The legal landscape for diversity, equity and inclusion initiatives remains unsettled, with companies facing increasing challenges due to recent Supreme Court decisions, heightened regulatory scrutiny and evolving federal enforcement priorities. The Justice Department has issued civil investigative demands and encouraged whistleblower lawsuits, while the Equal Employment Opportunity Commission's enforcement slowed due to leadership vacancies but is expected to intensify following the appointment of a new commissioner. Companies are also contending with conflicting obligations across state and federal regulators, complicating their efforts to navigate compliance and avoid legal pitfalls.

Disney's latest employee event series reflects a significant shift in corporate language away from "diversity," "equity" and "DEI," terms that have become politically sensitive. Instead, an email sent to employees emphasizes "belonging," "inclusion" and "culture," following a broader corporate trend. This change is evident in the Global Belonging Week's itinerary, which omits any direct references to DEI, aligning with research showing a steep decline in the use of such language across major US companies.

Disney's actions reflect a legitimate path companies are taking to mitigate risk in this climate of heightened scrutiny while staying true to their values. Seasoned executives recognize that inclusion remains essential to retaining talent, building strong cultures, driving growth and protecting consumer trust. They also understand that continued commitment to inclusion and belonging is central to organizational health and a defining measure of leadership.

It's critical to align the values you declare internally with the way you act externally -- in the marketplace, with customers and in society. Reframing language to avoid political distraction can be pragmatic as long as companies lead with clarity, conviction and courage.

Inclusion has always been about growth, resilience and relevance. The question for leaders isn't whether inclusion is legal -- it's how to stay clear, courageous and consistent when the environment is volatile. When inclusion is framed as an engine for growth, it moves out of the margins and into the mechanics of the business. That's where it becomes measurable, scalable and transformational.

--BRIDGE CEO Sheryl Daija

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The importance Americans place on businesses promoting diversity, equity and inclusion has declined, according to a new Gallup and Bentley University survey. This year, only 69% of US adults said DEI is important for businesses, down from 78% in 2022 and marking the lowest rate since tracking began. This trend reflects a shift in public sentiment, even as DEI continues to be associated with innovation and profitability.

A federal judge in Seattle has ruled that the Trump administration must restore millions of dollars in school mental health grants to certain recipients in sixteen Democratic-led states. The judge found the administration's decision to withhold the funds, citing opposition to diversity-focused criteria, was arbitrary and capricious. The preliminary order restores funding to affected districts while the legal challenge continues.

Minneapolis, St. Paul and several other jurisdictions have sued the Trump administration, alleging that it has placed "unlawful and unrelated conditions" on more than $100 million in public safety and disaster grants. The lawsuit, led by Chicago and filed in federal court in Illinois, challenges the administration's demand that local governments abandon diversity, equity and inclusion initiatives to qualify for grant dollars.

Companies must move past "polite inclusion" following Black History Month, writes Judith Germain, founder of the Maverick Paradox Magazine, who highlights the need for genuine systemic change to ensure lasting inclusion. Germain notes that while representation increases during the month, true influence remains stagnant. Germain introduces the concept of the "influence gap," which is the difference between who is present and who holds power, and she provides strategies for HR to close this gap, including conducting influence audits and redesigning performance metrics.

The Trump administration's attacks on diversity, equity and inclusion are part of a broader project of cultural rewriting, aiming not only to dismantle civil rights progress but to reinterpret history itself, writes James Greenberg, the founding editor of the Journal of Political Ecology. The erasure of DEI programs severs the historical memory of social struggles, creating a new narrative where exclusion is normalized and past movements for recognition are cast as errors. "By turning DEI into a weapon, the state has revealed the deeper project: to redefine legitimacy itself. To declare who counts and who is branded an enemy," Greenberg writes.

Brands are experiencing a "paralysis" in inclusive marketing, with diversity, equity and inclusion efforts significantly rolled back amid political and economic pressures, said God-is Rivera, chief strategy officer of Burrell Communications Group Worldwide. The stagnation comes despite data showing that diverse audiences represent a significant growth opportunity, as 75% of consumers say a brand's reputation for diversity and inclusion influences their purchasing decisions, per Kantar.

"Consumers are really noticing today when a brand kind of flutters in and out for a certain holiday, certain moment, and it's like, Where are they for the entire rest of the year?," says Asha Shivaji, co-founder and CEO of the SeeMe Index.