Late on January 21, 2025, President Trump issued an executive order titled, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” The order is targeted at what the president describes as “illegal” diversity, equity, inclusion, and accessibility policies that:
. . . not only violate the text and spirit of our longstanding Federal civil-rights laws, they also undermine our national unity, as they deny, discredit, and undermine the traditional American values of hard work, excellence, and individual achievement in favor of an unlawful, corrosive, and pernicious identity-based spoils system.
Trump’s Executive Order (EO) revokes Executive Order 11246 (EO 11246) which was signed in 1965 by President Lyndon Johnson and established various affirmative action requirements for federal contractors and subcontractors, including written plans and reporting requirements. The current EO further states that the Office of Federal Contract Compliance Programs within the Department of Labor shall immediately cease:
- Promoting “diversity”;
- Holding Federal contractors and subcontractors responsible for taking “affirmative action”; and
- Allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.
Of note, the new EO states that covered contractors may choose to continue complying with the requirements of EO 11246 for up to 90 days from January 20, 2025. In addition, the new EO requires that all federal contracts and grants include a term requiring parties to agree that the organization’s “compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions” and a term requiring parties “to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”
As the obligations of government contractors and subcontractors under EO 11246 are contractual, there are many questions as to how these changes will be implemented. Notably, the new executive order does not end affirmative action requirements for covered federal contractors in connection with two laws aimed at protecting veterans—the Vietnam Era Veterans Readjustment Assistance Act (VEVRAA) and individuals with disabilities—Section 503 of the Rehabilitation Act. These programs are enforced by the OFCCP and require covered federal contractors to engage in affirmative action outreach efforts for protected veterans and individuals with disabilities, as well as creating affirmative action plans.
It is important to remember that affirmative action in the employment context never allowed employers to make employment decisions based on protected characteristics, such as race and gender. Federal contractors, and employers in general, have been and continue to be prohibited from taking applicants’ and employees’ protected characteristics into account when making decisions related to hiring, promotions, terminations, and other terms and conditions of employment. However, the new executive order clearly will impact federal contractor and subcontractor practices and reporting requirements and likely will alleviate some administrative burdens.
The EO also includes provisions seeking to end so-called “DEI discrimination and preferences” throughout the government and in the private sector. Over the next 90 days, we expect to receive more information from the OFCCP about how this new direction will impact federal contractors and subcontractors. In addition, we anticipate that civil rights groups will challenge the new EO, but these lawsuits may take considerable time to resolve. Employers therefore will want to understand their real-time compliance obligations and track any potential changes.
Employers should consult with experienced human resources professionals and/or labor and employment counsel with any questions regarding this significant change by the Trump administration. For all MEA members, the Hotline is available to provide this assistance. For MEA Essential and Premier members, a Member Legal Services attorney is available for additional consultation.
*This Alert is provided for general informational purposes only and does not constitute legal advice.
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