On his second day in office, President Donald Trump issued Executive Order: Ending Illegal Discrimination and Restoring Merit-Based Opportunity aimed at dismantling diversity, equity, inclusion and/or accessibility (DEI or DEIA) programs, mandates, policies, preferences and positions. The executive order has implications for the federal and private sectors.
Specifically, the president orders “all executive departments and agencies to terminate all discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements.” In addition, it orders all agencies to enforce civil rights laws and to combat “illegal private sector DEI preferences, mandates, policies, programs, and activities.” And it encourages the private sector to follow suit.
Whether this executive order will be contested or not remains to be seen. Meanwhile, this eAlert features key highlights and takeaways for the public and private sector.
Expectations for the Federal Government
- Effective immediately, the Office of Federal Contract Compliance Programs (OFCCP) within the Department of Labor is ordered to cease:
- Promoting “diversity.”
- Holding federal contractors and subcontractors responsible for taking “affirmative action.”
- Allowing or encouraging federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion or national origin.
- Additionally, several executive orders related to DEI and DEIA are revoked, among these, the 1965 issued Equal Employment Opportunity (E.O. 11246).
- The director of the Office of Management and Budget (OMB) and the attorney general are ordered to:
- Review and revise, as appropriate, all government-wide processes, directives and guidance.
- Excise references to DEI and DEIA principles, under whatever name they may appear, from federal acquisition, contracting, grants and financial assistance procedures to streamline those procedures, improve speed and efficiency, lower costs and comply with civil-rights laws.
- Terminate all “diversity,” “equity,” “equitable decision-making,” “equitable deployment of financial and technical assistance,” “advancing equity” and like mandates, requirements, programs or activities, as appropriate.
Expectations for Federal Contractors, Subcontractors and Grant Recipients
- The executive order allows federal contractors and subcontractors to comply until April 20, 2025, with the requirements of Equal Employment Opportunity Executive Order 11246.
- Agency heads are ordered to include in every contract or grant contractual terms requiring contractors to:
- Agree that “compliance [...] with all Federal anti–discriminatory laws is material for government payment decisions” for purposes of the False Claims Act.
- Certify they are not operating “any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”
- Federal contractors and subcontractors are prohibited from considering “race, color, sex, sexual preference, religion, or national origin” in “employment, procurement, and contractual practices.”
Expectations for the Private Sector
Under the executive order, the private sector is encouraged to end “illegal DEI discrimination and preferences.” While the private sector is encouraged to end DEI policies, the federal agencies are ordered to combat “illegal private-sector DEI preferences, mandates, policies, programs, and activities.”
For this, within 120 days the attorney general is required to provide a report with recommendations for enforcing federal civil rights laws and other measures to “encourage the private sector” to comply with the purpose of this executive order. The report must propose a “strategic enforcement plan” identifying:
- Key sectors of concern within each agency’s jurisdiction.
- The most egregious and discriminatory DEI practitioners in each sector of concern.
- A specific plan with measures to deter illegal DEI discrimination.
- Strategies to encourage the private sector to comply.
- “Up to nine potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations” including foundations with $500M or more in assets and “local bar and medical associations, and institutions of higher education with endowments over 1 billion dollars.”
- Litigation, regulatory action and sub-regulatory guidance.
Exclusion for Veterans and Protected Persons
The executive order “does not apply to lawful Federal or private-sector employment and contracting preferences for veterans of the U.S. armed forces or persons protected by the Randolph-Sheppard Act.”
What Does the EO mean for Federal Contractors, Subcontractors and Grant Recipients
- You are still required to comply with the laws preventing discrimination on the basis of race, color, religion, sex or national origin.
- You are not expected to comply with Affirmative Action Plans and should not expect enforcement actions from the OFCCP related to Affirmative Action mandates.
- You are expected to comply with veteran and protected persons employment and contractual preferences.
- You must certify that you do not follow illegal DEI practices.
- You need to review contracts for new antidiscrimination laws and compliance with such laws.
- You should expect termination for convenience for contracts related to the subject matter of this executive order.
- You should review any pending audits from OFCCP if they related to EEO issues and the very recently revoked Equal Employment Opportunity Order.
What Does the Executive Order Mean for Businesses
- Ensure compliance with Title VII of the Civil Rights Act of 1964.
- Review your policies and programs to avoid triggering an investigation or litigation.
- Work with your employees to ensure safety and address concerns.
- Pay attention to developments in this area and how this will evolve and be challenged.
- Review any guidance that will likely be issued by various departments and agencies.
