“DEI is on its way out. Any company still clinging to this sinking ship had better hop on a life raft in a hurry.”
That was the sentiment posted on X by Alliance Defending Freedom SVP Jeremy Tedesco in the wake of President Trump’s historic series of executive orders banishing DEI from the federal government and beyond. Tedesco’s remark reflects an increasing disdain for an ideology that—just a few short years ago—seemed to have hijacked virtually every American institution.
As Tedesco made clear in an op-ed celebrating President Trump’s decisive moves to root out DEI from the federal government, federal contracting, education, and even the private sector, DEI is simply “discrimination repackaged. It’s an ideology that treats some people worse than others based on skin color, biological sex, and religion.
“If that sounds illegal,” Tedesco writes, “it’s because it is.”
Let’s take a look at DEI and learn why ADF and so many others are striving to do their part to hasten the downfall of this destructive ideology.
What is DEI?
Almost five years ago, in the grip of the activist-fueled societal upheaval that followed the death of George Floyd, American institutions were searching for answers.
How could a major corporation signal its support for the downtrodden of society? How could a university indicate that its sympathies lie not with the “oppressor” majority but with the “oppressed” minority? How could we “do the work”?
These were understandable sentiments at the time. After all, race-based discrimination is a tragic and inescapable part of the American story. And it’s one that an entire generation, through relentless messaging by virtually every cultural authority, had already been catechized in to carry the endless guilt of our nation’s “original sin” of racism and chattel slavery.
Many found their answer in so-called “diversity, equity, and inclusion” policies, which promised to usher in a new era of social justice, productivity, and increased profits.
To understand DEI, consider the following quote from self-described “anti-racist” advocate Ibram X Kendi: “[t]he only remedy to past discrimination is present discrimination. The only remedy to present discrimination is future discrimination.”
Of course, it’s difficult to hear that proposition without immediately recalling that two wrongs don’t make a right. No company, school, church, or person can undo the sins of the past by sinning in the present—yet that is exactly the promise held out by DEI.
Or, as Chief Justice John Roberts wrote in a U.S. Supreme Court decision: “The way to stop discrimination on the basis of race is to stop discriminating on the basis of race.”
As the past several years have shown, hastily embraced DEI policies haven’t just failed to deliver on their promises. They’ve failed spectacularly.
DEI down in flames
By the time President Trump issued his executive orders, DEI had been on a losing streak so significant and total that it would’ve made some of the more historically hapless sports teams blush.
The first major domino to fall came in the summer of 2023. That’s when the Supreme Court handed down its landmark decision in Students for Fair Admissions, Inc. v. Harvard that nixed racial discrimination in college admissions policies. By affirming that such discrimination violates constitutional freedoms and Civil Rights protections, the ruling sparked what The Wall Street Journal has described as a full-scale “legal assault” on DEI.
As ADF CEO, President, and General Counsel Kristen Waggoner wrote in an op-ed at WORLD, DEI’s downfall in the courtroom reached its most recent low in December 2024 in a ruling from the U.S. Court of Appeals for the 5th Circuit. In that decision, the Court considered a 2020 Nasdaq rule that forced the nearly 3,000 companies on its exchange—including Apple, Microsoft, and Google’s parent company Alphabet—to adopt discriminatory diversity quotas for their board members.
“Thankfully, the U.S. Court of Appeals for the 5th Circuit recently threw out Nasdaq’s discriminatory rule,” Waggoner wrote. “Writing for the 9-8 majority, U.S. Circuit Judge Andrew Oldham made clear that the SEC [U.S. Securities and Exchange Commission] had ‘intruded into territory far outside its ordinary domain’ in approving the rule, which he described as a ‘public-shaming penalty’ for corporations not living up to the SEC-approved quotas. After the ruling, Nasdaq said it did not intend to seek further review. This is a major win for freedom and meritocracy over identity politics in the workplace.”
DEI’s crumbling narrative
As more sunlight shines on DEI’s inherent legal risk thanks to its losses in the courtroom, the underlying cultural narrative of DEI is also coming unraveled.
Questionable data
In a series of studies published between 2015 and 2023, McKinsey & Company reported finding a statistically significant positive relationship between DEI executive hiring policies and the earnings of large public firms that McKinsey chose to evaluate. Many major businesses across the United States relied on these studies to justify implementing widespread DEI programs.
But in a scholarly report published in 2024, Econ Journal Watch said it was unable to “quasi-replicate” the conclusions McKinsey drew. For this reason, the journal concluded that the McKinsey studies “should not be relied on to support the view that US publicly traded firms can expect to deliver improved financial performance if they increase the racial/ethnic diversity of their executives.”
