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DOJ Issues Memorandum for Federal Funding Recipients Addressing “Unlawful Discrimination” Practices

By Kerry Burke, Aaron Lewis, Kayleigh Scalzo, Ashley Joyner Chavous, Alex Thomson & Stephanie King on August 3, 2025
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On July 29, 2025, Attorney General Pam Bondi issued a memorandum titled “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination.”  The memorandum purports to offer “guidance” and “Best Practices” to recipients of federal funding, including “non-binding suggestions to help entities comply with federal antidiscrimination laws and avoid legal pitfalls.”  The Attorney General’s memorandum follows Executive Order 14173 (“Ending Illegal Discrimination and Restoring Merit-Based Opportunity”), which calls for “ending illegal discrimination and preferences, including DEI” in the private sector, as well as two “technical assistance” documents titled “What You Should Know About DEI-Related Discrimination at Work” and “What To Do If You Experience Discrimination Related to DEI at Work” issued by the Equal Employment Opportunity Commission (“EEOC”).  We previously discussed EO 14173 here and the EEOC technical assistance here.

The stated aim of the Attorney General’s memorandum is to “clarif[y] the application of federal antidiscrimination laws to programs or initiatives that may involve discriminatory practices,” including those labeled as “DEI” programs.  Based on DOJ’s interpretation of broad aspects of the Equal Protection Clause of the Fourteenth Amendment and Title VI, Title VII, and Title IX of the Civil Rights Act of 1964, the memorandum identifies five categories of what it describes as “unlawful practices.”  These include (1) granting preferential treatment based on protected characteristics; (2) using facially-neutral “proxies” for protected characteristics; (3) separating or restricting access to programs, activities, or resources based on protected characteristics; (4) making employment, contracting, or program participation selection decisions based on protected characteristics; and (5) facilitating training programs that may promote discrimination or hostile environments.  The memorandum lists examples of potentially discriminatory practices and “best practices” to “assist entities in avoiding legal pitfalls and upholding equal protection for all.”  Although these activities largely mirror practices previously highlighted in the EEOC’s technical assistance, the majority of the examples describe hypothetical practices at educational institutions or “federally funded” organizations.

As explained in the memorandum itself, the guidance does not impose any “mandatory requirements” on entities, including those that receive federal funding.  While the guidance does not carry the force and effect of law or change existing law, it confirms with greater clarity certain activities related to DEI that DOJ, Congress, and other regulators may be inclined to investigate as unlawful under federal antidiscrimination law – as underscored by the recent Senate Judiciary Committee hearing on DEI practices.   

Key Takeaways

  • While the memorandum is styled as non-binding guidance, it reflects DOJ’s expansive position regarding the lawfulness of several common components of corporate DEI efforts.
  • Many of the practices that DOJ has characterized as potentially unlawful have not been clearly addressed in existing case law, underscoring the need for careful legal review.  Prudent companies should continue to ensure that DEI programs align with federal courts’ interpretations of antidiscrimination law. 
  • Recipients of federal funding should consider reviewing the guidance with counsel – particularly DOJ’s suggestion to incorporate nondiscrimination clauses in “grant agreements, contracts, or partnership arrangements.”

If you have any questions concerning the material discussed in this client alert, please contact the members of our employment, government contracts, congressional investigations, or white collar investigations and defense practices.

Photo of Kerry Burke Kerry Burke

Kerry Shannon Burke has been helping public and private companies structure and execute capital markets and finance transactions and navigate the pitfalls of public company reporting and governance for over 25 years. Kerry regularly represents issuers, ranging from development stage ventures to large…

Kerry Shannon Burke has been helping public and private companies structure and execute capital markets and finance transactions and navigate the pitfalls of public company reporting and governance for over 25 years. Kerry regularly represents issuers, ranging from development stage ventures to large public companies, as well as underwriters and other institutional investors, with private and public debt and equity financings. She also has assisted public and private companies in structuring and negotiating financing transactions, including term loan and revolving credit facilities and acquisition financing.

Kerry is a “go-to” advisor for large public companies and their boards on corporate governance, SEC reporting, ESG, cybersecurity disclosure, succession planning and compliance program design. Kerry also assists private companies on governance and IPO readiness matters, including with respect to board and committee independence, internal and disclosure controls and similar matters.

Kerry has particular expertise counseling clients on the Investment Advisers Act and assists investment advisers, including private equity funds, hedge funds and venture capital funds, on various status questions and ongoing compliance matters.

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Photo of Aaron Lewis Aaron Lewis

As a partner and co-chair of Covington’s White Collar Defense and Investigations practice group, Aaron Lewis represents businesses, boards of directors, and individuals in sensitive, high-stakes government investigations, internal investigations, and regulatory enforcement matters.

He has advised clients facing alleged criminal and civil…

As a partner and co-chair of Covington’s White Collar Defense and Investigations practice group, Aaron Lewis represents businesses, boards of directors, and individuals in sensitive, high-stakes government investigations, internal investigations, and regulatory enforcement matters.

