Amid a flurry of executive orders starting his second administration, President Donald Trump issued an order entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the “Order”) on January 21, 2025. The Order will have an immediate impact on federal contractors and subcontractors currently subject to the affirmative action obligations concerning women and minorities under now-revoked Executive Order 11246 dated September 24, 1965 (and the subsequent executive orders that refined these obligations). It also signals a significant change in the focus of federal enforcement of equal opportunity laws. The Order does NOT, however, change any of the substantive federal law regarding employment discrimination. Under Title VII of the Civil Rights Act of 1964, it remains illegal for employers to make employment decisions on the basis of race, color, religion, sex, or national origin. Other federal and state statutes prohibit making employment decisions on various other bases, including age, disability, genetic make-up, etc.; none of these substantive laws have been changed. So what has changed?

1. Federal Contractor Affirmative Action Obligations Concerning Women and Minorities

Certain federal contractors and subcontractors, including those that employ at least 50 employees and have a federal contract or subcontract of at least $50,000, have for decades been required to comply with certain affirmative action obligations concerning women and minorities pursuant to Executive Order 11246. These obligations have never permitted an employer to show preferential treatment on the basis of race, color, religion, sex, and national origin. Quotas and preferential treatment on the basis of a person’s race, color, religion, sex, or national origin were always prohibited.

Rather, prior to its revocation by President Trump’s Order, Executive Order 11246 included a requirement that such contractors analyze their workforce on the basis of race, color, religion, sex, and national origin, and compare their workforce composition to that of the available workforce, as well as review their recruitment, hiring, training and promotional policies and practices, and prepare an affirmative action plan for women and minorities. In instances where there were significant discrepancies between the incumbent workforce and the available workforce, contractors were required to come up with plans designed to address those discrepancies, such as expanding recruitment efforts and reviewing hiring, training, and promotional practices to ensure they were non-discriminatory, and include placement goals in their written affirmative action plans to measure their progress towards achieving equal employment opportunity.

In addition to revoking Executive Order 11246, the Order prohibits the Office of Federal Contract Compliance Programs, the agency responsible for enforcement of federal contractor affirmative action obligations, from holding federal contractors and subcontractors responsible for taking “affirmative action” and from allowing contractors and subcontractors to engage in “workforce balancing” based on race, color, sex, “sexual preference,” religion, or national origin.

Although the Order allows federal contractors and subcontractors to continue to comply with the existing regulatory scheme until April 21, 2025 if they choose to do so, there is no enforcement mechanism during that time frame.

Existing federal contracts and subcontracts continue to include provisions requiring these actions, and such contracts are not voided. But there is essentially no chance that the federal government during this administration will be enforcing those provisions. Federal contractors and subcontractors with current obligations under Executive Order 11246 no longer need to comply with them. They may not, however, ignore their obligations to not discriminate in employment on the basis of protected characteristics under applicable federal, state, and local laws.

2. The Order Did NOT Alter Other Federal Contractor Affirmative Action Obligations

It is important to note that the Order did NOTalter federal contractors’ and subcontractors’ affirmative action obligations concerning individuals with disabilities and veteran status, which are statutory. These will likely remain in place unless Congress repeals them. Until then, federal contractors and subcontractors that meet the jurisdictional threshold have an obligation to continue to comply with those affirmative action obligations, including preparing and maintaining written affirmative action programs.

3. Diversity, Equity, Inclusion, and Non-Discrimination

Preferences in employment on the basis of race, color, religion, sex, or national origin have been illegal since the passage of the Civil Rights Act of 1964. This includes–except in very rare and limited circumstances–preferences designed to help people in groups that have historically been marginalized by discrimination. So it is not, and has not for sixty years, been legal to hire or promote employees on the basis of race, color, religion, sex, or national origin.

Despite six decades of non-discrimination laws, significant disparities continue to remain in our economy and in many workplaces on the basis of race and sex in particular. Some employers have sought to address such disparities through programs and policies designed to address some of the underlying barriers that may be preventing people from diverse groups from succeeding in their workplaces. Affinity groups, training, revision of policies, and recruiting outreach have all been tried to ensure a non-discriminatory workplace.

Most of these programs and policies are and have been perfectly legal and do not discriminate on the basis of protected characteristics. Programs and policies adopted by employers to go beyond equal employment opportunity and the prevention of unlawful discrimination, however, would cross the line into unlawful racial or sexual preferences. Employment opportunities limited to women or racial or ethnic minorities, mentorship or training programs not open to white employees, and mandatory training sessions that declare that all white people are racist simply because of the color of their skin are, and were always, violations of the Civil Rights Act of 1964.

Section four of the Order focuses on such unlawful programs in the private sector, i.e., beyond the federal contractor setting. It commissions a report from each agency on the “most egregious and discriminatory DEI practitioners in each sector of concern” and requires each federal agency to identify “up to nine potential civil compliance investigations” in the following categories:

  • Publicly traded corporations
  • Large non-profit organizations
  • Foundations with assets of $500 million or more
  • State and local bar and medical associations
  • Institutions of higher education with endowments of more than $1 billion

In addition, any federal contractor, subcontractor, or grant recipient will be required to “certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”

Employers, therefore, should scrutinize their existing programs related to diversity, equity, inclusion, belonging, and non-discrimination. As noted above, most such programs are fully legal and bring value to the organization. But this is an opportunity to refine and improve existing policies so that they legally accomplish the organization’s appropriate goals. The article we authored last year (see January 2024 Alert) remains appropriate advice.

The bottom line is that, other than the elimination of federal contractors’ affirmative action obligations concerning women and minorities, the Order does not change other federal contractor affirmative action obligations or the law governing treatment of individuals on the basis of legally protected characteristics. Employers should take this opportunity to review, revise, and improve their existing policies and practices.