EEOC Opens EEO-1 Data Collection and Cautions Employers There Is No “Diversity Exception” to Title VII

Updated August 6, 2025. On August 1, 2025, DOJ’s Civil Rights Division announced it had terminated a 1981 court-ordered consent degree in Luevano v. Ezell. The press release states that the consent decree “limited the hiring practices of the federal government based on flawed and outdated theories of diversity, equity, and inclusion” and “imposed draconian test review and implementation procedures on the Office of Personnel Management—and consequently all other federal agencies—requiring them to receive permission prior to using any tests for potential federal employees, in an attempt to require equal testing outcomes among all races of test-takers.” On August 4, 2025, DOJ’s Civil Rights Division issued a follow-up press release, which provided a link to the case’s dismissal in the United States District Court for the District of Columbia. While the termination of the Luevano consent decree is limited to federal hiring, the termination reflects this Administration’s policy, as articulated in an earlier executive order, seeking to eliminate disparate impact liability in all contexts to the maximum extent possible.

*          *          *

On May 20, 2025, U.S. Equal Employment Opportunity Commission (“EEOC”) Acting Chair Andrea Lucas announced the opening of the portal accepting EEO-1 demographic data reports. In the press release, Acting Chair Lucas cautioned employers that “[t]here is no ‘diversity’ exception to Title VII’s requirements,” and stated that the EEOC going forward will prioritize “remedying intentional discrimination claims.”

*          *          *

The press release sets June 24, 2025 as the deadline for 2024 EEO-1 Component 1 reporting submissions, and made it clear that date will not be extended. The release noted that this collection period is shorter than prior years as part of the EEOC’s “efforts to identify continued cost savings for the American public.” This year, after receiving approval from the Office of Management and Budget, the EEOC eliminated the option of reporting the number of employees who self-identify as non-binary, and employers can now only report employees as male or female.

In the press release, Acting Chair Lucas reminded employers that they “may not use information about [their] employees’ race/ethnicity or sex—including demographic data [they] collect and report in EEO-1 Component 1 reports—to facilitate unlawful employment discrimination based on race, sex, or other protected characteristics in violation of Title VII,” and noted “[t]here is no ‘diversity’ exception to Title VII’s requirements.”

The press release also advises employers of the EEOC’s intent to “fully and robustly comply” with President Trump’s recent directive to federal agencies, including the EEOC, to deprioritize disparate impact theories of liability, including “investigations and lawsuits that challenge neutral practices that have unequal outcomes based on race, sex, or other protected characteristics.” Accordingly, Acting Chair Lucas stated that the EEOC, under her leadership, “will prioritize remedying intentional discrimination claims.” The EEOC also explained that a disparate impact “does not justify [a] company or organization treating any of [their] employees differently based on their race or sex.”

The press release concludes by stating that the “EEOC is the sole federal agency authorized to investigate and litigate against private companies and other private employers for violations of federal laws prohibiting employment discrimination,” and the EEOC “is responsible for coordinating the federal government’s employment antidiscrimination effort.” The U.S. Department of Justice, on the other hand, recently made clear its intent to “vigorous[ly]” use the False Claims Act in connection with its enforcement actions against private entities that are federal contractors or recipients of federal funds to the extent those entities have engaged in DEI activities that violate the civil rights laws.

Employers should continue to closely monitor the changing political and legal landscape in this area.