Emerging Litigation Podcast

Episode: What DEI Changes Mean for Employers | Featuring Patice Holland

Host: Tom Hagy
Guest: Patice Holland, Principal at Woods Rogers, Employment Litigator, JEDI Chair
Date: April 30, 2025

EPISODE OVERVIEW

Main Theme:
This episode explores the profound changes to Diversity, Equity, and Inclusion (DEI) practices in the wake of the Trump administration’s executive order targeting these programs. Legal expert Patice Holland discusses the current legal landscape, the difference between executive orders and federal law, the challenges for employers (public and private), and the real-world implications for businesses considering changes to DEI initiatives.

GUEST INTRODUCTION

• About Patice Holland:
  • Principal at Woods Rogers, co-chair of Government & Special Investigations Practice (02:47)
  • Employment litigator focusing on employer compliance (01:53)
  • Chair of the firm’s JEDI (Justice, Equity, Diversity, and Inclusion) Committee
  • Co-chair of Virginia Bar Association’s Diversity Committee, substitute judge, and member of Virginia Bar Board of Governors (02:47–03:35)
  • Former semi-professional singer (01:59)

KEY DISCUSSION POINTS & INSIGHTS

1. Background: The Trump Executive Order on DEI

• Nature of Order:
  • Eliminates use of “disparate impact” liability, mandates the end of DEI/DEIA programs in federal government, and asks agencies to focus on merit-based treatment. (04:22)
• Definition:
  • “Disparate impact” refers to policies that, while neutral on their face, disproportionately and negatively affect protected groups. (05:48)
  • DEIA adds “Accessibility” to DEI, focusing on access for people with disabilities. (06:55)
• Limits of Executive Orders:
  • “Executive orders…do not make law. They carry the force of federal law, but they don’t really make law.” — Patice Holland (05:48)
  • Orders set policy direction but employers must focus on actual legal compliance with statutes and regulations.

2. What Employers Need To Know

• Federal Law Still Governs:
  • Title VII of the Civil Rights Act (federal) and state laws like the Virginia Values Act still protect various groups even if DEI programs change. (08:24)
  • Employers must comply with Supreme Court precedents (e.g., Bostock decision protecting LGBTQ+ employees) regardless of order. (08:24)
• Review and Assessment:
  • Employers should audit all outward communications, internal policies, vision/mission statements, and job titles for DEI references. (09:37)
  • Cannot just “rename” DEI programs; superficial changes are insufficient. (10:58)

3. Understanding Title VII and State Law

• Title VII:
  • Prohibits discrimination in employment on basis of race, color, national origin, sex (incl. pregnancy, gender identity, and sexual orientation). (11:06)
• Diversity vs. Quotas:
  • “Diversity … has been politicized in so many ways…What has not changed and should not change is what the law is.” — PH (12:04)
  • Efforts to diversify should be about improving thought, background, and experience in the workplace, not quotas. (12:04–13:50)
• Virginia Values Act:
  • Broader than Title VII in some respects; includes protections for LGBTQ+, pregnancy, lactation, and covers discrimination based on hair traits (the “CROWN Act”). (14:46)

4. Current Environment: Social Reaction and Risk Assessment

• Backlash and Boycotts:
  • Companies are caught in a “damned if you do, damned if you don’t” moment—removing or retaining DEI policies can both provoke boycotts or social media campaigns. (07:44)
  • Some companies are superficially rolling back DEI without substantive changes. (09:37)
  • “Just changing the name of something is not enough…You have to really be intentional.” — PH (10:58)

5. Case Study: Target and Other Retailers (20:32)

• Target:
  • Rolled back DEI initiatives following the executive order, prompting a notable boycott that led to financial loss (~$12 billion). (22:18)
  • Target’s impact was larger due to its image as a champion of minority-owned businesses. (21:25)
  • “Target really had a target on its back because of their announcement... it affected the minority-based communities a little bit more.” — PH (22:17)
• Other Companies:
  • Walmart also rolled back DEI, but with less public outcry due to its brand history. (20:32)
  • Apple, Trader Joe’s, Costco, Ben & Jerry’s—publicly recommitted to DEI and saw positive results from consumers. (24:42–25:11)
  • “The companies that are standing their ground on [DEI] do seem to be doing better.” — Tom Hagy (25:11)

