/>iOn January 21, 2025, President Trump signed an Executive Order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” This Executive Order is a major pivot in federal policy regarding affirmative action and diversity initiatives, which have been in place for decades, particularly within federal contracting. The implications of this Executive Order are far-reaching, affecting both federal contractors and private employers across the United States.
Key Aspects of the Executive Order
A significant component of the Executive Order is the revocation of Executive Order 11246. Enacted in 1965 by President Lyndon B. Johnson, Executive Order 11246 mandated that federal contractors and subcontractors implement affirmative action programs to ensure equal employment opportunities for women and minorities. According to the Department of Labor, this requirement has become deeply embedded in the operational frameworks of approximately 25,000 firms and 120,000 establishments, impacting nearly 20% of the U.S. workforce. By revoking this order, President Trump’s Executive Order effectively dismantles the federal mandate for race and gender-based affirmative action.
The Executive Order further instructs all federal agencies to eliminate any programs, policies, or mandates that are deemed discriminatory or illegal under what the Executive Order characterizes as the guise of DEI (Diversity, Equity & Inclusion). This encompasses the cessation of activities such as promoting diversity initiatives and holding contractors accountable for affirmative action measures. Contractors “may” continue complying with the existing affirmative action requirements under Executive Order 11246 until April 20, 2025. Additionally, the Office of Federal Contract Compliance Programs (OFCCP) is specifically directed to stop engaging in workforce balancing based on race, color, sex, sexual preference, religion, or national origin. The overarching goal, as stated in the Executive Order, is to promote individual initiative, excellence, and hard work, aligning employment practices more closely with merit-based principles.
Despite these sweeping changes, it is crucial for federal contractors and subcontractors to remain compliant with existing anti-discrimination laws, such as Title VII of the Civil Rights Act, the Equal Pay Act, the Age Discrimination in Employment Act and the Americans with Disabilities Act. Moreover, the obligations under the Vietnam Era Veterans Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act remain intact. These statutes continue to require affirmative action and non-discriminatory practices specific to employees who are veterans or are disabled, underscoring the nuanced landscape of compliance that employers must navigate.
Additionally, the Executive Order calls for the development of a new contract term, likely replacing the current Equal Employment Opportunity clause, for inclusion in federal contracts. This term will require contractors to agree that compliance with all applicable federal anti-discrimination laws is essential to the government’s payment decisions. Contractors must certify that they do not operate any programs promoting DEI that violate federal anti-discrimination laws. The White House Fact Sheet on the Executive Order describes this certification as a clear statement that contractors will not engage in illegal discrimination, including any DEI practices the order characterizes as illegal. This certification is expected to be published in the upcoming weeks.
Employers should carefully review their current employment practices to ensure compliance with nondiscrimination statutes, such as Title VII of the Civil Rights Act of 1964. Any policies or practices that might be inconsistent with existing law should be revised to ensure compliance. Additionally, employers should review their Equal Employment Opportunity policies and communications to assess potential risks of enforcement agency investigations.
Employers should also stay informed about potential challenges to the Executive Order and look for additional information about sectors, industries, and organizations that federal agencies may identify for investigation. Guidance from the Attorney General, Secretary of Education, and other federal agencies will be essential as these changes unfold.
The Executive Order “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” represents a pivotal shift in federal policy, reshaping the landscape of affirmative action and DEI initiatives. As the ramifications of this order unfold, it is imperative for employers to remain vigilant and proactive in adjusting their compliance strategies. Staying informed about these developments and seeking guidance from legal advisors will be crucial in navigating this new era of employment practices.
