On July 29, 2025, the Office of the Attorney General of the United States Department of Justice (DOJ) released a memo entitled Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination (the “DOJ Memo”) which aims to clarify the types of policies and practices that the current administration may deem unlawful discrimination, including under Diversity, Equity & Inclusion (DEI). By its own language, the guidance does not include mandatory requirements, but rather what it describes as “Best Practices,” “non-binding suggestions,” and “practical recommendations” to avoid risk of violating federal laws covering discrimination, including Title VI and Title VII of the Civil Rights Act of 1964 and Title IX of the Education Amendments of 1972.
The DOJ Memo states that “[e]ntities receiving federal funds, like all other entities subject to federal antidiscrimination laws, must ensure that their programs and activities comply with federal law and do not discriminate on the basis of race, color, national origin, sex, religion, or other protected characteristics – no matter the program’s labels, objectives, or intentions.”
The DOJ Memo cautions that the following non-exhaustive programs, policies, and initiatives may “result in revocation of grant funding” and “[f]ederal funding recipients may also be liable for discrimination if they knowingly fund the unlawful practices of contractors, grantees and other third parties.”
- Programs granting preferential treatment based on protected characteristics, including race-based scholarships; preferential hiring promotion practices prioritizing candidates from “underrepresented groups”; and access to facilities or resources based on race or ethnicity.
- Policies using facially neutral proxies for protected characteristics, such as:
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- Policies requiring job applicants to explain “cultural competence,” “lived experience,” or “cross-cultural skills” when doing so “effectively evaluate[s] candidates’ racial or ethnic backgrounds rather than objective qualifications.”
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- Policies requiring applicants to describe “obstacles they have overcome” or submit a “diversity statement” if statements advantage applicants based on protected characteristics.
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- Recruitment strategies “targeting specific geographic areas, institutions, or organizations chosen primarily because of their racial or ethnic composition rather than other legitimate factors.”
- Practices segregating individuals based on protected characteristics, such as conducting trainings that separate participants by race, sex, or other protected characteristics; segregating access to facilities or resources based on protected characteristics (even if intended to create “safe spaces”- although this does not apply to facilities that are single sex based on biological sex to protect privacy or safety such as restrooms, locker rooms, or lodging); and basing eligibility to participate in programs on protected characteristics.
- Policies unlawfully considering protected characteristics in selection decisions, including:
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- Policies requiring a “diverse slate” for hiring or setting “racial benchmarks” or mandating “demographic representation” in candidate pools.
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- Policies prioritizing the awarding of contracts to women-owned business or minority-owned businesses, “without satisfying an appropriate level of judicial scrutiny.”
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- Policies requiring a set number of participants in a scholarship, fellowship or leadership initiative to be from a specific demographic group or an underrepresented group.
- Training programs promoting discrimination or hostile environments, including trainings excluding or penalizing participants based on protected characteristics or trainings including “severe or pervasive use” of materials that “single out, demean, or stereotype” based on protected characteristics, such as “toxic masculinity” and statements that “all white people are inherently privileged,” as such training may “violate Title VI or Title VII if they create a hostile work environment or impose penalties for dissent in ways that result in discriminatory treatment.”
The DOJ Memo also includes recommendations on “Best Practices” for employers to ensure compliance with antidiscrimination laws including:
- Ensuring inclusive access to all programs and activities, and ensuring resources are open to all qualified individuals and do not exclude participants based on protected characteristics (except when “necessary where biological differences implicate privacy, safety, or athletic opportunity”).
- Basing selection decisions on specific, measurable skills and qualifications directly related to job performance or program participation. Criteria such as social economic status, first generation status, or geographic diversity must not be used if selected to prioritize individual based on racial, sex-based, or other characteristics.
- Prohibiting the use of facially neutral policies and practices designed to favor specific demographic groups and increase the representation of specific racial or sex-based groups (such as programs targeting “underserved geographic areas” or “first-generation students”) if the criteria are chosen to increase participation by specific racial or sex-based groups. It is advisable to use universally applicable criteria, such as academic merit or financial hardship, applied without regard to protected characteristics or demographic goals.
- Documenting the legitimate reasons for employment decisions (such as hiring, promotions, or the selection of contracts) unrelated to protected characteristics and ensuring that those rationales are consistently applied and are “demonstrably related to legitimate, nondiscriminatory institutional objectives.”
- Scrutinizing facially neutral criteria if they serve as a proxy for protected characteristics.
- Eliminating diversity quotas and discontinuing policies mandating the representation of specific protected groups in candidate pools, hiring panels, and final selections.
- Ensuring trainings are open to all qualified participants regardless of protected characteristics and do not “segregate” participants into groups based on protected characteristics or create a hostile environment by requiring participants to affirm ideological positions or “confess” biases or privileges based on protected characteristics.
- Including non-discrimination clauses in agreements or contracts with third parties and requiring those third parties to comply with federal law and specifying that federal funds may not be used for programs that discriminate based on protected characteristics and monitoring third parties that receive federal funds to ensure ongoing compliance.
- Establishing clear anti-retaliation policies prohibiting retaliation against individuals engaged in protected activities (such as raising concerns, filing complaints, or refusing to participate in potentially discriminatory programs) and providing safe, confidential, and accessible channels for individuals to report concerns about unlawful practices.
While the guidance itself is not binding, given the current evolving legal landscape, organizations should audit their policies and practices to ascertain areas of potential risk as to protected class discrimination. It is also recommended that organizations prioritize robust training aimed at preventing harassment, discrimination and retaliation by educating employees about implicit bias, cultural awareness and promoting civility in the workplace.
At KSB Law, we provide a broad array of workplace training to help mitigate bias.
We also provide DEI Compliance Audits to help organizations ensure compliance with the evolving legal landscape.
This summary is for informational purposes only and is not intended to constitute legal advice. This information should not be reused without permission.