As some DEI critics say victory is near, companies face new pushback over rollbacks

When the nation’s largest group of HR professionals invited anti-DEI activist Robby Starbuck to a marquee conference for a talk on workplace diversity programs that he’s pressured companies such as Walmart and McDonald’s to abandon, scores of its members raged on social media – with many vowing to ditch the conference and sever ties with the trade group.

But Johnny C. Taylor Jr., who heads the Society for Human Resource Management (SHRM), said the backlash reinforces the need for human resources managers to hear from people like Starbuck. With diversity, equity and inclusion programs under more scrutiny than ever, Taylor said, “we need to armor members with the tools they need to keep themselves out of the crosshairs of the government.”

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The episode highlights how tensions over DEI continue to roil corporate America after five years of whiplash. Such initiatives have long faced criticism from conservatives who view them as a form of discrimination with deep political and ideological undertones. But the Trump administration’s move to end what it called “illegal” DEI within 48 hours of taking office in January raised the stakes for employers, prompting many of them to jettison representation goals for suppliers and workforces as well as other DEI policies.

The retreat sparked pushback from employees, consumers, regulators and other influential groups who argued that companies should stand by the diversity policies that executives had attested were vital to their businesses. Now, after months of back-and-forth, some DEI critics believe victory is near, while companies remain vulnerable as they seek the right balance.

Dan Lennington, managing vice president and deputy counsel at the Wisconsin Institute for Law & Liberty, who has spent much of the past few years identifying employer DEI initiatives to challenge in court, said he’s running out of programs to target.

“My target list has gone pretty much to zero now,” Lennington said. “There’s no Amazon Black business accelerator, there’s no huge FedEx supplier diversity programs, no Microsoft or Apple Black founders programs. Those are all gone.”

David Glasgow, who is executive director of New York University’s Meltzer Center for Diversity, Inclusion, and Belonging and counsels Fortune 500 companies and other large firms, said employers are struggling to signal that they’re still committed to the principles underpinning DEI while evolving their programs.

“I’m hearing a lot from leaders who are really anxious about how this is all being perceived,” Glasgow said. “Now that the dust has settled, leaders are saying, ‘Oh, did we overcorrect?’ or ‘Maybe the way we communicated that wasn’t ideal. How do we undo the damage?’”

Niki Ramirez said she let her SHRM membership lapse in September after more than 18 years because of Starbuck’s planned appearance this week at the trade group’s Blueprint Conference in Louisville. The Phoenix-based HR professional said she has spoken with at least a half-dozen others who made similar decisions on the grounds that “those who want to dismantle DEI have no position that’s valuable in that conversation.”

“I’m all for respectful conversations and productive disagreement,” she said. “But putting together a panel of people including someone who said in the world of the public that DEI is poison, there’s no miscalculating that.”

Though SHRM acknowledged the social media blowback in a statement, it contends that there has been “no actual cancellations” tied to Starbuck, who has used his online megaphone to pressure multibillion-dollar brands such as Ford, Harley-Davidson and Tractor Supply Co. to roll back their DEI programs.

Starbuck said he and SHRM should not have to defend his involvement, noting that he has had “an outsize impact on workplace policies.”

“If HR wants to represent America’s workforce, then it has to understand all of America,” Starbuck said. “While I think it’s important to use my voice, I also think it’s important to engage with people who challenge my ideas.”

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Shifting standards

Employers have been reassessing their DEI programs since the Supreme Court struck down affirmative action in university admissions in June 2023. Dozens of lawsuits ensued, alleging that certain identity-based programs violated federal civil rights laws. Pressure to evolve intensified early this year, after President Donald Trump issued the first wave of executive orders targeting affirmative action and DEI initiatives long used by the public and private sectors to diversify their ranks. Companies scrambled to maintain government contracts and evade both legal and White House scrutiny. Large employers such as Google, Bank of America and Accenture axed workforce representation goals and supplier diversity programs, while others rebranded to move away from DEI terminology.

