Trump’s D.E.I. Order Causes ‘Chaos’ Among Corporate Leaders

More than 200 diversity officers, some from Fortune 500 companies and some from nonprofits, gathered last summer at N.Y.U. School of Law and on video to talk about the future of their diversity, equity and inclusion, or D.E.I., programs, which had become a legal and social target. Anxiously, they wondered how to protect themselves. Did they need to rethink internship programs for underrepresented workers, or drop certain diversity language from their websites?

Those concerns ratcheted up sharply this week. In his first days in office, with a series of sweeping moves, President Trump took aim at diversity efforts.

Mr. Trump ordered federal officials overseeing government D.E.I. efforts to be put on leave. His efforts did not stop with government employment. He revoked an executive order signed in 1965 that prohibited discriminatory hiring and employment practices for private government contractors. Perhaps most alarming for business leaders was the order’s focus on private corporations, whether they do business with the government or not. “We’re already seeing that this flurry of orders has created fear and confusion,” said David Glasgow, executive director of the Meltzer Center for Diversity, Inclusion and Belonging at N.Y.U. Law.

The executive order instructs the federal government to look at private sector D.E.I. initiatives: Each federal agency, it says, will identify “up to nine potential civil compliance investigations” that could include publicly traded corporations, nonprofits and large foundations, among others.

“That discrete number is a way of striking fear into organizations’ hearts,” said Kenji Yoshino, a constitutional lawyer at N.Y.U. who advises some Fortune 500 companies on D.E.I. “They just don’t want to be one of those nine. Until those nine are announced, it’s going to cause others to be risk-averse.”

Civil rights lawyers believe that the D.E.I. programs that are most legally vulnerable are those that give employment benefits, like jobs or promotions, to specific groups on the basis of their race. In 2023, a Supreme Court decision struck down race-conscious preferences in college admissions and was followed by a wave of lawsuits against company diversity efforts.

With the executive order, Mr. Yoshino said, “Trump is putting the muscle of the executive branch” behind the Supreme Court’s 2023 decision.

Plenty of companies, reading the writing on the wall, had begun to shift their approaches to D.E.I. before Mr. Trump took office. Meta told employees earlier this month it would end its D.E.I. work, including eliminating the chief diversity officer role and dropping diversity hiring goals. Tractor Supply, John Deere and Harley Davidson retreated on D.E.I. too. Amazon recently scaled back some of its diversity programming too, with a vice president, Candi Castleberry, writing in a memo to staff in December: “We’ve been winding down outdated programs and materials.”

Some companies, including Walmart, said they would stop sharing data with the Human Rights Campaign, a nonprofit that tracks corporate L.G.B.T.Q. policies.

Mr. Yoshino said he does not think sharing data with the Human Rights Campaign presents any legal risk, and believes companies rolling back this commitment are doing so to avoid social blowback. He views many other D.E.I. programs as legally safe too, including unconscious bias training and fellowships or retreats that are dedicated to advancing employees of color, but are open to anyone’s participation.

Nearly a dozen companies did not respond to requests for comment on the future of their D.E.I. programming, and some declined to comment citing fear of attracting attention to their work.

A managing partner of the law firm Jenner & Block, Ishan Bhabha, said since the executive order came down he has been getting “tons” of calls from clients who are worried about whether their D.E.I. programs are in compliance. He said it’s early days, and there could be legal challenges to the executive order or to administrative actions following it, but “an executive order like this gives a good idea of what this administration’s priorities are going to be.”

The White House did not respond to a request for comment, but the text of the executive order condemned “illegal D.E.I.” policies, saying they “deny, discredit, and undermine the traditional American values of hard work, excellence, and individual achievement in favor of an unlawful, corrosive, and pernicious identity-based spoils system.”

Some companies have stood firm in support of D.E.I., including Costco, Patagonia and Microsoft. For those chief diversity officers who are doubling down on their work, there’s a new sense of isolation, as well as whiplash. Less than five years ago, after the killing of George Floyd in May 2020, dozens of companies started announcing new commitments to fighting racial injustice. Walmart set up a Center for Racial Equity. The consulting firm Bain started a new D.E.I. practice. Glassdoor reported a 54 percent rise in job postings for D.E.I. roles in 2020, compared with levels before the pandemic.

Some diversity leaders have begun to brainstorm ways that companies can keep up their efforts without attracting legal scrutiny. Mr. Glasgow said he has begun to wonder if it’s time to drop the term “D.E.I.,” now that those three letters have become politically charged.

“If you had asked me a year ago I would have probably said don’t change it,” Mr. Glasgow said. “Over time I’ve become a little bit more convinced that the acronym may be unhelpful, because empty terms make easy targets.”

Those trying to salvage the goals underlying D.E.I. programs said they are trying to maintain optimism in spite of the chill in their field.

“The backlash has been against a very narrow band of activities,” said Bo Young Lee, who was formerly in charge of diversity at Uber and is now president of research and advisory at AnitaB.org, which supports women and nonbinary people in tech. That “narrow band,” she said, included data sharing with the Human Rights Campaign’s index, as well as offering internships for racial and L.G.B.T.Q. minorities. She views paid parental leave, for example, as a diversity policy that is now deeply embedded in corporate culture and safe from attack.

Denise Young, former worldwide chief of human resources at Apple, said corporate diversity leaders are facing a more complex environment for their work, but she believes that most will find ways of continuing to bring in diverse talent because they know it’s good for business.

“It’s the political environment we now live in, but it doesn’t change the needs of business,” Ms. Young said. “Talent comes in every shape of human existence.”