DEI Programs Face New Antitrust and Discrimination Scrutiny From Federal Agencies

Key Takeaways

• Federal agencies are increasing their enforcement attention on DEI programs. Recent messaging by the FTC and EEOC reflects focus on whether DEI initiatives result in differential treatment based on any protected characteristic.
• The FTC recently issued warning letters to 42 top law firms unveiling an innovative legal theory that the firms’ collaboration with a third-party DEI certification program to achieve shared DEI benchmarks could be a violation of federal antitrust law. However, the FTC has not initiated any enforcement action based on that theory and stopped short of saying any firm had actually violated the law.
• Employers are encouraged to review their DEI initiatives in light of recent federal guidance. Programs should be evaluated to ensure neutral application, independent decision-making, and alignment with longstanding antidiscrimination laws.

Over the past year, employers have faced a steady shift in federal enforcement messaging around diversity, equity, and inclusion (“DEI”) programs.

The focus on DEI programs began almost immediately upon President Trump taking office. On January 21, 2025, he signed an executive order titled, “Ending Illegal Discrimination and Restoring Merit Based Opportunity,” that not only directed the federal sector to discontinue diversity initiatives in awarding contracts or making hiring decisions, but also encouraged the private sector to halt DEI initiatives as well.

Following that lead, in early 2025, the U.S. Equal Employment Opportunity Commission (“EEOC”) and the U.S. Department of Justice (“DOJ”) jointly released guidance making clear that workplace initiatives — regardless of intent — must comply with existing antidiscrimination laws and protect all employees and applicants, including those who may not historically have been the focus of DEI efforts. In response, many employers revised program language and emphasized neutral criteria for hiring and promotion.

Recent developments suggest that this enforcement posture is hardening. Federal agencies are now taking more explicit positions that DEI programs may be unlawful if they result in differential treatment based on protected characteristics, and that simply reframing or relabeling program initiatives will not insulate employers from scrutiny.

FTC Flags DEI Certification Programs for Antitrust Concerns

On January 30, 2026, the Federal Trade Commission (“FTC”) issued warning letters to 42 law firms, explaining that participation in third-party diversity “certification” programs may violate the Sherman Antitrust Act of 1890 — the preeminent piece of federal antitrust legislation, which prohibits collusion to fix pricing and market conditions and the establishment of monopolies.

The FTC reasons that those programs raise concerns about anticompetitive collusion because they encourage firms to adopt similar hiring, promotion, or compensation practices. According to the FTC, when organizations rely on a common benchmark (e.g., a collective goal of ensuring that at least 30% of a given talent pool comes from underrepresented racial or other groups), that coordination may reduce independent decision-making and competition for talent, even if participation is voluntary and intended to advance DEI.

The letters signal that businesses, not just law firms, should exercise caution when engaging in external certifications, pledges, or programs that could be perceived as standardizing employment practices across companies. However, they stop short of saying that any organization has clearly violated the law.

The FTC’s theory is an interesting one. The warning letters do not allege that the 42 law firms that worked with the third-party diversity program agreed upon fixed compensation or a unified approach to mine minority talent. Rather, the allegation is that they engaged in “monthly knowledge-sharing calls” to “openly share their innovative ideas for overcoming our common challenges,” even though “we are all competing for a shrinking talent pool.” Based on these conversations, the FTC reminded the warning letter recipients that attempting to apply a 30% diversity hiring benchmark could harm competitive processes, “especially if they deprive labor markets of independent centers of decisionmaking or they create or abuse employers’ monopsony power.”

The FTC’s argument presents an innovative interpretation of the Sherman Act, considering the sheer number of law firms in the market and the broad nature of the conversations at issue. This theory, if pursued, would also seem amenable to defense under the First Amendment’s freedom of speech and freedom of association clauses. The FTC has not yet begun any enforcement action, nor have the recipient firms issued any response as of yet.

EEOC Clarifies Enforcement on DEI and National Origin

The FTC is not alone in strong messaging on DEI. In late December 2025, the EEOC took a notably more direct position on DEI programs, indicating that certain diversity initiatives may be deemed unlawful regardless of intent or program labeling if they favor or disadvantage employees based on race or other protected characteristics. In fact, EEOC chair Andrea Lucas has explicitly stated that the agency’s vision is to “attack” all forms of racial discrimination in the workplace, including those arising from DEI programs.¹

This messaging builds on the late November 2025 updates to the EEOC’s national origin guidance, which clarified that discrimination may include favoring foreign workers over U.S. employees, as well as the reverse. The EEOC specifically updated its national origin landing page and published a one-page technical assistance document to provide guidance on what national origin discrimination looks like in the workplace, noting that considerations such as customer preference, lower labor costs, or beliefs about productivity do not justify favoring foreign workers over U.S. workers.

Taken together, these developments stress that agency scrutiny now focuses squarely on the substance and effect of workplace programs, and all DEI and diversity-oriented initiatives must be carefully administered to comply with longstanding antidiscrimination laws.

Best Practices for Employers

Based on these developments, participation in third-party certification or pledges that set shared benchmarks across organizations should be approached with caution, and employers should carefully review their policies to ensure that their employment practices do not result in differential treatment based on protected characteristics. Employers should continue monitoring guidance from federal agencies to ensure that programs remain compliant with evolving regulatory priorities.

If you have any questions regarding the recent guidance or their effect on your business, please contact any member of the AGG Employment practice.

[1] David Hood-Nuño & Bianca Flowers, Exclusive: Corporate America Faces DEI Reckoning in 2026, EEOC Chair Says, Reuters (Dec. 19, 2025, 11:16 AM), https://www.reuters.com/sustainability/society-equity/corporate-america-faces-dei-reckoning-2026-eeoc-chair-says-2025-12-19/.