Sneak Preview: DOJ Memo Defines Federal Stance on Unlawful Discrimination

(The following was excerpted from a recent Thompson Grants Compliance Expert article.) The Department of Justice (DOJ) recently issued a memorandum for all federal agencies and recipients of federal funding urging them to follow federal antidiscrimination law, emphasizing that the agency will consider programs supporting diversity, equity and inclusion (DEI) as discriminatory.

The July 29 memorandum clarifies how the federal government will apply antidiscrimination laws and provides nonbinding best practices “to assist entities in avoiding legal pitfalls and upholding equal opportunity for all. Entities that receive federal financial assistance or that are otherwise subject to federal antidiscrimination laws, including educational institutions, state and local governments, and public and private employers, should review this guidance carefully to ensure all programs comply with their legal obligations.”

The tone of the memorandum is similar to a “Follow the Law” letter issued by the Department of Transportation in April (see “Letter Demands DOT Recipients Follow Federal Laws,” June 2025) and a Dear Colleague letter issued by the Department of Education in February (see “ED Letter Affirms Stance on Racial Preferences,” April 2025).

The memorandum states that entities receiving federal funds, like all other entities subject to federal antidiscrimination laws, must ensure that their programs and activities comply with federal law and do not discriminate on the basis of race, color, national origin, sex, religion or other protected characteristics “no matter the program’s labels, objectives or intentions.”

Key points that DOJ addressed in the memorandum include:

• Prohibition on protected characteristics as criteria: Using race, sex or other protected characteristics for employment, program participation, resource allocation, or other similar activities, opportunities or benefits, is unlawful, except in rare cases where such discrimination satisfies the relevant level of judicial scrutiny.
• Importance of sex-separated intimate spaces and athletic competitions: Compelling employees to share intimate spaces with the opposite sex or allowing men to compete in women’s athletic competitions would typically be unlawful.
• Unlawful proxy discrimination: Facially neutral criteria (e.g., “cultural competence,” “lived experience,” geographic targeting) that function as proxies for protected characteristics violate federal law if designed or applied with the intention of advantaging or disadvantaging individuals based on protected characteristics.
• Scrutiny of third-party funding: Recipients of federal funds should ensure federal funds do not support third-party programs that discriminate.
• Protection against retaliation: Individuals who object to or refuse to participate in discriminatory programs, trainings or policies are protected from adverse actions like termination or exclusion based on that individual’s opposition to those practices.

(The full version of this story has now been made available to all for a limited time here.)
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