He has advised clients facing alleged criminal and civil violations of the False Claims Act (FCA) and the Foreign Corrupt Practices Act (FCPA), as well as allegations of public corruption, export controls violations, obstruction of justice, and espionage. Aaron’s clients have included companies and independent board committees in the aerospace and defense, automotive, technology, entertainment, and retail industries and he routinely leads internal investigations of alleged misconduct or compliance failures, including several investigations involving allegations of ineffective internal controls and dysfunctional workplace cultures. He returned to Covington in 2015 after six years of service in the Department of Justice (DOJ), first as Counsel to Attorney General Eric Holder in Washington, and later as an Assistant United States Attorney in Los Angeles.

During his service in the Justice Department, Aaron advised the Attorney General on a range of enforcement issues, including intellectual property protections, national security matters and civil rights. He worked closely with senior officials at the White House, the Justice Department, and several law enforcement agencies, including the FBI and DHS. As an Assistant United States Attorney, most recently in the National Security Section, Aaron investigated and prosecuted cases involving thefts of trade secrets, export control violations, and computer network intrusions. He also prosecuted cases involving bank fraud, false statements, and mail fraud. An experienced trial and appellate lawyer, Aaron has tried several cases to verdict, and argued before the Ninth Circuit Court of Appeals.

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Photo of Kayleigh Scalzo Kayleigh Scalzo

Ranked by Chambers USA among government contracts practitioners, Kayleigh Scalzo represents government contractors in bid protests and other high-stakes litigation matters with the government and other private parties. She has litigated bid protests in a wide variety of forums, including the Government Accountability…

Ranked by Chambers USA among government contracts practitioners, Kayleigh Scalzo represents government contractors in bid protests and other high-stakes litigation matters with the government and other private parties. She has litigated bid protests in a wide variety of forums, including the Government Accountability Office, U.S. Court of Federal Claims, U.S. Court of Appeals for the Federal Circuit, FAA Office of Dispute Resolution for Acquisition, federal and state agencies, and state courts.

Kayleigh a co-chair of the American Bar Association Public Contract Law Section’s Bid Protest Committee. She is also a frequent speaker on bid protest issues.

Kayleigh maintains an active pro bono practice focused on immigration issues and gender rights.

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Photo of Ashley Joyner Chavous Ashley Joyner Chavous

Ashley Joyner Chavous’s practice focuses on large scale congressional investigations, criminal and civil enforcement matters, and internal corporate investigations.

Ashley represents financial institutions, public companies, and senior executives in investigations and enforcement actions brought by Congress, the Department of Justice, the Securities and…

Ashley Joyner Chavous’s practice focuses on large scale congressional investigations, criminal and civil enforcement matters, and internal corporate investigations.

Ashley represents financial institutions, public companies, and senior executives in investigations and enforcement actions brought by Congress, the Department of Justice, the Securities and Exchange Commission, and other U.S. regulators. She has conducted cross-border internal investigations in Asia, Europe, and South America. Her expertise involves advising clients on risk mitigation strategies when responding to letter requests and subpoenas and preparing CEOs and other senior executives for interviews, depositions, and congressional hearings. As a member of Covington’s Institutional Culture and Social Responsibility practice, Ashley also routinely handles highly sensitive reviews and investigations related to workplace misconduct and institutional culture, and civil rights and racial equity assessments.

Ashley has experience representing clients at all stages of litigation, from case inception through trial and appeal. She has argued motions before state and federal courts, and examined fact and expert witnesses at trial.

Previously, Ashley was a newspaper reporter covering crime and the courts.

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Photo of Alex Thomson Alex Thomson

Alex Thomson is an associate in the firm’s Washington, DC office and is a member of the White Collar Defense and Investigations and Institutional Culture and Social Responsibility Practice Groups. He has extensive experience conducting civil rights and racial equity assessments for leading…

Alex Thomson is an associate in the firm’s Washington, DC office and is a member of the White Collar Defense and Investigations and Institutional Culture and Social Responsibility Practice Groups. He has extensive experience conducting civil rights and racial equity assessments for leading corporations, investigating workplace cultural issues including reports of misconduct, harassment, and discrimination, and advising clients on the lawful design and implementation of diversity, equity, and inclusion processes and practices.

Alex also advises clients responding to high-profile investigations before the Department of Justice that entail significant legal and reputational risks. His practice focuses on white collar criminal defense and government and internal investigations.

Alex serves on the Board of Directors for the Joint Distribution Committee (JDC), the leading global Jewish humanitarian organization. Prior to joining Covington, Alex served as a law clerk to the U.S. House Committee on the Judiciary and was a fundraiser for the Jewish Federation of Boston. He also has served on national finance committees for two presidential campaigns.

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Photo of Stephanie King Stephanie King

Stephanie King is an associate in the firm’s Washington, DC office. She is a member of the Congressional Investigations and Election and Political Law Practice Groups where she advises clients facing or preparing for congressional inquiries which present legal and public relations risks. …

Stephanie King is an associate in the firm’s Washington, DC office. She is a member of the Congressional Investigations and Election and Political Law Practice Groups where she advises clients facing or preparing for congressional inquiries which present legal and public relations risks. She also provides guidance on lobbying, campaign finance, and pay-to-play regulations.

Prior to law school, Stephanie was the Associate Director of Content Strategy for a digital communications firm, where she oversaw the strategic drafting and production of campaign advertisements and online messaging.

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  • Posted in:
    Employment & Labor
  • Blog:
    Global Policy Watch
  • Organization:
    Covington & Burling LLP
  • Article: View Original Source

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