The Department of Justice (DOJ) issued a directive on July 29, 2025, clarifying how federal antidiscrimination laws apply to Diversity, Equity, and Inclusion (DEI) programs, particularly for recipients of federal funding. The guidance asserts that any program or policy—regardless of its stated goals or labels—must comply with federal laws prohibiting discrimination based on race, sex, religion, national origin, or other protected characteristics. The memo builds on prior executive orders and emphasizes that entities receiving federal funds, including educational institutions, government contractors, and nonprofits, may face enforcement actions or loss of funding if they engage in practices deemed discriminatory.
The Administration previously agreed to a court ruling questioning the constitutionality of the US Department of Transportation’s disadvantaged business enterprise (DBE) program. The new guidance does not directly address the DOT program but calls into question the use of similar requirements by states and local governments. Several cities have already dropped subcontracting requirements based on race or sex.