One of President Donald J. Trump’s first executive orders fundamentally upends the time-consuming and costly affirmative action requirements that federal contractors have followed for years. By signing the Jan. 21, 2025, executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” President Trump revoked Executive Order 11246 (“EO 11246”), a landmark law that prohibited federal contractors and subcontractors from discriminating against employees and required the development of affirmative action plans. With this new executive order, federal contractors must now stop implementing diversity, equity and inclusion (“DEI”) and other affirmative action efforts that seek to rebalance the workforce as EO 11246 required. Employers are now on alert that President Trump’s second term in office has prioritized the elimination of preferences of any sort in employment.
Background of Executive Order 11246
The most immediate impact of President Trump’s executive action is the revocation of EO 11246, a 60-year-old order from President Lyndon B. Johnson that was issued on the heels of another landmark law prohibiting discrimination in the workplace, Title VII of the Civil Rights Act of 1964 (“Title VII”). EO 11246 was directed to federal contractors and subcontractors, and both laws prohibited discrimination in employment based on race, color, religion, sex or national origin. EO 11246 went further and mandated that contractors develop and implement affirmative action plans, a complex and expensive process overseen and enforced by the Office of Federal Contractor Compliance Programs (“OFCCP”) within the U.S. Department of Labor. EO 11246 was also later amended to include prohibitions on discrimination based on sexual orientation and gender identity. The OFCCP had developed a robust compliance program based on audits, investigations and regulations to ensure that contractors complied with EO 11246’s affirmative action requirements. Federal contractors, particularly large ones, often employed teams of attorneys and statisticians to meet the law’s requirements.
What Is the Impact on Federal Contractors?
The president’s revocation of EO 11246 now prohibits federal contractors and subcontractors from doing what they had been required to do just the week earlier: developing and creating affirmative action programs based on race, color, sex, sexual orientation, gender identity, religion or national origin. The OFCCP is now prohibited from “promoting diversity” or “allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.” By April 21, 2025, contractors and subcontractors must stop promoting diversity, taking affirmative action or engaging in workforce balancing as required by EO 11246.
The OFCCP will notify all employers subject to current reviews or investigations that, to the extent the allegations concern EO 11246, those allegations are now closed. Federal agencies must also include in contract and grant awards a clause requiring the contractor or grant recipient (1) to agree that its compliance with federal antidiscrimination laws is material to the government’s payment decisions, for purposes of the False Claims Act, and (2) to certify that it does not operate any programs promoting DEI that violate federal antidiscrimination laws.
Federal contractors are still required to comply with other affirmative action laws like the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), which protects miliary veterans, and Section 503 of the Rehabilitation Act, which covers workers with disabilities. While the new order appears to acknowledge that VEVRAA and Section 503 remain the law, the OFCCP is prohibited from enforcing their affirmative action requirements.
Despite the revocation of EO 11246, almost all federal contractors remain subject to generally applicable laws prohibiting discrimination in the workplace, such as Title VII and similar state and local laws. While those laws do not typically mandate affirmative action plans like EO 11246 did, their prohibitions on discrimination remain enforceable and subject to enforcement by government agencies like the Equal Employment Opportunity Commission.
How Are Private Employers Affected?
President Trump’s new executive order does not contain any immediate impact on employers that are not federal contractors or subcontractors. However, the new order does require the attorney general to develop a report within 120 days “to encourage the private sector to end illegal discrimination and preferences, including DEI.” While such a report, without accompanying legislation or regulations, would not impact state and local laws, it does make clear to the private sector that the Trump administration is targeting employers that have implemented DEI programs.
Brownstein will continue to track all of President Trump’s executive orders.
