Recent executive actions have left many employers uncertain about what is permissible in Diversity, Equity, and Inclusion (DEI) programs. Our services fall outside the scope of the executive order’s intentions and remain a lawful and essential tool in inclusive recruitment.
About the Executive Orders
In 2024 and 2025, a series of Presidential Executive Orders raised concerns among employers about the legality of DEI-related initiatives. These orders lacked clarity but conveyed potential consequences for programs that were perceived to favor or disadvantage employees based on race, gender, or other protected characteristics.
On March 19, 2025, the U.S. Equal Employment Opportunity Commission and Department of Justice clarified that unlawful DEI activity includes:
- Race- or gender-based hiring or promotion quotas
- Discriminatory exclusion from mentorships, training, or advancement
- Retaliation against employees who oppose DEI practices
- Employee Resource Group (ERG) membership policies that limit participation based on identity
Why Inclusive Sourcing Matters
While employers must comply with anti-discrimination laws, the need for inclusive talent pipelines remains critical.
Data consistently shows that diversity drives better business outcomes. For instance, companies in the top quartile for board gender diversity are 27% more likely to financially outperform than those in the bottom quartile (McKinsey, 2023) and teams following an inclusive process make decisions 2x faster with half the meetings (Cloverpop, 2017).
Furthermore, the fact remains that rampant pay, hiring, and promotion disparities continue to exist in corporate America for certain underrepresented communities compared to the majority. Consider this: Black workers earn ~76 cents and Hispanic workers ~73 cents for every $1 earned by white workers (U.S. Census Bureau, 2023). Companies need to continue to find ways to be inclusive and ensure their workforce has the diversity needed to compete and attract an American customer base.
TalentAlly’s Compliance
Though the executive orders led some agencies to cancel DEI events, the White House publicly acknowledged Black History Month in February 2025, encouraging agencies to celebrate the contributions of Black Americans. This shows that not all DEI efforts are deemed unlawful and reinforces the need for a balanced, lawful approach.
Furthermore, consider the following:
- The Department of Treasury/IRS consulted with internal counsel and confirmed that their ongoing contract with TalentAlly is not in violation of the executive orders or EEOC/DOJ guidance.
- Multiple defense and federal contractors, after legal review, have affirmed that their use of TalentAlly services does not constitute unlawful DEI activity.
- TalentAlly does not require identity-based reporting and welcomes all candidates.
TalentAlly’s Position & Compliance
TalentAlly’s services remain fully compliant with EEOC and DOJ guidance and do not constitute unlawful DEI activity.
We Do Not:
- Require or promote hiring based on quotas (race, ethnicity, gender, etc.). Each employer should make a hiring decision based on merit.
- Restrict access to any service, network, or opportunity based on identity.
- Discriminate against majority populations or limit employer autonomy.
We Do:
- Help employers expand their outreach to include underrepresented communities.
- Support inclusive recruitment through broad, lawful talent sourcing.
- Ensure employers reach a diverse candidate pool, so final hiring decisions can still be based on merit and qualifications.
TalentAlly agrees that employers need to make hiring decision based on merit, but talent acquisition professionals should continue to advertise to and attract individuals of all backgrounds including those that are proven to be underrepresented in America’s workforce and have proven to have pay and promotion disparities.
Remember: effective DEI programs expand talent pools, ensuring equal opportunities for all without disadvantaging anyone. DEI in talent acquisition isn’t taking an even playing field between Applicant A and Applicant B and giving Applicant B an unfair advantage. It is promoting your open positions in a way that Applicant B hears about the open position in the first place and is encouraged to apply. It expands your opportunities to new applicants without giving anyone an unfair advantage.
A diverse array of employees with different backgrounds and experiences leads to a workforce with more creativity, ingenuity, and longevity, with generally stronger financial performance. Homogeneous talent pools can also be discriminatory and leave hiring managers with a very little sample size of qualified candidates.
Continue Building Inclusive Pipelines – Confidently and Legally
TalentAlly’s solutions allow you to meet your workforce goals without legal risk and with full compliance under current federal guidelines. If you have questions about how TalentAlly aligns with your internal policies or legal review process, we’re here to help.
- Want to review your current campaigns for compliance? Let’s set up a consultation with our team.
- Looking to reach broader, more qualified talent pools—without quotas? We can help you craft an inclusive outreach strategy tailored to your industry and region.
- Contact us at sales@talentally.com or your TalentAlly Account Manager to get started.
This information is for guidance and informational purposes only and does not constitute legal advice. It should not be relied upon as a substitute for consultation with a qualified legal professional. The user is solely responsible for any actions taken or not taken based on this information.
