Understanding DOJ Guidance on Unlawful Discrimination Risks

On July 29, 2025, the US Department of Justice (DOJ), led by Attorney General Pam Bondi, released a memorandum clarifying what it considers unlawful discrimination under federal civil rights laws. As reported by McDermott Will & Schulte, the guidance, though directed primarily at recipients of federal funding, cautions that private employers subject to statutes such as Title VII should also review and align their practices.

The DOJ memorandum identifies several prohibited practices, including preferential treatment based on protected characteristics, using neutral criteria as proxies for unlawful discrimination, and segregation. Notably, diversity, equity, and inclusion (DEI) programs continue to be scrutinized, despite their stated intentions.

The DOJ warns that criteria like “lived experience” or “cultural competence” may constitute unlawful proxies if linked to protected characteristics. Training programs are also flagged, with the DOJ cautioning that content stereotyping groups—for example, statements on “toxic masculinity”—may create a hostile work environment.

Another significant point of conflict arises around sex discrimination. While the DOJ guidance urges “sex-based boundaries rooted in biological differences,” this position is at odds with the Supreme Court’s Bostock decision and state laws that explicitly protect sexual orientation and gender identity. Employers must carefully navigate these inconsistencies. 

Additionally, religious protections remain a focal point, with recent case law (Groff v. DeJoy) heightening the standard for denying accommodations, potentially increasing tension with LGBTQ+ protections.

Although the DOJ outlines nine best practices, courts may not defer to its interpretations following the Loper Bright ruling. For compliance teams, the key takeaway is that while the guidance does not alter existing law, it signals a heightened enforcement approach. Employers should reassess policies, training, and hiring criteria to mitigate legal risks across federal, state, and local frameworks.