On July 29, 2025, United States Attorney General Pam Bondi issued new guidance that significantly changes how the government interprets federal antidiscrimination laws to apply to entities receiving federal funds – including private and public employers, state and local governments, and educational institutions – particularly with respect to entities that maintain Diversity, Equity, and Inclusion (DEI) policies and practices. The guidance provides a detailed list of DEI practices that the United States Department of Justice (DOJ) considers unlawful, as well as sets forth examples of “Best Practices” entities receiving federal funds can adopt to minimize legal risk.

Although the guidance is non-binding and does not have the force of law, it nonetheless indicates how the DOJ will interpret and apply federal antidiscrimination statutes to federal funding recipients. More specifically, it provides a non-exhaustive list of examples of policies and practices that could result in revocation of federal grant funding and/or liability for discrimination, including:

• hiring or promotion preferences or employment/position quotas based on race, sex, gender identity, and other classifications, as well as neutral criteria such as “lived experiences,” “cross-cultural skills,” “overcoming obstacles,” or geographic or institutional targeting that function as proxies for discriminatory criteria or practices;
• diversity statements in job applications that could penalize candidates for not expressing race- or gender-based values;
• segregating access to facilities or resources based on protected characteristics, such as a lounge exclusively for minority employees;
• race- or gender-specific mentorship, leadership, or professional development opportunities , including employee resource groups or trainings; and
• retaliation against employees who question or opt out of employer-mandated DEI training.

Although the memorandum sets forth significant changes to the status quo that employers have been accustomed to under previous administrations, it also provides guidance as to best practices for all employers, including those who do not receive federal funds. 

The DOJ recommends that employers ensure all programs, activities, and resources are open to all qualified individuals except as “necessary where biological differences implicate privacy or safety.”  As for hiring and promotion practices, the DOJ recommends eliminating diversity quotas, basing selection decisions on measurable skills and qualifications, and documenting the legitimate rationale for decisions. Employers should also discontinue the use of any policies designed to favor specific demographic groups and scrutinize the criteria used for screening applicants. The DOJ also recommends that non-discrimination clauses be included in agreements with third parties.

We will continue to monitor developments with respect to antidiscrimination laws and DEI policies and practices.