO 11246. EO 11246 had been in effect since September 1965. It prohibited discrimination by federal contractors and subcontractors on the bases of race, color, religion, sex, and national origin, and required them to take affirmative action. All federal contractors were ordered to stop their affirmative action programs for employees by April 21, 2025. DOL still enforces Section 503 (disability) and various veteran's rights laws, which, for now, have affirmative action provisions.
EO 14173. "Ending Illegal Discrimination and Restoring Merit-Based Opportunity." This EO instructs federal agencies to end their DEI initiatives. This is the key EO targeting "illegal DEI," but was very vague on what constitutes "illegal" DEI. Subsequent guidance confirms that the Administration is taking an expansive interpretation of Students for Fair Admissions v. Harvard, 600 U.S. 181 (S. Ct. 2023). The Administration deems practices "illegal" which actually are not and have never been considered illegal.
EO 14321. April 23, 2025 "Restoring Equality of Opportunity and Meritocracy." This EO declares that "It is the policy of the United States to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible to avoid violating the Constitution, Federal civil rights laws, and basic American ideals." The EO directs the Attorney General to amend or repeal existing regulations, guidance, rules, or orders that impose disparate-impact liability.
EO 13899 (12/11/19), which was reaffirmed and expanded in EO 14188 (1/29/25). These Executive Orders target "antisemitism" in schools and on university and college campuses, but apply to all recipients of federal financial assistance with Title IV obligations. "While Title VI does not cover discrimination based on religion, discrimination against Jews or other religions may give rise to a Title VI violation when the discrimination is based on an individual's race, color, or national origin." The Administration has included "antisemitism" as the basis for many of its actions against colleges and universities and other entities. HHS is one of several agencies that are part of the Federal Task Force to Combat Antisemitism.
Agency Interpretations Apply to Health Care Institutions
The first Trump Administration was critical of agencies that had issued sub-regulatory "guidance." Such guidance has now become a favored method of explaining its new positions, without going through notice and rulemaking. The Department of Justice has a coordinating role, so positions taken by one agency indicate positions that are likely to apply to enforcement by other agencies or in other industries.
ED OCR February 28, 2025, FAQs. The Department of Education issued guidance in February, and subsequent FAQ's, describing types of activities that create a hostile environment under Title VI. These principles would apply to claims of harassment of or between patients in a covered facility; mandating courses, orientation programs, or training that are designed to emphasize and focus on racial stereotypes; or sanctioning employees who participate in protests or take certain positions on racially charged issues.
HHS May 6, 2025 Dear Colleague Letter to Medical Schools on SFFA v. Harvard. This letter tracks the guidance from the Department of Education and DOJ. HHS has launched a number of investigations of medical schools (including Duke), and scholarship programs by recipients of HHS assistance, for "DEI" violations, including racial exclusions in scholarship programs.
DOJ July 29, 2025 "Guidance for Recipients of Federal Financial Assistance Regarding Unlawful Discrimination." Targets "DEI" and other programs and practices that discriminate. Examples of "unlawful practices" include:
- "Preferential Hiring or Promotion Practices," such as a DEI policy that prioritizes candidates from "underrepresented groups;" or use of "unlawful proxies" such as "cultural competency" or recruitment targeting specific geographic areas, institutions, or organizations chosen primarily because of their racial or ethnic composition.
- Permitting biological men in women's and girls' restrooms, changing areas, etc.
- Sex-based selection for contracts (e.g., all preferences for minority or women-owned businesses), or any decisions based upon "under-represented" groups.
- DEI training that includes "statements stereotyping individuals based on protected characteristics, such as "all white people are inherently privileged," "toxic masculinity," etc.
EEOC Actions and Guidance. The EEOC issued new Guidance: "What You Should Know About DEI-Related Discrimination at Work." One specific issue singled out segregation of DEI or other training into groups based on race, sex, or another protected characteristic.
The OPM Memos on Religious Expression. (July 16, 2025 and July 28, 2025). These two Memos, and a recent DOJ opinion, affirm the rights of federal employees to engage in religious expression at work, such as employees forming a prayer group and gathering when not on duty; an employee engaging in discussions with other employees about "why his faith is correct and why the non-adherent should re-think his religious beliefs" unless and until the other employee objects; or inviting employees to worship at her church despite belonging to a different faith. They also detail the effect of Groff v. DeJoy, No. 22-174 (S. Ct. June 29, 2023), which raised the bar for when employers can deny religious accommodations because they impose an undue hardship. Examples include telework and other flexibility for those abstaining from work during certain times or participating in religious observances or practices.
These are federal interpretations of the right to "free expression" under the Constitution, which would also apply to all state and local government employees. The EEOC is likely to follow these principles in investigating complaints under Title VII.
Conflicts with Existing Laws and Regulations
Disparate impact is a recognized theory of liability under Title VII. While the EEOC may no longer bring those claims, private plaintiff's attorneys can do so. Federal courts are likely to permit those claims unless the Supreme Court changes its longstanding position and finds that such theories violate the Constitution under an expansive interpretation of SFFA v. Harvard. State and local FEP agencies are likely to continue to bring these types of claims under local law.
There is a long history of interpretations by the EEOC, DOL, other agencies and the courts that activities to "expand the pool" of qualified applicants, such as outreach to under-represented groups or mentoring and skills programs, are not illegal. Similar efforts to retain diverse employees, such as mentoring, coaching and affinity groups, were also protected. All such efforts are now being scrutinized by DOJ, the EEOC and other agencies.
A number of states are fighting federal actions that they claim are interfering with rights traditionally given to the states, or state laws that are "more protective" than federal laws. This Administration claims that state laws cannot protect classes that are "illegal" (gender identity); permit "illegal" conduct (use of restrooms based upon gender identity); or violate the Constitution or Title VII.
So, What Do We Recommend?
- Assess Your Organization’s Risk Tolerance.
Employers and businesses need to engage in ongoing, constant risk assessment, and decide their level of risk tolerance, in the context of their mission, vision, and stakeholders.
- Which practices are you committed to maintaining if you can?
- Do you want to change preemptively, or wait for a challenge?
- Since this Administration has threatened or taken action with little notice, what is your risk tolerance if you receive critical federal contracts or funding?
- Can/should you follow state law even if conflicting with new federal positions?
- Ultimately: which battles do you want to fight if you are challenged?
- Self-Audit
Once your organization understands its risk tolerance, self-audit your policies, procedures, and practices, including those for employees and for customers/clients/patients, etc.
You should avoid the obvious issues that were not legal in the past, including quotas, using diversity as a "tiebreaker," narrow definitions of diversity; and tying compensation to diversity goals.
You should then look at the Administration's priorities and prioritize prevention. For example, which harassment complaints should be investigated promptly with appropriate action; be particularly sensitive to claims of antisemitism and reverse discrimination. Also review your current practices on religious accommodations, make sure you understand the impact of Groff v. DeJoy, and consider the DOJ guidance for federal employees.
Then, critically examine your current DEI programs, if you still have them. Many health care employers and entities have devoted resources to a culture of "Diversity, Equity and Inclusion," without engaging in discrimination. What are the goals of the program? Are there aspects that are contrary to the Administration's positions? Are the company's statements regarding DEI creating risk? Considering your risk tolerance, should you make changes to reduce the risk of challenges? These are the kinds of questions to discuss with your counsel.
