DEI 2025: Impact of New EEOC Rules, DEI Shareholder Proposals
Impact of New Regulations
Pro-DEI Shareholder Initiatives Fare Better Than Anti-DEI Causes
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New rules from the Equal Employment Opportunity Commission and the Justice Department primarily affect affinity groups, training, mentoring and sponsorship programs, according to a report by the law New York law firm Foley Hoag.In the meantime, while anti-DEI shareholder proposals are up, pro-DEI (diversity, equity, inclusion) proposals so far have already outdone anti-DEI proposals in terms of shareholder approval.
Impact of New Regulations
According to the Foley Hoag summary, it is now “unlawful for employers to limit membership in workplace affinity groups based on race, sex, religion, or national origin. Thus, it appears that the EEOC will find affinity groups to be a lawful as long as the employer gives all employees the opportunity to participate in the affinity group, regardless of their race, sex, or national origin.”
As concerns training programs, “The EEOC states that it is unlawful to separate workers into groups based on race, sex, religion, or national origin when administering DEI or any trainings, workplace programming, or other privileges of employment, even if the separate groups receive the same programming content or amount of employer resources. What’s more, depending on the facts, an employee may be able to plausibly allege that a diversity or other DEI-related training creates a hostile work environment by showing that the training was discriminatory in content, application, or context.”
When it comes to mentoring and sponsorship. It is now “unlawful to limit access to mentoring, sponsorship, or other workplace networks on the basis of race, sex, religion, or national origin. Accordingly, it appears that that the EEOC will not find mentoring or sponsorship networks unlawful if they are available to employees without regard to their race, sex, religion, or national origin.”
It remains “unlawful to make decisions about hiring, firing, promotions, demotions, compensation, or fringe benefits based, in whole or in part, on protected characteristics,” i.e., gender, age, race, disabilities, etc.
Pro-DEI Shareholder Initiatives Fare Better Than Anti-DEI Causes 
According to a recent report in the Harvard Law School Forum on Corporate Governance by David A. Bell , Partner and Co-Chair of Corporate Governance, and Wendy Grasso, Corporate Governance Counsel, at Fenwick & West LLP:
- Total anti-DEI proposals submitted for the 2025 proxy season have exceeded pro-DEI proposals.
- Total pro-DEI proposals for 2025 appear to be on pace to finish below the 2024 proxy season totals, based on early data.
- Total anti-DEI proposals for 2025 have already surpassed the 2024 proxy season totals.
- Pro-DEI proposals continue to fare better than anti-DEI proposals in terms of shareholder approval.
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