DE&I as a Business Risk: Japanese Companies Fined for DEI Violations in Guam and Reflections on the Trump Executive Order — The Roots of DE&I in the U.S.

In March 2025, the U.S. Equal Employment Opportunity Commission (EEOC) announced that Leopalace Resort, a major hotel and resort in Guam, had agreed to pay a settlement of over $1.4 million USD (approximately ¥200 million). The settlement was in response to allegations that non-Japanese employees—including those from the U.S.—were provided with inferior wages, benefits, and employment conditions compared to Japanese employees, despite holding equal or higher positions. 

This is not a distant issue for many Japanese companies. Instead, it highlights how risks inherent in HR systems and operations at overseas locations are now being evaluated against global legal and ethical standards. 

The Trump Administration’s DE&I Repeal Order vs. the Enduring Core of America 

In January 2025, President Trump issued an executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” effectively repealing DE&I initiatives within the federal government. 

This has led some to mistakenly believe that “DE&I is outdated” or “on its way out.” 

However, DE&I has been a foundational principle of U.S. society for over half a century, rooted in the Civil Rights Act of 1964. Despite temporary shifts in federal policy, agencies like the EEOC, state-level bodies, private companies, and broader society continue to advance DE&I efforts. 

It is important to distinguish between a temporary political measure and the institutional framework of society. 

What This Means for Japanese Companies 

The Guam case centers on the inequitable treatment of local employees, suggesting underlying biases against foreign workers and systemic inequality. 

Japanese companies with U.S. entities that structurally replicate the following practices should urgently reassess them as management issues: 

– Pay, promotion, and benefit disparities between Japanese expatriates and local staff 

– HR evaluation systems operating solely on Japan HQ standards 

– Organizational structures limiting local employees’ access to managerial or decision-making roles 

These reflect misaligned HR operations that ignore local labor norms and legal standards, and may unintentionally create unfairness. 

From Ideals to Governance 

DE&I is no longer a “nice-to-have” initiative but a critical governance factor directly tied to a company’s sustainability and credibility. 

What is required of Japanese companies is not just declaring DE&I ideals, but taking practical actions, such as: 

– Integrating DE&I strategy into governance and risk management 

– Ensuring global consistency in human capital disclosures 

– Designing systems based on transparency and fairness felt by local employees 

– Ongoing training and dialogue to address unconscious bias 

– Leveraging people analytics using objective talent data 

HRAI’s Emphasis on the Global HR Perspective 

At HRAI, we see HR as a professional domain that supports management. In global business, it requires an understanding of and ability to integrate legal, cultural, and ethical frameworks. 

Cases like this reaffirm the need for HR and management to work together, understand local realities, and reflect those in HR systems and practices. 

Conclusion 

The Guam case highlights the DE&I risks faced by Japanese companies operating abroad. Despite the Trump administration’s repeal order, the principle of fairness remains deeply embedded in American society. DE&I is now about execution and awareness at the ground level, not just policy. 

In today’s interconnected world, the practice of Global HR and leveraging international HR networks are more crucial than ever. 

Even if HR systems appear well-structured, unfair operations or perceptions can surface later as lawsuits or damage to corporate reputation — or, as this case shows, with real financial penalties. 

DE&I is no longer about whether or not to implement it, but rather how to implement, execute, and embody it. 

HRAI remains committed to supporting sustainable corporate growth by spreading the knowledge and practical application of global HR and management.