A scholarly paper featured at the Harvard Law School Forum on Corporate Governance cast further doubt on DEI’s efficacy. After sampling over 2,400 U.S. public firms, researchers from the University of Melbourne and Cornell University said they were unable to confirm that recent LGBT or racial minority board governance quotas, which were pushed on virtually every major company just a few years ago, have resulted in “a significant effect on firm performance, valuation, or risk.”
Creating a divisive culture
A fundamental problem with DEI programs is that many employees feel they have the opposite of their intended effect. A study conducted by the Network Contagion Research Institute (NCRI) in collaboration with Rutgers University found that DEI practices can induce hostility, increase authoritarian tendencies, and foster agreement with extreme rhetoric.
This problem has also made its way to college and university campuses. The University of Michigan has one of the largest DEI initiatives in the country, and it spent $250 million over 10 years to ingrain DEI in its culture.
But as The New York Times reported, “Michigan’s own data suggests that in striving to become more diverse and equitable, the school has also become less inclusive.”
In a survey released in 2022, University of Michigan students were less likely to interact with students of a different race, religion, or political persuasion than they had been before the university began its DEI initiative. Respondents also reported less of a sense of belonging and a less positive culture on campus.
In 2021, Michigan professor Dr. Eric Fretz began his entrepreneurship class with a written disclaimer apologizing in advance for any “soft sexism” he might display.
“Born in the 1960s,” the disclaimer read. “The end of the era for all moms being at home, all textbooks showing only male scientists, etc.” Dr. Fretz said he would “try to do a good job being balanced with my examples and being sensitive to social justice issues,” and he invited students to “call me on it” if he failed.
Instead of reading Dr. Fretz’s disclaimer as an attempt to be inclusive (which it was), one student emailed him and said his disclaimer was “extremely disrespectful and ignorant of the struggles that women and girls continue to face on a daily basis.” She proceeded to file a Title IX complaint against him.
“It’s this gotcha culture they have created on campus,” Dr. Fretz told The Times. “It’s like giving a bunch of 6-year-olds Tasers.”
The story is just one of many examples The Times uncovered. Time and again, Michigan students were said to have expressed hostility toward people of a different sex, race, or religion than them. Unfortunately, DEI’s core tenets mean results like this aren’t a bug but a feature.
Moving away from DEI
Because of the legal, moral, and practical questions surrounding DEI, many businesses have begun moving away from DEI policies. In November 2024, the nation’s largest private employer, Walmart, announced it would sunset its Center for Racial Equity just four years after investing $100 million into it. In addition, the retail giant with over 2.1 million employees said it would phase out the term “diversity, equity and inclusion” in company documents and stop sharing data about its LGBT policies with far-left activist organization the Human Rights Campaign (HRC), The Wall Street Journal reported.
Similarly, aircraft manufacturer Boeing dismantled its DEI department in 2024 after it was criticized by prominent voices, including Tesla CEO Elon Musk, for prioritizing DEI over the quality and safety of its aircraft. Meta and McDonald’s have made similar changes and join other household brands like Target, Amazon, Tractor Supply, John Deere, Harley Davidson, Ford, and Toyota, many of which dropped DEI and HRC commitments in response to recent customer campaigns led by influencer Robby Starbuck.
“HR organizations like to make the argument that you need the right mix of skin color and gender preference to perform and innovate,” an insider at Boeing told City Journal. “But everyone who has had to build things knows that what really drives value is integrity, hard work, and technical expertise.”
A mandate to root out DEI
Last November, the American electorate rejected the takeover of political and civic life by narrow-minded DEI ideologies. Acting on this mandate, President Trump immediately signed a series of executive orders that seek to eliminate DEI not only from the federal government but also from corporate America writ large.
In “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” President Trump landed a haymaker to the multibillion-dollar DEI industry.
The order overturns several previous executive orders—including one highly weaponized holdover from the Johnson administration—and extends the battle lines to federal contractors, federally funded educational institutions, and the private sector itself.
Federal contractors account for $759 billion of the federal budget and are directly required to comply with DEI mandates. The order requires that each federal agency include a term in every contract that requires the contractor to acknowledge that noncompliance with federal anti-discrimination laws will affect the government’s payment decisions, and to certify that it does not have DEI programs that violate the law. Meanwhile, the executive order also tasks agency heads and the U.S. Attorney General with identifying targets for investigation among American corporations and institutions that discriminate under the guise of DEI policies.
