The EEOC Defines “Illegal DEI” – What Employers Need to Know

For several weeks, employment law and HR professionals have been hearing about the term “illegal DEI.” But what did “illegal DEI” actually mean—especially to the U.S. Equal Employment Opportunity Commission (EEOC), the federal discrimination watchdog? Until recently, that was anyone’s guess.

That changed yesterday when the EEOC issued guidance clarifying when DEI initiatives might cross the line into unlawful discrimination under Title VII of the Civil Rights Act of 1964. The Guidance is a technical assistance document released without an EEOC quorum. So, it’s not a rule or a law. Still, here’s what employers need to know about it.

When is a DEI Initiative Unlawful?

Under Title VII, a DEI initiative, policy, program, or practice may be unlawful if it involves an employment action motivated—in whole or in part—by race, sex, or another protected characteristic.

This means that any employment decision, such as hiring, firing, promotion, demotion, compensation, or access to training and mentorship, that is influenced by protected characteristics could be considered discriminatory.

Key Areas of Concern

Employers should be mindful that disparate treatment—making employment decisions based on race, sex, or other protected characteristics—is prohibited under Title VII. This applies to:

• Hiring and Firing – Selecting or rejecting candidates based on race, gender, or other protected traits.
• Promotion and Demotion – Offering advancement opportunities based on identity rather than merit.
• Compensation and Benefits – Paying employees differently based on race, sex, or other characteristics.
• Training and Mentorship – Restricting access to leadership programs based on identity rather than qualifications.
• Work Assignments – Assigning roles or projects based on identity rather than skills or experience.
• Internship and Fellowship Opportunities – Offering opportunities based exclusively on identity rather than an open, merit-based process.
• Performance Evaluations – Basing performance ratings on identity-related factors rather than objective job performance criteria.
• Disciplinary Actions – Applying different disciplinary standards based on protected characteristics rather than consistent enforcement of company policies.

Examples: When DEI Becomes Discrimination

Imagine a company implements a mentorship program exclusively for women and people of color to promote workplace diversity. While the intent is positive, excluding white male employees from participation could constitute unlawful discrimination under Title VII.

For example, if an employer implements a hiring preference for underrepresented groups that automatically excludes equally qualified candidates from other demographics, this could also be unlawful disparate treatment.

Similarly, setting quotas or reserving positions for specific demographic groups—rather than ensuring a fair and inclusive selection process—risks violating federal anti-discrimination laws.

Key Takeaways for Employers

Focus on Equal Treatment – Employment decisions should be based on merit and qualifications, not on race, sex, or any other protected characteristic.

Design Inclusive Programs – DEI programs should be open to all employees rather than limiting opportunities to certain identity groups.

Foster Inclusive Collaboration – Encourage voluntary participation in employee resource groups (ERGs) and mentorship programs open to all employees, ensuring access is based on interest and professional development goals rather than identity. Create networking and leadership opportunities that bring together diverse perspectives without requiring employees to participate based on protected characteristics.

Final Thoughts

DEI initiatives play a critical role in fostering an inclusive workplace, but intent does not override the law. To stay compliant with Title VII, businesses should ensure their DEI programs promote diversity without creating new forms of discrimination.