Caroline Burnett

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The diversity, equity, and inclusion (DEI) landscape in the United States has undergone major shifts this year, driven by new executive actions, heightened regulatory scrutiny, deepening cultural and political divisions and emerging litigation trends. For legal practitioners advising employers, the past nine months have been marked by uncertainty, risk recalibration, and strategic decision-making.

This blog will bring you up-to-date on material developments and outline key takeaways for federal contractors and private companies from U.S. Attorney General Pam Bondi’s July 29 memorandum titled “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination.”

Level Set: The Executive Orders and Federal Retrenchment

In January 2025, President Trump signed a series of executive orders (EOs) aimed at unlawful DEI programs, revoking race, ethnicity and gender-based affirmative action requirements for federal contractors, and directing public and private entities to end policies that constitute “illegal DEI discrimination.”

The EOs do not change existing federal discrimination laws, such as the bedrock prohibitions on discrimination in employment in Title VII of the Civil Rights Act of 1964 (Title VII). The EOs do not categorically ban any private employer DEI programs. Rather, the EOs direct federal agencies and deputize private citizens to root out (through investigations, enforcement actions, or False Claims Act (FCA) litigation) “illegal discrimination and preferences” and, for government agencies, to take particular actions. They reflect the policy view that many DEI policies violate federal anti-discrimination laws because these laws prohibit employment decisions based on certain demographic characteristics, while DEI may promote employment decisions on this basis. For more on the specific details of the EOs, read our blog, A Roadmap to Trump’s DEI Executive Orders for US Employers.

Catching Up: Legal Challenges to the Orders and Their Current Status

The EOs have faced multiple legal challenges, with various organizations and entities suing the Trump administration. In one of the most significant cases, a federal district court in Maryland issued a nationwide preliminary injunction blocking enforcement of three key provisions from Executive Orders 14151 and 14173 in February. Then, in March, the Fourth Circuit Court of Appeals stayed the injunction, allowing the Trump administration to enforce the executive orders while litigation continues. This week, oral arguments are being heard before a panel of Fourth Circuit judges.

As of September 22, 2025, several courts have issued contradictory rulings on the constitutionality of the EOs. The Supreme Court also determined that federal courts generally lack authority to issue nationwide injunctions, in its June 27, 2025 decision in the Trump v. CASA. Accordingly, the path for the Trump administration to enforce the EOs remains open. Federal agencies’ main enforcement mechanism under the EOs is terminating federal contracts and requiring federal contractors to certify that they do not operate any DEI programs that violate federal anti-discrimination law.

Following the Timeline: Breaking Down the Guidance from Federal Agencies and Recent Enforcement Activity

Over the last several months, federal agencies have been taking action to combat illegal DEI practices. Several agencies have sent companies requests to certify that they are not in violation of federal anti-discrimination law, and that this is material to the government’s funding decision, per the EO’s certification requirement.

Federal agencies, including the Equal Employment Opportunity Commission (EEOC) and the Federal Communications Commission (FCC), have also issued requests for information to certain companies (usually based on publicly available information) expressing concerns about their DEI practices. Requests have asked for information about various DEI-related topics, including hiring and promotion processes, diversity goals, application and selection criteria for fellowship programs, and participation in diversity internship programs.

In March, the FCC Chairman stated that the agency would use its “public interest” review of mergers and acquisitions to target companies with certain DEI programs. In response, several large telecommunications and media companies with pending mergers scaled back their DEI initiatives.

Also in March, the EEOC and the Department of Justice (DOJ) issued published a joint one-page technical assistance document entitled “What To Do If You Experience Discrimination Related to DEI at Work,” which provides examples of potential DEI-related discrimination under Title VII and directs employees who suspect they have experienced DEI-related discrimination to promptly notify the EEOC. Simultaneously, the EEOC also published a longer technical assistance document (“What You Should Know About DEI-Related Discrimination at Work”) with eleven questions and answers addressing the process for asserting a discrimination claim and the scope of protections under Title VII as they relate to DEI programs.

