A new report from the far-left Human Rights Campaign shows a remarkable shift: a 65% drop in Fortune 500 companies publicly communicating commitments to diversity and inclusion initiatives. Just a few years ago, corporations raced to outdo one another with ever-expanding DEI pledges. Today, many are quietly stepping back.
This is not a retreat from fairness. It is a return to sanity.
For years, corporate America embraced an ideological experiment that blurred the line between equal opportunity and preferential treatment. What began as a push for broader inclusion morphed into quota-driven mandates, demographic scorecards and internal political signaling exercises that often had little to do with business performance.
Now, the legal system — and increasingly federal regulators — are pushing back.
Consider the recent lawsuit against Starbucks, where Missouri’s attorney general alleged ‘systemic discrimination’ in hiring and promotion practices tied to DEI goals. While a federal judge dismissed the case on procedural grounds, the filing itself signaled growing scrutiny over whether corporate diversity initiatives cross into unlawful discrimination.
Nike is currently facing a federal investigation by the Equal Employment Opportunity Commission over allegations that certain DEI-related employment practices may have resulted in race-based discrimination against White employees. Whether the agency ultimately finds wrongdoing or not, the investigation underscores a new reality: DEI programs are no longer insulated from legal challenge.
And JPMorgan Chase has been sued over allegations of ‘systemic’ race bias, including claims that the bank conducted ‘fake interviews’ to satisfy internal diversity targets. That allegation — that a company might go through the motions of interviewing candidates solely to hit demographic benchmarks — illustrates how performative compliance can undermine both fairness and trust.
But the scrutiny does not stop at employment law.
In recent weeks, the Federal Trade Commission reportedly sent letters to 42 of the largest and most profitable law firms in the United States, warning that racially discriminatory hiring practices — even if adopted under the banner of DEI — could constitute unfair or anti-competitive conduct. According to reporting, the firms were participating in a program overseen by the Diversity Lab that required at least 30% of leadership candidates to come from underrepresented groups.
That kind of industry-wide coordination raises serious questions.
First, there is the obvious Civil Rights Act concern: employment decisions cannot be made on the basis of race, period. But there is also a broader antitrust dimension. When competitors collectively adopt demographic quotas or coordinated hiring mandates, they may be engaging in collusive conduct — effectively setting industry standards through cooperation rather than competing freely for the best talent.
This theory is not new. Federal antitrust authorities have previously warned climate and ESG coalitions that there is no ‘ESG exception’ to the antitrust laws. As former FTC Chair Lina Khan stated plainly: competitors are not permitted to coordinate with one another simply because the coordination is framed as socially beneficial. The same logic applies here. There is no DEI exception to the Sherman Antitrust Act.
For years, corporate America embraced an ideological experiment that blurred the line between equal opportunity and preferential treatment.
Markets function best when companies compete — for customers, for innovation, and, yes, for talent. The moment competitors coordinate around hiring mandates or collective pledges, they drift away from competition and toward centralized standard-setting. That is precisely what antitrust law exists to prevent.
The pendulum is swinging back toward merit.
Employees want to know they were hired because of their ability. Shareholders want disciplined capital allocation. Customers want quality products at fair prices. None of those priorities require demographic quotas or public virtue declarations.
