Diverse-Slate Hiring, Supplier Selection, and Employee Resource Groups

As we covered in a prior client alert, the U.S. Department of Justice (“DOJ”) issued its “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination” on July 29, 2025. Although the memo is directed primarily at federal funding recipients, all employers subject to federal civil rights laws should carefully assess their DEI programs and policies in light of DOJ’s current approach. Below we provide three key areas from the memo, as well as an initial compliance checklist for employers.

Three Key Areas for all Employers

The DOJ memorandum is advisory, clarifying how existing federal civil rights laws – including Title VII, Title VI, Title IX, the Equal Protection Clause, and the False Claims Act – apply to diversity, equity, and inclusion (DEI) initiatives. While the guidance does not prohibit all diversity programs, it ties the lawfulness of DEI efforts to program context, design, and implementation.

Below are examples illustrating how the principles in the DOJ memo apply to three workplace programs:

Diverse-Slate Hiring Requirements: The DOJ memo cautions that hiring procedures mandating a minimum number of candidates from specific racial or other protected groups may be unlawful if they function as quotas. Instead, employers should train recruiters and hiring panels to assess candidate skills and experience, broadening talent pools without relying on protected characteristics.

Preferences for Women- or Minority-Owned Businesses: Supplier selection programs that prioritize contracts based on race or sex may violate federal law when those traits serve as the basis for selection. Employers should use business-related metrics – such as supplier performance, capacity, and certifications – to ensure compliance while supporting organizational goals.

Affinity Groups and Employee Resource Groups: Current DOJ and EEOC guidance explains that employee resource groups should not restrict membership based on protected traits. Such groups should be voluntary, open to all employees, and focus on professional development or support.

Compliance Checklist for Employers

To support ongoing compliance and consistency as enforcement evolves, employers should consider the following steps:

• Inventory Programs: Catalog all supplier programs, hiring policies, trainings, and employee resource groups to identify potential compliance issues.
• Document Decisions: Ensure hiring, promotion, and termination decisions are based on job-related qualifications and not protected characteristics.
• Update Supplier Processes: Revise supplier RFPs and selection criteria to emphasize business capabilities and certifications rather than ownership demographics.
• Train Key Teams: Keep HR and procurement staff up-to-date on legal requirements and best practices regarding civil rights law compliance.
• Engage Legal Counsel: Work with legal advisors to audit, revise, and implement programs and policies consistent with DOJ and federal agency guidance.

For a comprehensive audit or additional action items, please reach out to your Hunton legal counsel.

How Hunton’s Labor & Employment and Higher Education Teams Can Help

Federal contractors and funding recipients, including colleges and universities, face evolving compliance challenges in managing DEI programs and related employment practices. Hunton’s labor and employment team provides guidance to employers of all sizes on meeting their legal obligations under federal civil rights laws. Hunton’s higher education team advises colleges and universities on their obligations under federal and state laws. For advice and assistance, please contact your Hunton lawyer.