The joint guidance makes clear that any employment action motivated—in whole or in part—by an employee’s or applicant’s race, sex, or another protected characteristic, is unlawful discrimination, and the law does not distinguish between “reverse” discrimination against historically privileged groups and discrimination against minority or historically disadvantaged groups.[1] This guidance, while not binding, sets forth the agencies’ interpretation of the law, and as a result has influenced employer risk assessments and prompted internal reviews of hiring and promotion practices. (More here in our blog, EEOC and DOJ Issue Joint Guidance on DEI-Related Discrimination.)

In April, President Trump issued Executive Order 14281 directing federal agencies like the EEOC and the DOJ to deprioritize enforcement of anti-discrimination laws using the “disparate impact” theory of legal liability. Disparate impact is legal doctrine in US anti-discrimination law that allows plaintiffs to bring discrimination claims with respect to facially neutral practices that have a disproportionately adverse effect on members of protected groups—such as racial minorities or women—even if there is no intent to discriminate. It was recently reported that the EEOC plans to close by the end of month all pending worker charges based solely on unintentional discrimination claims and issue “right to sue” notices allowing plaintiffs to pursue those claims in court. This would mark another significant enforcement shift for the agency in recent months. The EEOC has already curtailed litigating and processing claims of discrimination based on transgender status under Title VII.

In May, the DOJ launched the Civil Rights Fraud Initiative, which uses the FCA to target entities that misrepresent compliance with federal anti-discrimination laws to receive federal funds. The FCA’s qui tam mechanism allows private citizens (relators) to sue on behalf of the federal government and share in any recovery. The DOJ has encouraged whistleblowers to come forward, and in recent weeks the DOJ has issued civil investigative demands (CIDs) to federal contractors and grantees seeking documents and information related to their DEI practices.

Most recently, on July 29, Attorney General Pam Bondi issued a memorandum to federal agencies entitled “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination” (DOJ Memo). The memo signals a substantial shift in how the DOJ intends to interpret and enforce federal anti-discrimination laws—particularly in relation to DEI initiatives. The memo itself does not have the force of law, instead it reflects how the DOJ interprets and intends to apply federal anti-discrimination law. While the memo is directed at educational institutions and private entities receiving federal funding, its examples of unlawful discrimination are relevant to all employers.Continue Reading An Employer’s Back-to-School Guide on Recent Developments in Workplace DEI

In 2025, multinational giants across industries are redefining the scale and scope of global workforce reductions—with some cutting tens of thousands of jobs at a time in particular divisions, shuttering certain factories worldwide, moving to different countries, or otherwise undertaking large-scale restructuring—and this trend is likely to press on. Indeed, the World Economic Forum’s Chief People Officers Outlook – September 2025 shows 42% expect continued turbulence in the year ahead. These sweeping moves, driven by AI disruption, economic recalibration, and strategic realignment, underscore the urgent need for legally sound, jurisdiction-sensitive approaches to reductions in force.  

Headcount reductions can be achieved using a variety of different mechanisms ranging from performance-based terminations, redundancy-based layoffs, location-based closures or other indirect strategies like attrition management, voluntary separation programs, and early retirement incentives. No matter the approach or structure for implementing a global reduction in headcount, executing a major business change while mitigating legal exposure requires a nuanced understanding of local employment laws, cultural expectations, justification requirements, local regulations impacting the treatment of equity awards, as well as potential immigration and visa implications. Missteps during the planning or execution stage can trigger material employment claims, unexpected and substantial financial and operational costs, regulatory fines, operational disruption and reputational damage.

Fortunately, there are tried and true methods to avoid most unintended effects and unwanted outcomes. Here we provide 10 practical planning tips for building your strategy when the company seeks to reduce its headcount through a global reduction in force (RIF).

The Economic Backdrop: A Mixed Outlook

Even with the uptick in layoffs, the global economy in 2025 is showing signs of resilience, with the International Monetary Fund projecting 3.0% growth this year and 3.1% in 2026. However, this modest optimism is tempered by persistent inflation, geopolitical tensions, and a surge in protectionist trade policies. According to the World Economic Forum’s Future of Jobs Report 2025, slower growth is expected to displace 1.6 million jobs globally by 2030, with automation and digital transformation accelerating the shift.