“Where historically employers have focused on lifting up groups that have been marginalized at the expense of the majority community,” Taylor said, now “we’ve got to focus on, ‘How do you make everyone feel included?’”

Lawsuits challenging employer DEI policies, including those filed by nonminorities, have been creeping up, especially after a June Supreme Court decision that struck down a federal standard that required members of groups that historically have not faced discrimination to meet a higher bar for unfair treatment in some regions.

But direct challenges to DEI policies by investors have been rejected at companies including Apple, Disney, Costco and Goldman Sachs.

Meanwhile, the legal landscape remains unsettled. The Justice Department has hit some companies with civil investigative demands for information on their DEI programs and has encouraged whistleblowers to sue on behalf of the government, but a long-promised list of the agency’s top targets has not been made public.

Enforcement by the Equal Employment Opportunity Commission, whose acting chair, Andrea Lucas, has said ending “illegal DEI” is a top priority, fell to its lowest level in decades this year amid a lack of the three-person quorum, said Christopher DeGroff, an employment lawyer with Seyfarth Shaw. But the appointment of a new commissioner this month cemented a Republican majority and restored the agency’s decision-making authority.

“It would be dangerous for employers to believe that the EEOC has taken its foot off the gas based off these fiscal year numbers,” he said, adding that it’s likely the agency is “keeping its powder dry” for 2026.

Some key corporate cases have continued: Court documents show Wells Fargo agreed to pay $85 million to settle a 2022 federal lawsuit alleging it conducted bogus interviews to meet its own requirement that certain roles have a diverse slate of candidates. Job applicants were brought in for roles that had already been filled, the lawsuit alleged, or roles for which they were clearly unqualified.

When asked for comment, the bank giant said in a written statement, “We are pleased to have reached a settlement.”

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A ‘fundamental misunderstanding’

Advocates for DEI programs argue that backtracking companies have erred – and may make themselves vulnerable to lawsuits from women, people of color and others who feel a company is less committed to equal opportunity.

Companies “failed to properly assess the larger risk pool,” which made them “reactive” in their adjustments as they sought to avoid “third-party lawsuits and potential degradation of reputation” because of attacks from conservative critics like Starbuck, said Stacey Abrams, a former Georgia state representative and candidate for governor and the founder of American Pride Rises, a nonprofit focused on advancing equal opportunity.

Now, “a lot of companies that were making feints toward abandonment are rethinking,” Abrams added.

Target has become a cautionary tale of the costs of pulling back too far, Abrams noted. The company was an early adopter of diversity efforts, starting its Office of Diversity and Inclusion in 2003, and portrayed programs geared toward workforce and supplier representation as a key part of its business practices.

While the chain has struggled with declining sales for years, retail experts say the fallout from a “Target fast” by civil rights leaders and frustrated consumers in response to its DEI changes has weighed on its performance.

In a May 21 earnings call, Target CEO Brian Cornell attributed declining traffic and revenue at Target to several “consecutive months of declining consumer confidence, uncertainty regarding the impact of potential tariffs and the reaction to the updates we shared on belonging in January.” “Belonging” references the company’s diversity and inclusion policies.

“There’s a fundamental misunderstanding that DEI was a branding technique as opposed to a values system. You can certainly change your branding, but you can’t change your values without it having a resounding effect,” Abrams said.

Yet the company is still contending with the fallout of its initial DEI efforts. It’s facing multiple lawsuits in Florida, including one led by the City of Riviera Beach Police Pension Fund, alleging that Target’s diversity policies and campaigns erased “tens of billions” in market value. Before the protest, its market capitalization was hovering around $61 billion. Today, it’s nearly $43 billion.

Target has signaled its commitment to DEI values despite the end of some programs. In a recent news release, it highlighted its partnership with the Russell Innovation Center for Entrepreneurs in Atlanta as part of its effort to “fuel a more inclusive economy.” The company “plans to continue our work together” with RICE, which supports Black-owned businesses, it confirmed to The Washington Post.

