The first week of the Trump administration has ushered in a significant shift in the government’s viewpoint and enforcement agenda regarding Affirmative Action (AA) and Diversity, Equity and Inclusion (DE&I) practices. A series of orders have been issued that will fundamentally alter the obligations and options that employers have relating to AA and DE&I.
On January 21st, President Trump issued a wide-ranging Executive Order entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the Order). The stated purpose of the Order is to end “illegal preferences and discrimination.”
First and foremost, the Order rescinds Executive Order 11246 that was signed by President Lyndon Johnson in 1965. For 60 years, EO11246 has been the sole legal basis for the federal government’s requirement that federal contractors fulfill certain affirmative action obligations relating to minorities and females, including the obligation to annually prepare an affirmative action plan.
The Order requires the 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 or subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.”
Federal contractors will now be required to certify that they are not involved in DE&I initiatives that could be seen as violating federal civil rights law under the new administration’s guidelines.
Federal contractors are still required to maintain affirmative action plans for protected veterans and individuals with disabilities, as those obligations are based on legislative mandates, not on EO11246. State and local affirmative action obligations remain unchanged, requiring contractors doing business with state or local governments to comply with applicable affirmative action and reporting requirements. Employers are well-advised to consult with counsel about any remaining affirmative action obligations they may have.
Beyond the realm of federal contractors, the Order has several other mandates, including:
- Rapid development of a “strategic enforcement plan,” including litigation and regulatory action, under which federal agencies will identify and target for enforcement prominent corporations, non-profits, institutions of higher education, bar and medical associations, and foundations to “deter DE&I programs or principles … that constitute illegal discrimination or preferences.”
- All federal government departments and agencies have been ordered to dismantle their DE&I programs, signaling a major move to reduce government pursuit of DE&I initiatives. All federal employees associated with DE&I programs were immediately placed on paid administrative leave, presumably while the Trump Administration figures out how to re-deploy them or separate them outright.
- A previous mandate for federal agencies to implement detailed “equity action plans” has been rescinded, along with protections that shield federal contractor workers from discrimination based on sexual orientation and gender identity.
What This Means for Employers
These sweeping changes will have a profound impact on employers, particularly those who are federal contractors or who have DE&I programs in place. Employers should review and assess their DE&I programs to ensure they comply with the new federal guidelines. It’s also important for employers to revisit their anti-discrimination policies to ensure they align with the latest executive orders, particularly those related to sexual orientation and gender identity.
Additionally, businesses should prepare for the possibility of increased scrutiny regarding their DE&I initiatives. With the administration focused on curbing these programs, employers may face greater challenges in justifying their diversity strategies. Those challenges may come not just from the federal government, but from public interest groups or individuals who share the Trump Administration’s viewpoint of DE&I and AA. It is crucial for employers to take proactive steps in reviewing and, if necessary, revising their DE&I practices to minimize potential legal risks.
K|W|W attorneys are available to help you analyze and manage the risks associated with this seismic shift in government enforcement. As always, your workforce is our priority.