Irish firms warned on risks of curtailing DEI
Lawyers at RDJ have highlighted the risks posed to Irish employers by US President Donald Trump’s crackdown on DEI (diversity, equality, and inclusion) programmes.
They note that US corporations such as McDonalds, Walmart, and Amazon have dropped or curtailed their DEI policies in response to three executive orders on the issue signed by Trump.
The RDJ lawyers also note that several law firms who were investigated by the US Equal Employment Opportunity Commission pledged to provide pro bono legal services to the Trump administration, on the condition that further claims made against the firms by the commission relating to diversity would be withdrawn.
Safeguards
In Ireland, the firm highlights a recent survey carried out by Expleo, which found that 43% of large enterprises in Ireland had experienced employee resignations due to recent changes in their DEI policies.
According to the survey, 49% of large enterprises said that they were increasing their DEI commitment, but 42% felt there was too much focus being placed on it.
The RDJ lawyers point out that the survey took place against a backdrop of “plentiful regulatory and statutory DEI safeguards” that continue to be strengthened, with the Corporate Sustainability Reporting Directive (CSRD) and the EU Pay Transparency Directive due to be implemented into Irish law in the near future.
They list the existing suite of DEI-linked obligations that permeate all aspects of employment law in Ireland – including the Employment Equality Acts, the reporting regime on the gender pay gap, and the Work Life Balance and Miscellaneous Provisions Act 2023.
Consent
“In many cases DEI considerations are underpinned in various aspects of Irish employment legislation, meaning that employers are in many cases legally obliged to comply with DEI – not just for the benefit of their employees, but to avoid legal liability themselves,” the RDJ analysis warns.
Outlining other potential risks for Irish organisations, the law firm states that rowing back on DEI initiatives could require employee consent, if the policy was structured contractually in nature.
“Accordingly, where consent was not obtained, breach of contract claims could arise,” the RDJ lawyers warn.
“In everyday terms, changes to DEI policies could have knock-on effects such as absenteeism, the lodging of grievances, and culture change within companies,” they add.
The RDJ lawyers conclude that, while Irish organisations should continue to uphold policies that comply with Irish law, they may also need to communicate with their US-based stakeholders on their use of practices that may be contentious in the US, such as DEI quotas and ‘preferencing’ of certain groups.