DEI-washing

Verizon just made headlines — by eliminating its entire DEI program. In a memo to the FCC, the company announced sweeping changes:

NO DEI roles or departments

NO DEI references in training materials

NO demographic hiring goals

NO supplier diversity benchmarks

NO scholarships or internships targeted at underrepresented groups

NO diversity-focused recognition surveys.

NO mention of “diversity, equity, or inclusion” on its website or in recruiting materials

NO mention of “diversity, equity, or inclusion” in recruiting materials

And yet, despite this full-scale rollback, Verizon insists it remains "committed to … an inclusive culture."

Let me be very, very clear: You cannot claim to support inclusion while dismantling every tool you've built to achieve it. That's like closing your fire department while saying you're committed to fire safety.

Understanding the difference between legal and illegal DEI

If you want to understand the difference between legal and illegal DEI, here's what illegal looks like.

From The Hollywood Reporter: "CBS Studios has settled a lawsuit from a script coordinator for SEAL Team, who accused parent company Paramount of carrying illegal diversity quotas that discriminate against straight white men."

In the lawsuit, Brian Beneker alleged he was denied a job after Paramount implemented an "illegal policy of race and sex balancing" that prioritized hiring less qualified applicants who identified as minorities, LGBTQ+, or women.

Here's the legal reality — Quotas and preferences based on protected characteristics are unlawful. Title VII requires that employers hire the most qualified person for the job, regardless of race, sex, or any other protected trait.

But what if you want to improve representation of marginalized groups in your workplace, and do it legally?

Damage caps for discrimination claims don't work

$75,000. That’s what Morton Salt just paid to settle a lawsuit brought by the EEOC.

The agency alleged that Morton Salt discriminated against a Black employee because of his race and disability—and then retaliated against him for reporting it.

The allegations are disturbing:

• A white coworker allegedly used the n-word repeatedly, including calling employees "worthless [n-words]"—something Morton knew about.

• A Black employee reported the racist behavior.

• Instead of addressing or investigating the harassment, Morton reprimanded and ultimately fired the person who spoke up.

And what did it cost them? Seventy-five grand.

Documentation wins cases

Charles Carroll worked as a high-ranking exec at IDEMIA, the company behind TSA PreCheck. He ran a new initiative called "Trusted Fan" and was involved in renewing a major TSA contract.

He was also in his 60s and had recently been diagnosed with prostate cancer.

A year after disclosing his diagnosis, and after delivering the TSA contract renewal, he was fired. The company said it was due to performance issues: lack of leadership, mishandling the Trusted Fan rollout, and frustrations around the contract renewal process.  

The Sixth Circuit upheld summary judgment for the employer across the board, including on Carroll's disability and age discrimination. Why? One word: documentation.

Will SCOTUS heighten the evidentiary burden for plaintiffs in "reverse discrimination" cases?

Yesterday, the Supreme Court heard oral arguments in the case of Marlean Ames, a straight woman who sued the Department of Youth Services for sex discrimination under Title VII. She alleged that she was passed over for a promotion, then demoted, and that a gay man was subsequently promoted into her former position—all due to her sexual orientation (straight).

Ames claimed sex discrimination, but the 6th Circuit disagreed, ruling that she failed to establish the "'background circumstances' to support the suspicion that the defendant is that unusual employer who discriminates against the majority."

What are these "background circumstances"? According to the 6th Circuit, plaintiffs typically prove this with evidence that a member of the relevant minority group (here, gay individuals) made the employment decision at issue or with statistical evidence demonstrating a pattern of discrimination against the majority group. Ames lost because she provided neither.

And that's the issue SCOTUS will decide—does "discrimination" under Title VII mean discrimination regardless of majority or minority status, or does it take on a different meaning when the claim comes from a member of the majority class? Does a member of the majority class have to show something "more" to establish discrimination.

How to respond to the Justice Department's DEI hitlist

"The Department of Justice's Civil Rights Division will investigate, eliminate, and penalize illegal DEI and DEIA preferences, mandates, policies, programs, and activities in the private sector." 

