Global diversity equity and inclusion (DEI) challenges

Diversity equity and inclusion (DEI) poses unique legal and practical challenges for employers with multicountry operations. To develop an effective global diversity equity and inclusion strategy, it’s important to understand some fundamental differences between U.S. employment law and the laws in most other countries.

Is DEI irrelevant outside the U.S.?

One can argue that diversity equity and inclusion is US-centric phenomenon that does not properly map onto workforces elsewhere. But this doesn’t quite capture it. On one hand, DEI must be global. Many employers are multinational organizations with cross-border reporting structures and stated global values as part of environmental, social, and governance (ESG) practices. And notwithstanding the U.S.’s unique history of institutionalized racism, the concepts of systemic racism and oppression of marginalized populations are not limited to the U.S. Employers Initiatives designed for a US employee population can’t be applied globally without serious reflection and thought. But

The invisible hand: at-will employment

You may already know that U.S. employment laws center around “employment at will.” Either party to an at-will employment relationship can terminate employment without notice, cause, or payment, and there is no “employment contract” between the parties.

At-will employment is unique to the U.S. Everywhere else, employment is by contract, and employers cannot terminate the relationship without giving minimum notice and/or payment. In many locations, they also need a valid justification. In the U.S., by contrast, employers can terminate an at-will employment relationship for any reason (or no reason) except for specific unlawful motives such as discrimination or retaliation.

Why is this so critical for employers considering global diversity, equity, and inclusion to understand? Because at-will employment drives the entire employer-employee power dynamic. That dynamic is lopsided in the employer’s favor everywhere. But the at-will aspect of U.S.-based employment gives employers far greater license to make unilateral business decisions. It also affords U.S. employers far greater control over the composition of their workforce and over employment-related policy changes.

Employers treading in the cross-border DEI space must not underestimate the fundamental nature of this distinction. On the other hand, incorporating this and other key differences (such as employer-administered health insurance and data-protection regulation) offers exciting possibilities for global diversity equity and inclusion.