Some employers that shifted on DEI are finding themselves hog-tied by conflicting regulatory obligations. In May, for instance, the Federal Communications Commission green-lit Verizon’s $20 billion acquisition of Frontier Communications only after Verizon agreed to end its DEI programs.

But the condition flagged the state regulators who must approve the deal: The head of the California Public Utilities Commission questioned during a public hearing in June whether the prerequisite ran afoul of state laws and regulations for maintaining diversity in the utility’s workforce and supply chain. Within weeks, CPUC Commissioner John Reynolds accused Verizon of “replying evasively and deficiently” to requests for clarity about the changes in store for its DEI policy, regulatory filings show.

Verizon did not respond to a request for comment.

The Justice Department signed off on the deal in February, but approval expires within a year. Companies are calling on the CPUC to render a decision at its Dec. 18 meeting.

Worker and consumer advocacy groups have criticized the telecommunications giant. Jason Solomon, director of the National Institute for Workers’ Rights, notes that Verizon “promised the Trump Administration it would abandon equal opportunity and fired the team dedicated to making sure that hiring, compensation and promotions at the company were fair,” in a statement shared with The Post.

Verizon “didn’t need to go that far,” Solomon said.

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Focus on compliance

In July, the Justice Department released guidance outlining how it planned to apply federal antidiscrimination laws to such programs. That includes targeting employers who use “proxies for protected characteristics,” as opposed to “explicit consideration” of protected traits such as race and gender. Using “lived experience” or “cultural competence” as a work-around is impermissible.

Employers “must ensure that their programs and activities comply with federal law and do not discriminate on the basis of race, color, national origin, sex, religion, or other protected characteristics – no matter the program’s labels, objectives, or intentions,” the guidance states.

Jonathan Segal, an employment attorney with Duane Morris, said the Justice Department is probably taking a sterner stance than some courts would in assessing where policies violate the law.

The pendulum could hardly have swung farther since 2020, Segal noted, when the murder of George Floyd ignited protests nationwide and gave rise to broader conversations about systemic racism. Dozens of large companies pledged billions and adopted practices meant to create more diverse workforces, including recruiting and mentorship programs for historically marginalized groups, antibias training and employee resource groups.

The Trump administration is now determined to block such initiatives. “Either DEI will end on its own, or we will kill it,” Assistant Attorney General Harmeet K. Dhillon told the Senate Judiciary Committee on Civil Rights in July.

Companies have largely opened up programs that once were restricted by such characteristics as race, gender and sexuality to people of all backgrounds, Segal said. Identity-centered programs “made the assumption that because increasing diversity is important that that would necessarily be lawful,” he added. “But just because your goal may be laudable doesn’t mean that it’s lawful.”

Efforts to stay on the administration’s good side have put some employers at a disadvantage abroad, particularly where diversity efforts are still encouraged or required.

In April, London Mayor Sadiq Khan blocked Accenture from a nearly $66 million bid to overhaul the city’s transit marketing strategy because it “no longer met the criteria for diversity that we expect from all suppliers” after it retired some programs to keep good standing with the Trump administration, the Telegraph reported.

Accenture declined to comment.

Luke Hartig, who counsels Fortune 500 companies and other large employers on social and reputational issues as president of Gravity Research, said the number of companies shifting gears on DEI has slowed precipitously as they waited to see the administration’s approach to enforcement. Down the line, he expects to see the “pendulum” swing back, “if not toward the strong pro-DEI days of 2020 and 2021, then at least toward something a little more moderate.”

“I don’t see a lot more adjustments that companies can make,” Hartig said, pointing to shifts such as companies eliminating training programs geared toward tackling workplace bias, and the axing of supplier diversity and workforce representation goals.

Femily Howe, a gender inclusion adviser in Silicon Valley, said she felt a “pretty sudden shift” after the 2024 election. Topics that used to be easy to engage on, such as making the workplace more inclusive for women, have become undesirable. And she said a number of clients who’ve already paid her consultancy for the year are saying “our DEI got shut down, so we’re not sure how to use you anymore.”

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