Overview

• The DOJ’s July 29 memo defines four categories of DEI practices—preferential treatment, proxy discrimination, segregation and biased training—as potentially unlawful under Titles VI, VII, IX and the Equal Protection Clause.
• It provides non-binding best practices, advising recipients to avoid diversity quotas, document merit-based rationales and scrutinize neutral criteria that could function as proxies for protected characteristics.
• All federal fund recipients—from universities and hospitals to state and local governments and contractors—have begun auditing DEI programs and updating contracts to include nondiscrimination clauses.
• The DOJ’s Civil Rights Fraud Initiative positions the department to use the False Claims Act to pursue entities that knowingly violate the guidance or certify non-compliant DEI practices.
• Federal agencies are revising grant and oversight procedures to incorporate the new criteria in anticipation of enforcement actions.