Agency heads are wasting no time implementing the order. For instance, the Equal Employment Opportunity Commission’s new acting chair, Andrea Lucas, has stated that some of the EEOC’s top priorities will be “rooting out unlawful DEI-motivated race and sex discrimination” and “defending the biological and binary reality of sex and related rights, including women’s rights to single-sex spaces at work.”
For his part, Tedesco cheered on the historic orders.
“President @realDonaldTrump is right to rid the federal government of legally risky, divisive DEI programs. It’s a major promise he made to voters, and he’s right to keep it,” he posted on X. “DEI is a proven failure. It does nothing but introduce legal risk, eliminate a healthy meritocracy, and destroy unity. Any program that treats some people worse than others based on protected class characteristics like skin color and deeply held religious beliefs violates the fundamental American promise of equal treatment under the law.”
A better way forward than DEI
Every company is at its best when it focuses on providing quality goods and services. That’s how corporations improve our lives, and it’s also how they deliver the best results for their shareholders and customers. At the same time, promoting a sense of belonging, purpose, and respect among employees is a noble pursuit.
That is why instead of only emphasizing factors such as race and sex, businesses should promote diversity of thought and respect the inherent dignity and uniqueness of every individual. Rather than succumbing to activist pressure to politicize their businesses, C-suite leaders should embrace a positive role for business to advance justice, civil liberties, and public welfare by conducting their business well.
By respecting religious freedom, employing people with different ideological views, and fostering healthy discussion, companies can create an environment in which all employees can trust that their ideas are heard and respected, even if some people disagree with them. This gives every employee an opportunity to succeed and enables companies to do what they do best—provide excellent goods and services instead of taking divisive positions on contentious political issues.
As Waggoner writes at WORLD, “Christians should welcome this shift toward seeing and treating people based on their shared humanity in the imago Dei. As God’s image-bearers, there is far more that unites us than divides us, and people should never face discrimination because of artificial race or gender quotas.”
Now is a golden opportunity to recover a true vision of equality, one that affords equal dignity to all and allows individuals to rise or fall based on merit, not melanin—to be judged, at long last, by the content of their character.
What is ADF doing about DEI?
At ADF, our Corporate Engagement team has been a leader in the fight against DEI. In 2022, we launched the Viewpoint Diversity Score Business Index, the premier benchmark for measuring corporate respect for free speech and religious freedom.
In 2024, our Index found that at least 91 percent of the 85 largest tech and finance companies promote DEI in the workplace. Each of those companies owes its shareholders an explanation for why it continues to endanger its investments by discriminating against employees and customers based on protected characteristics.
Protecting shareholders’ votes
Pulling from this information, ADF has mobilized our shareholder coalition of faith- and values-aligned investors with over $250 billion in assets under management. Together, we are engaging these companies through the shareholder resolution process.
Through these resolutions, shareholders can get companies and their other shareholders to address important issues of corporate governance, including issues like religious freedom and DEI, at their annual meetings. Companies often try to avoid public fights on these issues by negotiating policy changes or disclosures with shareholders or by asking the SEC for permission to remove the resolution entirely.
For example, ADF attorneys recently called on the SEC to deny government contractor IBM’s request to exclude a DEI shareholder resolution from the proxy ballot at its annual meeting. IBM (whose federal contracts are worth over a billion dollars per year) is facing a lawsuit stemming from its CEO’s open admission that the company promotes DEI and bases its personnel decisions on whether hiring managers meet discriminatory quotas.
In what ADF attorneys point out is an “absurd” claim, IBM attempted to spike the shareholder resolution because it was unable to properly understand or define DEI.
Over the past three years, ADF attorneys have gone 8-for-8 defending shareholder resolutions at the SEC—including wins over Apple, JPMorgan Chase, John Deere, and Starbucks. We are successfully working with some of the largest companies in America to increase disclosures and change policies around DEI and other free speech and religious liberty issues.
Mobilizing shareholder voices
We are also mobilizing shareholders through public letters and media. In November, for example, our coalition sent a letter signed by investors, financial advisors, and the State Financial Officers Foundation urging Fortune 1000 companies to leave behind harmful and discriminatory DEI policies.
“Americans have sent a powerful message at the ballot box,” said Tedesco. “They’re tired of divisive ideologies like DEI that pit people against each other because of their skin color or deeply held beliefs. Corporate leaders need to learn this same lesson.”
Many companies are already taking these lessons to heart, as we have seen recently. We hope that many more will do the same and will continue working with companies to restore a corporate culture that respects the fundamental freedoms of every American.
