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State Attorneys General Issue Multistate Guidance on Diversity, Equity, Inclusion, and Accessibility

What You Need to Know

  • Key takeaway #1

    Sixteen state attorneys general take position that DEI and DEIA policies and practices are legally viable as they reduce litigation risk by proactively protecting against discriminatory conduct that violate the state and federal law. The AGs also state that DEI and DEIA practices are profitable for businesses and helps maintain thriving workplaces.

  • Key takeaway #2

    This multistate guidance stands in stark contrast to guidance issued by the federal government in recent weeks, which seeks to ban “illegal” DEI and DEIA in both the public and private sectors.

  • Key takeaway #3

    Private sector employers, particularly those who maintain contracts with the federal government and/or state governments, should review their policies and practices to assess their compliance with both state and federal anti-discrimination laws, and to identify heightened risk where those requirements may conflict as federal and state enforcers diverge on the viability of DEI and DEIA programs.

Client Alert | 3 min read | 02.20.25

On February 13, 2025, a coalition of sixteen state attorneys general issued a “Multi-State Guidance Concerning Diversity, Equity, Inclusion, and Accessibility Employment Initiatives” (the Guidance). Led by Attorney General Andrea Campbell of Massachusetts and Attorney General Kwame Raoul of Illinois, and joined by the Attorneys General of Arizona, California, Connecticut, Delaware, Hawaii, Maine, Maryland, Minnesota, Nevada, New Jersey, New York, Oregon, Rhode Island, and Vermont, the Guidance is a direct response to concerns from the private sector in the aftermath of President Trump’s recent Executive Order 14173, which  directed federal agencies “to encourage the private sector to end illegal discrimination and preferences, including DEI.” The Guidance clarifies “the state of the law for businesses, nonprofits, and other organizations operating” in their respective states.

The Guidance refutes the Executive Order’s conflation of “unlawful preferences in hiring and promotion with sound and lawful best practices for promoting diversity, equity, inclusion, and accessibility in the workforce” as “inaccurate and misleading.” The Guidance emphasizes the importance of DEI and DEIA in combatting workplace discrimination, explains the limits of the effects of federal executive actions on “longstanding laws, values, and practices,” and provides tips for best practices in DEI and DEIA policy implementation. For example, the Guidance makes clear that many state laws are more expansive than federal anti-discrimination laws and that affirmative policies and practices aimed at ensuring diverse perspectives in the workplace help prevent unlawful discrimination. Importantly, the Guidance points out that companies who do not proactively seek to prevent discrimination are exposed to “greater risk by making it more likely that discrimination will occur and continue over time.” It further notes that “the absence of policies and procedures may be a factor considered by enforcement authorities and courts” when adjudicating claims of discrimination.  

The state attorneys general take the position that, for businesses in their jurisdictions, “well-designed” DEI and DEIA initiatives are not considered impermissible discrimination under state law, but rather are required means of ensuring private employers “pay attention to the impact their practices have on different groups based on protected characteristics in order to avoid and limit liability for unlawful conduct.”  In a non-exhaustive list of best practices for the private sector to consider, the Guidance provides recommendations for what private sector employers could use to address three main areas affected by DEI and DEIA: (1) recruitment and hiring, (2) professional development and retention, and (3) assessment and integration.

For recruitment and hiring, the Guidance recommends prioritizing diversity of applicant backgrounds, the use of panel interviews to help eliminate bias, standardized criteria setting for evaluation of candidates and employees, and the use of hiring practices and protocols that ensure reasonable accommodations for equitable access.

With respect to professional development and retention, the Guidance similarly recommends the implementation of policies to ensure equitable access to development, training, and mentorship opportunities, and suggests establishing “Employee Resource Groups” to encourage the creation of inclusive and supportive spaces and conducting trainings on bias and inclusion.

Finally, for assessment and integration, the Guidance encourages monitoring programs to evaluate the success of DEI and DEIA policies, the creation of clear protocols for reporting discrimination and harassment, and suggests establishing work groups for research and collaboration on crafting strategies for even more inclusive policies and activities.

Because this state-level Guidance may conflict with federally-issued Executive Orders and other recommendations, we strongly encourage businesses to work with their attorneys to navigate this changing legal landscape and find ways of minimizing risk from competing state and federal expectations. To that end, Crowell is ready to advise and assist employers and others in evaluating their DEI and DEIA policies, programs, practices and initiatives to ensure compliance with state and federal law.

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Client Alert | 10 min read | 03.27.25

FinCEN Axes Corporate Transparency Act’s Reporting Obligations for U.S. Companies and U.S. Persons

Since December of last year, the status of the CTA has been in a state of perpetual flux, following a dizzying series of federal court rulings and FinCEN announcements. On February 28, 2025, we reported that FinCEN paused enforcement actions for entities required to report under the CTA’s Beneficial Ownership Information Reporting Rule (BOI Rule) until FinCEN issued an interim final rule providing new guidance regarding the BOI Rule’s requirements and associated deadlines. Then, on March 2, 2025, Treasury went a step further, indicating that it would altogether cease enforcement against U.S. citizens and domestic reporting companies for violations of the BOI Rule, explaining that it would instead issue proposed rulemaking to narrow the scope of the BOI Rule to “foreign reporting companies” only and set new reporting deadlines. ...