FTC Warns 42 Major Law Firms Over DEI Hiring Practices

The U.S. Federal Trade Commission (FTC) issued formal warning letters on Friday to 42 of the nation’s most prominent law firms. The commission suggests that certain Diversity, Equity, and Inclusion (DEI) hiring initiatives may constitute unfair and anticompetitive behavior.

This move aligns with the current administration’s broader effort to dismantle DEI programs across both public and private sectors. The FTC’s intervention signals a shift in how employment metrics are viewed through the lens of antitrust and labor competition laws.

Antitrust Concerns and Labor Competition

The FTC’s warnings target firms participating in programs designed to meet specific demographic benchmarks. FTC Chairman Andrew Ferguson stated that agreements between firms to reach these metrics can “distort competition for labor.”

The commission warned that these programs may impact:

• Hiring Decisions: Restricting the pool of candidates based on predetermined quotas.

• Compensation: Influencing pay scales through non-competitive agreements.

• Promotions: Affecting career advancement pathways within the legal profession.

Targeted Firms and Previous Legal Battles

The list of 42 firms includes some of the highest-grossing legal entities in the world. Several of these firms have previously clashed with the administration over similar issues:

• Legal Challengers: WilmerHale and Perkins Coie previously filed successful lawsuits to block executive orders regarding hiring practices, arguing they were unconstitutional.

• Settlement Seekers: Paul Weiss, Skadden Arps, and Latham & Watkins recently reached agreements with the White House. These deals involved pledging millions of dollars in pro-bono legal services to administration-supported causes in exchange for voiding previous executive orders.

• Industry Shift: A recent report indicates that 46 of the top 50 U.S. law firms have already scrubbed or significantly altered DEI references on their websites to avoid regulatory scrutiny.

The Role of Diversity Lab

All 42 firms mentioned in the FTC’s warning are participants in a program managed by Diversity Lab. Since 2017, this consultancy has offered a certification for firms that ensure at least 30% of their leadership candidates are from underrepresented groups.

While Diversity Lab has defended the legality of its program—citing a May 2025 federal court ruling that found the certification does not establish illegal quotas—the FTC now argues that these collective agreements could still violate antitrust principles by coordinating hiring behavior across the industry.

Increased Federal Oversight

The FTC’s warning is part of a multi-agency push for transparency in legal hiring. In March 2025, the Equal Employment Opportunity Commission (EEOC) demanded granular hiring data from 20 major firms.

The requested data includes:

1. Applicant Names: Full lists of all individuals who applied for roles.

2. Influencing Factors: Explicit details on whether race or gender played a role in specific hiring or promotion decisions.

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