Partner Lucy Blake was featured in Edward Fennell’s Legal Diary, where her commentary on the recent US Department of Justice memo— “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination”—was recognised as “Legal Comment of the Week.” The memo outlines what the administration sees as the “significant legal risks” associated with DEI programs and practices, and Lucy’s insights offer a timely reflection on the complexity multinational businesses now face in this evolving legal landscape.
Lucy offered a series of observations highlighting the challenges facing multinational businesses in this evolving regulatory landscape:
“The memo released by the DOJ exacerbates the tension for global companies. They face a Catch 22 situation with fundamentally divergent legal obligations on different sides of the pond—what they’re required to do in the UK or EU could land them in hot water in the US, and vice versa.”
“The tension is particularly acute for companies with government contracts, whose failure to comply with one set of obligations or the other may risk exclusion from public tender processes, and a subsequent loss of business.”
“This divergence between obligations in different jurisdictions gives rise to difficult legal, commercial, reputational, and political predicaments.”
“It means that businesses are being forced to ‘pick their poison’ and may need to choose which set of responsibilities they are willing to breach.”
“The DOJ memo outlines what the administration sees as the ‘significant legal risks’ around DEI programs and practices. The memo sets out: (a) a ‘non-exhaustive list’ of unlawful practices, including examples; and (b) recommended best practices.”
“Across the pond in the EU and UK, however, there are multiple legal requirements, some of which are in tension with the expectations outlined in the memo. The dissonance between competing obligations places those with transatlantic businesses in an invidious position.”
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