Since re-taking the White House, President Trump has taken dramatic steps to dismantle DEI (Diversity, Equity, and Inclusion) programs in workplaces nationwide. President Trump’s executive orders targeting DEI programs pose some particular challenges though, for employers doing business in California, where state and local laws continue to require compliance with broad, progressive measures intended to protect applicants and employees. This includes those from communities that have been historically disadvantaged.
California-Specific Implications
California employers must reconcile the about-face in federal law enforcement made by the EO with state and local laws that continue to require that they maintain equity and diversity in the workplace. Examples of California state legal schemes to consider include:
- FEHA and DEI Programs – The California Fair Employment and Housing Act (FEHA) continues to impose strict anti-discrimination requirements and to require anti-discrimination training for employees. While the EO seeks to abolish race- and sex-based workplace policies at the federal level, FEHA still requires that California employers prevent workplace discrimination and harassment. Employers should be careful to ensure that any changes to DEI initiatives remain consistent with California’s legal framework.
- Pay Equity Considerations – California has some of the strongest pay equity laws in the country, including the California Equal Pay Act, which requires equal pay for substantially similar work regardless of race, gender, or ethnicity. Companies that move away from structured DEI initiatives should still maintain fair pay practices to mitigate risks under state law.
- State-Level Regulatory Scrutiny – While the federal government may seek to investigate DEI policies as discriminatory, to date, California’s Civil Rights Department (CRD) remains committed to enforcing workplace equity laws. Employers should anticipate continued state-level enforcement of nondiscrimination and equal opportunity law, regardless of federal directives.
Initial Considerations for California Employers
The January 21 Executive Order raises new and important questions for employers, including whether existing DEI policies may expose them to regulatory scrutiny or litigation. Since the order does not explicitly define “illegal discrimination or preferences”, it remains unclear how broadly any enforcement actions might be applied. DEI principles are integral, and in some cases central, to the mission of many California-based companies. Some organizations may wish to take a more cautious approach, choosing to modify or discontinue certain programs, while others may opt to maintain their course and continue initiatives that may attract attention from the Administration, Attorney General, or relevant agencies. The calculus will largely depend on the employer’s priorities, values, and tolerance for risk.
In summary, given the complex interplay between federal and state laws, California employers should take a measured approach when evaluating their DEI programs.
- Review DEI Initiatives for Compliance – Employers should assess whether their existing DEI policies and activities comply with both federal and state laws. While certain race- or sex-based preferences may now face heightened federal scrutiny, general diversity efforts — such as mentorship programs, broad recruitment strategies, and pay equity assessments — can likely continue without legal risk.
- Ensure Hiring and Promotion Policies Are Merit-Based – While California law supports workforce diversity, employers’ hiring and promotion decisions should be based on job-related qualifications rather than demographic factors. Notably, nothing in the EO prohibits efforts to attract diverse candidates, as long as final hiring decisions are based on qualifications (rather than protected characteristics), and do not involve what the EO terms “illegal preferences”. Employers should therefore focus on inclusive recruitment strategies that encourage a diverse candidate pool while ensuring that final decisions rest on objective criteria independent of DEI considerations.
- Monitor Litigation and Regulatory Risks – Beyond federal enforcement, California employers should remain aware of potential private lawsuits alleging discrimination or reverse discrimination under both federal and state law. Legal challenges to employer DEI policies and practices may increase, particularly in industries where such initiatives have been heavily implemented. The EO could embolden individuals to file discrimination claims against employers based on perceived disadvantages resulting from DEI initiatives.
- Stay Informed on State-Level Developments – With California often diverging from federal employment policies, businesses should monitor updates from the California Civil Rights Department (CRD) and other state agencies to ensure ongoing compliance with state requirements.
For guidance on navigating these changes, California businesses should consult experienced employment counsel.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
Leave a Reply