Legal Clarity for Inclusive Workplaces: What Employers Need to Know

As the national conversation around diversity, equity, and inclusion (DEI) continues to evolve, many organizations are left wondering: *What are we actually allowed to do now?* With recent Executive Orders raising questions—and in some cases, fears—about the legality of DEI programs, HR leaders are seeking answers. 
 
In a recent webinar hosted by me (Jenna Shellman, Archbright’s Director of IDEAL - Inclusion, Diversity, Equity, Accessibility, and Leadership) and Erin Jacobson, employment attorney and President of Workplace Law Group, participants gained legal clarity and reassurance.  

Here are the key takeaways every organization should know.

Most Organizations Are Staying the Course—Legally and Strategically 
 
Despite the political spotlight, a live poll conducted during the webinar revealed that 83% of participants have not adjusted or paused their diversity, equity, and inclusion commitments due to Executive Orders. This aligns with a 2025 Conference Board study showing that 61% of organizations are maintaining their efforts, even if they are reassessing or rebranding some components. 

Organizations should be aware that scaling back diversity, equity, and inclusion efforts can carry business risks. Companies like Target, which have reduced their DEI commitments, have experienced declines in revenue, stock value, and brand reputation. In contrast, Costco has maintained its DEI focus and avoided similar setbacks. For organizations choosing to stay the course, it is essential for leaders to communicate clearly about their DEI initiatives—what actions they are taking and why they matter.

“The legal foundation for inclusive workplace practices is still solid,” said Erin Jacobson. “Most employers are simply reviewing their language, not dismantling their programs.” 
 
What the Executive Orders Do and Don’t Do 
 
Many employers worry that federal orders have made diversity, equity, and inclusion programs illegal or risky. Erin clarified: 

• The orders mainly apply to federal contractors or federally funded programs. 

• Private employers, especially in states like Washington and Oregon, are still well within their rights to promote inclusive workplaces. 

• There is no broad ban on DEI training, policies, or goals. 

Instead of halting DEI programs, legal counsel recommends refining them: 

• Avoid language that could be interpreted as promoting hiring quotas. 

• Ensure trainings focus on behavior and culture rather than ideological mandates. 

Emphasize inclusivity, opportunity, and employee engagement—core business values. 
 
The Rise of Rebranding: A Legal and Strategic Move 
 
According to the same Conference Board study, 37% of organizations are rebranding their DEI efforts. Terms like: 

• “People and Culture” 

• “Employee Experience” 

• “Culture and Belonging” 

• “Opportunity, Access, and Leadership” 

• “Inclusive Excellence” 

…are replacing more politically loaded terms. This isn’t just semantics. Rebranding helps organizations continue meaningful work without drawing unnecessary legal or public scrutiny. 
 
“Rebranding can provide legal insulation while maintaining your organizational values,” Erin noted. 
 
How Employers Can Stay Confident and Compliant 

• Audit your trainings and materials. 

• Remove language that suggests preferential treatment based on protected classes. 

• Focus on inclusion, collaboration, and leadership development. 

• Consult legal counsel when updating policies. 

• Especially if you're a federal contractor or receive public funds. 

• Stay true to your mission. 

• Use employee feedback, legal input, and cultural alignment to guide your diversity, equity, and inclusion work—not headlines or fear. 

Final Thoughts 
 
While some organizations are hitting pause, most are not. Instead, they’re moving forward smarter—with more inclusive language, clearer legal boundaries, and renewed purpose. You don’t need to abandon your diversity, equity, and inclusion goals. You just need to evolve them. 
 
Need help auditing your policies or updating your diversity, equity, and inclusion language?Archbright is here to support your journey toward inclusive, compliant culture. 

Let us know how we can help!

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