Ditching DEI: Causes for concern and the case for inclusive policies

Introduction

From progress to pullbacks, U.S. President Donald Trump’s crackdown on Diversity, Equality & Inclusion programmes is being felt internationally. Ireland, however, has made steady progress on embedding DE&I policies into legislation relevant to Employment law and broader societal frameworks. This insight examines the risks posed by the curtailment of DE&I initiatives from an Irish perspective, and the importance of continuing to champion inclusive policies despite the shift in attitude of the Trump administration.

A top priority for President Trump upon his return to the Oval Office in January 2025 was an immediate retreat from Diversity, Equality and Inclusion (‘DEI’), which he implemented through three Executive Orders. An order published on 20 January 2025 had the objective of “Ending Radical and Wasteful Government DEI Programs and Preferencing” within the U.S. federal government. In a further order of the same date, President Trump sought to instruct the federal government to recognise only two sexes- male and female. The following day, on 21 January 2025, another order was signed, targeting “Illegal DEI Discrimination and Preferences” within the private sector. 

On 22 January 2025, President Trump issued a memorandum eliminating policies which he claimed “prioritised diversity, equity, and inclusion (DEI) over safety and efficiency” at the Federal Aviation Authority (FAA). President Trump claimed that the FAA recruited individuals with “severe intellectual disabilities”. When an air collision occurred over Washington DC just weeks later, the U.S. President sought to draw attention to the Federal Aviation Authority’s DEI policy, stating that the crash “could have been” caused be a ‘diversity hire’ within Air Traffic Control, although admitting there was no evidence yet to suggest that this was the case.

Further, on the 18^th of March 2025, President Trump signed a memorandum removing DEI from the US Foreign Service tenure and promotion criteria, citing a need to put ‘merit first’, and stating that “foreign policy positions should be filled by the most qualified individuals, not by discriminatory quotas or ideological requirements”. The White House press release stated: “President Trump is restoring fairness and accountability in federal hiring and terminating DEI across the federal government.”

Private Sector Impacts in the U.S. and Further Afield

U.S. giant corporations such as McDonalds, Walmart and Amazon have since either dropped or notably curtailed their DEI policies, in some cases leading to calls for boycotts. 

Several law firms who were investigated by the US Equal Employment Opportunity Commission pledged to provide pro bono legal services to the Trump Administration, on the condition that further claims made against the firms by the commission relating to diversity would be withdrawn. 

The Irish Climate

A recent survey conducted in Ireland by Expleo found that forty per-cent of large enterprises in Ireland have experienced employee resignations due to recent changes in their DEI policies. Forty-nine per-cent of large enterprises said they were increasing DEI commitment, however forty-two per-cent felt there is too much focus being placed on it.

All of this occurs against a backdrop of plentiful regulatory and statutory DEI safeguards which continue to be strengthened- for example, CSRD and the EU Pay Transparency Directive are due to be implemented into Irish law in the near future. (See also: our insight on reporting requirements under CSRD). CSRD will oblige employers to provide a new level of detail in their reporting on metrics such as disability, diversity, work life balance and health and safety in the workplace.

These obligations will be the latest in what is an existing suite of compliance obligations relating to DEI, which permeate all aspects of employment legislation in this jurisdiction:

• The Employment Equality Acts provide for the promotion of equality in the workplace through imposing liability on employers who are found to have discriminated against, bullied, victimised or harassed their employees. 

• Gender Pay Gap Reporting regime obligations are to be broadened this year, with Employers required to publish their report to an online portal which is readily accessible to all. Whilst the Gender Pay Gap Information Act 2021 does not currently provide for financial penalties for non-compliance, such non-compliance is actionable by complaint to the Workplace Relations Commission (WRC) under Section 85C of the Employment Equality Act 1998. 

• The Work Life Balance and Miscellaneous Provisions Act 2023 introduced some new employee rights relating to important issues like requesting carer’s leave, breastfeeding breaks and requesting remote/flexible working. Failure to uphold these rights are actionable by way of complaint to then WRC who can direct the Employer to comply with the provisions and/or award monetary compensation to the Employee. 