In this climate, in-house legal counsel must be proactive in managing employment risks associated with cost-cutting, restructuring, and reductions in force.

Strategic Planning Tips for Your Global RIF Playbook

1. Level-set with key business stakeholders—communicate the jurisdictional complexity of a RIF involving multiple jurisdictions.

Employment protections vary widely around the world. While at-will employment in the United States allows for relatively straightforward terminations (barring union involvement or statutory notice requirements), most jurisdictions around the world (including the majority of Europe, as well as Canada, Australia and Japan) provide mandatory protections against dismissal, which often include articulating a legally justified reason for the RIF as well as taking additional procedural steps before employees are impacted. When constructing plans for a global RIF, it’s helpful to be clear with business leaders who are not employment counsel that it’s essential to build alternate timelines and costs based on jurisdiction-specific requirements.

Along these lines, engaging with local counsel early to navigate procedural nuances is key. This helps mitigate the risk of unforeseen complications, such as delays due to mandatory consultation periods, unexpected severance obligations, or exposure to legal claims arising from non-compliance with jurisdiction-specific requirements. Timescales and costs for RIFs are likely to increase as a result of legislative changes in 2026, underscoring the importance of checking local requirements early on.

2. Pressure-test the business justification for the RIF.

The starting point for analyzing reductions-in-force is understanding the legal threshold for a justified reduction (e.g., in Japan, there must be a strong economic justification for redundancies). Only very few international jurisdictions (e.g., Singapore and Switzerland) do not require employers to show specific grounds or justification for termination.Continue Reading Cutting Costs Without Cutting Corners: 10 Practical Tips for Managing Legal Risk in Global Reductions in Force

Multinational employers operating in the Middle East and Africa face escalating geopolitical tension, challenging economic conditions and evolving social expectations. Our recent webinar covered how countries across MEA are responding to these pressures—and what employers need to know to stay compliant and competitive.

Click here for a link to the recording, and also a preview…

In a recent conversation with our colleagues across the Americas—in Argentina, Brazil, Canada, Colombia, Mexico and the United States—we examined the latest developments affecting multinational employers in the region. Please click here to tune in to the recording at your convenience. Read on for a preview of some of the key…

We recently recorded a lively discussion with several of our Baker McKenzie colleagues to discuss the major developments impacting multinational employers operating in Europe. For your convenience, click here for a link to the recording.

To preview some of the key changes our team highlighted, read on!

The socio-political climate across Europe is contributing to…

Earlier this month, we recorded an action-packed webinar with several of our Baker McKenzie colleagues to discuss the major developments impacting multinational employers operating in Asia. For your convenience, click here for a link to the recording.

And, for a tl;dr of sorts, read on!

Several jurisdictions in the Asia Pacific region have held key…

As AI adoption accelerates across workplaces, labor organizations around the world are beginning to take notice—and action. The current regulatory focus in the US centers on state-specific laws like those in California, Illinois, Colorado and New York City, but the labor implications of AI are quickly becoming a front-line issue for unions, potentially signaling a new wave of collective bargaining considerations. Similarly, in Europe the deployment of certain AI tools within the organization may trigger information, consultation, and—in some European countries—negotiation obligations. AI tools may only be introduced once the process is completed.

This marks an important inflection point for employers: engaging with employee representatives on AI strategy early can help anticipate employee concerns and reduce friction as new technologies are adopted. Here, we explore how AI is emerging as a key topic in labor relations in the US and Europe and offer practical guidance for employers navigating the evolving intersection of AI, employment law, and collective engagement.

Efforts in the US to Regulate AI’s Impact on Workers

There is no specific US federal law regulating AI in the workplace. An emerging patchwork of state and local legislation (e.g. in Colorado, Illinois and New York City) address the potential for bias and discrimination in AI-based tools—but do not focus on preventing displacement of employees. In March, New York became the first state to require businesses to disclose AI-related mass layoffs, indicating a growing expectation that employers are transparent about AI’s impact on workers.[1]

Some unions have begun negotiating their own safeguards to address growing concerns about the impact that AI may have on union jobs. For example, in 2023, the Las Vegas Culinary Workers negotiated a collective bargaining agreement with major casinos requiring that the union be provided advance notice, and the opportunity to bargain over, AI implementation. The CBA also provides workers displaced by AI with severance pay, continued benefits, and recall rights.

