U.S. DOJ Issues Guidance on ‘Unlawful Discrimination’ Related to DEI Programs for Recipients of Federal Funding

On July 30, 2025, the U.S. Department of Justice (DOJ) issued guidance addressing the application of federal antidiscrimination laws to recipients of federal funds and other covered entities. The non-binding guidance cautions that programs labeled as diversity, equity, and inclusion (DEI) initiatives may still be subject to scrutiny if they involve criteria that operate as “unlawful proxies” for protected characteristics. Examples identified by DOJ include characteristic-based scholarships, preferential hiring or promotion, affinity groups, and race-based training sessions. The guidance also underscores that entities may be held responsible for the practices of contractors or grantees, and it outlines “best practices” to mitigate risk, such as using job-related criteria, ensuring broad access, and documenting legitimate decision-making rationales.