Action items called for in the AG’s memo, including criminal enforcement

The AG plans to enforce compliance with anti-discrimination statutes and end “illegal DEI and DEIA” using both criminal and civil statutes. Consistent with President Trump’s EO, the Civil Rights Division and Office of Legal Policy will submit a report including “proposals for up to nine potential civil compliance investigations” of publicly traded corporations, large non-profit corporations or associations, foundations with assets of $500 million or more, state and local bar and medical associations, and institutions of higher education with endowments over $1 billion. Significantly, the AG also states that the report should address “proposals for criminal investigations.”

Additionally, DOJ is expected to collaborate with state attorneys general in jurisdictions pursuing similar enforcement measures, leading to coordinated lawsuits and heightened regulatory scrutiny against private and public institutions that maintain race- and sex-based diversity initiatives.

DOJ will also intensify oversight of federal hiring and contracting practices, focusing on identity-based preferences in recruitment, promotions, and training programs within government agencies. Federal contractors will face increased scrutiny, particularly those with supplier diversity programs or DEI-based hiring benchmarks linked to federal funding.

Key targets/sectors highlighted in the memo

The DOJ memo identifies several key sectors where it intends to focus enforcement against DEI policies, particularly industries that have historically implemented race- or sex-conscious hiring, promotion, and contracting initiatives.

Higher education is a primary target, especially universities receiving federal funding that maintain affirmative action-style faculty hiring, student scholarship programs, or DEI-focused administrative positions. Corporate DEI programs are also under scrutiny, particularly those that use demographic quotas or benchmarks in hiring, or set aside positions or leadership tracks for underrepresented groups, or incorporate race- or sex-based supplier diversity requirements in procurement decisions. The memo suggests that companies implementing such policies could face civil rights violations under the Civil Rights Act of 1866 and Title VII of the Civil Rights Act of 1964, as well as criminal statutes.

DOJ is also targeting DEI initiatives in government-regulated industries, including health care and aviation. In health care, diversity-based hiring and training programs in hospitals, medical schools, and research institutions may face investigation, particularly if federal funding is contingent on race- or sex-based criteria. The aviation sector, including FAA programs and private airlines with diversity-focused hiring for pilots and leadership roles, could also be scrutinized for alleged violations of equal employment laws. Federal contractors and grant recipients are another key focus, as DOJ plans to assess compliance with new anti-DEI mandates by reviewing whether companies engaged in government work continue to prioritize race or sex in hiring, promotions, or subcontracting. This sector is particularly vulnerable given previous federal incentives for DEI in contracting, which may now be grounds for enforcement actions or funding restrictions.

Other potential DOJ targets include the tech sector, the banking and finance sector, the legal sector, and the nonprofit sector. Race- or sex-conscious hiring and promotion initiatives will face increased scrutiny. Venture capital firms with funds dedicated to underrepresented founders and other DEI-focused investment funds may be required to change their approach. Nonprofit foundations offering grants based on racial or sex diversity could face increased scrutiny as well.

DEI initiatives that are exempt from DOJ enforcement

President Trump’s EO contains an exemption allowing employment and contracting preferences within the federal or private sector for veterans of the U.S. armed forces and persons protected by the Randolph-Sheppard Act (including blind individuals). Thus, programs, initiatives, and policies for the benefit of veterans will not be prohibited by President Trump’s ban on DEI.

AG Bondi’s memo expressly allows “educational, cultural, or historical observances – such as Black History Month, International Holocaust Remembrance Day, or similar events – that celebrate diversity, recognize historical contributions, and promote awareness without engaging in exclusion or discrimination.” Thus, DOJ will make a distinction between “programs, initiatives or policies that discriminate, exclude or divide individuals based on race or sex” and those merely celebrating diversity.

Corporate employee resource groups or other voluntary employee-led groups promoting workplace inclusion are permitted to the extent that they do not deny participation or attendance at events of certain groups.

Criminal enforcement

Companies that fail to adjust their DEI policies to align with Title VII’s anti-discrimination mandates could face significant criminal penalties as a result. The DOJ memo instructs the Civil Rights Division and the Office of Legal Policy to prepare a report that includes “proposals for criminal investigations.” The Trump administration is expected to aggressively enforce the EO using criminal civil rights and government fraud statutes. One might reasonably expect, for example, that DOJ will consider deployment of 18 U.S.C. section 241 or 242, each providing for fines or up to 10 years’ imprisonment, or both. Section 241 makes it unlawful for two or more persons to agree to injure, threaten, or intimidate a person in the free exercise or enjoyment of any right or privilege secured by the Constitution or laws of the United States because of his or her having exercised such a right. Section 242, in turn, makes it a crime for someone acting under color of law – including, for example, government contractors or administrators at public universities – to willfully deprive a person of a right or privilege protected by the Constitution or laws of the United States. The specter of a federal criminal civil rights prosecution counsels in favor of heightened vigilance in this area.

Additionally, where the federal government requires statements or certifications from companies regarding their compliance with federal anti-discrimination statutes, such companies could face liability under government fraud statutes such as 18 U.S.C. section 286 (Conspiracy to Defraud the Government with Respect to Claims), 18 U.S.C. section 287 (False, Fictitious, or Fraudulent Claims), 18 U.S.C. section 371 (Conspiracy to Defraud the United States), or 18 U.S.C. section 1001 (False Statements). Companies could also face related civil liability under 31 U.S.C. section 3729 (False Claims Act).

Action items to consider

Companies should consider taking the following actions in anticipation of DOJ and other enforcement:

• Proactively assess DEI programs in light of DOJ’s new approach to understand any vulnerabilities.
  • Review company websites, compensation programs, fellowship and training programs, mandatory workplace trainings, and ads – even pictures can be used as evidence.
  • Recognize that using a term different from “DEI” (and other associated language changes) should account for how these changes may be viewed by criminal enforcers. For example, if “DEI” is changed to “equal opportunity,” but there is evidence that would suggest to DOJ that little has changed on the ground, a federal prosecutor may view the change as evidence of concealment and thus aggravation.
  • Audit and assess any DEI commitments made to internal and external stakeholders.
• Explore and document race- and sex-neutral programming consistent with Students for Fair Admissions v. Harvard. For example:
  • Avoid race- or sex-based quotas and instead focus on inclusive hiring strategies such as:
    • Expanding recruitment outreach to first-generation professionals without setting numerical race- or sex-based targets.
    • Offering mentorship and sponsorship programs that are open to all employees rather than restricted by demographic factors.
• Companies that contract with the government should review their policies to ensure compliance with new anti-DEI mandates and avoid potential penalties or disqualification from federal contracts.
• Federal contractors and grant recipients should carefully review all certifications and disclosures to ensure compliance, and should periodically perform audits to facilitate continued compliance.

Conclusion

DOJ’s intensified scrutiny of DEI initiatives (both civil and criminal) signals a significant shift in federal enforcement priorities, posing heightened legal risks for corporations, universities, federal government contractors and grant recipients, and federally regulated industries. Companies must carefully assess their DEI programs to ensure compliance with evolving legal standards. Organizations that fail to adjust may face civil liability, federal enforcement actions, or potential criminal exposure under statutes such as Title VII, 18 U.S.C. section 241, and the False Claims Act. As DOJ partners with state attorneys general and expands litigation efforts, potentially affected entities should consult legal counsel to mitigate risks and strategically align their diversity efforts with the administration’s enforcement framework.

Client Alert 2025-045