Trump Executive Orders on DEI Impact Federal Contractors and Set the Stage for Enforcement Priorities
The first few days of the Trump Administration have resulted in a flurry of Executive Orders (“EO”), including a number of orders focused on Diversity, Equity, and Inclusion (“DEI”) initiatives. These orders impact both the federal and private sectors. While many open questions remain, this alert summarizes the orders which are most relevant to private sector employers.
“Ending Illegal Discrimination and Restoring Merit-Based Opportunity”
In this January 21, 2025 Order (“Jan. 21 Order”), President Trump revokes several Executive Orders, including EO 11246, which has been in effect for nearly 60 years; though contractors may continue to comply with EO 11246 for 90 days following the Jan. 21 Order (through April 21, 2025). EO 11246, as amended and along with its implementing regulations, required certain federal contractors to develop and maintain written affirmative action programs and prohibited contractors from discriminating against employees and applicants on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. EO 11246 also obligated contractors subject to its requirements to file compliance reports with the Office of Federal Contract Compliance Programs (“OFCCP”)—the division of the Department of Labor tasked with ensuring government contractors comply with various antidiscrimination requirements and regulations.
In revoking EO 11246, the Jan. 21 Order states that it intends to streamline the federal contracting process “to enhance speed and efficiency, reduce costs, and require Federal Contractors and subcontractors to comply with our civil-rights laws” including by “ending illegal preferences and discrimination.” As such, it orders the OFCCP to immediately cease “(A) Promoting ‘diversity’; (B) Holding Federal contractors and subcontractors responsible for taking ‘affirmative action’; and (C) Allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.” Additionally, going forward, every contract or grant award will require the counterparty or recipient to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws. Relatedly, these contracts and grants must also include a term requiring the contractor or grantee to agree that its compliance “in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions” for purposes of the False Claims Act. This addition could lead to further litigation under the False Claim Act, including potentially qui tam litigation brought by whistleblowers.
The Jan. 21 Order explicitly notes that it does not apply to contracting preferences for veterans of the U.S. armed forces. In a January 23 e-mail, OFCCP also confirmed that the Jan. 21 Order does not impact other federal contractor requirements related to veterans under the Vietnam Era Veterans’ Readjustment Assistance Act (“VEVRAA”) or to individuals with disabilities under Section 503 of the Rehabilitation Act as these are statutory requirements which remain in effect. Therefore, any affirmative action plans under VEVRAA and the Rehabilitation Act should continue.
Notably for all private sector employers, Section 4 of the Jan. 21 Order directs the Attorney General, in consultation with the heads of relevant agencies, to submit a report containing recommendations for enforcing federal civil rights laws and “taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI.” Among other items, each agency is tasked with identifying up to nine potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations, State and local bar and medical associations, and higher education institutions as part of a plan to deter DEI programs and principles, which may also include federal litigation.
“Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government”
This January 20, 2025 Order (“Jan. 20 Order”) states that it “is the policy of the United States to recognize two sexes, male and female” which “are not changeable”. The Jan. 20 Order goes on to state that “sex” will refer to “an individual’s immutable biological classification as either male or female” and does not include the concept of gender identity, as gender identity “reflects a fully internal and subjective sense of self, disconnected from biological reality and sex and existing on an infinite continuum, that does not provide a meaningful basis for identification and cannot be recognized as a replacement for sex.” By February 19, the Secretary of Health and Human Services is ordered to provide clear guidance on the sex-based definitions in the Jan. 20 Order. The Jan. 20 Order also goes on to require each agency to enforce laws governing sex-based rights, protections, opportunities, and accommodations in accordance with the definitions set forth in the Jan. 20 Order. In particular, the Jan. 20 Order states that the prior administration misapplied the holding in the Supreme Court case of Bostock v. Clayton County in enforcing access to single-sex spaces (e.g., restrooms) based on gender-identity, and orders the Attorney General to issue immediate guidance to change this application. The Jan. 20 Order further tasks the Attorney General, Secretary of Labor, and the General Counsel and Chair of the Equal Employment Opportunity Commission (“EEOC”) to prioritize investigations and litigation to enforce the “right to single-sex spaces in workplaces and federally funded entities” as well as the “freedom to express the binary nature of sex.”
“Ending Radical and Wasteful Government DEI Programs and Preferencing”
Also on January 20, 2025, President Trump issued an order “Ending Radical and Wasteful Government DEI Programs and Preferencing” (the “Government DEI Programs Order”). While largely focused on federal employment, the Government DEI Programs Order also requires each agency to terminate, among other things, all “equity-related” grants or contracts, as well as all DEI or DEIA performance requirements for contractors and grantees. It further directs the agencies to provide the Director of the Office of Management and Budget with (in relevant part): (i) a list of all federal contractors who have provided DEI training or DEI training materials to agency or department employees and (ii) a list of federal grantees who received federal funds to “provide or advance DEI, DEIA, or ‘environmental justice’ programs, services, or activities since January 20, 2021.”
Takeaways
The Executive Orders described in this alert are newly issued, and their impact will likely be fleshed out in the coming weeks and months by further agency guidance, as well as eventual litigation. In the Press Release announcing her recent appointment as Acting Chair of the EEOC, Commissioner Lucas stated her priorities would include “rooting out unlawful DEI-motivated race and sex discrimination; protecting American workers from anti-American national origin discrimination; defending the biological and binary reality of sex and related rights, including women’s rights to single-sex spaces at work; protecting workers from religious bias and harassment, including antisemitism; and remedying other areas of recent under-enforcement.” Our Firm will be closely monitoring these developments, additional guidance, and any associated legal challenges. In the interim, all employers, but particularly federal contractors, should consider taking a close look at their internal policies, procedures, and employment practices that may be impacted by the EOs and work closely with employment counsel to assess whether any changes may be advisable.
Employers with questions about these Executive Orders and their impact should contact Kristina Grimshaw at kgrimshaw@fglawllc.com or any other attorney at the Firm.
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