On January 21, 2025, President Donald Trump issued an executive order titled, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (EO). The stated purpose of the order is to end illegal diversity, equity, inclusion, and accessibility (DEIA) initiatives across federal agencies and private organizations that contract with the government. This order asserts that DEIA policies violate civil rights laws and undermine merit-based hiring principles.
What Does the EO Say?
I. Revocation of EO 11246
Section 3 of the January 21 EO focuses on federal contracting and revokes a series of earlier executive orders and presidential memoranda on the topic. Notably, it rescinds President Lyndon Johnson’s 1965 Executive Order 11246, which had required federal contractors and subcontractors to affirmatively recruit women and minorities and ensure employment practices did not discriminate on the basis of race, color, religion, sex, and national origin. EO 11246 additionally mandated that contractors develop annual affirmative action plans to measure compliance with these objectives.
The new EO bars federal contractors from considering race, color, sex, sexual preference, religion, or national origin in their employment and contracting practices. It also directs the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) to immediately cease:
- Promoting “diversity.”
- Holding federal contractors and subcontractors responsible for taking “affirmative action,” and
- Allowing or encouraging federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.
Federal agencies must now include specific terms in their contracts or grant awards that require contracting parties or grant recipients to comply with all applicable federal anti-discrimination laws and confirm that they do not operate any illegal DEIA programs. Additionally, the Office of Management and Budget must remove all references to DEIA principles from federal acquisition, contracting, grants, and financial assistance procedures. Contractors have 90 days, or until April 21, 2025, to comply with the EO requirements.
It is important to note that Section 503 of the Rehabilitation Act of 1973 (protecting the disabled) and the Vietnam Era Veterans’ Readjustment Act of 1974 (VEVRAA) (protecting certain veterans) remain unaffected by the EO.
II. Encouraging the Private Sector to Comply
While the EO does not override federal anti-discrimination laws or Title VII’s protection against discrimination based on race, color, religion, sex, and national origin in the employment context, it does urge federal agencies to implement the stated principles of the EO within the private sector. Section 4 directs the Attorney General, in consultation with agency heads, to submit a report within 120 days that:
- Identifies sectors and organizations of concern,
- Highlights discriminatory practices,
- Proposes a plan to address illegal DEI-based discrimination, and
- Includes recommendations for potential civil investigations targeting large corporations, non-profits, professional associations, and institutions with significant assets.
StraightforWARD Legal Advice:
I. What the EO Means for Federal Contractors
The main takeaways of the EO for federal contractors are as follows:
- The OFCCP remains the regulatory body for government contractors.
- Contractors’ non-discrimination obligations still apply.
- The EO removes the requirement for federal contractors to have affirmative action plans related to race and gender (previously mandated by EO 11246).
- Contractors should assess any pending OFCCP audit requests to determine whether the information requested stems from EO 11246.
- The EO introduces the development of a new contract clause (most likely, a replacement for the current Equal Employment Opportunity clause) that requires contractors to agree that “compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions for purposes of section 3729(b)(4) of title 31, United States Code.”
- The EO mandates that contractors certify they do not operate DEIA programs that violate federal anti-discrimination laws.
- Contractors should review any new government contracts for new/relevant EEO/DEIA terms.
II. What the EO Means for All – Contract and Non-Contractor – Employers
The EO does not alter existing employment discrimination laws, but it does indicate a heightened focus on investigating and enforcing actions against DEIA programs that involve discriminatory preferences. The full effect of the EO is yet to be realized, and many questions for contractors and employers alike remain unanswered at this stage. In preparation for future changes, employers should:
- Ensure employment practices comply with nondiscrimination laws.
- Review EEO policies.
- Ensure DEIA initiatives do not violate federal anti-discrimination laws.
- Stay informed on regulatory changes or requirements that may stem from the EO.
For guidance on navigating these changes and safeguarding against potential violations, employers are encouraged to contact Renee Harris at (215) 647-6616 or rharris@thewardlaw.com.