President Donald Trump’s Administration is tackling diversity, equity, and inclusion (DEI) programs with the help of the Equal Employment Opportunity Commission (EEOC). Leading the EEOC is newly-appointed Chairman Andrea Lucas, who shares many of President Trump’s opinions about DEI in the workplace.
Lucas has made it clear that the EEOC will not allow discrimination through DEI practices. That includes hiring based on race or sex, which the EEOC head called “unlawful discrimination.” She notes that if a company created a “training program only for men or only for white employees, everyone would immediately and viscerally understand that that was unlawful.”
Instead of focusing on DEI, Lucas wants companies to adopt merit-based hiring and promotions. She’s also pushing for companies to curb anti-American biases that have them relying on overseas employees through work visas.
Companies That Embraced DEI Are Prime Targets
The EEOC can target companies that break work laws and regulations. Lucas warned that this could include companies that adopted DEI policies during the Biden administration. The regulator’s statute of limitations is only one year, but it has open cases as far back as 2020, giving it plenty of ammo to go after companies that engaged in DEI hiring before Trump took office.
What This Means for the Stock Market
The latest comments from the EEOC Chairman come as many companies back down from DEI initiatives to meet the Trump administration’s standards. However, some are holding out and sticking to DEI practices. Apple (AAPL), Microsoft (MSFT), and Costco (COST) are three large companies that have doubled down on DEI despite the policy shift. This could land them in hot water with regulators and they might not find relief from the courts as the Supreme Court recently ruled against DEI in multiple cases.
Looking at these stocks, AAPL and COST have Moderate Buy ratings while MSFT is a Strong Buy. Microsoft also has the highest upside potential at 28.17% compared to AAPL’s 6.71% and COST’s 5.54%.