Similarly, in 2023 both the Writers Guild of America (WGA) and Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) negotiated agreements with the Alliance of Motion Picture and Television Producers (AMPTP) that include safeguards against AI reducing or replacing writers and actors. WGA’s contract requires studios to meet semi-annually with the union to discuss current and future uses of generative AI—giving writers a formal channel to influence how AI is deployed in their industry. The SAG-AFTRA contract requires consent and compensation for use of digital replicas powered by AI.Continue Reading Navigating Labor’s Response to AI: Proactive Strategies for Multinational Employers Across the Atlantic

As discussed in our blog here, President Trump’s series of executive orders aimed at eradicating “illegal” diversity, equity and inclusion policies and programs across the federal government and in the private sector did not define the term “illegal discrimination.” On March 19, the Equal Employment Opportunity Commission and the Department of Justice released guidance addressing this and outlining how DEI practices may be unlawful under Title VII of the Civil Rights Act of 1964 if they involve an employer or other covered entity taking an employment action motivated—in whole or in part—by an employee’s or applicant’s race, sex, or another protected characteristic.

Together, the EEOC and DOJ issued a joint one-page technical assistance document entitled “What To Do If You Experience Discrimination Related to DEI at Work,” providing examples of “DEI-related discrimination” under Title VII and directing employees who “suspect [they] have experienced DEI-related discrimination” to “contact the EEOC promptly.” 

The EEOC simultaneously released more detailed guidance entitled “What You Should Know About DEI-Related Discrimination at Work,” which includes eleven questions and answers addressing the process for asserting a discrimination claim and the scope of protections under Title VII as they relate to DEI practices.Continue Reading EEOC and DOJ Issue Joint Guidance on DEI-Related Discrimination

In the first two days of his presidency, President Trump signed a series of executive orders aimed at dismantling diversity programs across the federal government, revoking longstanding DEI and affirmative action requirements for federal contractors, and directing public and private entities to end policies that constitute “illegal DEI discrimination.”

Suffice it to say the orders have left federal contractors, corporations, nonprofits, and other employers in the private sector grappling with what to do next. While the EOs reverberations will be felt for some time and the DEI journey for federal agencies and the private sector is likely to be a circuitous one as challenges are raised in the courts, before Congress and in the court of public opinion, employers do need to gain some traction and start the trip. In this article, we present a roadmap to consider as employers work through the impacts of the EOs on their organizations.

At the starting line: what the EOs do and don’t do

Executive orders are a powerful tool through which the President issues formal directions to the executive branch, agencies and officials on how to carry out the work of the federal government. Historically, EOs mostly addressed administrative matters, but some sought to drive substantial policy changes. While congressional approval is not required for an EO to be effective, judicial review is commonplace and also, EOs can be reversed by later administrations.

President Trump’s EOs addressing DEI do not change existing discrimination statutes, such as the bedrock prohibitions on discrimination in employment in Title VII of the Civil Rights Act of 1964. The orders do not ban or prohibit any or all private employer DEI programs. Rather, the orders direct federal agencies and deputized private citizens to root out (through investigations, enforcement actions, or False Claims Act litigation) “illegal discrimination and preferences” and, for government agencies, to take particular actions.

Similar to the situation following the US Supreme Court SFFA decision in June 2023, if your DEI programs were lawful before Trump’s inauguration – they still are. What is “illegal” under federal law today is the same as it was before Trump’s presidency. But what’s clearly different is the ferocity of the federal government’s intent and resources dedicated to scrutinizing alleged race- or sex-based preferences in the workplace, and the resulting level of scrutiny applied to DEI programs.Continue Reading A Roadmap to Trump’s DEI Executive Orders for US Employers