Just days into taking office, President Trump delivered on his campaign promises to dismantle DEI programs in federal agencies. On January 20 and 21, President Trump issued two such executive orders targeting DEI and affirmative action-based programs for agencies and government contractors. PilieroMazza previously wrote about Trump’s Ending Radical and Wasteful Government DEI Programs and Preferencing Executive Order for contractors who may perform work on DEI contracts, available here. This article focuses on the Ending Illegal Discrimination and Restoring Merit-Based Opportunity Executive Order (the Order). PilieroMazza reviews the Order’s requirements below and explains what steps contractors should take to avoid non-compliance.
The Order declares race- and sex-based preferences illegal and orders agencies to terminate any such programs or requirements. In doing so, the Order revokes a number of prior executive actions deemed illegal, including EO 11246 which was issued by President Johnson in 1965 and established affirmative action program requirements for federal contractors. EO 11246 also established contractors’ obligations to create annual affirmative action plans for women and minorities. Unsurprisingly, the Order also revokes EO 13672, which added prohibitions for discrimination based on sexual orientation and gender identity. Additionally, the Order guts the authority granted to the Office of Federal Contract Compliance Programs (OFCCP), the office responsible for enforcing contractor affirmative action obligations. The OFCCP is ordered to immediately cease enforcement of contractor affirmative action responsibilities.
The Order explains that contractors may continue to comply with their affirmative action obligations for 90 days or by April 21, 2025. After this date, contractors may no longer engage in these practices. The Order goes on to require agencies to grant contract awards based on a contractor’s (1) agreement that its compliance with all federal anti-discrimination laws is material to the government’s payments and (2) certification that it does not operate any programs promoting “illegal DEI.”
Accordingly, the Order has the following immediate implications for contractors:
- Contractors subject to EO 11246 requirements to create an Affirmative Action Plan for women and minorities should end this practice and discontinue any related affirmative action practices, such as action-oriented programs and auditing systems, by April 21, 2025. Important Note: The Order does not end affirmative action requirements under VEVRAA or Section 503 of the Rehabilitation Act, which require Affirmative Action Plans for veterans and individuals with disabilities. These obligations are statutory in nature and remain ongoing.
- Companies should review their handbooks, internal policies, as well as subcontract agreements to ensure that references to EO 11246 Affirmative Action Plans are removed.
- Companies with fewer than 100 employees may also want to reconsider having applicants and new hires complete self-identification. This obligation no longer applies. Companies with more than 100 employees are still obligated to continue this practice.
- In light of the certification requirements, contractors should review their trainings, training materials, and learning management systems to ensure there are no references to illegal DEI practices. While the Order is vague about what constitutes DEI, policies that express race- or sex-based preferences or opportunities should be revised. References to historical discrimination also risk non-compliance.
- Per an Order issued by the Acting Secretary of Labor, contractors with pending OFCCP cases, conciliation agreements, investigations, complaints, and/or any other OFCCP enforcement-related or investigative activity should expect that those components related to EO 11246 be ceased and any open audits be closed by January 31, 2025. Notably, those components related to Section 503 and VEVRAA will be placed on hold pending further guidance.
Due to these swift and significant executive actions, contractors should take time to revisit their DEI programs, affirmative action plans, and equal employment opportunity policies to determine what potential changes will need to be made. PilieroMazza recommends working with legal counsel to assist with reviewing and revising such policies and programs, and our attorneys are available to assist you in doing so. Should you have questions, please contact Sarah Nash, Nichole Atallah, Sara Strosser, or another member of the Firm’s Labor & Employment Group.
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If you’re seeking practical insights to gain a competitive edge by understanding the government’s compliance requirements, tune into PilieroMazza’s podcasts: GovCon Live!, Clocking in with PilieroMazza, and Ex Rel. Radio.
