President Trump signed two executive orders (the “Trump Executive Orders” or “Orders”) repealing diversity, equity and inclusion (“DEI”) and diversity, equity, inclusion and accessibility (“DEIA”) initiatives. The Trump Executive Orders require the federal government and federal contractors to terminate all discriminatory programs explicitly including DEI and DEIA mandates, policies, programs, preferences and activities under whatever name they appear. The Orders also require all federal agencies to encourage private-sector employers to terminate their discriminatory practices, including “race-and sex-based preferences,” and DEI mandates, policies, programs and activities.
The Trump Executive Orders make clear that employment decisions should be based on merit, aptitude, hard work and determination without taking into consideration whether or not the individual is in a protected class. They also rescind Executive Order 11246 and the regulations promulgated under it that previously required the federal government to take affirmative action and prohibited federal contractors from discriminating on the basis of race, color, religion, sex, sexual orientation, gender identity or national origin.
Accordingly, on January 25, 2025, the Acting Secretary of Labor ordered Department of Labor employees to end all investigative and enforcement activity under Executive Order 11246 and to cease and desist from all related activities with respect to pending cases, conciliation agreements, investigations, complaints and any other enforcement-related or investigative activity under Executive Order 11246. Federal contractors have 90 days to comply with the Trump Executive Orders.
NOTE: While the Trump Executive Orders are quite broad and do not define illegal or discriminatory programs per se, they clearly state that rebranding a DEI or DEIA initiative would not be acceptable. In addition, the Trump Executive Orders do not provide any specifics on how to measure “merit, aptitude, hard work and determination” in the context of employment decisions. Without any guidance from the federal government, it is not yet possible to determine the full scope of the prohibitions and what, if any, practices would be consistent with the Orders.
I. Federal Contractors and Subcontractors
In accordance with the Orders, the Office of Federal Contract Compliance Programs (“OFCCP”) must immediately stop: (i) promoting diversity, (ii) requiring federal contractors and subcontractors to comply with affirmative action and (iii) encouraging federal contractors and subcontractors to maintain balanced workplaces based on race, color, sex, sexual preference, religion or national origin.
Federal contractors and subcontractors may not consider race, color, sex, sexual preference, religion or national origin in ways that violate federal civil rights laws in their employment, procurement and contracting practices.
Furthermore, federal contractors and grant awards must include language stating that the contractor agrees to comply with applicable federal anti-discrimination laws. The contractor must also certify that it does not operate any programs promoting DEI in violation of federal anti-discrimination laws.
II. Private-sector Employers
The Attorney General must, within 120 days, provide a report to the Assistant to the President for Domestic Policy with recommendations to encourage private sector employers to end illegal discrimination and preferences. Among other things, the report must provide a strategic enforcement plan that: (i) identifies key areas of concern, (ii) identifies the most egregious and discriminatory companies in each area of concern, (iii) provides strategies to deter illegal discrimination and preferences and (iv) identifies litigation that would be appropriate for federal lawsuits, intervention or statements of interest. Each relevant agency must list up to nine potential civil compliance investigations of publicly traded corporations, large non-profits, foundations with assets of $500,000,000 or more, state and local bar and medical associations and institutions of higher education with endowments over $1 billion.
III. Educational Institutions
Within 120 days after the issuance of the Orders, the Attorney General and the Secretary of Education must provide guidance regarding measures and practices to comply with Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, 600 U.S. 181 (2023) which found that race-based affirmative action plans used for college admissions (except military academies) violated the Equal Protection Clause of the Fourteenth Amendment.
IV. Exceptions
The Trump Executive Orders indicate a possible exception in the case of employment and contracting preferences for veterans. They also do not prevent state or local governments, federal contractors, or federally-funded state and local educational agencies or institutions of higher education from engaging in First Amendment-protected speech, and they do not prohibit federally-funded institutions of higher education from teaching, advocating for, endorsing, or promoting unlawful employment or contracting practices prohibited by the Trump Executive Orders.
V. Takeaways
Because the scope of the Trump Executive Orders is quite broad, employers should, with assistance from legal counsel, carefully review all their Human Resources practices (e.g., hiring, promoting, mentoring, etc.) to identify any policies, procedures or practices that may be perceived as including illegal discrimination and preferences under federal law. In addition, employers should continue to monitor guidance from the federal government regarding the scope and application of the Trump Executive Orders and perform regular training for managers and supervisors accordingly.
If necessary, Human Resources practices should be modified, with advice from legal counsel, to comply with the Orders. However, employers should be mindful that other federal statutes, such as Title VII of the Civil Rights Act (“Title VII”), the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Dodd-Frank Act and individual state anti-discrimination laws still apply. Employers should train managers and supervisors so that they understand that, even though affirmative action and DEI initiatives may not be permitted, Title VII and other federal, state and local statutes still apply.
Complying with Title VII may not be as straightforward as it has been in the past. Discrimination claims may become more complex. For example, a company promotes a woman instead of a man. The man files a complaint because he feels he deserves/merits the promotion more than the woman because he has more education or went to better schools. The company hired the woman even though she does not have as much education because she has more job-related experience. Employment decisions will need to be carefully documented to demonstrate that such actions are based on merit and/or other factors unrelated to race and sex and not based on illegal discrimination or preferences. To mitigate potential litigation, employers should carefully document Human Resources actions by explaining the business need for such action.
In the past, employers have made decisions because one individual is a better fit based on personality. This is a purely subjective opinion and should be carefully documented to demonstrate that the decision is not discriminatory.
Furthermore, employers may face more litigation if individuals who were not historically protected by anti-discrimination laws may now be able to file claims of discrimination based on their race or sex.
VI. Conclusion
The Trump Executive Orders will have a significant impact on federal contractors and subcontractors, private employers and educational institutions. The scope of the changes will be clearer when guidance is issued. In the meantime, many private employers should review their programs in case they become the subject of an audit or investigation. Such a review would also be beneficial in case of litigation.
We will continue to monitor developments and provide alerts as more information becomes available.
If you would like to further discuss the impact of the Trump Executive Orders on your organization, please contact The Wagner Law Group’s Employment Law and Human Resources Team: Katherine Brustowicz, Denise Chicoine, David Gabor, Johanna Matloff and Virginia Peabody (Senior Consultant).
