Walmart Inc. stunned civil-rights activists in November by saying it was pulling back on diversity, equity and inclusion efforts. The world’s largest retailer said it would stop using the term “DEI” in official communications, remove some LGBTQ products from its website and no longer consider race and gender to boost diversity when granting supplier contracts, among other changes.
Six months later, the company’s moves seem less like a reversal and more like modest changes. “Belonging” has replaced most mentions of DEI— a semantic transition that began two years ago— but jobs posted on the company website still call for applicants who will support its policy of “diversity, equity & inclusion.” A landing page boasts about goods from “LGBTQIA+ founded brands,” accompanied by the tagline “Pride always.” And Walmart offers similar pages for Hispanic-, Black- and women-owned brands, noting that some have been categorized in collaboration with external groups that offer diversity certifications.
Walmart is hardly alone. Many programs at large US companies that have fallen under the diversity, equity and inclusion banner haven’t disappeared, according to interviews with more than two dozen senior staffers from large US companies and corporate advisors. Even businesses that have made announcements purporting to curtail their DEI initiatives have, in most cases, made mostly minor adjustments, while promising investors and employees that nothing meaningful has changed.
A Walmart spokesman said the company is addressing outdated references in job postings. “Our goal is to foster a sense of belonging, create opportunities for all our associates, customers and suppliers, and be a Walmart for everyone. We want to make Walmart the best place to work and shop,” a Walmart spokesperson said.
Executive orders targeting what President Donald Trump has termed “illegal DEI” have rattled general counsels across the country’s largest companies— especially a directive that federal agencies compile lists of organizations to target for investigation by May 21. The administration argues that rather than reducing bias and encouraging managers to hire and promote based on merit, DEI policies have been “deeply demeaning,” and have increased hostility between different groups.
But the orders haven’t fundamentally changed employment law, no matter how sweeping they may sound, said Jonathan Segal, a partner at law firm Duane Morris. And in many cases, familiar DEI efforts remainbecause those programs weren’t discriminating against employees. “You can do almost everything you were doing before with modest changes,” Segal said.
Nor have the orders persuaded executives that all the programs that came to be known as DEI were a bad idea. Many admit that some elements of DEI went too far. However, by and large they continue to believe that efforts to recruit, promote and retain candidates from underrepresented groups are key to making sure they have the most capable and talented staff. They are loathe to eliminate policies that help workers feel welcomed and supported. They continue to fear discrimination lawsuits from workers of color, women, LGBTQ people and those with disabilities— not to mention the wrath of investors and the press.
With guidance from lawyers, many companies have focused on a handful of changes. Gone are specific targets for demographic representation across their workforces, though companies are still required to collect data on the race and gender of their employees. Some people who once had titles like “diversity officer” are now called something else and run newly renamed initiatives. Employee resource groups — affinity organizations that cater to a characteristic like race, gender, sexual orientation, disability status and more — face new scrutiny and limits on their spending, but most continue to exist. Health benefits for trans employees and employees’ trans family members have hardly budged.
Internship and mentorship programs developed to elevate traditionally marginalized groups mostly remain, with the new caveat that anyone can apply. Recruiting programs, especially at historically Black colleges and universities, haven’t changed. Molson Coors Beverage Co., Ford Motor Co., Deloitte LLP, McDonald’s Corp. and Boeing Co. are among those who’ve sought applicants in recent weeks through partnerships with the Thurgood Marshall College Fund, a non-profit group that helps some of the country’s largest companies orchestrate internship and scholarship programs for students at HBCUs, primarily Black institutions and historically Black community colleges.
In one example of how companies are trying to send one message to DEI critics and another to investors, last summer Lowe’s Cos. announced a rollback that would restructure its employee resource groups, curtail external sponsorships and limit participation in external workplace surveys. But in December, a top executive promised the scale of changes were limited: “These are the only changes that we have made,” Janice Dupré, executive vice president of human resources stressed at the company’s investor day, before touting the senior leadership team as “one of the most diverse in the Fortune 500.”
“Our commitment to diversity and inclusion is embedded in our values and core to who we are as a company,” a Lowe’s spokesperson said in a statement. “We’re proud of our accomplishments, and we will continue to strive to cultivate a workplace that reflects the customers and communities where we operate and where everyone feels welcomed, valued and respected.”
Subha Barry, once the chief diversity officer at Merrill Lynch, now runs Seramount, a company that provides workplace training and inclusive leadership plans for large companies. Because she stays away from more controversial discussions about social justice, she said she’s seen little impact on demand for her company’s services.
“There’s a return to a new sense of normalcy where companies are adapting, adjusting,” she said. “Ninety percent of our companies are saying they don’t see any major disruptions happening in the long term.”
DEI is the latest term used to describe corporate policies that developed in response to the Civil Rights Act. In the 1980s, as companies prepared for rising shares of women and people of color in the workforce, executives began developing programs to better recruit, develop and integrate talent. These efforts ultimately evolved into the myriad initiatives often called DEI.
While initially centered on race, the acronym came to also embody programs that would benefit a variety of minority groups, including women, people who identify as LGBTQ, those with disabilities and veterans. Such recruitment and training programs were slow to produce results, and often developed only after an investigation found evidence of rampant discrimination.
Then came the 2020 murder of George Floyd, an unarmed Black man killed by a White police officer in Minneapolis, setting off waves of protests about racial justice. Corporate executives responded by adopting sweeping, transformative language to spur their workforces into action, and setting ambitious goals for boosting diversity in their ranks. But just as today’s rhetoric about DEI rollback run into the reality of corporate inertia, the loud calls for boosting DEI after Floyd’s death often amounted to merely incremental changes. Many companies poured money into expanding DEI efforts based on programs they already had, hoping increased attention to race would help them transform their workforces.
