Yes, but its implementation matters more than before. A DEI program is not categorically illegal, but the legal boundaries have narrowed in 2025 and 2026.
What has always been unlawful under Title VII is making employment decisions based on race, sex, or other protected characteristics. Programs that are set up correctly are still legal, and 16 state attorneys general assured employers this in a 2025 joint letter.
What changed in 2025 and 2026
Executive Orders 14151 and 14173 (January 2025) directed federal agencies to enforce civil rights laws against "illegal DEI preferences," and federal contractors and grantees now certify that their programs do not violate anti-discrimination law. In February 2026, the Fourth Circuit vacated the nationwide injunction against that certification requirement.
EEOC Chair Andrea Lucas sent letters to hundreds of large employers reminding them that Title VII prohibits race or sex-based decisions regardless of DEI framing. The DOJ's Civil Rights Fraud Initiative has active False Claims Act investigations into Alphabet and Verizon.
What is still lawful when open to all employees
- Skills-based, structured hiring processes
- Employee Resource Groups open to any employee regardless of identity
- Inclusive benefits such as family leave, flexible schedules, and pay transparency
- Mentoring and sponsorship programs open to all
- Bias training that does not single out specific groups
- Process metrics like structured interview usage and pay equity audits
What to cut or rebrand
Companies looking to launch a DEI or DEIB program without getting sued typically decide to rearrange these items:
- Race or sex-based quotas or preferences
- ERGs, training, or fellowships restricted to specific demographic groups
- Training that separates employees by race or sex
- Public diversity targets with numerical goals
- Interview slate requirements with rigid demographic mandates
What companies usually do
Companies usually audit current programs against the lists above. Cosmetic rebrands are a specific DOJ target, so any renaming has to reflect a real change in substance. They document the business rationale for every remaining program, and for federal contracts review certification with counsel.
Disclaimer:
This article informs. It does not advise on the law.
TL;DR
- DEI programs remain lawful when open to all employees and not based on race or sex-based preferences or restricted membership.
- Keep: skills-based hiring, inclusive ERGs, mentoring, bias training, pay equity audits. Cut: demographic restrictions and numerical targets.
- Rules are changing through EEOC and DOJ enforcement, so employers often track agency guidance and document every program's rationale.