Good morning!
The Trump administration's ongoing attacks on diversity, equity, and inclusion (DEI) programs have sent companies scrambling to reexamine their DEI programs. As a part of reassessment, employers across the country are now wondering what to do about a hallmark of corporate culture, employee resource groups (ERGs).
Voluntary worker-led groups, ERGs are typically formed around a shared common interest, such as parenting, caregiving, or protecting the environment. These groups are often given small spending stipends, and leaders are sometimes even directly compensated by companies. As the workplace has evolved over the past few decades, many of these ERGs have centered on gender or ethnicity, such as groups centered on women or Black employees.
President Trump’s executive orders from his first week in office specifically targeted DEI programs within the federal government. Follow up guidance from the Office of Personnel Management (OPM) to federal agencies demanded leaders to prohibit ERGs that “promote unlawful DEIA initiatives” or “advance recruitment, hiring, preferential benefits, or employee retention agendas” based on protected characteristics such as race, age, and gender.
Even before that additional guidance, federal workers told NBC News that ERGs had been put on pause, with meetings and events abruptly canceled to comply with the executive order. Other groups have been dismantled entirely, such as Pride, an LGBTQ-focused group at the Department of Justice that has been active for more than 30 years, NBC reported.
But will the ERG carnage happening in the public sphere come for the private one as well? While the OPM memo doesn’t apply to private employers it “certainly tells what the Trump administration thinks is lawful and unlawful in terms of employee resources groups,” says Joe Schmitt, a labor attorney at law firm Nilan Johnson Lewis.
Some private companies made efforts to dismantle their ERGs even before Trump took office. Ford Motors changed their employee groups to focus on “networking, mentorship, personal and professional development, and community service,” according to an internal memo sent to employees. And Harley Davidson announced in August of 2024 that its Business Employee Resource Groups will focus solely on professional development and networking, steering away from anything to do with human rights campaigns, according to a company statement posted on social media platform X.
Lawyers tell Fortune that there are a few things that private companies should consider when examining their ERGs. Companies should make sure that these groups are non-exclusionary and open to everyone. For example, a women-focused ERG should be open to all employees who want to join. And legally it gets a “little bit more gray” if ERGs are involved with hiring practices, says Annette Tyman, a labor and employment attorney at law firm Seyfarth. That could be something like tasking an ERG with finding or retaining certain subsets or workers, like asking a women’s ERG to help the company recruit female employees.
That said, legal sources tell Fortune that while some companies may want to put an end to these programs entirely, they advise against that. “I'm not seeing companies completely dismantle ERGs, and I'm not advising clients to stop ERGs either,” says Andrew Turnbull, co-chair of law firm Morrison Foerster’s global employment and labor group. Instead, he notes, companies should ensure that ERGs are open to everyone, and avoid micromanaging them.
“You know, if a company gets too involved in these ERGs, it may detract from the whole benefit of having these groups in the first place,” he says. “Which is to help employees connect outside of typical work functions.”
Brit Morse
brit.morse@fortune.com
