After the DEI Executive Order

February 14, 2025

What Are the Compliance Requirements for Private Employers?

In January 2025, President Trump issued the “Ending Illegal Discrimination and Restoring Merit-based Opportunity” executive order, which significantly impacts private employers, particularly those that implement diversity, equity, and inclusion (DEI) programs. This order aims to curtail employment practices that provide preferential treatment based on race, sex, or other protected characteristics, reinforcing a strict adherence to merit-based hiring and advancement.


For private employers, especially federal contractors and organizations with established DEI initiatives, understanding the legal implications of this order is essential to ensure compliance while mitigating potential liabilities.

 

Key Legal Implications for Private Employers

  • Revocation of affirmative-action mandates for federal contractors. The order revokes prior mandates, including Executive Order 11246, which required federal contractors to adopt affirmative-action programs to address historical disparities in hiring. The revocation effectively eliminates federal obligations for contractors to develop workforce diversity plans or set hiring goals based on demographic representation.
  • Regulatory scrutiny of employment practices. Federal agencies, particularly the Department of Justice (DOJ) and the Equal Employment Opportunity Commission (EEOC), have been directed to investigate employment policies that could be deemed discriminatory under the new legal framework. Employers must ensure that any DEI initiatives remain neutral and do not grant or deny opportunities based on race, gender, or other protected classifications.
  • Merit-based employment enforcement. The executive order underscores the importance of meritocracy, requiring employers to justify employment decisions strictly based on qualifications, experience, and performance. Organizations implementing hiring quotas, targeted recruitment efforts, or employee resource groups may need to re-evaluate these programs to avoid potential litigation risks.
  • Compliance audits and investigations. The attorney general is tasked with formulating an enforcement plan that includes identifying employers whose DEI initiatives may conflict with federal non-discrimination laws. Employers should anticipate increased oversight, potential audits, and legal challenges if their policies include race- or gender-conscious hiring, promotions, or training programs.

 

Compliance Strategies for Employers

Given the legal uncertainties surrounding this order, private employers must take proactive steps to avoid violations and potential legal repercussions.

  • Conduct an internal policy review. Employers should undertake a comprehensive audit of all DEI programs, training materials, hiring practices, and workplace policies. Any language or initiatives that suggest preferential treatment based on race, gender, or ethnicity should be reassessed to ensure alignment with the updated legal framework.
  • Emphasize equal opportunity and non-discrimination. To remain compliant, companies should reaffirm their commitment to equal opportunity without the use of race- or gender-based preferences. Employee training programs should be reviewed to ensure they focus on compliance with federal anti-discrimination laws rather than implicit bias or identity-based initiatives.
  • Monitor federal guidance and legal challenges. Since the implementation of this order may lead to litigation and policy revisions, employers should stay informed of further legal developments from the DOJ, EEOC, and other regulatory bodies. It is advisable to consult employment-law attorneys to navigate these changes effectively.
  • Prepare for increased scrutiny and potential investigations. Employers, particularly those with government contracts, should be prepared for potential audits and legal reviews. Documentation demonstrating that hiring and promotion decisions are based solely on qualifications and performance will be crucial in defending against any claims of discriminatory practices.

 

Conclusion

The repeal of affirmative-action mandates and the increased focus on merit-based employment and advancement signal a substantial shift in workplace compliance requirements for private employers. Organizations that have historically engaged in DEI initiatives must carefully reassess their programs to ensure they do not run afoul of federal regulations. While diversity efforts are not outright prohibited, any policies that confer advantages or disadvantages based on protected characteristics may expose employers to legal liability.


To mitigate risks, employers should prioritize objective hiring and promotion criteria, eliminate race- or gender-based preferences, and stay informed on regulatory updates. Consulting legal experts and conducting internal audits will be critical steps in ensuring compliance with this evolving legal landscape.


Krupa Kotecha is an attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm that is certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council.


Krupa Kotecha wrote this article which was featured in Businesswest. Click here to visit their website.

