Articles

Employment Law Update: Trump, Executive Orders, and DEI

Date: February 6, 2025
On his first day in office, President Trump issued many new executive orders (EO) including an EO “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” The EO’s purpose is to end “illegal” diversity, equity, and inclusion (DEI) practices in federal contracting and the private sector. The EO revokes any previous orders that required federal contractors to take affirmative action to ensure equal employment opportunity based on race and gender. It also directs federal agencies to identify, and target for investigation, certain private organizations that violate anti-discrimination laws by using DEI preferences.  Agencies are also directed to develop “other strategies” to encourage private employers to eradicate illegal DEI.

While the EO (along with others) certainly has set the stage for concern surrounding DEI initiatives, the EO does not change all the existing federal laws that prohibit employment discrimination. The EO does, however, make clear Trump’s administration will focus on cracking down on DEI programs that favor, or disadvantage certain groups based on their race, color, sex, sexual preference, religion, or national origin. Employers who continue with DEI programs need to ensure their practices comply with EEO laws.

What Federal Contractors Need to Know

The EO affects federal contractors in several ways:
  • It cancels the requirement to prepare and submit affirmative action plans for race and gender to the Office of Federal Contract Compliance Programs (OFCCP), which has been required by EO 11246, issued by President Lyndon Johnson in 1965.
  • It orders the OFCCP to immediately stop: (1) promoting diversity, (2) holding contractors accountable for affirmative action, or (3) allowing workforce balancing based on race and gender.
  • It requires federal agencies to include a new clause in their contracts that requires contractors to comply with all anti-discrimination laws and certify that they do not run any illegal DEI programs. The EO does not explain what this certification will involve but The White House Fact Sheet accompanying the EO states the certification will be an “unmistakable affirmation that contractors will not engage in illegal discrimination, including illegal DEI.”
  • It makes compliance with anti-discrimination laws a material condition for payment by the government, which could expose contractors to liability under the False Claims Act.

The EO does not:
  • Eliminate the OFCCP as an agency or eliminate contractor non-discrimination obligations.
  • Affect the obligations of contractors under the laws that protect veterans and individuals with disabilities (VEVRAA and Section 503). The OFCCP will still enforce these laws.

Contractors should review any pending OFCCP audit requests, prepare VEVRAA and Section 503 plans, and check any new contracts for the new EEO/DEI clause.

What All Employers (Including Private Sector) Need to Know

The EO also affects all employers, whether they are federal contractors or not, by:
  • Directing federal agencies, led by newly confirmed Attorney General Pamela Bondi, to identify and target sectors, industries, and organizations that use illegal DEI preferences and to pursue litigation against them.
  • Requiring the attorney general, the secretary of education, and other federal agencies to issue guidance on how to comply with anti-discrimination laws and avoid illegal DEI practices.
  • Directing the Attorney General to submit a report within 120 days identifying key sectors of concern, egregious and discriminatory practitioners, and asks each agency to identify up to nine potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets of $500 million dollars or more, state and local bar and medical associations, and institutions of higher education with endowments over 1 billion dollars.

Employers should review their employment practices and DEI initiatives for compliance with anti-discrimination laws, such as Title VII of the Civil Rights Act of 1964. They should eliminate or revise any policies or practices that are likely to be challenged by the administration. This may include “diverse slate” practices, as well as policies and programs that limit participation to membership in specific protected classes or exclude or segregate other groups based on a protected characteristic. They should also communicate their commitment to equal employment opportunity and nondiscrimination to their employees and provide support for emotional and mental health and wellness.

Please reach out to Whiteford’s Labor and Employment Law Team for guidance on compliance. We will continue to monitor and report on developments.
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.