 

That's the key sentence from a Feb. 5, 2025, memo that Attorney General Pam Bondi sent to all DOJ employees.

What does it mean? No one really knows. What we do know is that diversity, equity, inclusion, and accessibility are top priorities for this administration. The key question is how the administration defines "illegal."

Here's what we can infer so far:

An expensive lesson on pay-equity compliance

Mastercard has agreed to pay $26 million to settle allegations that it systematically underpaid thousands of female, Black, and Hispanic employees. The settlement resolves claims that the company underpaid 7,500 female, Black, and Hispanic workers compared to their male and white counterparts for performing the same or similar work.

As this case illustrates, allegations of systemic pay discrimination hit hard—financially and reputationally. As an employer, you can and should take steps to ensure fair pay practices. Not only because it's the right thing to do, but because it's critical to avoid costly lawsuits and foster a workplace of trust and respect.

Costco's masterclass on responding to DEI backlash

It's not easy to stand firm in today's polarized world, but Costco just showed everyone how it's done.

Recently, Costco's board rejected a shareholder proposal aimed at rolling back its DEI (diversity, equity, and inclusion) initiatives. Instead, the company doubled down on its commitment to making its workplaces inclusive and equitable.

In a statement, the retail giant wrote: "Our Board has considered this proposal and believes that our commitment to an enterprise rooted in respect and inclusion is appropriate and necessary. Our success has been built on service to our critical stakeholders: employees, members and suppliers. Our efforts around diversity, equity and inclusion follow our code of ethics."

Predictably, the backlash came fast, with calls for a boycott from some corners. Unlike many other companies, however, Costco didn't buckle under the pressure of a right-wing boycott. Instead, it stood its ground for what it believes in.

Why?

"Jon, why do you post all this stuff about awful things employers do? Aren't you a management-side lawyer and advocate?"

Here's why:

How many chances does an employee get under a "Last Chance Agreement"?

When is a Last Chance Agreement not a "last chance" agreement? When the 6th Circuit reviews it, apparently.

In Moore v. Coca Cola Bottling Co., the 6th Circuit held that an employee's last chance agreement, signed after the employee tested positive for marijuana, did not bar his subsequent discrimination lawsuit when terminated following yet another positive test.

The LCA stated, in relevant part, "Moore releases and forever discharges the Company … from any and all liability of any kind whatsoever, relating to his employment with the Company, arising prior to the date of this Agreement[.]"

What does Project 2025 mean for employers? Discrimination edition

I promise this post is not political … but we do have to talk about Project 2025.

Project 2025 is an initiative organized by the Heritage Foundation aimed at preparing for a conservative presidential administration after the November election. Its goal is to promote conservative policies and ensure that the right personnel are in place to implement those policies from day one of the administration. Some call it a utopian dream, others (🙋‍♂️) an authoritarian dystopian nightmare.

Regardless of where you fall in this philosophical political debate, Project 2025 contains a lot of information of interest to employers — specifically, what changes they could expect to labor and employment laws in a second Trump administration.

Discrimination liability for "agents" extends to AI vendors, says federal court

Can an HR software vendor be held liable for the alleged discriminatory hiring decisions of its customers? According to one federal court, the answer is yes.

Derek Mobley — a Black man over the age of 40 who suffers from anxiety and depression — alleges that he applied for 80-100 positions since 2018 that use Workday as a screening tool … and has been rejected every single time despite his qualifications.

Mobley claims that Workday's artificial intelligence unlawfully favors applicants outside of protected classes through its reliance on algorithms and inputs influenced by conscious and unconscious biases.

Last week, the federal judge hearing Mobley's claim rejected Workday's efforts to dismiss the lawsuit on the basis that it was not Mobley's "employer" and thus the workplace anti-discrimination laws do not cover its actions in this context.

Refusing to participate in mandatory training isn't "protected activity," it's insubordination

"I am not taking this training because it's a joke … making non-white colleagues all victims and turning white colleagues … into villains."

