In a new wrinkle to the Trump administration’s anti-DEI campaign, the Federal Trade Commission sent warnings to several large law firms, claiming their participation in a diversity certification program could be unlawfully collusive in violation of antitrust laws. Meanwhile, the EEOC is suing a Fortune 100 company over its public DEI goals.
Why it matters: The FTC’s involvement in DEI issues is the most recent example of the current administration’s all-hands approach to combatting DEI, reminiscent of the Biden administration’s “all of government” approach to labor issues. The EEOC’s investigation is the first of its kind against a major company regarding DEI practices.
Public DEI Goals Under the Microscope: Meanwhile, the EEOC continues to turn up the heat on companies. This week, for example, the EEOC made public its ongoing investigation into Nike for “systemic allegations of DEI-related intentional race discrimination.”
- The investigation centers on the company’s publicly disclosed DEI goals, serving as a reminder that such information may provide fodder for investigation and litigation under the current administration.
- Nike’s goals included representation targets for racial minorities and women in leadership roles, and tied progress on such goals to executive compensation.
- The investigation has been ongoing since 2024, when it was opened by then Commissioner (and now Chair) Andrea Lucas – it was only made public this week because the EEOC filed a motion compelling the company to comply with its investigation, which the EEOC claims the company has failed to do.
- For its part, Nike has claimed that it has complied as much as possible with the EEOC’s “onerous” information requests, and called the new motion publicizing the investigation “a surprising and unusual escalation.”
- This is the first time the Commission has launched an official investigation against a large company where it is claiming that DEI practices could be unlawfully discriminatory.
Diversity certification participation at issue: Several large firms, including DLA Piper, Paul Wiess, Skadden, and Sidley Austin participated in a Mansfield Certification program from Diversity Lab.
- Entities can receive the certification if they meet certain DEI standards, such as agreeing to consider talent pools for promotions and leadership opportunities made up of at least 30% of underrepresented groups.
- Achieving the certification also involves regular “knowledge-sharing calls” with other firms or companies where participants share best practices for achieving desired DEI outcomes, including in hiring and recruitment.
FTC letter: The FTC sent a letter this week to several firms participating in the above program claiming that such participation could be unlawfully collusive. Specifically, the letter asserts that the following conduct could be potentially illegally anticompetitive:
- Agreements to compose job candidate panels based on protected characteristics (race, sex, etc.) – which the letter claims are quotas.
- Sharing competitively sensitive information about pay and other benefits between employers.
- Such “DEI coordination” can “infect all aspects of…hiring” and “distort competition for labor”, according to the letter.
What’s next: The letter warns of potential liability under federal antitrust laws and suggests the program may be subject to review under civil rights laws, but stops short of starting any official investigation or enforcement proceedings. It does, however, “strongly recommend” that the firms review relationships with diversity certification programs for unlawful behavior.
What CHROs need to know:
- The Trump administration’s all of government approach to stamping out DEI is only beginning, and the FTC’s involvement shows the potential breadth of its scope.
- The EEOC sent similar letters to law firms last year; expect both agencies to potentially target large companies in a similar fashion.
- The EEOC’s investigation outlined above could provide a critical test case for the legality of corporate DEI practices that were industry standard as recently as 2024.
- Chair Lucas recently commented that the Commission was unlikely to issue specific guidance on “unlawful” DEI practices, so the outcomes of investigations like the one above may be employer’s best guide to what this administration considers unlawful.