September 25, 2025
Starbucks is facing a new wave of litigation, in this instance over its workplace dress code. Employees in California, Colorado, and Illinois allege that the Company’s updated policy forced them to purchase clothing items out-of-pocket without reimbursement, raising questions about employer obligations under state expense reimbursement laws. The Lawsuits On September 17, 2025, employees in Illinois and Colorado filed class-action lawsuits, while workers in California submitted complaints to the State’s Labor and Workforce Development Agency. If the Agency declines to act, those workers intend to pursue their own civil claims. The lawsuits are backed by the union organizing Starbucks workers, and plaintiffs argue that requiring employees to buy specific uniform items without full reimbursement violates the states’ statutes. Under laws in California, Colorado, and Illinois, employers must cover necessary business expenses, which can include uniforms or clothing mandated by a dress code. What the Dress Code Requires The revised policy, implemented in May 2025, requires employees to wear a solid black shirt (short or long sleeves, but not sleeveless or midriff-bearing) underneath their signature green apron. Pants must be khaki, black, or denim, and shoes must be in muted tones such as black, gray, navy, brown, tan, or white. The policy also forbids “theatrical makeup” and visible face tattoos, prohibits nail polish and tongue piercings, and limits workers to one (1) facial piercing. In an effort to offset the change, Starbucks provided two shirts free of charge to each employee. Workers contend this was not enough, since multiple additional items were required to comply with the policy. Court documents show that some employees who failed to follow the dress code were subject to verbal warnings or sent home before starting their shifts. Worker Claims One plaintiff, Shay Mannik, a shift supervisor in Colorado, reported purchasing four black T-shirts, compliant shoes, and jeans to meet the dress code requirements. Despite these costs, Mannik claims they were never reimbursed. “It’s unfair that a billion-dollar company puts this burden on workers already struggling with unpredictable hours and understaffed stores,” Mannik stated through attorneys. Starbucks’ Response Starbucks defended the policy as a way to “deliver a more consistent coffeehouse experience to our customers and provide our partners with simpler and clearer dress code guidance.” The Company emphasized that it issued two free shirts to employees to prepare for the change. Key Considerations for Employers The Starbucks litigation underscores several important lessons for businesses:  Uniform Policies May Trigger Reimbursement Duties. Even when employers provide some clothing, state laws may still require reimbursement if employees must make additional purchases. State Laws Differ. California, Colorado, and Illinois all impose expense reimbursement obligations, but requirements vary, and enforcement can be aggressive. Here in Massachusetts, an employer does not need to pay for or reimburse an employee for general clothing, such as khakis, a black shirt, and black shoes, since these are ordinary items that can be worn outside of work. If the employer requires a specific style, brand, or logo (making the clothing a true uniform) then the employer must provide or reimburse for it and cover the cost of maintenance if special cleaning is needed. The only exception for ordinary clothing is if the cost would reduce the employee’s pay below minimum wage. Policy Rollouts Should Weigh Legal Risks. Employers introducing or revising appearance standards should carefully evaluate potential compliance costs, both financial and reputational. Takeaway The lawsuits against Starbucks will test the boundaries of state reimbursement laws and may influence how courts interpret employer obligations regarding dress codes. For companies, this case highlights the need to review policies proactively and ensure expense reimbursement practices comply with applicable state requirements. At The Royal Law Firm, we advise businesses on preventive compliance and represent employers when disputes arise. Our team’s focus on business defense ensures that policies are both operationally effective and legally sound. The Royal Law Firm LLP is a woman-owned, women-managed corporate law firm certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council. If your business has any questions on this topic or any other matters, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.
September 24, 2025
The Royal Law Firm is proud to announce that we have been ranked in the inaugural Chambers Spotlight Massachusetts Guide, which is a prestigious recognition from the internationally renowned legal research company Chambers and Partners! We are honored to be recognized for our exceptional expertise in Labor & Employment law. This ranking reflects our unwavering commitment to delivering top-tier legal counsel to businesses throughout the Commonwealth and beyond. Only 2% of attorneys are ranked by Chambers. The Royal Law Firm is the only Labor & Employment firm ranked in Springfield, MA. This award highlights small and mid-sized firms with a proven record of excellence and partner-level attention to client matters. Chambers Spotlight is a new guide designed to showcase the very best boutique and mid-sized firms across key U.S. legal markets, focusing on firms that combine regional insight, national impact, and client-focused service. About The Royal Law Firm The Royal Law Firm is a New England-based, women-owned law firm that exclusively represents businesses. Our attorneys are known for their aggressive litigation strategy, proactive employment law counseling, and commitment to understanding every client’s unique business model and goals. We are proud to be certified as a Women-Owned Business through state and national organizations including WBENC, NAMWOLF, and the Commonwealth of Massachusetts Supplier Diversity Office. The Royal Law Firm was founded by Amy Royal in 2008 with a mission to promote diversity in the legal field, serve businesses exclusively, and give back to her hometown community. As a seasoned trial lawyer with over 25 years of civil litigation experience representing companies, Amy specializes in employer-side employment law, business tort defense, labor law, and corporate transactions. She has successfully defended clients in individual and class action cases involving wage and hour issues, discrimination, harassment, FMLA, OSHA, ERISA, and more. Amy also advises on union matters, HR policies, workplace investigations, and affirmative action compliance. Her commercial litigation work spans business torts, unfair competition, and contract disputes, while her transactional practice includes drafting employment agreements, vendor contracts, and regulatory compliance strategies. Our recognition in the Chambers Spotlight Guide reflects the dedication and excellence of our entire team. Thank you to our clients, peers, and community for your continued trust and support. We look forward to continuing to serve you with excellence.