That's what Charles Vavra wrote in an email to the HR Director of Honeywell International, his now former employer, after she had reminded him of the company's requirement that he complete its unconscious bias training.

Over the next few weeks, the HR Director and other company officers tried to convince Vavra to complete the training. Vavra's response? "Whatever the consequences … I will accept." The consequences were Vavra's termination.

Vavra had a strange way of showing his acceptance of those consequences. He sued Honeywell for retaliation, claiming that his opposition to mandatory DEI training constituted protected activity under Title VII.

Supreme Court eases path for employees to sue employers for discriminatory job transfers

In a unanimous decision, the Supreme Court held that an employee alleging a discriminatory job transfer need not show the suffering of a "materially significant" disadvantage. Instead, the employee need only show "some injury respecting her employment terms or conditions."

The case involved a police sergeant forced to transfer out of her position in the department's intelligence division. The employer claimed that she could not establish a Title VII volitation because the transfer did not result in a diminution of her pay. 

“DEI” is not a 4-letter word

"DEI" is not a 4-letter word … no matter what some people want you to believe.

Companies such as Sherwin-Williams are scrapping their internal use of the words "Diversity," "Equity," and "Inclusion," and are replacing them with words such as "Belonging" and "Culture."

A DEI smackdown

It's a DEI heavyweight battle of epic proportions that played out of X over the past week.

In the blue corner, hailing from Big D, the owner of the Dallas Mavericks and serial entrepreneur Mark Cuban: 

I've never hired anyone based exclusively on race, gender, religion. I only ever hire the person that will put my business in the best position to succeed. And yes, race and gender can be part of the equation. I view diversity as a competitive advantage.

And in the red corner, hailing from our nation's capital, EEOC Commissioner Andrea Lucas: 

Unfortunately you’re dead wrong on black-letter Title VII law. As a general rule, race/sex can't even be a "motivating factor" — nor a plus factor, tie-breaker, or tipping point.… This isn't an opinion; reasonable minds can't disagree on this point. It's the plain text of Title VII.

DEI programs continue to be a lawsuit target

Major League Baseball. NASCAR. Starbucks. McDonald’s. Morgan Stanley, American, United and Southwest Airlines. America First Legal, a conservative group led by Stephen Miller, has targeted each of these for their “illegal” practices of hiring non-Whites and females.

In its most recent letter to the EEOC, urging it to investigate American Airlines, AFL cited the following as evidence of “unlawful employment practices” —

5th Circuit rejects the “ultimate employment decision” test for workplace discrimination claims

"Female employees are not given full weekends off and can only receive weekdays or partial weekends off."

Is this policy legal or illegal? 

Despite what SCOTUS said about collegiate affirmative action, corporate DEI efforts are still legal

Last week, a federal court judge dismissed a lawsuit filed by a conservative shareholder against Starbucks challenging the company's diversity, equity, and inclusion policies. He called the lawsuit "frivolous."

In 2020, Starbucks decided that it needed a greater representation of BIPOC (Black, Indigenous, People of Color) employees. As a result, it announced a policy that aimed to increase company-wide BIPOC representation to at least 30% in five years. Its efforts included implementing a leadership accelerator program for BIPOC employees, linking executive compensation to meeting DEI goals, and granting funds to community nonprofits.

National Center for Public Policy Research, which owns around $6,000 in Starbucks stock, sued, claiming those policies require the company to make race-based decisions in violation of state and federal civil rights laws. Explaining the lawsuit, the NCPPR said that setting "goals for the number of 'diverse'—meaning not-white—employees it hires … is outright racial discrimination."

The No Robot Bosses Act

"I, for one, welcome our robot overlords." 🙃

Consider this scenario. "You're a delivery driver and your employer's tracking algorithm determines you’re not performing up to its standards — and then sends you an email to let you know you've been fired without any warning or opportunity to speak to a human being." According to Senator Bob Casey, it is this example, along with others, that caused him to draft the the "No Robot Bosses Act."

If enacted, it would add protections for job applicants and employees related to automated decision systems and would require employers to disclose when and how these systems are being used.