The new administration wasted no time doing its best to dismantle DEI last week by signing several  Executive Orders, including the one entitled Ending Illegal Discrimination and Restoring Merit Based Opportunity (the Order). And while we knew it was coming, it still hit hard. Some headlines  were misleading and required a closer look, but many accurately reflected the purposeful attempt  to roll back our civil rights. The onslaught of articles and varied analysis was relentless and the fear,  uncertainty and confusion was palpable. The dismantling of DEI within the federal government and  its agencies will have lasting impact. The unwinding of the Equal Employment Act of 1965 is disheartening.  

Loutel works primarily with private and public companies. The Order contains provisions that  caused particular angst for our clients. It is important to understand legally what that the Order  does – and does not – do so you are equipped with the tools to continue to invest in your people and  culture. 

The Order begins with the premise that the administration “supports federal civil-rights laws that  protect individual Americans from discrimination based on race, color, religion, sex, or national  origin.” That is Title VII. Then it purports to articulate that organizations have essentially been  discriminating — violating Title VII – through adoption and use of race and sex-based preferences  under the guise of DEI. This is referred to as “illegal DEI discrimination and preferences.” Then the  Order directs federal agencies to identify companies that should be the subject of civil compliance  investigations resulting from illegal DEI programs. All in the name of Title VII. 

But what exactly does “illegal DEI discrimination and preferences” mean? Title VII is the law that  prohibits discrimination. The administration asserts that DEI programs violate Title VII because they  discriminate and prefer people based on race and sex. If an organization’s DEI program was  discriminating and preferring people based on race and sex, then that organization was already  violating Title VII long before this Order. [For example, if a company had a mentor program for  women only and did not allow men to participate, such a program arguably violates Title VII]. 

The real issue here is not that DEI is illegal, but the Order demonstrates a lack of understanding  about DEI and the law. DEI is about ensuring all people have access and opportunity, and feel  valued, respected and included in the workplace. DEI is culture –the overall experience every employee has each day as a member of your organization. Culture reflects and is shaped by the  company’s values, as consistently embodied in behavior, actions, and interactions within the  workplace. DEI works to ensure that an organization’s culture is healthy and safe for everyone. In  other words, a culture free from discrimination and preferences. 

Some companies will cower and succumb to the fear of external pressures. The reality is that  internal risk of losses or potential lawsuits resulting from an unhealthy culture is far greater. For those organizations that understand the value in optimizing people and culture to drive  organizational success, here are three things to think about to insulate your organization from  potential legal risk:  

1. Conduct a comprehensive audit of policies, processes, programs, and systems to ensure  they align with your organization’s core values, are equitably applied to all employees, and 

remain responsive to the evolving legal landscape. This includes all talent and performance  management processes from acquisition to promotion. 

2. Use culture assessments to uncover employee insights and set metrics on communication,  trust, respect, fairness, and psychological safety, identifying risks and tracking outcomes.  This approach reduces legal exposure, improves retention, safety, service, and productivity,  and ensures measurable progress through relevant KPIs. 

3. Engage employees at all levels and implement broad culture solutions, such as mentorship  programs, robust communication strategies, leadership training, Culture Committees, and  innovative initiatives that foster engagement, inclusion, and psychological safety. 

Many organizations recognize the importance of this work in attracting and retaining both talent and  customers. If your organization is among them, Loutel’s legal and consulting team is here to guide  you through these challenges, helping you emerge stronger, more sustainable, competitive, and  successful.