Such efforts met resistance almost immediately, with critics arguing that diversity programs amounted to discrimination against White (and sometimes Asian) people. They argued that bias training blamed employees for the sins of their ancestors, amplifying rather than diminishing racial angst. The pushback gained steam with the Supreme Court’s decision in Students for Fair Admissions v. Harvard, a landmark case that overturned affirmative action in college admissions in 2023.
While not directly implicated in that ruling, corporate America quickly began to question whether its own programs — especially those open to people only on the basis of race or gender — might run afoul of the course set by the court. Meanwhile, Trump’s return to the presidency has elevated DEI’s most ardent critics. His administration has argued that “corporations and universities use DEI as an excuse for biased and unlawful employment practices and illegal admissions preferences.” He’s intensified the pressure on federal contractors, who must pledge that they’re not engaging in “illegal DEI,” while providing little detail on what exactly that is.
“President Trump’s executive order mandates recommendations to strengthen enforcement of federal civil rights laws against unlawful discrimination, including DEI initiatives, and he anticipates further actions to ensure equal opportunity for all Americans,” White House spokesperson Harrison Fields said in a statement.
Meanwhile, critics like influencer Robby Starbuck and activist group Alliance Defending Freedom have pushed companies to stamp out even elements of DEI that don’t violate the law, arguing that employers shouldn’t be making statements or instituting policies that express “woke” beliefs, especially about gender or race. Starbuck has said he intends to go after companies who pledged to abandon DEI but whose commitment was only “surface level.”
Companies “don’t want to end up on a list, don’t want to be a target,” said Craig Leen, a partner at law firm K&L Gates and the former director of the Office of Federal Contract Compliance Programs during Trump’s first term.
Trump has ordered each federal agency to identify up to nine large companies, associations and nonprofit groups that should be investigated over DEI policies. But while the administration’s signaled a new enforcement priority, the president’s actions haven’t meaningfully changed anti-discrimination law. “A lot of what companies are doing in the DEI area they’re still able to do,” Leen said, though he suggests they consider re-branding.
In response, many large employers have pulled back on any initiative that might inhabit a legal gray area. DEI critics have argued that numeric goals for workforce demographics, even when only aspirational, effectively amount to illegal quotas; such metrics were on the chopping block at almost half of companies who announced changes to their DEI plans, according to a Gravity Research study. Wells Fargo & Co. and BlackRock Inc. are among financial firms who said they’d no longer require hiring managers to interview a diverse slate of job candidates.
Segal, the employment law specialist, also tells clients to go a step further, revisiting the underlying messaging behind their DEI plans. For example, companies that say they want a workforce that “reflects the diversity of the community” might draw scrutiny, because it could be seen as suggesting a company employ a certain number of people from each demographic group. But seeking a workforce that “reflects the talent in our community” likely mitigates the risk. Surely all companies have a responsibility to shareholders to seek out the best talent, taking care to look for people with backgrounds that might historically have been overlooked.
“It sounds a little bit like semantics, but the words matter,” Segal said. He estimates that three quarters of firms he’s worked with “have made changes to their communications” about diversity initiatives to ensure that they can’t be interpreted as discriminatory, but by and large the underlying programs remain intact.
Companies are also saying less. The director of a nonprofit group focused on Latino entrepreneurship said it had scrapped a planned press release about financial backing from corporate philanthropy. The donor didn’t want publicity, even though they’d sought such recognition in the past. Similarly, a banker said his employer balked at adding its name to an event championing Latinos in tech, but still sponsored the event for its client-building potential.
In a survey of C-suite executives published in February, law firm Littler Mendelson PC found 55% were more concerned about the risk of lawsuits related to DEI after Trump’s inauguration than they were before. Even so, 49% of respondents said they were not considering any new or further rollbacks of their programs after Trump’s executive orders, while 27% said they were considering them only “to a small extent.”
In the short term, they’re simply desperate to avoid government scrutiny. Johnny Taylor, the CEO of the Society for Human Resource Management, said leaders of large public companies mostly want to maintain diversity and inclusion programming that keeps workers happy. Executives don’t want to find their companies’ names on a government list of “woke” companies, he said. But they’re also worried that top law firms who’ve struck deals with the Trump administration — like Paul Weiss Rifkind Wharton & Garrison and Latham & Watkins LLP — will fulfill their pledges to provide pro bono legal services by representing aggrieved former employees claiming reverse discrimination.
What Taylor hears from CEOs is a version of: “Tell us what we can do that will affirm our commitment to this work but is not going to get us sued and get us into a protracted legal battle,” he explained.
One way executives are solving that puzzle is by keeping battles quiet. A few companies, including Costco Wholesale Corp. and Apple Inc., have publicly defended their diversity efforts in the face of proposals from conservative groups to curtail those initiatives. But Deere & Co., McDonald’s and IBM — all companies that have made statements to employees or the public signaling retrenchment on DEI — have kept a much lower profile while asking shareholders to reject similar proposals.
The government’s next steps remain a crucial unknown for corporate America, and the uncertainty has left lawyers at top firms guessing — and their phone lines busy.
Employment “law used to be more about looking at the different court cases and giving your advice about what a court is likely to do,” said Leen, the K&L Gates lawyer and former government official. “When you have a very active administration, companies are more interested in what the administration might do than what a court might rule down the line.”
Photo: A protest at Harvard University in 2023. Photographer: Scott Eisen/Getty Images
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