• The Protected Disclosures Act 2014 provides that where a worker makes a disclosure of information which in their reasonable belief tends to show one or more relevant wrongdoings, which came to the attention of the worker in a work-related context and is disclosed in the manner set out in the Act, this shall be a protected disclosure. Actions that constitute relevant wrongdoing under the Act include a failure to comply with any legal obligation. Penalisation is defined by the Act as any direct or indirect act or omission which occurs in a work-related context, is prompted by the making of a report and causes or may cause unjustified detriment to a worker, and includes acts such as discrimination, disadvantage or unfair treatment. It is a legal obligation under the Employment Equality Acts that employers shall not discriminate against employees or prospective employees.  If a worker were to make a protected disclosure regarding discrimination in the workplace or the recruitment process, the employer may be exposed to a degree of risk if that employee feels that they have been penalised for that disclosure. 

• Similarly, the The Sick Leave Act 2022 prohibits penalisation of an employee for availing of their statutory sick leave. Penalisation as defined in the Act includes loss of opportunity for promotion, coercion or intimidation and more. Some employees might avail of more sick leave than others and employers will need to ensure that they do not penalise any employees for availing of their right to paid statutory sick leave. 

• The Safety, Health and Welfare at Work Act 2005 imposes on employers an express duty of care towards employees. This Act also imposes an obligation on employers to provide systems or work which are, as far as reasonably practicable, safe and without risk to employee health, and to prevent improper conduct or behaviour which is likely to put the safety, health or welfare of employees at risk. Recent case law has extended the definition of ‘health’ for the purposes of this legislation to include mental health as well as physical health. In the case of Sweeney v Board of Management of Ballinteer Community School [2011] IEHC 131 the High Court linked the Employers’ duty of care under the 2005 Act to Section 15 of the Employment Equality Act 1998- imposing vicarious liability on the Employer for the bullying and harassment of the Plaintiff by another employee, as the acts occurred within the scope of employment. DEI policies may form an important part of safeguarding the health of employees in the workplace. Discrimination, bullying and harassment are all risk factors for health in the workplace, contributing to work-related stress and occupational illness. Ensuring that employees have equitable access to opportunities and feel included and valued in the workplace forms part of managing and preventing health risk in the work environment. Employers should ensure that they comply with their obligations to ensure, insofar as is reasonably practicable, the safety, health and welfare at work of their employees. DEI policies act as a useful tool for employers in this regard. 

• The Corporate Sustainability and Reporting Directive (EU) 2022/2464 sets out sustainability reporting for undertakings who are governed by the law of a Member State and who trade in the EU market. This was transposed into Irish law by S.I. No. 336/2024 - European Union (Corporate Sustainability Reporting) Regulations 2024. There are 12 reporting standard and one such standard, ESRS S1, requires companies to make disclosures relating to the companies’ own workforce. In the disclosure, undertakings are required to explain their approach that they take to manage any material or actual potential impacts on their own workforce in relation to certain factors. One of these factors is equal treatment and opportunities for all. Gender equality and equal pay for work of equal value, training and skills development, diversity, and other such matters are all encompassed within equal treatment and opportunities for all. 

Risks of Amending DEI Policies

Employment law experts have been assessing the potential risks and impacts of DEI curtailment in large enterprises in Ireland. Where policies are being amended to row back on DEI, this could require employee consent if the policy was structured contractually in nature. Accordingly, where consent was not obtained, breach of contract claims could arise. 

In everyday terms, changes to DEI policies could have knock-on effects such as absenteeism, the lodging of grievances, and culture change within companies. Experts warn of the potential impacts on employee mental health and wellbeing and even a potential increase in personal injuries claims arising from these impacts. 

And as outlined above, in many cases DEI considerations are underpinned in various aspects of Irish employment legislation, meaning that Employers are in many cases legally obliged to comply with DEI, not just for the benefit of their employees, but to avoid legal liability themselves. 

How to Proceed

It is a turbulent time for DEI, however, it is important to keep up to date with developments across the globe whilst also continuing to uphold Irish Employment and Equality law and practices. This will be a point for discussion between Irish Enterprises and their U.S. stakeholders. 

Concepts/practices which are contentious in the U.S., such as DEI quotas and ‘preferencing’ should be borne in mind. Irish enterprises may need to communicate to their U.S.- based stakeholders the extent to which these practices are utilised in their business practice, if at all. 

Irish Enterprises should continue to uphold policies which comply with your obligations under Irish equality and anti-discrimination law, including the WRC codes of practice. Additionally, it is important for Irish enterprises to stay up to date with upcoming employment law developments, (such as the upcoming Irish transposition of the EU Pay Transparency Directive) and inform their overseas stakeholders of their commitment to compliance with these new developments.