By Andrew Goudsward

WASHINGTON (Reuters) – President-elect Donald Trump is set to challenge policies aimed at boosting diversity at companies and universities when he takes office next month, throwing the weight of the U.S. government behind growing conservative opposition to such practices.

The Justice Department and other federal agencies are likely to start investigations and bring lawsuits over diversity, equity and inclusion policies as they argue that many of those practices violate anti-discrimination laws.

> "DEI is unlawful discrimination," said Mike Davis, the founder of the Article III Project, a conservative advocacy group, who has advised Trump on legal issues. "It's illegal for the government to do it. It's illegal for universities to do it. And it's illegal for companies to do it."

The plans would turn the power of the Justice Department's Civil Rights Division—created in 1957 to enforce laws aimed at stopping discrimination against Black people and other marginalized communities—against policies designed to benefit those groups.

Trump signaled his intent late on Monday when he tapped lawyer Harmeet Dhillon as his pick to oversee the division as an assistant attorney general, saying that her career highlights included "suing corporations who use woke policies to discriminate against their workers."

Proponents of DEI policies say they are needed to address longstanding racial inequities in U.S. society, while opponents argue that many of the policies are exclusionary and focus on race and gender at the expense of individual merit.

Title VI of the 1964 Civil Rights Act, which forbids racial discrimination in programs that receive federal funds, could empower the Justice Department to challenge university admissions practices and racial equity programs in healthcare.

> "The argument is going to be to the extent that there's a consideration of race in any context by any entity that receives federal funds, that's a problem under Title VI," said Danielle Conley, the head of the anti-discrimination practice at law firm Latham & Watkins.

UNIVERSITIES IN FOCUS

Trump vowed in a campaign video to direct the Justice Department to pursue civil rights investigations into universities, saying they had been captured by the "radical left."

> "We are going to get this anti-American insanity out of our institutions once and for all," Trump said in the video, posted in July.

The Trump transition team did not respond to a request for comment.

Legal challenges could include claims that universities are not following the U.S. Supreme Court’s 2023 ruling barring consideration of race in college admissions. The Justice Department under Democratic President Joe Biden has defended an exemption allowing U.S. military academies to continue using affirmative action policies, a stance Trump could reverse.

During Trump’s first term, the Justice Department sued Yale University alleging that its admissions practices discriminated against Asian American and white applicants. The lawsuit was later dropped under the Biden administration.

A BROADER CAMPAIGN

Even in situations where the Justice Department does not have direct enforcement authority, the government could still weigh in on existing cases to argue that its interpretation of civil rights laws aligns with others challenging DEI policies.

America First Legal, a conservative group founded by Trump adviser Stephen Miller, has brought 15 lawsuits since 2022 targeting major companies like Facebook and Instagram owner Meta Platforms (NASDAQ:META) and Amazon.com (NASDAQ:AMZN) over their diversity efforts.

Seven of those cases, including the complaints against Meta and Amazon, have been dismissed after judges found that the person or group suing did not suffer harm that would allow them to sue. America First Legal has appealed some of those decisions.

America First Legal did not respond to requests for comment.

'BETRAYAL OF THE MISSION'

The America First Legal cases are part of a larger effort to pressure companies to scrap practices aimed at boosting racial and ethnic representation in the workplace.

Many of their legal challenges were brought on behalf of white men using laws passed during the post-Civil War Reconstruction era and the civil rights movement of the 1950s and 60s designed to support Black Americans.

> "It would be a betrayal of the mission of the Civil Rights Division to turn it into a legal force that protects primarily the interests of white men," said Thomas Healy, a Seton Hall University law professor who has written about civil rights issues.

DEI opponents note that federal anti-discrimination laws are race neutral and generally apply to all forms of exclusion based on race or gender.

Civil rights advocates fear that even the threat of government scrutiny will cause companies to back away from prior commitments on diversity.

> "The risk I see is that employers may be worried about getting sued and roll back their programs," said Amalea Smirniotopoulos, a senior policy counsel at the NAACP Legal Defense Fund. "At the heart of these attacks is fundamentally an attempt to hoard opportunity for a limited group of people."

Walmart (NYSE:WMT) in late November became the latest major U.S. corporation to scale back its DEI efforts, following JPMorgan Chase (NYSE:JPM) and Starbucks (NASDAQ:SBUX).

About half of the American public believes that federal and state governments and powerful U.S. institutions need to do more to address inequities caused by structural racism, according to an October Reuters/Ipsos poll. One in three disagreed with the idea, the poll found.

Anti-discrimination lawyers said many DEI policies may be able to withstand legal scrutiny if they're focused on measures that do not involve explicit consideration of race, such as expanding employee recruiting and setting aspirational goals for diversity.

> "It is not pre-ordained what the outcome of the various challenges will be," said Debo Adegbile, head of the anti-discrimination practice at law firm WilmerHale.

LEGAL OBSTACLES

The Justice Department will face some obstacles in any effort to combat DEI policies. Its Civil Rights Division does not enforce federal laws banning racial discrimination in hiring and contracting against private employers, according to experts in discrimination law.

The Equal Employment Opportunity (SO:FTCE11B) Commission is the only federal entity empowered to sue companies over employment discrimination. The five-member EEOC is expected to have a Democratic majority until at least 2026, which could stymie some of Trump's plans.

But the Civil Rights Division can bring employment discrimination cases against state and local governments.