On his second day in office, President Trump issued an Order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” addressing diversity, equity, and inclusion (DEI) in federal government as well as mandates and programs affecting the public and private sector. Specifically, the President acted to “order all executive departments and agencies to terminate all discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements.” The President further ordered that all federal agencies “enforce our longstanding civil-rights laws” and “combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.”
The Order targets not only the ending of DEI policies and programs within the federal government, but also directs federal agencies to take action to address private sector DEI programs based on existing civil rights and equal opportunity laws. The stated policy underlying these actions is that DEI policies “not only violate the text and spirit of our longstanding Federal civil-rights laws, they also undermine our national unity, as they deny, discredit, and undermine the traditional American values of hard work, excellence, and individual achievement in favor of an unlawful, corrosive, and pernicious identity-based spoils system.” The Order states that DEI policies prioritize how people were born instead of what they are capable of doing.
Federal Contractors and Subcontractors
Of particular importance to federal contractors and subcontractors, President Trump’s Order revokes Executive Order 11246 adopted in 1965, as well as later amendments and related executive actions, which required equal employment opportunity (EEO) program compliance for federal contractors. Federal contractors may continue to comply with the pre-Order EEO regulatory scheme for 90 days, then should transition to comply with the Order. Furthermore, the Office of Federal Contract Compliance Programs (OFCCP) of the Department of Labor is directed 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.
More directly, federal contractors and subcontractors are ordered to stop considering race, color, sex, sexual preference, religion, or national origin “in ways that violate the Nation’s civil rights laws.” Federal agency heads are instructed to include in every contract and grant award a requirement that the contracting party or grant recipient agree that compliance with all aspects of all applicable federal anti-discrimination laws is material to the government’s payment decisions, and requiring each contracting party and grant recipient to certify that it does not operate any programs promoting DEI that violate federal anti-discrimination laws.
Private Sector Employers
The Order encourages the private sector to “end illegal DEI discrimination and preferences.” Federal agency heads and the Attorney General are directed to take “appropriate action” to “advance in the private sector the policy of individual initiative, excellence, and hard work.” Federal agency heads and the Attorney General are directed to report back to the President within 120 days with recommendations for enforcing federal civil rights laws and other actions to “encourage the private sector to end illegal discrimination and preferences, including DEI.” The recommendations due in 120 days are directed to include identifying “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.”
Education Institutions
With respect to education in particular, the Attorney General and Secretary of Education are directed to issue guidance within 120 days to all state and local educational agencies and higher education institutions that receive federal funds or participate in federal student loan assistance programs on how such entities should comply with the recent U.S. Supreme Court decision in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College. This Supreme Court decision essentially struck down race-conscious affirmative action policies and practices in the college admissions process based on the Equal Protection Clause of the Fourteenth Amendment. Harvard College and the University of North Carolina, the schools at issue in the case, used an applicant’s race as one of numerous factors considered in the admissions process.
Order Exclusions
The Order specifically excludes federal and private sector employment and contracting preferences for veterans and blind persons subject to the Randolph-Sheppard Act. The Order also states that it does not prevent state or local governments, federal contractors, or education institutions from “engaging in First Amendment-protected speech,” and does not prohibit teachers from teaching a course “advocating for, endorsing, or promoting the unlawful employment or contracting practices prohibited by this Order.” These carve-outs are not expected to insulate this Order from legal challenges.
Key Takeaways for Employers
- Private sector employers with DEI or similar programs should carefully review their programs to determine whether some or all aspects of such programs can and should continue in light of this Order. Any employer choosing to continue an existing DEI or similar program is advised to discuss continuation with counsel.
- Federal contractor or subcontractor employers will no longer be required to comply with Executive Order 11246 and the OFCCP requirements relating to diverse workforces and diversity programs. This likely includes preparing and submitting various OFCCP diversity-related reports. However, federal contractors and subcontractors are advised to continue doing so for up to 90 days in order to determine whether this Order will be subject to legal challenge and issuance of an injunction, in which case the Executive Order 11246 and OFCCP requirements may remain in effect until the legal challenge is resolved. However, federal contractors and subcontractors should be advised that this Order directs them to stop considering race, color, sex, sexual preference, religion, or national origin “in ways that violate the Nation’s civil rights laws.” Contractors with questions on implementation of this Order should consult legal counsel.
- Large private entities such as publicly traded corporations, national nonprofit associations, large foundations, state and local bar and medical associations, and large higher education institutions should brace for impact, as the Attorney General and other federal agencies are likely to begin investigations of DEI practices within 120 days. Large private entities, especially those highly visible in the public arena such as major universities that had high-profile pro-Palestine movements on campus or large public corporations that have highly publicized DEI programs, should take steps now to review existing DEI policies and practices and ensure compliance with existing federal civil rights laws.
- State and local education agencies and higher education institutions receiving federal funding or participating in federal student aid programs are also advised to review existing DEI policies and practices to ensure compliance with existing federal civil rights laws.
- Legal challenges are almost guaranteed, and all affected entities should stay abreast of developments including possible injunctions issued to postpone enforcement of this Order.
- More details on how the federal government will enforce this Order are expected in the next 90 to 120 days.
The legal issues impacting this topic are and will continue to be ever-changing (Employment Law in Motion!), and since publication of this blog post, new or additional information not referenced in this blog post may be available.
This article is provided for informational purposes only—it does not constitute legal advice and does not create an attorney-client relationship between the firm and the reader. Readers should consult legal counsel before taking action relating to the subject matter of this article.
