Diversity & Inclusion

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Our 2026 Looking Ahead Report explores the trends, developments, and emerging risks shaping financial services in the year ahead, covering topics like agentic AI in fintech, corporate fraud prevention, cybersecurity, workforce strategies, a regional spotlight on the Middle East and much more. Here is an excerpt:

Global workforce strategies for the financial sector

As financial institutions recalibrate their workforce strategies for 2026 and beyond, they face a rapidly shifting regulatory terrain shaped by geopolitical tensions, technological disruption and evolving societal expectations. 2025 has seen a marked acceleration in legal reforms and policy shifts across jurisdictions, with four key themes emerging at the forefront of employment and compliance planning. These trends are not isolated – they are interconnected, and they demand a proactive, globally attuned approach to workforce governance.

The Shifting DEI Landscape

While institutional diversity, equity and inclusion (DEI) programs and practices have been subject to more legal scrutiny in the US this year, other regions—particularly EMEA and parts of Asia—are deepening commitments and expanding regulatory requirements. Major US-based financial institutions have scaled back public commitments to DEI, rebranding or removing references to diversity figures and programs in corporate filings, amid heightened political scrutiny under the current US administration. In contrast, many financial institutions across EMEA remain committed to robust DEI frameworks. For example, the UK’s financial regulators have proposed regulatory standards to embed diversity and inclusion into governance structures. And in South Africa, financial and insurance activities is a sector specifically identified under new affirmative action targets now in force. This divergence underscores the need for multinational financial institutions to carefully navigate DEI policy and goals with regional nuance, balancing local regulatory pressures with global values and workforce expectations.

Employers, including those in the financial sector, are under pressure (from both employees and government authorities) to increase transparency, particularly on workforce composition and compensation. In Brazil, for example, equal pay enforcement has intensified, with hundreds of companies inspected in the last year. Some of the significant changes include the US, where certain states, including California, require gender pay reporting, and shareholder activism is driving pay equity disclosures. In the EU, the Pay Transparency Directive requires member states to implement legislation by June 2026, with gender pay gap reporting starting in June 2027. Key requirements include: mandatory pay range disclosure; banning salary history questions; and employee rights to pay information with an increased role overall for worker representatives.Continue Reading What’s On the Radar for Financial Institutions in 2026?

Fast Track to 2026: A 75-Minute Must-Attend Webinar for In-House Counsel

The legal landscape impacting California employers is evolving at breakneck speed. As we race toward 2026, employers need to stay agile, informed, and ready to shift gears. This high-impact session will cover the most pressing workplace trends, risks, and regulatory changes ahead for California…

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

The implementation of EU Pay Transparency Directive will come into effect in 2026, requiring companies to identify “equal” or “equivalent” positions and ensure they are compensated equally, regardless of gender. This assessment can be particularly challenging for companies with a large workforce in different jurisdictions.

To support in this effort we have developed a specialized…

Tune into our annual Global Employment Law webinar series as we bring the world to you.

Our Global Employment Law Fastpass webinar series is here again! Every June, we offer four regionally-focused webinars to help you stay up-to-speed on the latest employment law developments around the world. From tariffs and economic uncertainty to the use…

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

On March 14, 2025, the Court of Appeals for the Fourth Circuit lifted the preliminary injunction blocking key provisions of President Trump’s executive orders related to diversity, equity, and inclusion (our summary of the DEI EOs is here). This decision temporarily reinstates the enforcement of Executive Orders 14151 and 14173, pending further appellate review.

Background

As discussed here, on February 21, a Maryland district court issued a nationwide preliminary injunction, citing concerns that the EOs were likely to violate the First and Fifth Amendments by chilling free speech and due process. The preliminary injunction had blocked the federal government from forcing contractors and grantees to certify that they aren’t promoting “illegal DEI.”

The government defendants immediately filed a notice of appeal with the Fourth Circuit, while also seeking a stay of the district court’s preliminary injunction. On March 3, the district court denied their request for a stay with Judge Abelson concluding that the potential harm of the orders outweighed the administration’s policy priorities.

The Fourth Circuit’s Panel Decision

The three-judge appellate panel unanimously stayed the injunction on March 14, with all three judges writing separate concurrences. There is an undercurrent in each opinion that the injunction came too early (for it’s unclear still what types of programs the government will try to eliminate) to determine if the government’s actions will implicate the First and Fifth Amendment concerns raised by plaintiffs. Also, the court takes the government defendant’s representations that the EOs are distinctly limited in scope and apply only to conduct that violates existing federal anti-discrimination law as true.Continue Reading Fourth Circuit Allows Trump Administration to Enforce DEI EOs (For Now)

** UPDATE ** On March 3, 2025, the federal judge in the Maryland lawsuit denied the Trump administration’s request to stay the preliminary injunction discussed below.
The judge ruled that the administration failed to demonstrate a likelihood of success on the merits and that the injunction was necessary to prevent potential violations of free speech
…

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

Special thanks to co-presenters Jose Larroque, Ma. Rosario Lombera, and Javiera Medina-Reza.

In a climate marked by high levels of insecurity, immigration issues and the anticipated renegotiation of the Trade Agreement between Mexico, the United States and Canada, proposed labor reforms under Mexico’s first female president, Claudia Sheinbaum Pardo, aim…