6. Key Legal Risks for Employers

• Federal Contractors:
  • Greater scrutiny if receiving federal funds. Must certify compliance with the new executive order to avoid liability under the False Claims Act. (29:38–30:54)
  • Private employers have more discretion but should balance business, legal, and reputational risks. (31:17)
• Checklist for Employers:
  • Are you a federal contractor or do you receive federal funds? (31:12)
  • Review DEI positions and consider reorganizing roles/titles. (31:17)
  • Audit external sites and internal handbooks for compliance (31:17–32:30)
  • Assess risk/benefit of policy changes to both external stakeholders and internal culture (33:36)
  • “At the end of the day, it’s a business decision. Target made a business decision, so did Costco … you have to be willing to take the consequences for your company.” — PH (33:45)

7. Impact on Employees & Corporate Culture

• Employee Morale:
  • Employers must consider how rollback of policies may affect LGBTQ+ staff, minority workers, or broader employee psychology. (34:42)
• Stakeholder Buy-In:
  • “Get a buy-in from your shareholders…Because at the end of the day, that’s really going to be important.” — PH (34:20)

NOTABLE QUOTES & MEMORABLE MOMENTS

• On the Limits of Executive Orders:
  “Executive orders…do not make law. They carry the force of federal law, but they don’t really make law.” — Patice Holland (05:48)
• On Compliance:
  “You want to make sure your policies are lawful. That’s the key.” — PH (06:10)
• On the Politicization of DEI:
  “Diversity…has been politicized in so many ways over the years. But what has not changed and should not change is…what the law is.” — PH (12:04)
• On Company Risk Assessment: “Do you scale back those programs…do nothing…wait and see…be more aggressive…? I will say that the executive orders, though, specifically say just changing the name is not enough.” — PH (09:37–10:58)
• On Target’s Situation: “Target really had a target on its back…these boycotts then pursued. … Target took a risk and that risk unfortunately ended up [with] decreased foot traffic for their company.” — PH (22:17–25:11)
• Advice for Employers: “Look at your employee handbook. Make sure you are complying with the applicable laws: Title VII, EEO statement…at the end of the day, this could end up in court.” — PH (33:36)

RECOMMENDED EMPLOYER ACTIONS [34:00+]

• Determine if you are a federal contractor or receive federal funds—if so, higher compliance burden
• Audit all internal policies, outward-facing websites, job descriptions, and communications
• Assess disparate impact of existing or proposed initiatives
• Secure buy-in from all stakeholders (internal and external) before making significant policy shifts
• Consider employee morale and psychological impact, and anticipate internal blowback
• Remember that business decisions about DEI now carry both legal and reputational consequences

TIMESTAMPS FOR IMPORTANT SEGMENTS

• Patice Holland’s Background: 02:47 – 03:35
• Discussion of Executive Order & Definition of Disparate Impact: 04:22 – 07:44
• Legal Protections, State Laws, Title VII Overview: 08:24 – 11:55
• DEI’s Politicization & Value Beyond Compliance: 12:00 – 13:50
• The Virginia Values Act & Expanding Protected Classes: 14:46 – 15:50
• Corporate Cases: Target, Walmart, Boycotts: 20:32 – 25:11
• Employer Compliance Checklist & Federal Contractors: 29:38 – 34:00
• Concluding Employer Advice & Cultural Impact: 34:00 – 35:36

Tone:
Clear, practical, direct, and nonpartisan, with occasional humor and humanizing anecdotes reflective of both Tom Hagy’s and Patice Holland’s approachable legal style.

For legal professionals, general counsel, HR managers, and business leaders, this episode is essential listening for understanding both the current and potential future state of DEI compliance under changing federal policies.